Wagoner: $25 billion sounds good to me
At a press conference on Thursday, shortly after announcing plans for a new engine plant in Flint, Michigan, General Motors CEO Rick Wagoner said his employer, "should be able to put to good use its portion of a $25 billion government loan package."
Wagoner goes on to say he's concerned about the details of the plan but hopes the package is expanded to include all gas-saving technologies, not just electric cars. Which is understandable, considering GM has already invested a great deal of money into the Volt and would logically welcome financial assistance in investigating other fuel-saving methods. Then again, the Volt may just yet turn out to be classified as an electric car by the EPA, as the California Air Resources Board just did.
Wagoner was also pleased to hear about the Senate's approval of a $7,500 tax credit for buyers of electric vehicles. The tax break is something the company has been lobbying for since May, and would certainly help to get the Volt's price tag closer to the original $30k estimate and hopefully allowing the General to sell the estimated 60,000 units we once heard.
[Source: The Associated Press via Yahoo Finance]
Reader Comments (Page 1 of 2)
TyWright 6:49PM (9/26/2008)
We all know he's gonna pour it into poorly built, boring cars with no brand theme. Wagoner's the WRONG GUY man.
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Virginia Wolf 7:06PM (9/26/2008)
It took you 8 years to realize this?
Stratojet 12:33PM (9/27/2008)
"Yep. Socialize the costs, privatize the profits. What a joke."
What a cliché this is:
-Japan has a national health care system in place
-They did help (if not pay for all of it) for the Toyota hybrid system
-They spend tons of money on lobbying in USA
-They get tax breaks from many USA states and canadian provinces (Ontario)to build factories. This is taxpayer money , it seems.
Let's talk about the pseudo free marlet capitalism :
-No government interventions (Japan does not play with the value of their yen?)
-Pure supply and demand law ; China can export everything they want in USA without limits. $256 billion trade deficit with China, $82 billion for Japan and $12 billion with Korea . $350 billions every year is no chump change .
What does this mean? China, Japan , Korea socialize the production cost and nationalize the profits. Believe me , the profits go to their own government in big part.
The US large industries, Steel, Computers, Auto, airplanes etc have been in charge of providing health care and pensions to their workers for a long time. This is a huge burden to sustain when you are in a not so fair trade environment.
The hard earned money taxes given to large corporation is another very tired old cliché. It was also given to the Asian manufacturers to establish factories here. In Canada, they even gave incentives (up to $2000) to certain vehicles which attained uner 6l/100km. Most of this went to the Yaris. When they realize the idioty of this program, they cancelled it for 2009. Talk about wasting taxpayer $$.
As far as bad management, how far back do you want to go? Who do you want to include as incompetents? Unions, Government, CEO's?
Why don't we start back in 1937 when a Michigan governor gave the UAW the monopoly of representation for the big three?
Don't think for a moment that any North American citizen can escape the consequences of the laissez-faire free market philosophy. Free market exist only in Economic books in well known universities, the same institutions who provided so many brillant MBA's to our financial system. Real life is what is going on now. Not pretty.
bakka 6:51PM (9/26/2008)
Good ol socialism helps out capitalism.
What a joke.
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JD 9:01PM (9/26/2008)
Yep. Socialize the costs, privatize the profits. What a joke.
JD 8:16PM (9/27/2008)
Also, does he realize (I just checked) that GM's Market Cap is only $5.53B? For $25B, the federal government could buy GM almost 5 times over. What a joke!
Quick thing for those who aren't aware: Market Cap is share price x # of outstanding shares. Essentially the value of the company.
MemphisNET 6:52PM (9/26/2008)
Between the US and Canada, are they REALLY worried they can't sell all 60,000 units at 40k? I have a feeling it will sell like mad anyway because of what it is.
Having said that, the 30-35k CND range is what I was hoping for :D
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jgp 6:57PM (9/26/2008)
NO MORE BAILOUTS.
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Tim 7:02PM (9/26/2008)
Its not a bailout! It is a loan at below market rates to a comapny that pay millions in dividends to shareholders while losing billions and paying more millions to bold executives. If anything the US taspayer will make money... I'm sorry I can't do this you're right corporate welfare in the 21st century. YAY...
Tim 7:03PM (9/26/2008)
This is great we can help GM build four cylinder engines for the Silverado and Hybrid H2s. Seriously though GM has a lot of supporters here who feel that it is patriotic to buy an American brand and I can respect that. But when is Wagoneer going to do the patriotic thing and take a pay cut until GM starts making money. Oh well. Until the next 25 billion Rick...
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Virginia Wolf 7:12PM (9/26/2008)
Agree. If you want to buy GM, great, by all means. But do not force US to pay for you.
By the way i would be OK with a bailout/welfare checks if these companies agreed to a far higher MPG, but they not only refused that, they also refused to take pay cuts and "lobbied" the government into an option to repay loans in 25 years.
BoxerFanatic 7:00PM (9/26/2008)
Where did these people learn accounting?
GM is losing money faster than the government can give it to them...
And the US government is increasing the national debt, outspending revenues, and giving preferential treatment tax breaks to just a few to buy an overly expensive car.
How about getting MORE efficient, in both private and public sectors, rather than less efficient?
How about not bailing out GM when no one else considers them a good enough risk to lend to.
How about building good cars, rather than barely adequate ones?
How about giving EVERYONE more of their money back, instead of incentivizing more personal debt with a specific tax incentive to buy new cars.
They incentivized sub-prime loans to people who couldn't afford to buy homes... now they are incentivizing new cars, a steeply depreciating appliance, not an appreciating real asset, to people who probably can't really afford the new cars in the first place.
I call shenanigans on the whole damn thing. It is a shell game for powerful people to get more money on the backs of the real taxpayers and consumers.
Not a single ounce of this encourages responsibility. Not corporate responsibility, not personal consumer responsibility, and certainly not government responsibility, and accountability.
If they want to sell new-fangled tech in a new wondercar, then make it affordable, or don't. But don't con people into thinking they can afford it, when they can't. Consumer debt has been harmed by all sorts of things, probably the largest being over-leveraging on auto loans for new cars. And when they can't borrow, they lease.
If you can't pay for it, you can't afford it. That is going to have to make a harsh comeback into the american, and the world's economic consciousness.
As someone who has already learned that, yet is watching others continue to not get it, especially the ones responsible for my tax burden, I am not at all pleased with this. It most certainly doesn't impress me.
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bakka 8:05PM (9/26/2008)
Yup ya gottit right, but the public is just stupid to see.
Not much ya can do.
REALITYCHECK 11:47PM (9/26/2008)
If you can't tell by now the banks will loan money to anyone! This money will go to convert cars to a 21st centuary standards that will give us cars that will use a quarter of the gas in ten years and trucks that will use a third also in that time. The cost of conversion should be shared by all if you want to speed up the cycle time. Its either that or cars that are way to small for American families. You can do the small car thing in Europe because they have much better public transpotation. We are spread out way to far to do what they are at this time, except for places like NY.
steveo391 4:58PM (9/27/2008)
Yeah and everybody else it to stupid to realize that japenese cars aren't the be all and end all of cars and that the north americans are catching up mighty quick. Only about 10 years to late.
iQuack 11:13PM (9/26/2008)
Any loan from the government (taxpayers) should have been granted under the condition that GM replace its senior management. Lend all of that money to the same doofuses? Why?
Of course, "help" for GM preserves union jobs even though it's the union's choke hold on GM that has made its cars uncompetitive for many years.
GM will ALWAYS be a sickly POS until it's out from under the heavy weight of the "jobs bank" and other ridiculous obligations that were granted to workers under strike threats many years ago before Toyota, Honda, Nissan, BMW, etc. came in and ate GM's lunch.
Best thing for GM is to dump its legacy costs; the UAW is crushing the company and until the union is out of the way, GM will continue stumbling despite all the hype about the Volt and other dreams that vanish on awakening.
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Brian 10:43AM (9/27/2008)
@ iquack
Are you forgetting that the unions only assemble the cars as they come down the line? The unions aren't the ones who poorly managed the company to where it is today. The unions didn't plan, design, and engineer the poor product of the past. All the way up until the early 90s GM still had enough money to buy small countries. So don't go there and say that the union strangled them to where they couldn't build competitive product. Thats a load of $hit. The workers today are really the ones paying the price for past management mistakes. The union could still be very much a part of GM today if it still had the same market share as it did just 15 year ago, but past management lost it.
uygugugig 1:41AM (9/27/2008)
A. Wagoner can go screw.
B. GM can go screw.
C. WHY GIVE A LOAN TO THESE IDIOTS?! THERE THE ONES WITH ALL THE FUEL SAVING PATENTS AND NOW NEED A LOAN TO BRING THEM TO MARKET? THERE THE ONES TOLD BY OPEC IN 1980 TO NOT BRING A CAR THAT GOT OVER 50MPG TO MARKET. THE SAME PEOPLE WHO HAVE BEEN F-ING UP SINCE 1970 AND GETTING THERE BUTTS KICKED BY TOYOTA, ETC. THE SAME IDIOTS WHO 10 YEARS FROM NOW WILL BE IN THE SAME POSITION. THE SAME IDIOTS WHO EVERY 5 YEARS NEED TO A "TURN AROUND."
What a joke. Did we give a loan to black and decker to market lithium ion cordless drills for example? No! They invested like a normal business in there own business and the future.
The auto industry knows damn well how to build a fuel efficient car and now they have suddenly forgot and need a sweetheart loan?
Screw GM. Tired of waiting for the turnaround. Every year we are promised some great cars "just around the corner" and every year there delayed or significantly changed or don't have the promised manual transmission. Done!
Stick the volt up your ass too! If I want to save $1500 a year I will buy the new honda hybrid for $19,500 and not the volt for near $50,000!
DOUBLE THE YOUR MONTHLY PAYMENT TO SAVE $1500?!
I DON'T THINK SO!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
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halogenrep 1:46AM (9/27/2008)
Damn YOU, Nancy Pelosi and Henry Reid. Damn you for throwing our hard earned tax money on the HUMMERS!!!
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Mobius_1 5:54AM (9/27/2008)
I would like 25 billions dollars, too, except I'll actually have something (like the biggest collection of cars) to actually show some signs of wealth if I somehow get it, rather unlike the endless money pit that is any of the big three...
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