The Plan

[Madman]

Cheers,
Madman of the People

[JWC]

Damn, that poster is funny and it hits home.

I told my brother inlaw, he buy's only Nissan, that he didn't buy an American car, but he will be buying an American car company.

He didn't think my comment was funny.

[GoCougs]

I tend to agree with the diesel engine, V8-6-4, and the EV-1 as each setback their perspective technologies 10-20 years or more in this country.... christ diesels still haven't really taken ahold yet once again

Speaking of the viability of diesel...

At my local gas station today:

87: $1.89
Diesel: $2.97

[Speed_Racer]

Haha to that poster! So true...sad, but true. If only we'd let the free market take its course.

[Nethead]

I've not been paying much attention to the bail-out.  It appears that only GM and Cerberus/Chrysler are asking for cash, with Ford saying they're OK without the cash for now and only want something like a credit line that they believe they will only need to use if one of the other two go bankrupt--although I never heard of any reasons why the bankruptcy of GM or Cerberus/Chrysler would cause Ford to need some credit(?)... 

Is that correct?

[SVT666]

I've not been paying much attention to the bail-out.  It appears that only GM and Cerberus/Chrysler are asking for cash, with Ford saying they're OK without the cash for now and only want something like a credit line that they believe they will only need to use if one of the other two go bankrupt--although I never heard of any reasons why the bankruptcy of GM or Cerberus/Chrysler would cause Ford to need some credit(?)... 

Is that correct?

More or less.

[r0tor]

Ford saying they're OK without the cash for now and only want something like a credit line that they believe they will only need to use if one of the other two go bankrupt--although I never heard of any reasons why the bankruptcy of GM or Cerberus/Chrysler would cause Ford to need some credit(?)... 

Is that correct?

If GM and Chrysler go under, their parts suppliers will more then likely go under (which Ford probably shares some of them)... and if thats the case Ford is SOL and needs to scramble to reengineer or bail-out their parts suppliers

[FoMoJo]

I've not been paying much attention to the bail-out.  It appears that only GM and Cerberus/Chrysler are asking for cash, with Ford saying they're OK without the cash for now and only want something like a credit line that they believe they will only need to use if one of the other two go bankrupt--although I never heard of any reasons why the bankruptcy of GM or Cerberus/Chrysler would cause Ford to need some credit(?)... 

Is that correct?

I'm not sure if they question is...if GM and Chrysler go bankrupt why would Ford need the money?...but if that's the question...

If/when GM and/or Chrysler go bankrupt it would drive the suppliers into bankruptcy as well and, as most automakers in NA, including the imports, use the same suppliers, there would be an upheaval in the NA industry for all of them in their ability to assemble vehicles thereby drying up their revenue source.  Money would be needed while they acquire other supply sources.  No doubt, they are looking into this now.

I hope this helps to answer your question...if you had one .

[Nethead]

Yes, the Nethead here did have a question of sorts--actually, more of a request for an affirmation of whether my brief bail-out summary agrees with the general public perception as to the bail-out postures of the three domestic manufacturers:

GM wants cash.
Cerberus/Chrysler wants cash.
Ford doesn't want cash but a credit line that it may or may not need to use, depending upon whether the other two can stave off bankruptcy in the short-term.
I could use a little cash myself.  Small denominations, unmarked, in a plain suitcase will be just fine.  No IOUs.  I will use these, uh,  contributions  to purchase the Senate seat vacated by President-Elect Barack Obama and I'll see that a proper bail-out of the Big Three gets passed.  After I get a modest percentage of those Treasury funds from the Big Three, of course...

[the Teuton]

I hope the Reps finally come to their senses and vote down the bill.

My dad came to the self-made epiphany that the automakers want this bailout because they won't have to renegotiate with the unions.  But the question is:  Why wouldn't they want to renegotiate their contracts (with bankruptcy) instead of keeping the status quo and maybe doing it all over again in a few years?

[FoMoJo]

I hope the Reps finally come to their senses and vote down the bill.

My dad came to the self-made epiphany that the automakers want this bailout because they won't have to renegotiate with the unions.  But the question is:  Why wouldn't they want to renegotiate their contracts (with bankruptcy) instead of keeping the status quo and maybe doing it all over again in a few years?

Do you mean Representatives (as in House of) or Republicans (as in those angry old men that just love pork).

As it is, the House passed the bill and Republican Senators are threatening to sink it.

[SVT32V]

I hope the Reps finally come to their senses and vote down the bill.

My dad came to the self-made epiphany that the automakers want this bailout because they won't have to renegotiate with the unions.  But the question is:  Why wouldn't they want to renegotiate their contracts (with bankruptcy) instead of keeping the status quo and maybe doing it all over again in a few years?

My prediction is that this bailout is all smoke and mirrors, not enough to make a difference, but allows the dems and carmakers a smoke shield to make it look like they tried and also seem pro-union. In a few months Chrysler/GM will go Ch. 11, allowing them to put the screws to the UAW, and the dems will say they tried.

Ford will use the fact the others now have an advantage to also put the screws on the UAW.

Sadly, much like the airlines, I suspect the taxpayers will be left with picking up a good portion or all of the UAW pension nonsense.

[Colonel Cadillac]

I hope the Reps finally come to their senses and vote down the bill.

My dad came to the self-made epiphany that the automakers want this bailout because they won't have to renegotiate with the unions.  But the question is:  Why wouldn't they want to renegotiate their contracts (with bankruptcy) instead of keeping the status quo and maybe doing it all over again in a few years?

There's some hope here:

"This package doesn't demand the fundamental core restructuring that is absolutely necessary for these companies to survive," Vitter said.

McConnell indicated he would support a proposal by Sen. Robert Corker, R-Tenn. Under that proposal, the car companies would get immediate assistance under the conditions they work with creditors to reduce their debt by two-thirds and with the United Auto Workers union to bring labor costs in line with those of foreign auto makers. If a March 15 deadline weren't met, the companies would be required to file for bankruptcy protection.

"The Corker proposal would make many much-needed and dramatic improvements to the underlying bill," McConnell said.

Corker said union leaders and car-company executives have expressed openness to those conditions, and the process would have the same effect as a reorganization in bankruptcy court.

http://money.cnn.com/news/newsfeeds/articles/djf500/200812111715DOWJONESDJONLINE001005_FORTUNE5.htm

Looks like there are a few people with their heads on straight. While this bill absolutely needs to pass, it needs to pass with the assurance that the UAW will bring their costs down and that the Big 3 have major reconstructions.

[SVT666]

The Department of the Treasury ready to prevent ?imminent failure? of the Big Three

Uncertainty swept through Detroit late last night when the Senate failed to pass a bailout plan for the Big Three automakers, but it looks as though all hope is not lost, after all, for Chrysler, General Motors and Ford. The Department of the Treasury announced on Friday morning that it will step in to help the Big Three.

Without immediate government funding, Chrysler and GM would be forced to file for Chapter 11 bankruptcy protection, a move that would likely spin both companies into liquidation. The Treasury Department doesn?t see this as a viable option for the U.S. economy, and has vowed to step in where Congress failed.

?Because Congress failed to act, we will stand ready to prevent an imminent failure until Congress reconvenes and acts to address the long-term viability of the [auto] industry,? The Department of the Treasury said in a statement Friday morning.

The emergency funding will likely come from the $700 billion already set aside for TARP funds. The Department of the Treasury has yet to announce how much funding the Big Three will receive, but look for the amount to at least equal the $15 billion Chrysler and GM have requested. Terms of the funding are also unknown at this time.

Although the Big Three are far from out of the woods, a collective sigh of relief should be emanating from Detroit this morning.

[Colonel Cadillac]

Looks like the UAW got what they wanted

[Nethead]

Actually, it looks like none of them got anything they wanted--the marketplace has apparently doomed Chrysler & GM with or without a bail-out, since all prayers for success depended on a much larger annual US sales volume in 2009 that realistically ain't happenin', per this excerpt from an article in the Left Lane News:

"According to a new study by CSM Worldwide, new car sales will fall to just 11.5 million units in 2009 ? marking the lowest total since 1982. In comparison, 12.35 million vehicles have been sold in the U.S. through the first 11 months of 2008.

According to Michael Robinet, vice president of forecast services with CSM Worldwide, Chrysler would not be able to sustain its operations at the level of 11.5 million units. If Robinet?s theory holds true, we will likely see Chrysler sold off in pieces during 2009 and 2010.

General Motors could be in the same boat as consumers are already steering clear of brands it says it intends to sell or kill off entirely. Because of this fact, CSM predicts the Big Three?s market share will slip from 2008?s 47.4 percent to just 43 percent in 2009.

As it stands now, anything below the 12 million mark is the death sentence for Chrysler and GM, regardless of how much Washington decides to give Detroit. If CSM?s prediction becomes reality, it would likely mean a long and deep recession for the entire United States, and probably the rest of the world, too."

BTW:  The effort to combine Buick, Pontiac, and GMC "under one roof" is part of the process of combining these makes into a full-line vehicle enterprise--much more marketable in a sell-off, yet without incurring the huge cost of buying all of GM.  Then, too, North Korea quietly said a GM that includes these three brands as well as Hummer and Saab is not as desirable a purchase as is a GM without these five brands.  They got that right!

[FoMoJo]

Something I heard on some discussion show that I'm still trying to digest.  Someone, an expert of some sort, said something to the effect..."the industrial sector is no longer the economical base, it's the financial sector"...I can't quite come to grips with that.  How many jobs can the financial sector generate compared to the industrial sector?

As well, it seems to me that what is happening in the US auto industry is what happened to the UK auto industry a couple of decades ago.  I hope hope not, but unless there is some intervention, it looks like it will.

One other thing...the "experts", as well as the decision makers, seem not to have an up-to-date appreciation of the domestic automaker's capabilities as far as manufacturing world class automobiles.  They refer to it as it was about 10 years ago.  Going by their comments, they all still seem to think that only Japan can build efficient and reliable vehicles. 

[MX793]

Something I heard on some discussion show that I'm still trying to digest.  Someone, an expert of some sort, said something to the effect..."the industrial sector is no longer the economical base, it's the financial sector"...I can't quite come to grips with that.  How many jobs can the financial sector generate compared to the industrial sector?

Money makes the business world go 'round.  Companies need capital to operate.  Where do they turn (normally) when they need a loan?

Companies typically invest some of their profits to build a stronger asset base.  Where do they turn for those services?

Most car buyers take out a loan to purchase a new vehicle.  Who provides those loans?

[dazzleman]

Something I heard on some discussion show that I'm still trying to digest.  Someone, an expert of some sort, said something to the effect..."the industrial sector is no longer the economical base, it's the financial sector"...I can't quite come to grips with that.  How many jobs can the financial sector generate compared to the industrial sector?

As well, it seems to me that what is happening in the US auto industry is what happened to the UK auto industry a couple of decades ago.  I hope hope not, but unless there is some intervention, it looks like it will.

One other thing...the "experts", as well as the decision makers, seem not to have an up-to-date appreciation of the domestic automaker's capabilities as far as manufacturing world class automobiles.  They refer to it as it was about 10 years ago.  Going by their comments, they all still seem to think that only Japan can build efficient and reliable vehicles. 

What type of intervention are you talking about?  Do you honestly believe that the government can succeed where private management has failed?

There's no reason why the US auto industry can't succeed.  It hasn't made the right moves to succeed, but with the right management, it could.  I doubt very much though that the government can do a better job.  Look at how well the British government did running auto companies.  It was a disaster there, and it would be a disaster here too.

[dazzleman]

Money makes the business world go 'round.  Companies need capital to operate.  Where do they turn (normally) when they need a loan?

Companies typically invest some of their profits to build a stronger asset base.  Where do they turn for those services?

Most car buyers take out a loan to purchase a new vehicle.  Who provides those loans?

All that is true, but the finance industry is still a secondary, service industry.  It facilitates the creation of wealth through other primary industries, but doesn't actually generate any wealth in its own right.  That's something we seem to have forgotten.

[MX793]

All that is true, but the finance industry is still a secondary, service industry.  It facilitates the creation of wealth through other primary industries, but doesn't actually generate any wealth in its own right.  That's something we seem to have forgotten.

I agree, there is sort of a co-existance there.  But the fact is, you can't just look at the people the financial sector directly employs, as they have influence beyond their own circle and in that sense they have an effect on employment beyond their own sector in the market.

[dazzleman]

I agree, there is sort of a co-existance there.  But the fact is, you can't just look at the people the financial sector directly employs, as they have influence beyond their own circle and in that sense they have an effect on employment beyond their own sector in the market.

I completely agree.

And that's the reason why more people supported a bailout of the financial system, as opposed to the auto industry.  A collapse of the financial system means a collapse of the total economic structure, even industries (unlike the auto industry) which are fundamentally healthy.

The auto industry is like a limb of the economy, while the financial system is the heart.  You can lose a limb and survive, but if the heart goes, the whole thing dies.

[the Teuton]

Personally, I can't wait until The Big Three consists of Ford, AM General, and Avanti.  That looks to be the way things are going.

[FoMoJo]

Money makes the business world go 'round.  Companies need capital to operate.  Where do they turn (normally) when they need a loan?

Companies typically invest some of their profits to build a stronger asset base.  Where do they turn for those services?

Most car buyers take out a loan to purchase a new vehicle.  Who provides those loans?

I was thinking more of jobs.  Ultimately, it seems, that the sector than can generate the most jobs would be the economical base.

[FoMoJo]

What type of intervention are you talking about?  Do you honestly believe that the government can succeed where private management has failed?

There's no reason why the US auto industry can't succeed.  It hasn't made the right moves to succeed, but with the right management, it could.  I doubt very much though that the government can do a better job.  Look at how well the British government did running auto companies.  It was a disaster there, and it would be a disaster here too.

It seems that there are a couple of things the GM and Chryser need at the moment; a bit of cash to keep them going and some means of getting out from under the labour and dealer restrictions they are subject to.  In order to make the right moves they need to get rid of some obstacles that are impeding them.  As for the government doing a better job, after watching some of those bozos during the hearings I wouldn't trust them to run a Kool-Aid stand.

[FoMoJo]

I completely agree.

And that's the reason why more people supported a bailout of the financial system, as opposed to the auto industry.  A collapse of the financial system means a collapse of the total economic structure, even industries (unlike the auto industry) which are fundamentally healthy.

The auto industry is like a limb of the economy, while the financial system is the heart.  You can lose a limb and survive, but if the heart goes, the whole thing dies.

While the auto industry is a limb, it is a limb of the industrial sector.  Would you not consider the industrial sector, as a whole, the heart of the economy?  I would think that it is, still, where the bulk of the people are employed and make their livings so that they can utilize the financial sector as well as other sectors such as service and recreational sectors.  The financial sector seems more like the life blood that flows between the various sectors to supply the energy and vitality to the economical system.

[FoMoJo]

Personally, I can't wait until The Big Three consists of Ford, AM General, and Avanti.  That looks to be the way things are going.

Perhaps, on a global view, that may make some sense.  However, if countries such a Germany, Japan, Korea, et al, can support multiple major automakers, the US surely can as well.  What is needed is removing the barriers that prevent them from doing so; and it's not just the unions and stupid managers.  The US has provided some of the outstanding management and engineering teams for the foreign manaufacturers that they have an interest in.

Although I have long been a Ford (racing) fan, it would be a shame to see Chevy and Dodge bite the dust .

[sparkplug]

I'm sure we can on these foreign companies if we have another world war to to build war materials. Yeah right.

The big 3 built a lot of the war machinery during WWII. Who will build it.

[Laconian]

We are already very militarized and the Big 3 retain little to no involvement in that.

[Madman]

Since the gub'mint is handing out free money, I suggest we all travel to Washington and lobby Congress to approve the CarSpin Bailout Plan!

All we need to do is fill in this official goverment form......





Cheers,
Madman of the People