Automakers: about $35 Billion should do it, or 50B

[we vs us]

quote:Originally posted by sauerkraut

I guess after the car makers ask for their hand-out (and/or corp. welfare), the Home Builders will be next asking for a hand out. The housing industry is in the dumper big time. Did ya hear that according to Reuters the Dow fell another 427 points today 11-19-08 and is now at the lowest since March, 2003. IMO Investors are dumping stocks in fear of Obama's tax increases. It's really looking grim..[xx(]

So let me get this straight.  You think the Dow has lost close to 4k in value over the last couple of months because investors are afraid of possible Obama tax cuts?

Please.  Clarify for me.

[waterboy]

quote:Originally posted by we vs us

quote:Originally posted by sauerkraut

I guess after the car makers ask for their hand-out (and/or corp. welfare), the Home Builders will be next asking for a hand out. The housing industry is in the dumper big time. Did ya hear that according to Reuters the Dow fell another 427 points today 11-19-08 and is now at the lowest since March, 2003. IMO Investors are dumping stocks in fear of Obama's tax increases. It's really looking grim..[xx(]

So let me get this straight.  You think the Dow has lost close to 4k in value over the last couple of months because investors are afraid of possible Obama tax cuts?

Please.  Clarify for me.

He'll have to check with Sean Hannity, Rush Limberger and Dick Morris before he can answer that Wevus. That's what they're preaching these days.[]

[Hawkins]

quote:Originally posted by we vs us

And PS, the private jet thing, while deplorable, is just big media bull**** populism.  It doesn't have anything to do with the issue.  Full stop.  These guys do similarly egregious things all the time.  Welcome to the world of the disgustingly wealthy. Welcome to capitalism!

It wasn't brought up by the media though, it was a question asked by Rep. Brad Sherman, D-California, according to the article I read.

I can't believe we still call this country the United States. We should rename it something that more accurate describes whats going on here. The "Fuedilism States of America," perhaps.

What is going on here is the taxpayers (the serfs) are being asked to give money to help keep the old money corporations (the Lords) in business.

Is capitalism dead?

[waterboy]

quote:Originally posted by cannon_fodder

Originally posted by we vs us

Dang you're wordy. Maybe you could go into politics!

Communicating online is so messy. You make some valid, defensible points. It is not an easy situation to assess. Maybe if I had as much confidence in the free market as you do it would be easier but my lifetime experience with American style capitalism makes me skeptical of market solutions. I also think market failures are more painful than most people can imagine. Stories from my parents enduring the depression and my going through "minor" recessions in this state during the late 60's and early eighties are still fresh to me. I can't imagine a country that would say "sorry folks. You made too much money back in the 60's when your UAW contract was forced down Detroit's throat. We're cutting you off. Enjoy Social Security while you can. We're going after it next."  

I look for errors in logic in popularly held opinions and explore them. I don't care what party or position they come from. Ain't nothing more popular than Union bashing in Okiehoma. I still think your assessment that labor is both the reason and the solution is faulty and more political than logical. To me its not worth the risk to find out if you're right. I did not understand that your comparison of wages was GM wages vs Toyota US wages. I would like to see a description of those wage comparisons. Maybe COI in Georgia is so low that they can effect that lower wage and benefit schedule. Maybe they decided to forego higher profits for market share. Maybe the parent company could absorb lower profit margins because of the economies provided from the homeland operations. Nonetheless its important to note that Toyotas cost a lot more than comparable Chevrolets.

And, lower wages sure didn't work in OKC with the Alera plant. Toyotas lower wages may only reflect better management of resources and costs by Toyota than GM is able to effect. One could also argue that they have more modern plants with less total labor required.

Yes, I believe, judging from the final result, that Japanese and German cars reflect better engineering which reflects better educated engineers. Our cars are pretty and fast...their cars work better, last longer and get better mileage. They have better management as well. Yes, I believe it is cultural. Our cars suffer by comparison.

Bottom line- there are way, way too many factors involved to simply scapegoat labor or labor costs. Lower them to $10 across the board. They'll still be broke. Only allow benefits after a year of employment. They'll still fail. Fire all employees the year before they become vested in their retirement plan. They will still fail. This system of producing cars is not competitive. Ask the Germans who bought Chrysler then ran away after a coupla years. Ask Volvo or Jaguar after Ford castrated their products. Latest news? GM may have an electric on the market by 2012. Woo Hoo! Prius beat them by a decade. Tesla by 5 years.

Anyway I have enjoyed the differing pov's.

[cannon_fodder]

Now, I hate to say I told ya' so... but I told ya' so.

About 2 months after their first massive "we need cash now or will go bankrupt" infusion of government money, they are both back with their hands out needing "cash now or will go bankrupt."   At least another $18 Billion or so to get them over the hump.   GM expects to need at least $2,000,000,000.00 in government money each month for the foreseeable future.

GM also plans on selling off Saab, Hummer and other brands.  Gee, who saw that coming?

Chrysler needs another $3Billion, wait.. never mind, they need at least another $5 Billion to survive.  More than double the initial $4 Bil they received.  

Now, neither has that plan ready that shows how they will become profitable companies... but they need another $23,000,000,000 to figure it out.  Did I mention the State of Oklahoma has a budget of $7 Billion for the entire year?   GM loses more government money than that in a quarter.

http://apnews.myway.com/article/20090217/D96DJ4080.html

So how deep into this do we go?  We are about $30,000,000,000 in.  If we double that and jump in for $60,000,000,000 will we then walk away, or drop another $60 Bil?  To save an industry that the Federal government already subsidizes more than any other (except maybe health care)?



A bit off topic...

Just for fun, and to anger the urban planners among us, Chrysler owns portions of the LA Subway system.  They bought it in the 1950's along with Firestone, shut it down and bricked up the tunnels so people would have to drive more.  They were afraid LA was starting to develop like NYC or central Chicago where people wouldn't need cars and it would be hard to retroactively get the government to build tons of freeways.  Solution:  By the subways and shut them down.

Thank you History Channel!

[Townsend]

quote:Originally posted by cannon_fodder



A bit off topic...

Just for fun, and to anger the urban planners among us, Chrysler owns portions of the LA Subway system.  They bought it in the 1950's along with Firestone, shut it down and bricked up the tunnels so people would have to drive more.  They were afraid LA was starting to develop like NYC or central Chicago where people wouldn't need cars and it would be hard to retroactively get the government to build tons of freeways.  Solution:  By the subways and shut them down.

Thank you History Channel!

GM bought Tulsa's trolleys up and replaced them with Busses.  So stick that in there and break it off.

[cannon_fodder]

Really?  I didn't know that.  How cool would it be to have a trolley system that the city grew around (unlike Houston that tried to superimpose one onto the existing car heavy street scape and had limited results).  Blast!

[Townsend]

This guy is angry but he covers how it happened.

http://www.lovearth.net/gmdeliberatelydestroyed.htm

In the late 1920s, General Motors secretly began to purchase trolley systems throughout the United States, using a number of front corporations. Trolley systems in Tulsa, Oklahoma, and Montgomery, Alabama, in Cedar Rapids, Iowa, and El Paso, Texas, in Baltimore, Chicago, New York City, and Los Angeles-more than one hundred trolley systems in all-were purchased by GM and then completely dismantled, their tracks ripped up, their overhead wires torn down. The trolley companies were turned into bus lines, and the new buses were manufactured by GM.
General Motors eventually persuaded other companies that benefited from road building to help pay for the costly takeover of America's trolleys. In 1947, GM and a number of its allies in the scheme were indicted on federal antitrust charges. Two years later, the workings of the conspiracy, and its underlying intentions, were exposed during a trial in Chicago. GM, Mack Truck, Firestone, and Standard Oil of California were all found guilty on one of the two counts by the federal jury. The investigative journalist Jonathan Kwitny later argued that the case was "a fine example of what can happen when important matters of public policy are abandoned by government to the self-interest of corporations." Judge William J. Campbell was not so outraged. As punishment, he ordered GM and the other companies to pay a fine of $5,000 each. The executives who had secretly plotted and carried out the destruction of America's light rail network were fined $1 each. And the postwar reign of the automobile proceeded without much further challenge.

[Conan71]

It's even worse:

GM says they are also going to go loot other govt's as well to keep them afloat, so this is only what they are asking the U.S. gov't for.

They act as if they have a lot of leisure time to make things happen.  They are still planning on sticking to multi-branding (Chevy, GMC, Buick, Caddy- no mention of Pontiac in their plans) and will phase out Saturn by 2011.

I guess they know better, but it sure would make sense to me to ****-can the GMC truck line all into Chevy, make Buick the lower tier Caddy, and looks like Pontiac is not in their long-term plans.  I figured Pont. could become sort of like Chevy's version of an "SVO".

Then you only have to pay to brand, badge, and distribute two vehicle lines.  So that might wind up with a lot of dealer consolidation, but looking around, it appears that's starting to happen anyhow.