VIDEO: Wagoner attempts to explain gov't loans to automakers
Over the past few weeks, we've heard how badly Detroit automakers needed $25 billion in government-backed loans, but very few of us know exactly who gets the money. GM CEO Rick Wagoner got in front of a camera to answer some of those questions, and to talk about some of the challenges the General faces. Some of the interesting comments from slick Rick include the fact that the $25 billion is available to all automakers and suppliers that invest in the US, not just the Detroit companies. Wagoner also explains that the loan money was part of the bill passed in 2007 to increase fuel economy by 40% over the next decade, and not just some handout from Washington. Hit the jump to view the video.
[Source: GM Fast Lane]
Reader Comments (Page 1 of 2)
Carlos 8:44AM (9/30/2008)
What has this government become...
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Dave 7:54PM (9/30/2008)
It is bizarre.
But the gov't is bailing out everyone it seems. And its not just in the USA.
OTOH - this is certainly not the first time the US govt has bailed out a US automaker.
Justin 8:53AM (9/30/2008)
Well hey...since we didn't give $700 Billion to the market...let's have a field day with the auto industry.
Oh wait...
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Ayatollah Rodriguez 9:03AM (9/30/2008)
Just quit already, Rick do you not understand that under your control, even before the oil and the credit GM was losing Market every year. You just do not know what you are doing. Step down and have someone with brains take over.
I also understand if you were simply unqualified, but the fact that you also stuff the board with HIGHLY biased people (CEO of Dupont) you basically commit an elligal act of hiring people who have a direct interest in you staying put.
Also you make 16+ Million Dollars a year, how many billions have you lost?
Rick let's look at your record, Aztek which you personally responsible for, FAILED, LAMBDAS all are on huge discount, FAIL. Sky/Solstice/G8/Astra/Aura/ALL SUVS...all are deathly poor in sales. Impala, is nothing but a Fleet car. G3/Aveo---need i say more. Aside from Malibu and Caddillac you have done nothing good for this company.
You also were in charge as GM was kicked out of the minivan segment, while VW just entered it. Your answer to demand for small cars will come in 2 years, about 5 years too late. Rick you are a failure.
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rar 9:13AM (9/30/2008)
Not that I don't disagree with your comment, but Mike, what's with all the name changing?
Ayatollah Rodriguez 9:21AM (9/30/2008)
Gotta keep it fresh
compy386 9:46AM (9/30/2008)
Do you seriously have nothing better to do with your day?
Ayatollah Rodriguez 12:58PM (9/30/2008)
Compy, i am sorry, i forgot that it is illegal to critique GM.
Red 9:29AM (9/30/2008)
If Wagoner is correct about the $25 billion being for everyone and not just the Big 3, then the media has been very misleading with their comments about the whole ordeal.
But I spoke to a lobbyist friend in D.C. last night and she said the $25 billion is essentially for GM, Chrysler and Ford. Odd.
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Todd 9:28AM (9/30/2008)
Yet another condescending "explanation" from some private jet, golfs five days a week, CEO.
Yeah, sure its not a "handout", glad I could personally help ensure your elitist life style indefinitely.
Mr. Wagner I don't remember receiving any checks from you when things were good, but I see you are more than happy to take my money ( tax dollars ) when things are bad.
Reality check, you and all your Rolex watch wearing, golden parachute types are an utter disgrace, history will not present you in a positive light. Laugh all the way to the bank with my money now, hear your embarrassed dissidents curse your name out loud later.
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Jordon 9:49AM (9/30/2008)
You all do realize when Toyota built their factory here in Kentucky they were given a some 10 year tax break to build it. Not a loan like this 25 billion but a break. GM, Ford, and most of Chrysler are American companies that hire many Americans (and pay better than Toyota and other Japanese companies). I don't see why a loan is such a bad thing.
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Sleighboy 2:11PM (9/30/2008)
Tax breaks are great, it reduces the burden on people/businesses and lets them operate with greater capital. The federal govt giving them a loan places the burden on us, and makes many people who do not want to support them or any federal aid pay by force.
Less government and taxes increases business and offers people more freedom. The more people that look at the government as their caretaker, the harder it is up foster the idea that humans are responsible for their own lives and the government is there to protect the rights we, as humans, are born with. The mentality today seems to be that government grants us rights, that is some backwards thinking.
I went a bit off-topic, oops.
Derek 9:58AM (9/30/2008)
So here's my idea.
Instead of giving 25B to a company that has a long history of using it poorly find the most promising small American auto manufacturer and give it to them to get off the ground.
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Avinash machado 10:13AM (9/30/2008)
Someone like Tesla?
Gardiner Westbound 10:02AM (9/30/2008)
Consumers electing to reject Detroit-3 products due their poor quality, reliability and durability involuntarily pay for them with confiscated tax dollars.
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EB 10:19AM (9/30/2008)
How about revising the bill so that the company can be part of the loan if the executives take paycuts?
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anoldbikeguy 10:46AM (9/30/2008)
To all of the naysayers above: FAIL -
Did you even listen to the video or have you ever looked at what this loan package is for from other sources? This loan is what the government agreed to do in order for the 'entire auto industry' (not only GM) to be able to meet the significantly higher fuel economy regulations. With the horrible state of the economy, companies failing left and right, I for one don't want government regulations to accelerate the failures. We can't continue to have our industrial base dissolve - or do you want to rely on Wall Street to keep our economy solvent? And don't even think of that BS standard unthinking comeback that other OEM's don't need help. Our government (yes, our tax dollars) subsidized the Prius and other hybrids from non-domestic OEM's with very large tax credits - in addition to the subsidies their own governments contributed in the development process.
Only in America are people so stupid, self centered and ignorant to say 'let them fail'. Every other country in the world supports their major industries - and would love to have the tax revenue that the domestic OEM's drive in this country. Think not just the OEM's own employees, but also the Tier One suppliers, their suppliers, the service industries - everyone from insurance companies to mom and pop companies all derive significant portions of their income, hence tax payments - due to the sheer number of people involved in the supply chain.
Have the domestic OEM's made mistakes? Sure - but so have all OEM's. None of them are perfect.
Wall Street holds a significant amount of blame in this as well - your profits must increase every quarter - not only increase, but the rate of increase must increase or we will downgrade your stock value. This sure doesn't help long term investment in future programs - and not just in the auto industry - the Wall Street sickness has really caused a train wreck this time.
So take a good look at what you have right now - your job, home and lifestyle - everyone in this country's jobs, homes and lifestyles are in deep jeopardy and our economy is folding like a house of cards.
It is short sighted to the extreme to think that a major component of what provided us with the lifestyle we all enjoy should be allowed to fade away, bringing down with it almost 10% of the jobs in this country at the same time. IDIOTS!
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Zanardi1782 11:17AM (9/30/2008)
Agreed. Folks, we have given tax breaks, subsidies, etc. to automakers (foreign and domestic) in the past.
This is no different. Sure the amount is large. But this is for more than one automaker. How much do we give a single automaker to build a plant here?
If it isn't right now, why was it right then? And if it wans't right then, why did we elect people that made the same mistake? We live in a democracy, right?
Secondly, mainstream media has been and is being misleading about this, because sensationalism sells. Funny how we seem to gobble up everything they say about "bailouts" but when an auto executive (who is actually involved in the process) comments on it, we don't believe him.
I'm not saying Mr. Wagoner is blameless. He is the boss and he is responsible for what happened during his tenure as CEO. And some bad decisions have been made, no question about it.
But let's be rational here. This loan has conditions attached to it. This isn't just a blank-check; our bureaucratic government with all its special-interest groups wouldn't allow it.
CarbonBlack 10:59AM (9/30/2008)
what a condescending prick!
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Parkerman 10:59AM (9/30/2008)
There should have been something in it that required the CEO's to take pay cuts.. Filthy pigs ruin the companies.
And to anoldbikeguy... About the people not being able to afford their stuff.. Umm.. To bad, They shouldn't have been STUPID with their money and bought stuff they couldn't afford. A change of lifestyle IS needed.
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