Bailout Nation 2: General Motors

[TheNiche]

Unless said country was at war with us

Ain't gonna happen.

[RedScare]

I fundamentally agree with you. As a conservative who strongly supports "Defense" though, I'm nervous about selling our three biggest means for manufacturing heavy equipment in a time of war. I know thats overzealous conservative paranoia, but its still there none the less.

I would rather see them collapse, consolidate, restructure, and the have one or two brands emerge as the victor. Yes, some jobs will be lost, but that's the risk of capitalism. I'd rather see bailout money go to the laid off workers for a set period of time, than to go to the companies themselves. I don't think it will help them recover, and we have all seen the mixed results with banking bailout.

If you look back at the beginning of this thread, you'll see my comment that having no auto manufacturing base is a national security concern. This is not overzealous conservative paranoia. This is an intelligent national defense concern. A nation of lawyers, accountants, MBAs and bankers will fail. Period. Our two-headed monster of antagonism toward blue collar industry and greed infested CEO culture will be our downfall. I am not in favor of bailing out incompetent auto industry CEOs, yet the blow to our manufacturing base could be catastrophic. We can't ALL sell insurance and make a living on eBay. Someone has to build things.

[memebag]

If you look back at the beginning of this thread, you'll see my comment that having no auto manufacturing base is a national security concern. This is not overzealous conservative paranoia. This is an intelligent national defense concern.

I agree. Don't sell China the stuff we need for building tanks. Nationalize it and let them lease the facilities if they need them.

A nation of lawyers, accountants, MBAs and bankers will fail. Period. Our two-headed monster of antagonism toward blue collar industry and greed infested CEO culture will be our downfall. I am not in favor of bailing out incompetent auto industry CEOs, yet the blow to our manufacturing base could be catastrophic. We can't ALL sell insurance and make a living on eBay. Someone has to build things.

Really? I see a lot of successful countries without a lot of heavy manufacturing capabilities. They aren't Team America World Police, but they maintain a higher standard of living than us just buying, selling, insuring, supporting and programming stuff made someplace else. I'm not saying that will work here, but I wouldn't rule it out.

[Deut28Thirteen]

It was marketing to a poorly-educated customer base. It had to mislead them or it would've gone out of business. In so doing, they made a good business decision and were rewarded--unlike GM, whose executives have no clue how to mislead Americans and therefore should be denied a bailout, so sayeth RedScare.

Seriously though, times change. Wal-Mart got where it is by demanding that producers lower their costs and by then passing along the savings to consumers. And the outcome of that was that producers have moved production overseas. It has increased the buying power of a ridiculously large number of low-income American consumers and is responsible for the employment of millions of people formerly living in squalor in third-world countries. They are a testament to everything that is great about capitalism and about the United States. They are true humanitarians. Someone needs to give them a frickin medal.

If they want a frickin medal outsource to Africa they need much more than China, and the labor would bemuch cheaper. You are right and thats why I said Wal-Mart was bad for America. Wal-Mart does demand the lowest prices because their the worlds biggest retailer, and producers want to sell at their stores. Wal-Mart says we are going to buy this product from you(producer) at 3.50 even though it cost you, the producer 4.00$ to make it. It forces producers to go overseas for cheap labor because they want to make profit and sell at Wal-Mart, and you cant do both if your manufacturing jobs are in America. The video was made in late 90s or early 2000s cant remember, but it was showing how Americans in parts of the country were dealing with higher unemployment rates befor the gas prices skyrocketed, before the houseing problems, befor the banks failed, and before this whole economic problem. Insteed of making 25$ an hour in a plant there forced to go make barely above minimum wage working for Wal-mart, the compinay that forced the jobs to go over seas in the 1st place.

I'd beg to differ. So would my grandparents, who lived through the Great Depression and had to rely on squirrel, oppossum, raccoons, and other such scumptious varmints for meat during those years.

You know what I ment and you know this is the greatest economic downturn since then. People in Detriot dont give a F about what happened in the 1930s when people say "Let Detriot go bankrupt". The citizens of of that city and surrounding area are worried about their jobs how are they going to provide for their families if the big three go bankrupt. The CEOs are still going to make their mulit million doller pay cheecks, because there just going to lay people off. The media needs to stop making it seem like we are just bailing out the CEOs cause were not. We are helping out the citizens than had notthing to do with their bosses failure at leading a corporation. I am not saying outsourcing is the cause of the big threes fall, but could help bring down the unemploment rate, which could go up if the big three fail. And I am not saying bring back all the jobs cause we do want our products to be able to compete in world markets. We can bring some back because Americans need jobs.

Your lines of argument are contradictory. We're losing advantage to China, which manufactures inferior products. Seems to me more like the reality is that to the extent that there is a market for inferior products, we're letting China take the lead, and that to the extent that there is a market for superior products--we buy Japanese.

If America wants to keep importing goods that have clamied lifes is up to them. The USFDA opened up offices in China which I am glad they did. If your going to import our 800 millon dollers of meds and 5 trillion in food make sure it is safe! Thats the problem their should not be a market for inferior products. China should be making guilty goods.

China is really more friendly to us than we are to them. They want peace between us. If we cut ties with them, they'd be up ____ creek. If there's any doubt about it, just look at their economy right now; they're so reliant upon us that when we go into recession, they go into depression.

Any body can put on a friendly face. They were caught spying on American Technology. The two nations are going head to head for the worlds oil. We owe them close to 600 billion. Like I said anybody can put on a friendly face.

If ever there was an argument for Globalization, peace between nations is that argument.

I would love peace. The problem with that is some people dont want peace. Take a look at world history. One could argue that war has been going on every day since written history. It is a disgrace that war has been apart of this worlds culture in a way that it has.

[Jeebus]

Really? I see a lot of successful countries without a lot of heavy manufacturing capabilities. They aren't Team America World Police, but they maintain a higher standard of living than us just buying, selling, insuring, supporting and programming stuff made someplace else. I'm not saying that will work here, but I wouldn't rule it out.

Those countries don't need heavy manufacturing capabilities because in times of war, they are protected by "Team America World Police". Who is going to protect us once we give up all of our manufacturing capabilities?

[TJones]

Duet, the whole reason for letting them go bankrupt is so the UAW can be dissolved. The Big 3 is sooooooo broken, that it has to be almost completely destroyed and started over again. You start with the foundation, they will be able to employ workers and possibly double the workforce as they will have much more money to hire more workers, because they won't be paying for workers who aren't actually working anymore.

EDIT: GM, FORD, and Chrysler are not going to fire all the workers and rehire NEW people that they have to spend time and money TRAINING them to learn how to put that bolt on the upper chimichanga. The downside is that those that are to remain in place will be taking a dramatic pay decrease, so they will have to cutback on cigarettes and beer purchases and concentrate on milk and bread for the family instead.

[RedScare]

Really? I see a lot of successful countries without a lot of heavy manufacturing capabilities. They aren't Team America World Police, but they maintain a higher standard of living than us just buying, selling, insuring, supporting and programming stuff made someplace else. I'm not saying that will work here, but I wouldn't rule it out.

I don't think a comparison between small countries with small national defense forces and a 305 million population country with the world's largest military capacity is valid. If we are going to also fundamentally change our outlook and standing in the world, perhaps we could survive. But, I doubt it. Maybe if we broke up into 4 or 5 Euro-style countries, some of the offspring could do without auto manufacturing, but a complete US cannot make do without its manufacturing base.

What we are watching is the argument on the limits of capitalism. By its nature, the manufacturing goes where it is cheapest. Lack of manufacturing not only leaves a country vulnerable to geopolitical forces, but does not provide work for its non-white collar workforce. While it is easy and simplistic to say tough luck, that uneducated and unemployed group will make life miserable for the employed through higher crime, substance abuse and civil unrest. A government owes it to its lesser educated citizens AND its better educated citizens to support a manufacturing base within its own borders. This irritates the true free marketers, but an unfettered free market would run all industry out of the country. That is not good for the majority of the populace.

[TJones]

Hey, what do you know ? I just saw Wolf Blitzer talking about Deerborn and Flint and guess where they were trying to do interviews ? At a BAR !!! Problem was, nobody was in there, looks like they are tightening belts already. Great foresight on those autoworkers' parts.

[houstonmacbro]

For decades, the big three put their greed & their goal of billions in profits above their desire to make quality automobiles.

In 1982, I made the switch to much higher quality Japanese automobiles. I never looked back.

The big three deserve to be where they are.

Agreed. I bought my first foreign car (Isuzu Trooper) back in 1995. I loved that truck. I moved to Hondas after that and have never been happier. This was after owning several American cars (Ford and Chevy). The quality is incomparable in my opinion and I wouldn't buy American any time soon.

[editor]

Kind of scary but we already owe China $350 billion.

I don't see what's scary about it. Every country owes every other country money. It's part of the game. People try to make it into some kind of "scary" thing, but if you understand it, it's not scary at all.

Reminds me of the Japanese scare in the 80's when they bought Rockefeller Plaza and everyone thought it was the end of the world.

[memebag]

I don't see what's scary about it. Every country owes every other country money.

How much does China owe the US?

[editor]

GM's YTD 3Q 2008 total costs and expenses were $132,534,000,000. The CEO's compensation (incl. salary, bonus, and "other") was $15.7 million in 2007. That's about 0.01% of their total costs and expenses.

Or it could be 314 full-time people paid $50,000/year.

I'd rather see 300+ people paid a decent wage than laid off so one person can make $15 mil.

Is he incompetent? And if he is so incompetent, how on earth did he land himself this sweet, lucrative gig?

Because he was hired based on who he knows, not how well he did his last job. Same as in many other boardrooms.

And how come he keeps getting raises?

Because his raises are determined and voted on by people who are his boardroom friends. His compensation is not tied to performance like the other 30,000 people at the company.

As of Sept. 30, 2008 GM had $16,007,000,000 of cash and cash equivalents on hand. In the 50 days since, it would be expected that the CEO would have earned only about $2.15 million in compensation, or about 0.013% of that category of assets.

Assuming there are weekends in that 50 days, that means he made "only" $8,144/hour. How will he ever manage to make ends meet when it takes him three hours to make what the average American earns in an entire year?

I have no doubt that the use of the corporate jet was an investment that paid off for GM.

It only pays off if GM gets the bailout. If it doesn't, then its money poorly spent.

I believe China tried to buy Unocal several years ago, but Congress wouldn't allow it. Chevron eventually gobbled up Unocal.

Now that China is a member of the WTO, Congress may not be able to block a sale this time.

[editor]

If you look back at the beginning of this thread, you'll see my comment that having no auto manufacturing base is a national security concern.

What about clothing? You can't buy "Made in America" clothing for the most part unless it's American Apparel or Jos. A. Banks.

What are all those soldiers going to wear? They won't fight nekkid!

The point is that there are lots of manufacturing sectors that America isn't in anymore. Agricultural sectors, too. They're not a national security concern. Equating the problems in Detroit to national security is a red herring.

[RedScare]

What about clothing? You can't buy "Made in America" clothing for the most part unless it's American Apparel or Jos. A. Banks.

What are all those soldiers going to wear? They won't fight nekkid!

The point is that there are lots of manufacturing sectors that America isn't in anymore. Agricultural sectors, too. They're not a national security concern. Equating the problems in Detroit to national security is a red herring.

So, your counter to my national security argument is to point out another industry that has been decimated in the US? Your argument is, "Don't worry about losing the ability to build tanks, because we can't make clothing either?" Would you really like to go there?

The point is that the purpose of government is to provide for the needs of its citizens. For 28 years, the government has been making it easier for a select few to make billions by shipping manufacturing offshore, rather than making it easier to keep that manufacturing in the US. This benefits no one in the long run, since a consumer based society needs well paid consumers to function. We made up for that shortfall by issuing easy credit until the financing scheme collapsed.

It was amusing to watch Pat Buchanan throw a temper tantrum yeaterday about France supporting Aerobus. He was apopleptic that Boeing was at a disadvantage because of France's socialist policies. What Pat never addressed was why he was mad at France. If France's socialist policies make Aerobus competitive, and therefore put French workers to work, is that not a validation of France's socialist policies? For decades, we've derided the failure of French socialism in the face of the US capitalist juggernaut. We bragged that free market capitalism proved superior to socialism. Why is Pat Buchanan now screaming at me that socialism is putting Boeing at a competitive disadvantage? Why is socialism putting US automakers at a competitive disadvantage?

There are no rules that prohibit governments from supporting those industries that help its citizens. If France gains greater employment through subsidizing its manufacturing companies, and the citizens approve of those subsidies, then it will occur. US complaints to the contrary sound like the same complaints the Texas Longhorns might make when Rice beats them on a trick play. The play is within the rules and it equalized a stronger competitor. The question is not when will France quit subsidizing Aerobus. The question is do we need to do the same for the benefit of our citizens.

As for the Big 3, some well thought out bankruptcy plans are coming out that will streamline the auto industry, unload crushing burdens brought on by greedy unions and incompetent management, and address warranty and financing issues by providing government guarantees. The Big 3 want to dictate their own terms, just as they did to get themselves into this mess. There is a huge challenge to Democrats to stare down the unions that have helped them over the years. I hope they do the tough thing...the right thing...by pushing GM to a pre-planned bankruptcy. It will be a big test to prove they are bigger than the GOP who never once stood up to their deregulation backers, allowing this collapse to occur. At this point, all we can do is wait and hope...and maybe write a few letters to your congressperson.

[RedScare]

All this talk of auto manufacturer bailouts made me think it was time for a RedScare Auto Bailout, so I called my bank and paid off my truck a month early. No more car payments for me! WooHoo!

[crunchtastic]

All this talk of auto manufacturer bailouts made me think it was time for a RedScare Auto Bailout, so I called my bank and paid off my truck a month early. No more car payments for me! WooHoo!

Just think, all that extra cake in time for extra holiday cheer!

[RedScare]

Just think, all that extra cake in time for extra holiday cheer!

Pouring a big ole glass of Holiday Cheer as we speak. Not having having been car note free since 1990, I had forgotten the sense of accomplishment that goes with that last payment. Hell, I may go buy a flatscreen TV!

[Mark F. Barnes]

So, your counter to my national security argument is to point out another industry that has been decimated in the US? Your argument is, "Don't worry about losing the ability to build tanks, because we can't make clothing either?" Would you really like to go there?

The point is that the purpose of government is to provide for the needs of its citizens. For 28 years, the government has been making it easier for a select few to make billions by shipping manufacturing offshore, rather than making it easier to keep that manufacturing in the US. This benefits no one in the long run, since a consumer based society needs well paid consumers to function. We made up for that shortfall by issuing easy credit until the financing scheme collapsed.

It was amusing to watch Pat Buchanan throw a temper tantrum yeaterday about France supporting Aerobus. He was apopleptic that Boeing was at a disadvantage because of France's socialist policies. What Pat never addressed was why he was mad at France. If France's socialist policies make Aerobus competitive, and therefore put French workers to work, is that not a validation of France's socialist policies? For decades, we've derided the failure of French socialism in the face of the US capitalist juggernaut. We bragged that free market capitalism proved superior to socialism. Why is Pat Buchanan now screaming at me that socialism is putting Boeing at a competitive disadvantage? Why is socialism putting US automakers at a competitive disadvantage?

There are no rules that prohibit governments from supporting those industries that help its citizens. If France gains greater employment through subsidizing its manufacturing companies, and the citizens approve of those subsidies, then it will occur. US complaints to the contrary sound like the same complaints the Texas Longhorns might make when Rice beats them on a trick play. The play is within the rules and it equalized a stronger competitor. The question is not when will France quit subsidizing Aerobus. The question is do we need to do the same for the benefit of our citizens.

As for the Big 3, some well thought out bankruptcy plans are coming out that will streamline the auto industry, unload crushing burdens brought on by greedy unions and incompetent management, and address warranty and financing issues by providing government guarantees. The Big 3 want to dictate their own terms, just as they did to get themselves into this mess. There is a huge challenge to Democrats to stare down the unions that have helped them over the years. I hope they do the tough thing...the right thing...by pushing GM to a pre-planned bankruptcy. It will be a big test to prove they are bigger than the GOP who never once stood up to their deregulation backers, allowing this collapse to occur. At this point, all we can do is wait and hope...and maybe write a few letters to your congressperson.

For the most part, not a truer statement has been made in this entire thread, especially what I high lighted in Red. The rest is much of an editorial, which hits on points that are very true in point, some may or may not agree with them, but they stand on their own accord none the less. These days Socialism in term is thrown around rather loosely, and a lot of knee jerk rhetoric seems to follow the subject around, no matter what circles you are a member of. There is mass confusion amongst the natives these days. A lot of good people out here that are completely lost, don't know which way to turn right now. And even a greater number, never had a clue to begin with, and some those it's really of no fault of their own, because they've had their head down in the grind to try and stay ahead, that they've never come up for air long enough to get a chance to see. The rest of those have never really given two cents either way, as long as their check was in the mail every month. And I am not referring to just people on welfare, but the huge amount of people we have on trumped up disability, with the help of crooked doctors are riding out the system in an Oxycontin daze. Then there are those that fall in to either and just exist from day to day, by whatever means necessary.

Barrack Obama is in a unique position, if he can pull it off, to go down in History as something far greater than just being the first black President. If he can put together a team of real ass kickers, people who will take it to the powers to be, and turn this thing around and pull us out of this tail spin we are in economically. This thing is a total wreck, and in havoc currently. The current powers to be are going through the motions, but not getting much done other than making sure there are enough life boats for them, should the ship go down. I've been paying close attention to these financial sessions they've been having, and I just haven't seen anything of any substance in in yet. Just a lot of posturing, and empty rhetoric. We are seeing however, those that are deep in the pockets of these fledglings. They are fighting tooth and nail to see that these entities do anything but fall into the hands of the government, by being nationalized and the government bean counters and auditors get to combing through the books, and all the skeletons come falling out of the closets. If the truth were known about the goings on behind the closed doors of these companies, half of the congress would be under criminal indictments. As Red stated earlier, now is the time for the Democrats to put up or shut up, they can make a stand here and show that they really are looking out for what best for our country, or just fall in line with the rest and continue on the same road we've been on for the last thirty years. If Obama can pull this off, he will rightfully go down as one of the greatest Presidents in History. This is a fine mess we find ourselves in, and in all fairness, it will take more than a single term to really right this ship, and get it back on course. It is also going to take great strength and leadership, because he is going to face opposition from both sides, because both sides are dirty in the dealings at hand, it's not going to be easy by any stretch. A big thing Obama has going for him, which can be a two edged sword, is this rock star persona he has, and the media attention he draws. This could be his ace in the hole, when it comes to standing up to big business, big politics, and big brother. People are desperate for help, for change, for anything that resembles as progress, from the depths we find ourselves in. Obama can turn up the heat under the feet of those not willing to help him win this war, by using the media to stimulate the vote against these rebels come time to be elected, just the way he did in favor of himself this year.

As Red so eloquently stated, Damn all this bailing out, and let them fall into pre-arranged Bankruptcy, restructure under those protections, strip them clean of excesses, including unions, and get back on track. Simply building different cars is not going to fix the problem, cutting out the billions in excesses will. That includes throwing 300 million a year into NASCAR, and cutting down some of the outrageous marketing crap. If the product is worth a crap, it will sell itself. Cut out the billions that are thrown away on developing cars that never make it to the assembly line, outrageous concept cars, that are not only out of the question, but just plain ridiculous. Build a better mouse trap, not fancier cheese.

[editor]

All this talk of auto manufacturer bailouts made me think it was time for a RedScare Auto Bailout, so I called my bank and paid off my truck a month early. No more car payments for me! WooHoo!

Congrats! I remember that feeling. There's nothing quite like it, especially when you're driving around the next day in something that is supremely, ultimately, unquestionably yours.

But don't go crazy and try to haul that flat screen TV home in it. You need 300 HP and a V-8 to do something like that. Detroit says so.

[TJones]

...

[Fringe]

All this talk of auto manufacturer bailouts made me think it was time for a RedScare Auto Bailout, so I called my bank and paid off my truck a month early. No more car payments for me! WooHoo!

If you had waited I'm pretty sure the government would have paid it off for you.

[RedScare]

If you had waited I'm pretty sure the government would have paid it off for you.

[TJones]

Surely there would have been a few bucks in that $25 Billion for me, don't you think?

So, I pay off the truck yesterday, and I decide to take it to the dealer to get an oil change and the tires rotated. Gotta keep my paid off truck in good repair, right? 40 bucks and an hour later, I drive off. What is that clicking sound? Why is it handling funny? I stop after only a block to find that they forgot to tighten the lug nuts, and two wheels nearly fell off. Sheared half a dozen lugs right off. After another couple of hours waiting for a tow back to the dealer, my paid off truck is in the shop getting new studs, and I'm driving this sweet little Tacoma pickup around for a few days.

Great way to celebrate paying off a vehicle, huh? At least the service manager was extremely helpful. Kept me from blowing a gasket on top of a lug nut.

Well, you should have let the whole thing fall to the ground. Huge lawsuit and it would be RedScare Toyota, where all HAIF members get half off MSRP !!! At the very least you would be driving a NEW '09 Tundra.

[RedScare]

Well, you should have let the whole thing fall to the ground. Huge lawsuit and it would be RedScare Toyota, where all HAIF members get half off MSRP !!! At the very least you would be driving a NEW '09 Tundra.

Lawsuits are a pain. I oughta know. As soon as I felt it shudder, I shut it down right in the middle of Kirby, next to Reliant Stdium. Didn't even try to get to the curb. I knew immediately what happened. At least it didn't cause any body damage.

To get back on topic, GM may actually run out of money before Congress even votes. I wonder if secretly, Congress is trying to freeze them into bankruptcy. That would provide some cover for the union backlash.

http://www.msnbc.msn.com/id/27840322/

[TJones]

Lawsuits are a pain.

You are sooooooooooo selfish, think about your fellow HAIFers, I need a GM job at RedScare Toyota.

Anywho, I am guessing this professional work happened at Mike Calvert on 610 ?

[RedScare]

You are sooooooooooo selfish, think about your fellow HAIFers, I need a GM job at RedScare Toyota.

Anywho, I am guessing this professional work happened at Mike Calvert on 610 ?

I probably shouldn't have mentioned Kirby Drive, huh?

Like I said, though, as prepared as I was to blow a major league gasket, the service manager was all over it. Before I even got back to the dealership, he had me set up with a free rental and an apology. The screwup on the tire rotation speaks for itself, but their response to it leaves little to gripe about. Assuming the repairs are done well, I will bear no ill will towards them whatsoever.

[TJones]

I probably shouldn't have mentioned Kirby Drive, huh?

Like I said, though, as prepared as I was to blow a major league gasket, the service manager was all over it. Before I even got back to the dealership, he had me set up with a free rental and an apology. The screwup on the tire rotation speaks for itself, but their response to it leaves little to gripe about. Assuming the repairs are done well, I will bear no ill will towards them whatsoever.

.....and people think Jiffy Lube is the only place that can screw up your car.

[RedScare]

.....and people think Jiffy Lube is the only place that can screw up your car.

Of course, Jiffy Lube would have denied it was their fault.

[TJones]

Of course, Jiffy Lube would have denied it was their fault.

In Jiffy Lube's defense, you may have just had a cross threaded oil drain bolt. Your situation, I think, trumps that in the incompetence file.

[RedScare]

In Jiffy Lube's defense, you may have just had a cross threaded oil drain bolt. Your situation, I think, trumps that in the incompetence file.

Oh, mine is record setting incompetence. Jiffy Lube would have blamed it on a HUGE pothole.