Autoblog

Come on! This country should NOT support bad business decisions made by overpaid morons who make the same mistakes every few decades! ANY type of bailout will just pad the pockets of the CEOs who made the stupid decisions in the first place. LET THEM DIE. Or almost die.

Only then will they 'cleanse' themselves of stupid ass business/marketing douchebags and let the designers and engineers finally make good cars.

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Agreed on the "no."

GM shed $15 billion last quarter, $3.6B of which was hard cash. With roughly $21B in the bank, and their promise of another $5B available in loans, that means that GM has $26B left in the bank. If loss continues at the current rate, that leaves another eight quarters--two years--before the organization is totally and completely out of cash.

Could GM realistically reverse that trend, or at least patch the dollar dam by 2010? Let's look at what's hitting showrooms betweeen now and then. The Camaro muscle car. The Traverse crossover. The full-size Silverado/Sierra Hybrids. The niche Solstice Coupe. The very-niche G8 ST, and the 6.2-liter G8 GXP sedan. Possibly the Aveo-clone G3.

Ford and Chrysler are in different handbaskets, but the story isn't dramatically different: dwindling reserves of cash, no game-changing products imminent.

I've got as soft a spot as any for the Detroit 3, but the fact is, they're all burdened by contracts, sales networks, and bureaucracies far too sprawling to be supported by their remaining market share. A bailout isn't the answer. Filing C11, shedding union workforces and extraneous dealer networks, and restructuring themselves as focused niche players... is.

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Call me crazy but isn't the US Government borrowing massive amounts of money year after year to keep things going. Isn't this kind of like taking a cash advance off your nearly maxed out credit card to lend money to a friend. Maybe not the wisest choice.

To P.J. GM has the Cruz slated for 2011 and the Volt for 2010. The Volt wont make them money but if they pull it off it will be a huge PR triumph and the Cruz will make them quite a bit of money. Ford has the Fiesta and next gen Euro Focus on the way plus a new Taurus and updated Fusion. Add to that the fact that quite a bit of the losses Ford and GM have booked were due to closing plants and cutting their workforces they both have a pretty positive outlook for things to turn around in a couple of years if they can hang on. Chrysler is another story.

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It's partially the governments fault for not putting tariffs on imports which made American auto companies have to cut corners to compete Furthermore if we can spend $250,000,000,000.00 a year (that's hundreds of billions) on illegal immigrants, we can spend a tenth of that to keep a few hundred thousands US Citizens employed during the US automotive company transitions. It's well invested tax dollars and regained the moment each of those workers cashes a check worth $675 (i.e. 33% in taxes). No job = no tax, no tax = no money for government, no money for government = no country. Your choice!

The illegals cost each household an average of exactly $2,248.96. That's right out of your pocket. For $225 you help your fellow citizen. Oh and that's once, not every year!

And those are facts! Not my theories.

I gladly offer my $225 to my fellow Americans.
Coincidently, I'd gladly offer the same $225 to put up a wall on the border. Not because I don't like people, I love everyone truly, but because it's not our job to support other countries, but it IS our job to support our fellow Americans.

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Freddie Mac's CEO collected $38 million while the company he ran fell into a financial morass. He's just one example of corporate chiefs who want taxpayers to bail them out. The govt with the FED is bailing out Fannie Mae & Freddie Mac and AMAZINGLY, these yahoos still get to keep their multimillion dollar salaries while they drove the companies in the ground with bad business decisions fueled by their own greed. OH, YOU AND I, JOHN Q. TAXPAYER WILL BE RESPONSIBLE FOR THE LOANS!

Great articles to read by Bill Fleckenstein on MSN Money:
http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/CrybabyCapitalistsWhineForMore.aspx
http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/NowGreenspanDoesntLikeBailouts.aspx

Once our government starts bailing out private companies, that is plain fascism, period.

The people of this country have to realize the Federal Reserve is a private banking cartel that violates the U.S. Constitution. When our government needs money, it just has it printed or we borrow it from foreign countries. Why is inflation at nearly a 30 yr high? With all the funny money the fed is printing. Inflation is not in increase in prices, but in increase in the money supply, which makes the value of the dollar less and as a result, prices go up.

So as far as backing the Big 3 for loans. Heck, they did it for the banks already why not do it for the auto companies? This country is beyond redemption financially. I shall not bother the people with an analysis of why the Federal Reserve System, fiat currency,fractional-reserve central banking. and unlimited "monetization of governmental debt are extraordinarily bad things-America and the rest world are about to be given another opportunity to learn what they didn't learn in 1932.

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NO NO NO NO NO NO NO NO NO NO NO!!!!!

that about sums it up. Hey how well did that Chrysler government bailout work in the '80s? The government should do whats best to ensure an even playing field and let market dynamics determine the rest.

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Randy,

We shouldn't be giving money to the illegals OR to companies who make dumb decisions. GM's CEO's compensation in 2007 was $15.7M, according to USA Today; Ford's CEO made $28M in the same year! I'm willing to bet the board of directors each made themselves $5-6M, too. Nope, we don't need them to keep paying these salaries and lending them money, too!

Anyone ever see the movie Rounders? When Matt Damon's character asks John Turturro's character for money to pay off a debt, Turturro turns him down because he can't give him all the money he needs and, thus, if he gives him what he can he only buys him a few hours, a day maybe, before they whack him. The same principle applies here. We're wasting money if we "loan" it to the Big 3 BEFORE they make the significant changes they need to make to stay in business. All we'd be doing is prolonging their death at our expense.

NO MONEY FOR THE BIG 3!!!

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@Fernando

I do understand your argument however if we choose to abandon the American business thus ignore the American worker, we let the entire country (and that's not an exaggeration) go to hell in a hand basket.

In addition to the "bail out" tariffs on every automobile sale that has its routes (or end up in the bank of) another country whether or not they build them here or not should be in place.

If you look at electronics, (tvs, phones, cells, vcrs, dvd players, tools) and the vast majority of every other product that sold in this country, you'll find they are made in another country more times than not. This is because the American companies cannot be competitive with slave wages, slave labor, over working, lack of human rights etc etc. No American company can get away with any of these things, thank God.

Instead, so the American consumer can have their toys (including me) we buy things at a discount from countries. These other countries lack labor laws, human rights laws, slave labor laws, human trafficking laws. Thus the product is cheaper and we buy it. Yeah we save 10 bucks now but in the end we make it so the American company that makes competing products can't compete because we actually protect human rights. Thus tariffs are needed to protect them. Remember, just because it saves you 10 bucks and says "Made in China" doesn't mean you should be able to sleep at night, especially when people were abused in the manufacturing of your toys.

In closing. Bail the US companies out and initiate tariffs so that we can compete in our own country without cutting corners. And that my friends is why it's partially the governments fault (and ours for letting them serve us, i.e. voting)

Ahhh, the power of voting! What we could do if we only did.

P.S. Electronics is not the only thing we outsource. Try this on for size: news, music, television, entertainment, pharmaceuticals, water, food, toiletries, cars, clothing. Whens the last time you bought something that said "Made in America". How much longer do you think we have before we don't have rights? If we keep feeding foreign companies that enslave, what is our fate? Can we change it?

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Hey how well did that Chrysler government bailout work in the '80s? -Boneheadotto

Late 70s actually... & they were LOAN GUARANTEES not a bailout. Loans Chrysler paid back 7 YEARS early. Ask Chrysler stock holders or fund managers holding pentastar assets how much profit the rescued automaker brought them.

Chrysler with strong design (& profits) looked very good to Daimler Benz almost 20 years after those government back loan guarantees.

Wanta place bets on Freddie Mac or other actual bailouts paying back their debts? Like it or not the Detroit based car companies still effect the American economy (both direct work force & the numerous supplier based industries).

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>It's partially the governments fault for not putting >tariffs on imports which made American auto >companies have to cut corners to compete

Yeah, put tariffs on imports, and the Big 3 would have relaxed and eventually become even less competitive. Labor costs in Japan are not cheap, our guys just blew it.

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"How about taking that 25Billion & improving the healthcare system in the country which leaves 40 million people uninsured? "

Because the health of an individual is not, and should never be the responsibility of the government. This is an issue best handled by the private sector without intervention... best accomplished by NOT letting large companies go down in flames. Higher employment = lower uninsured.

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"health of an individual is not, and should never be the responsibility of the government"

No healthcare but yes to corporate handouts. Founding fathers would be proud of you son

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You're taking quite a short-sighted look at the issue. The Big 3 are not some faceless entity and they are not Bob Nardelli and Rick Wagoner. The Big 3 are the hundreds of thousands of employees. You don't want to pay for the bailout out of tax payers' money? Well would you rather pay wellfare and unemployment for hundreds of thousands out of tax payers' money?

A collapse of the big 3 would be disastrous for the US economy. It's estimated that 1 in 10 jobs in this country is tied to the auto industry. Think about suppliers, advertising agencies, trucking companies, dealerships, etc, etc. Even things like caterers who are hired for Big 3 events and companies that sell cleaning supplies used by Big 3 facility maintenance will be affected. While the Big 3 have made bad decisions, there are hundreds of thousands of Americans who had no part in those decisions, but stand to lose their jobs.

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'Because the health of an individual is not, and should never be the responsibility of the government. '

What government? The US government? Have you read the Declaration of Independance? We set this government up to act in the best interests of the people. If we decide that ensuring we all have access to health care is in our interests then that's what the role of our government will be. This whole 'the gov't shouldn't be in the business of..' argument doesn't fly in America. Here government is the focused will of the people. Previous to our constitution most governments were the focused will of the rich people which is why you here conservatives talk about how they're just supporting classic theories of economics when they spout supply side logic.

' This is an issue best handled by the private sector without intervention.'

Are you mad? You want to leave it up to someone out to make a profit? My health? you're mental.

'... best accomplished by NOT letting large companies go down in flames. Higher employment = lower uninsured.'

My mistake, you're not mental, you're a fascist. Government operating in the best interests of corporations is one of the fourteen points of fascism.

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But wobby ears,

Whether they cut people now because they are taking a loss, or they cut people when they have the funding and they can upgrade to more mechanization (like Chrysler did in the 80's), people are going to get cut.

I don't expect the Big 3 to collapse. I expect them to shrink. We are going to pay 25 billion for companies that in the end will be smaller... and hence might not be able to bring in quite as much as they used to.

Deferred loans = taxpayer money paying the interest. For decades.

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^^^ I meant @ Alex.

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