So... What About a GM, Chrysler, Ford Bailout?

[ScottA]

Next will be the construction companies. I need a bailout.

[peternap]

Da%$....I sold all my GM Pre-market because I thought they were backing out.
Oh well, I made 500 bucks and for some reason, the stock is dropping (I went to the camera shop and Bass pro and haven't been keeping up)

[wildbil]

I say we should have left the banks to fail and now let the car companies fail. yes times will be tough but the government could put all that money into the normal people in this country.

let me get this straight...the banks and car companies couldnt sell a decent product, therefore they couldnt get our money from us. so they turn to our government who in turn gives them our money.  there is absolutely no logic there.

I'm going to start a business that sells jars of poop, then see if the gov will give me a few million to keep production going.

[apaknad]

sorry, they "been there done that". the feds have been selling jars of poop to the public for decades.

[Squirl]

This kind of shows how a free markets aren't "free."  The Japanese and European Car manufacturers are now getting bailouts from their governments.  This is simply a way to undercut American manufacturing.  I hope we Tariff the hell out of them, but we won't. 

[peternap]

I'm playing Russian Roulette with Ford today. Just bought 6000 shares at 1.48.

Popcorn time!

[muldoon]

inline with my if they want to build plants in mexico, let mexico bail them out comment it seems that China may be looking to simply buy up GM and Chrystler.

http://www.thetruthaboutcars.com/breaking-news-chinese-may-buy-gm-and-chrysler/

Chinese Automakers May Buy GM and Chrysler
By Bertel Schmitt
November 18, 2008

Chinese carmakers SAIC and Dongfeng have plans to acquire GM and Chrysler, China's 21st Century Business Herald reports today. (A National Enquirer the paper is not. It is one of China's leading business newspapers, with a daily readership over three million.) The paper cites a senior official of China's Ministry of Industry and Information Technology– the state regulator of China's auto industry– who dropped the hint that "the auto manufacturing giants in China, such as Shanghai Automotive Industry Corporation (SAIC) and Dongfeng Motor Corporation, have the capability and intention to buy some assets of the two crisis-plagued American automakers." These hints are very often followed with quick action in the Middle Kingdom. The hints were dropped just a few days after the same Chinese government gave its auto makers the go-ahead to invest abroad. And why would they do that?

A take-over of a large overseas auto maker would fit perfectly into China's plans. As reported before, China has realized that its export chances are slim without unfettered access to foreign technology. The brand cachet of Chinese cars abroad is, shall we say, challenged. The Chinese could easily export Made-in-China VWs, Toyotas, Buicks. If their joint venture partner would let them. The solution: Buy the joint venture partner. Especially, when he's in deep trouble.

At current market valuations (GM is worth less than Mattel) the Chinese government can afford to buy GM with petty cash. Even a hundred billion $ would barely dent China's more than $2t in currency reserves. For nobody in the world would buying GM and (while they are at it) Chrysler make more sense than for the Chinese. Overlap? What overlap? They would gain instant access to the world's markets with accepted brands, and proven technology.

---
I think this is timed propaganda, funny how it's coming out now.  I dont see how china would be dumb enough to buy them as is, but wait for chap11 or chap7 protection to ditch those pension and uaw responsibilities.  Ironic thing is, once they lose those liabilities they stop being a broken company and wont need to be bailed out. 

[desdawg]

I watched part of a Senate hearing on C-span last night. The witnesses were the CEO's of the big 3, president of UAW and one economist peter-morici.
The economist expressed a negative reaction to the bailout saying he doubted the ability of the big 3 to repay the loan if it was made. He also stated that bankruptcy was a good option for them. Senator Dodd who chaired the hearing called him the Mouse that Roared. I couldn't watch the entire thing as my eyelids grew heavy. It aired at 10:00 at night. Hopefully it will be on again. Some of these move from c-span to c-span2
Her is a blurb I couldn't get the video to play when I opened it.: http://idiotinc.com/look-at-me/liveblogging-the-senate-automaker-bailout-hearing/#more-524

[glenn kangiser]

I  think the Chinese bailout is the answer.  Let them buy the big 3 and fire the CEO's and ones who are destroying them.  The quality issue will work itself out.  No worse buying a Chinese car than a Mexican car.  The jobs are not here anyway - or maybe China will do it here for the cheap labor once the unions are out with their $75 hr. nut twisting labor.

[peternap]

I  think the Chinese bailout is the answer.  Let them buy the big 3 and fire the CEO's and ones who are destroying them.  The quality issue will work itself out.  No worse buying a Chinese car than a Mexican car.  The jobs are not here anyway - or maybe China will do it here for the cheap labor once the unions are out with their $75 hr. nut twisting labor.

American made, ain't nothin fina....comes straight to you, on a slow boat from China

Damn Ford is still tanking. Down to 1.39. I'm gonna need a lot of popcorn to follow this through.

[desdawg]

I  think the Chinese bailout is the answer.  Let them buy the big 3 and fire the CEO's and ones who are destroying them.  The quality issue will work itself out.  No worse buying a Chinese car than a Mexican car.  The jobs are not here anyway - or maybe China will do it here for the cheap labor once the unions are out with their $75 hr. nut twisting labor.

At $65/hr x 40 hrs X 52 weeks a person would get paid $135K a year to be on an assembly line running a rivet gun or an impact wrench. They said it cost $105K to entice an employee to make an early departure, severance and healthcare I assume. Could you loan me $25B so I can afford to downsize. What? The UAW President didn't address that while I was listening. The main conversation from the CEO's was about how they were going to improve and become profitable. 

[muldoon]

maybe.  I think it's more likely that china would buy gm for its assembly technology and existing assets.  I think GM china is one of the very few profitable business units left in GM.  I dont understand why they would want to sell here in the US at all given the market, the credit environment to come, the amount of debt burdened people, and expectations from americans on safety and "greeness".  If GM falls into chap7 bankruptcy, I could see china come in, pick up the carcass, and move production and eventually 95% of sales to china over the next decade.   

Keep in mind in the US, we have maybe 6 or 7 major cities; ie Chicago, New York, Los Angeles, Houston..  China has over 200 cities with more than 3 million.  It's a developing market and demand is increasing.  Their recent talks with Russia and Iran puts them on good even footing to keep oil flowing no matter what happens.  I can see China repeating much of what our 1930's looked like and coming out of it with government investment in Infrastructure and manufacturing.  They are very much in the same situation we were in at that time, when the industrialized revolution turned the US into a cheap labor manufacturing powerhouse that undersold England and most of Europe.  Eventually the credit and fraud swamped the game and needed a contraction.  We arose because our debt was low and we were in a position to spend money putting people to work -- much like China today. 

It sure would be unfortunate if we took the role of Germany or Hungary in that analogy. 

[peternap]

Hmmm....lost money today on Ford. Made some but not as much as I lost.

Bad day!

But there's always tomorrow.

[MountainDon]

So I see on the news that the CEO's of GM and Ford travel on one of a number of private corporate jets. That's how they arrived in DC with their hands out. They just don't get it do they? I think they are slime.

At least the Chrysler CEO said he was willing to work for a dollar for the next year. The GM guy said he wasn't ready to discuss that and the Ford CJO (Chief Jerk Off) said he thought things were fine as they are. That's $28 million worth of being fine last year for him.

Interesting thing I found in an article on Honda Motor Company... (couple years old)

Honda doesn't disclose executive pay in detail, but the sum of salaries and bonuses that Fukui [ed: Takeo Fukui is Honda's 61-year-old president] shares with 36 board members, $13 million, is just about enough for the boss at a big American company.

The FORBES ARTICLE for the curious

I love my Honda!

[MountainDon]

Peter, I think you should sell your Ford stock no matter what the price. $1.26 is better than zero. If my prayers are answered they will be broke by Thanksgiving along with GM and Chrysler! I am totally incensed at these guys.

[peternap]

Peter, I think you should sell your Ford stock no matter what the price. $1.26 is better than zero. If my prayers are answered they will be broke by Thanksgiving along with GM and Chrysler! I am totally incensed at these guys.

I agree with you about the companies needing to go broke Don. I expect the stock will bounce today and will get sold. I doubt any of them will go belly up on Thanksgiving though. They have more money than they're letting on, especially Ford.

Of the three, Ford is in the best shape and actually showed a profit first quarter (sort of, there's a lot of BS to sort through).

It makes me sad to see these hearings and se just how poorly the biggest companies in this country are run and to see just how stupid and out of touch our government is.

November has been an unpleasant month so far. There's a lot going on, most bad, but watching my predictions come true and seeing my country unravel is right at the top of the list of concerns.

[peternap]

I just looked at everything and my guess is any bounce will wait until next week.
To big a gamble to take on a stock that was a flip of the coin in the first place. Unless something changes in the next couple of hours, I'll pull the ripcord in pre market.

[desdawg]

This is from another forum I frequent. A little too much nest feathering going on. Sounds like they took their business plan from the governmental administration play book.
A Japanese company ( Toyota ) and an American company (Ford) decided to have a canoe race on the Missouri River. Both teams practiced long and hard to reach their peak performance before the race.
On the big day, the Japanese won by a mile.
The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team made up of senior management was formed to investigate and recommend appropriate action.
Their conclusion was the Japanese had 8 people rowing and 1 person steering, while the American team had 8 people steering and 1 person rowing.
Feeling a deeper study was in order, American management hired a consulting company and paid them a large amount of money for a second opinion.
They advised, of course, that too many people were steering the boat, while not enough people were rowing.
Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team's management structure was totally reorganized to 4 steering supervisors, 3 area steering superintendents, and 1 assistant superintendent steering manager.
They also implemented a new performance system that would give the 1 person rowing the boat greater incentive to work harder. It was called the 'Rowing Team Quality First Program,' with meetings, dinners, and free pens for the rower. There was discussion of getting new paddles, canoes, and other equipment, extra vacation days for practices and bonuses.
The next year the Japanese won by two miles.
Humiliated, the American management laid off the rower for poor performance, halted development of a new canoe, sold the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses and the next year's racing team was out-sourced to India .
The End.
Here's something else to think about:
Ford has spent the last thirty years moving all its factories out of the US , claiming they can't make money paying American wages.
TOYOTA has spent the last thirty years building more than a dozen plants inside the US. The last quarter's results:
TOYOTA makes 4 billion in profits while Ford racked up 9 billion in losses.
Ford folks are still scratching their heads.
Fords per hr labor cost (pay and benifits) is over $70, Toyota's is about $35, you do the math.

[peternap]

I got out in pre market at 1.30. Between the short profits yesterday and the losses on Ford, I lost about 550.00.  Could have been a lot worse.

I'm looking at some of the funeral supply companies. People are dieing to use them . Did you know Costco sells discount coffins

[MountainDon]

Here's an idea. Don't close Guantanamo Bay. Send the leaders of Fannie Mae, Freddie Mac, GM, AIG, Ford, etc. there. Throw out the rule book and let them rot.

[John_C]

 

C'mon Don.  Tell us how you really feel.

[peternap]

Just don't send Morgan Stanley. They just made up for yesterday. Bought 3000 at 9.03 and just sold at 10,22,

[apaknad]

i watched the highlights of the big 3 meeting w/washington and was stunned at the smugness and audacity of these A--H----S. their attitude and management and lack of leadership in looking at quarterly profits instead of farther down the road(read japanese strategies) is exactly what is driving these companies to ruin. the unions aren't helping either but they don't steer the company ship. i want the big 3 to hold out til my mom goes through god's other door (she gets my dad's retirment as income from fomoco) and then i don't care. want a bailout loan? management has to step down and unions have to renegotiate contracts. BTW, i have seen some posts where laborers are getting up to $80/hr. i would like to know where some of these figures come from. when i retired as a corr. officer at $19.69/hr the car co. line workers were making about $25/hr. that was in 2002. i know that benifits were calculated into some of these figures but they still seemed too high in some instances.

dan

[muldoon]

What good is it to give these guys a loan?  They are dead. 

From GM's latest 10-Q

Short-term borrowings and current portion of long-term debt.
September 2008: $7.21 Billion
September 2007: $5.26 Billion

In one year's time, short term borrowing and interest on long term debt has gone up by $2 billion per quarter, $8 billion per year!

GM has $36 billion in long term debt and has a negative net worth of $60 billion.

---
Why would anyone give them a loan?  Why should we, how exactly are they going to pay it back when they are burning 2 billion a quarter in losses?  Looking at yahoo finance, there entire market cap is 1.6Billion.  They are losing MORE than the entire company is worth every 3 months?  And they keep continueing to keep doing it. 

--
Heres an idea,  I want every single executive to put their entire net worth up as collateral on this loan.  Everything.  I want the unions to put the entire pension fund up as collateral.  All of it.  Now I might believe them when they say they are going to make it work because they have direct and very personal reasons to do so.  Then let's talk. 

The other side is I dont really see whats so bad about bankruptcy?  The airlines all went bk and they kept the planes in the air.  Why would GM or Ford go into BK, wash away some liabilities and emerge a healthier company?  The answer lies in lobbying money and the greed and fraud that makes all of us so mad. 

NO MORE 

[Sassy]

So I see on the news that the CEO's of GM and Ford travel on one of a number of private corporate jets. That's how they arrived in DC with their hands out. They just don't get it do they? I think they are slime.

At least the Chrysler CEO said he was willing to work for a dollar for the next year. The GM guy said he wasn't ready to discuss that and the Ford CJO (Chief Jerk Off) said he thought things were fine as they are. That's $28 million worth of being fine last year for him.

Interesting thing I found in an article on Honda Motor Company... (couple years old)

Honda doesn't disclose executive pay in detail, but the sum of salaries and bonuses that Fukui [ed: Takeo Fukui is Honda's 61-year-old president] shares with 36 board members, $13 million, is just about enough for the boss at a big American company.

The FORBES ARTICLE for the curious

I love my Honda!

Now THAT makes me mad!     We don't have any Fords...