Bail out U.S. automakers?

[haha]

if GM goes into Chapter 7 then Toyota and the other automakers will probably buy up a lot of the plants at firesale prices and get cheap money from Uncle Sam to retool them. The auto bailout they passed a few weeks ago says anyone is qualified as long as they use the money for plants that are 20 years old or older

No way any successful auto manufacturer will go into Michigan. It's UAW or bust. And given who will be in Washington, I'd say it's UAW all the way.

Ha

 

[windsurf]

Many chickens are coming home to roost here. As usual, the wage slave is the patsy. There will be huge irony in the breaching of contracts relative to the workers who embraced the Rebublican rhetroric and ideology of the past twenty years. The other irony is the substantial bailout of select financiers who actually make "nothing" but money in the abstract. I heard a lying commentator on right wing radio this a.m. saying that the top 3 reasons for the failure of the big 3 were union contracts, federal safety and cafe regulations and the valuation of the dollar relative to foreign currencies (in that order). I am not in a union but live in a region where prosperity is directly linked to the consumerism and satellite services generated by union contracts. When the people who have sold their souls to the big 3 are told, like the patsy in Animal House, that, "Hey, you fu**ed up, you trusted us," there is going to be trouble. The trouble will be a continuing downward spiral of woe that will probably not end up being capitalist nirvana. I realize that there are those who think that the end of unions, the end of government, the end of public schools and the end of ____________ (fill it in) will ensure their individual happiness.

 

[ERD50]

Many chickens are coming home to roost here. As usual, the wage slave is the patsy.

Did you see the numbers posted above? I hardly think "wage slave" applies to some of those union jobs.

There will be huge irony in the breaching of contracts relative to the workers who embraced the Rebublican rhetroric

I'm not an R, but I kinda think they aren't real union-friendly. So how is this irony? Explain.

I am not in a union but live in a region whee prosperity is directly linked to the consumerism generated by union contracts.

So the obvious solution to national prosperity is a $100/hour minimum wage, right?

-ERD50

 

[Steve O]

The way they are printing $$$ lately you would think so

 

[NW-Bound]

When SS and Medicare go bankrupt, who will bail us out?

 

[Keyboard Ninja]

When SS and Medicare go bankrupt, who will bail us out?

Noone. That is why it has been preached through the media to start investing in our own retirement and health plans regardless of what we are currently paying out for SS and medicare.

I'm still wondering what ever happened to common sense? I know if I let a friend "borrow" a $1 I may never see it again. There is also a chance I may see that same friend with his hand out asking to borrow another $1. I'm sure LOTS and LOTS of people have gone through that in their lifetimes.

 

[Lazarus]

I had a thought that doesn't bode well for the auto industry no matter what the government does to help 'em out.

Who would be buying a "new" car anyway with all the doom-and-gloom going on. Nobody has to buy a "new" car. Esp right after they got half their 401k wiped out. There are used cars enough around to last quite a few years. If I had a paid for car of any kind right now, I wouldn't be selling it too cheap - there may be a hot market for used cars the next couple years.

So what if they discount a $70k Escalade to 57K & 0% financing for 6 years - I still don't want it. Frankly, it's not worth 57k - or even 30k. I wouldn't even give you 25k for one brand new off the lot. (but maybe that's just me)

Well I just bought a new Ford PU just before things went bust. Gas was high and they couldn't give them away. Bought a fairly basic truck for 63% of sticker. About 9K off. Truck was abt 15K with all taxes license and basic extended warrenty. Thought it was a good oppritunity since both my vehicles were high mileage. Don't think I could get a used low milage one for much cheaper. In fact my previous Ford PU was bought slightly used for $16K some time ago and did not have as many options or a V8. The V8 gets better milage than the old V6!

The gas milage is better than you might thing abt 18.5 MPG

My other car is a Honda about the same age as the old truck. The Ford had less mechanical issues than the Honda did. But both were good. I don't know about GM but Ford's quality on the 150 is quite good.

I wonder if they are having much more luck selling them now that gas is down?

But I'm with you. I would never pay $70K for a car or anything like it. My record price paid for a new car is $16K for the Honda in 2000 and I still have it. At the low end like this sometimes new makes more sense than used.

 

[REWahoo]

I suggest one of the first foreign policy steps the new Obama administration undertake is improving relations with Cuba. Send a delegation immediately to research how they've kept those GM, Ford and Chrysler products running for 50 years - no reason for us to have to learn it the hard way.

 

[wildcat]

I voted no. I have zero confidence in our govt's ability to structure any kind of bail out. Also have zero confidence in GM/UAW to operate under a competitive cost structure.

Allow ex-auto workers to become part of the public works projects that seem to be part of the agenda so they can continue to work. I'm sure some of their skills could be very useful for such programs.

Allow the GM/UAW brass to go down with the ship.

In the case of a bail out, can you picture a couple guys in black suits at the GM board meeting representing the govt?

 

[Texarkandy]

....
Allow ex-auto workers to become part of the public works projects that seem to be part of the agenda so they can continue to work. I'm sure some of their skills could be very useful for such programs.

.....

The Border Patrol is hiring.

 

[youbet]

It will be interesting. If GM does fail and drives a systemic failure in the industry... Then the impact will be far and wide to our financial system and the economy.

It is not GM... it is the auto industry that could fail.

Those who are quick to say no govt help will $h!t if they lose another 1/3 of their assets from the current level... stocks and bonds (defaults).

We could see a DJIA at 6000. S&P 500 around 650. And perhaps 7 - 10 years to recover.

So you're suggesting we dump $200B+ (one of the lowest estimates I've seen) into the auto industry raising the national debt, driving inflation and causing taxes to increase and still have the same crappy domestic auto companies fold a few years from now?

Obama would have to put a special tax on non-USA owned manufacturers (tariffs for imports, special taxes for domestically manufactured autos) in order for GM/Ford/Chrysler to survive. The $200B+ only keeps them alive until these extra weights around the foreign competition are in place.

 

[Notmuchlonger]

Oh really.

UAW leader says no more concessions: Financial News - Yahoo! Finance

 

[shotgunner]

If GM goes under how big a hit will the taxpayer take via the Pension Guarnantee Corporation? I read somewhere GM's retiree's number close to half a million.

It is going to cost us one way or the other.

 

[cashbalancetrouble]

I'm still wondering what ever happened to common sense? I know if I let a friend "borrow" a $1 I may never see it again. There is also a chance I may see that same friend with his hand out asking to borrow another $1. I'm sure LOTS and LOTS of people have gone through that in their lifetimes.

Reminds me of the accountant who borrowed $5 for lunch. It was his last day on the job and didn't tell me. About ten years later he was applying for a job at another company where my wife was the boss. That $5 cost him quite a bit.

 

[Bikerdude]

I suggest one of the first foreign policy steps the new Obama administration undertake is improving relations with Cuba. Send a delegation immediately to research how they've kept those GM, Ford and Chrysler products running for 50 years - no reason for us to have to learn it the hard way.

It's called no snow or salt and 'necessity'.

 

[Independent]

If GM goes under how big a hit will the taxpayer take via the Pension Guarnantee Corporation? I read somewhere GM's retiree's number close to half a million.

It is going to cost us one way or the other.

The issue isn't the number of retirees but the funding status of the pension plan. That can be pretty volatile:

GM shows just how volatile pensions can be. In a mere four years, its U.S. funds have swung $35 billion, going from $17.8 billion underfunded (according to generally accepted accounting principles) in 2002 to $17.1 billion overfunded last year. [12/31/2007]

To lock in those hard-earned gains, GM has switched investment targets in its $101 billion pension portfolio to just 29 percent stocks and 52 percent bonds from 49 and 32, respectively. (The other 19 percent is in real estate and "alternative investments" such as hedge funds.) Bonds are much less volatile than stocks, hence the change.

Pension Pulse: What's Good for GM's Pension Fund?

In 2003, GM borrowed $18.5 billion and put the money into the pension fund. Then it got aggressive with investments in the fund.

The pension portion of the article is worth reading. I shows how hard it is for an regular investor (i.e. me) to figure out a company's pension status.

 

[tsturbo]

Let them fail. I was against the 1st bailout and I am against the government bailing out any company. Some will survive and some will fail. I started buying Honda's in the 80's because they built a fun and reliable product. The big three build products that do not last nearly as long as Honda or Toyota and they are much less reliable. The big three only want to produce big gas guzzlers so they can rake in big profits (or they used to, no one is buying those gas hogs now).

My son has a '92 Accord with 240k and it is still running strong, you will find very few if any big 3 auto's ('92 vintage) with 240K+ with original motor and running gear still running strong. Honda's are the only cars my children have ever owned.

 

[treypar]

I agree with Tsturbo that the American manufacturers do not make the cars that the public wants. I have purchased Honda cars since 1980 and have been extremely satisfied with the product and service. I had one Honda car that made it to 240,000 miles with no major problems. Unfortunatley that car was hit while it was parked due to some idiot driver and we had to buy a new one,which was a Honda.

 

[kumquat]

My son has a '92 Accord with 240k and it is still running strong, you will find very few if any big 3 auto's ('92 vintage) with 240K+ with original motor and running gear still running strong.

DS is driving an 89 Ford Probe which does have Mazda ancestry. DD bought it in 96 with 140K (as in kilometers). It now has 400+K, looks good, full compression, no oil loss etc. Will likely last another 100K.

I think the Detroit 3 get a bit of a bum rap. Quality has improved in the last several years. Parts are reasonable and most mechanics can fix them. Price repairs on an older high-mileage Japanese car.

 

[tsturbo]

Price repairs on an older high-mileage Japanese car.

You sir are mis-informed, that is an old myth. I will give you one quick example. My Company car and older ford escape, $600 for a brake job, $175.00 for my son's Accord. Keep buying big 3 auto's we need to keep mechanic's employed.

 

[treypar]

The cost of repairs on my older Honda cars were always minimal. Maybe the US cars are better today but they lost me as a customer many years ago and I am guessing that they lost many others along the way. IMO the Honda vehicles are a better value for the price when comparing to GM, Ford, etc. I think that this assumption is confirmed by the sales numbers.

 

[OAG]

DS is driving an 89 Ford Probe which does have Mazda ancestry. DD bought it in 96 with 140K (as in kilometers). It now has 400+K, looks good, full compression, no oil loss etc. Will likely last another 100K.

I think the Detroit 3 get a bit of a bum rap. Quality has improved in the last several years. Parts are reasonable and most mechanics can fix them. Price repairs on an older high-mileage Japanese car.

The Cuban Mechanics seem to have no problem keeping US Car running now for going in 35 years.

 

[Yankees Rule]

I keep hearing how much better American cars are these days. I stopped buying American cars in the 1980s, early.Ithink my last american car was a chevy Nova 1970 model with a 307 engine in it. Have driven a volvo 300,000 miles with no real problems, but then it was before FORD bought the large interest in them it was a 1990 240 model. Had VWs jettas that again I put 200,000+ miles on them in the 80s again before they started building them in MEXICO. All the German made ones were fantastic. Then we went to the Toyotas, and my Japan Built small pick up was never in the shop, and our sedan that we have now just runs and runs and runs. Just got back from a 2000 mile week of driving it and its 5 years old with over 100K on the car and runs like new. Tell me are American consumers part of the blame for American car companies troubles? I mean Ford and GM continued to build SUVs and large Pick Ups and until the summer gasoline price jump were well still making money on those awful vehicles. I mean come now why buy a vehicle that was a gas waster and a bad rough ride Then try to buy an American made sedan to compete with the Accords, and Camrys of the foriegn companies. I think we might have to let these companies die, or only give them money if they are mandated to improve mileage to over 40mpg and build quality that gives the consumer a vehicle that can compete with the Hondas and Toyotas on the road. But then again, maybe we just let honda and toyota build cars for America You know all the world economy and free trade stuff. Only the strong survive.

 

[tuixiu]

I know many will disagree with me, but I believe the Japanese auto makers have superior quality, and have had for quite some time.

I seriously doubt you'll find much disagreement at all.

 

[FinanceDude]

I look at this way: If Honda, Toyota, and Nissan needed a bailout, would there be any discussion at all in Congress? The answer is a flat "NO", they would be chastised for making poor business decisions and allowed to fail. Why impose a different standard on the Big 3, 3 companies that have been operating with inept management for over 30 years??