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Nekkei index plumments, GM retains the services of bankruptcy advisors

Late Thursday evening, the U.S. automaker bailout bill failed to pass through the Senate. The legislation is dead and there are no plans for another bill to go through the process until the end of the year. To quote Senate Majority Leader Harry Reid, this will be "a very, very bad Christmas" for many Americans.

Over the past day, Senators have tried to resolve the House-approved bill so it could pass Senate Republican muster, but reports suggest that the UAW was unwilling to accept GOP demands that workers agree to parity in pay and benefits.

News of the failed bill has already spread to markets across the Pacific, with the Nikkei index nose-diving over 6%. Things on this side of the world are bound to be worse when trading on the New York Stock Exchange begins tomorrow.

According to reports, General Motors has got bankruptcy and restructuring advisors on speed-dial in preparation for the bad news and Chrysler has already retained CH11 counsel.

Countless economists and industry analysts are warning that if any one of the Detroit 3 goes under, it will spell disaster for an economy already suffering in a recession. Video of the vote is embedded after the jump. More to follow tomorrow.

[Sources: Reuters, Detroit News, Automotive News - Sub. Req.]

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    • 1 Second Ago
      • 6 Years Ago
      well, i dont really care if lots of people get kicked out of their jobs (i, too, was almost kicked out because of the financial fiasco that is Wall Street)... this is how the market works, this is how free trade works...! this is what America advocates to other countries! or, do i sense a some "double standard" when it comes to free trade (recommended for everyone except the US of A)?

      the Big 3 put themselves where they are in right now, let them crawl out of it on their own!

      for those that would lose their jobs, blame the management of the Big 3... not the government for finally making a right decision of not interfering with the markets, much less trying to change dinosaur corporations!
        • 6 Years Ago
        Has it not become blindingly obvious that the markets need regulation? The free unregulated market produced the financial meltdown garbage.Wall Street, the bastion of free marketeering, where the smartest guys in the room produced garbage, were the first in line for a handout to save their sorry butts. There is no free market! FIAT and Renault are doing fine decades after government support- if GM and Ford can get out from under their cost disadvantage they may well go on for many more years.
      • 6 Years Ago
      Thanks Rick, for all your years of loyal service! He better get a bodyguard. Now businesses and banks can get to work reallocating all that wasted capital elsewhere.
      • 6 Years Ago
      Let me make sure I understand whats going on here.

      Congress approved 700 BILLION DOLLARS for struggling financial institutions that dug themselves deeper than any of the Big 3 could have imagined. Yet, somehow, they got that extremely large amount of money without having to off their fat, hugged-by-expensive-leather, greedy asses. Their companies combined employ relatively the same amount of employees as the Big3 combined. Why don't the politicians ever argue about this? I never remember seeing the CEOs of these companies pleeding their cases on C-SPAN. The Big 3 however are practically on there knees and under a microscope when it comes to this, and these idiot politicians wont spare a measly 14 billion to save these companies that are so much part of the economic structure in this country. These companies failing will do 3 times the damage to the economy than the credit companies failing.

      Why cant these idiots realize this.
      • 6 Years Ago
      Yeah, well... make better decisions next time. You make mistakes, you learn. Rebuild.
      • 6 Years Ago
      I could not have said it better. +1
      • 6 Years Ago
      You people have to understand, we are faced with two evils:

      Bail out the car companies
      Let them fail and fall further into recession

      Given the state of the economy at this point, the first option is the lesser of the two evils.
      • 6 Years Ago
      oh my god! do they have any idea what this will spell for the american auto industry's future, and for our economy's future?! This is insane!
        • 6 Years Ago
        the french gov just bailed out their auto industry

        the Japanese, Chinese, German and Korean auto companies are all going to get bailed out by their gov

        i would say there is a good 50% chance that tonight will be remembered as the beginning of the great depression of 2008

        bad stuff is going down
        • 6 Years Ago
        @jimmy glick

        Have you been paying attention at all the past couple months?

        Do me a favor and go get in your foreign car and drive off a cliff. That would be awesome.
        • 6 Years Ago
        @ naggs

        the german government spend not a single Cent for the German car manufactors...

        but to blame you...

        the only car producer who recived a government aid so far in Germany is GM!!!!!!!

        The German federal state Hessen gave GM/Opel a credit gurantee of half a Billion Euro. Possible that the German government gave GM/Opel about 1-1.5billion euro credit gurantee... together over 2billion Euro ($ 2.64billion). Befor christmas the German goverment claim if they add their help to the already given help by Hessen.

        Volkswagen, Audi, Seat, Porsche, BMW, Mercedes don´t get a single Cent...
        • 6 Years Ago
        When you say "they", I hope you're referring to the Big 3 and the UAW. They are the ones who created their own demise.
        • 6 Years Ago
        I don't understand how people can blame the big 3. Sure some of the blame is theirs, but if it weren't for the financial meltdown caused by garbage legislation then this never would have happened. If the economy were still just peachy the big 3 could turn themselves around. Why else would Cerberus buy Chrysler?
      • 6 Years Ago
      So I guess UAW now stands for "U Ain't Working"

      • 6 Years Ago
      What about military vehicles. Surely the design and manufacture of these cannot be affected?
      • 6 Years Ago
      It sucks and they should of prepared for the worst. If they go down they should go down in flames.

      They do need to reconstruct and start over. If they produce a few good cars they'll have a market share. It's not about quantity but quality and fuel mileage. The world is changing and they need to be ready to adapt and overcome. GM needs to focus on the Volt. I think it's a great car that I would actually consider it.

      I for one am tired of manufacturers increasing the auto price each year and trying to increase their sales goals. They've reached their peak and they have to reinvent the wheel. Simple business.

      • 6 Years Ago
      What's happening within the UAW are the same generational conflicts you have with Social Security. Members are going to get squeezed from both ends. Say total labor costs are $78, with $28 going to current workers and $50 for legacy costs to retirees. To get total labor costs down to $60 as an example, you'll have to cut retiree benefits $18 or current workers' wages by $18. Either side will say they have no room to give. In reality, both sides will have to give.

      I think the UAW will self-destruct with their intransigence, partly caused by this inter-generational conflict. It will get worse with the two-tier, significantly lower starting pay structure. The UAW has little public support as most Americans make less than its members, are losing their jobs too without their employers or businesses getting bailouts. Plus the UAW has a reputation for being a bunch of lazy, overpaid, unskilled workers who still put together a crappy car.
      • 6 Years Ago
        • 6 Years Ago
        The spiteful unions didn't make wage/labor concessions that were needed to make the bill happen.
        • 6 Years Ago
        Amazing...you blame the senate for not caring about jobs yet you have no problem accepting that corporations like GM, Ford, etc and hundreds of other "profitable" corporations in the US have been shipping jobs overseas for years and displacing hard working Americans...but that's the senate's fault right? Oh and the UAW's fault too for trying to keep it's employees American?

        Seriously...some of you people have really warped values or perceptions. Blame everyone but the corporations....
        • 6 Years Ago
        • 6 Years Ago
        rodan32 - riiiiiiiiight, it's the UAW's fault for the combined TWELVE corporate jets between Ford and GM, the multi-million-dollar-salaries of the top management, choosing to build trucks and SUVs that people don't want, and total lack of planning in making their plants flexible to build various models of vehicles so that if the public opinion shifts from SUVs to small fuel efficient they're able to adjust accordingly.

        think about it: if ALL US vehicles were $1000 cheaper (figure the cost of UAW benefits, although I'd be surprised if that were even the case) would you run out and buy one instead of the foreign competition? I certainly wouldn't... Foreign car companies are making the vehicles I want to buy, US companies aren't. It's that simple. And (at least) in my case, that's not the fault of the UAW.
        • 6 Years Ago
        seriously! WTF! The republicans want UAW employees to get paid the market price for unskilled labor? Heaven forbid they should get paid the same as other people doing the same job in the same country!

        • 6 Years Ago
        so the Republitards demanded the Unions make concessions to bring their pay into line with other non-union shops, but no concession with regards to:

        1) Management pay - want to bet that GM's management is making more $$$ than their Japanese equivalent?
        2) Corporate jets - Last I checked ToyotaUSA didn't have a fleet of corporate jets flying around the country...
        3) ANY cost-cutting measures by management whatsoever.
        4) ANY concessions on management, perks, travel, stock options, bonuses,

        This was a poison pill, meant to do nothing but PISS off the Democrats in Congress. If they were serious about a bill they would've offered something, ANYTHING worthwhile, but this is just ridiculous...
        • 6 Years Ago
        GM is doomed to fail.

        Moving all the eggs from the SUV basket to the Volt basket is a horrible idea.
        • 6 Years Ago
        The American Senate is extremely stupid yet they don't care because their jobs won't be affected in their minds. Any one of the American companies dies, the economy is just shot and I don't understand why they wouldn't. General Motors has shown it is developing many alternative fuels. Toyota is behind the game in reality, but in the minds of the blind people in this society, Toyota leads everything. They are just into developing hybrids right now and personal transportation that will stand no chance on our roads. They had hydrogen but last time I checked they weren't concerned in developing it at all. Yet General Motors has used E85, hybrids, plug-in hybrids, hydrogen vehicles, turbine vehicles (failure but still an attempt), and electric cars as well as CNG vehicles. I appreciate GM because they aren't just a one-hit wonder with this. They take hybrids and progress with them faster even though the EV-1 could be seen as further along the path and a setback at the same time. The EV-1 was GM's "Moon Landing" and I believe that the Volt is GM's "Moon Landing, for the Common People". If they fund now, the American companies will progress as Chrysler has released their EV products. I see the American Senate at this current time to be a disgrace to American History as America built this industry for the common people. Our society is based on industrialization and if one company falls, suppliers go, jobs are lost, houses are lost, income will be greatly reduced. It would be a giant chain effect as not just the auto industry would be collapsing. Any goods industry would collapse simply because without so many jobs, people can't buy other products. So the government boneheads making a good choice? I think not. Destroying the nation, they get their gold stars there. With an economic meltdown caused by these events of bankruptcy, it is sad and maybe a bit farfetched to say that the US and Canada will not be first-world countries for long.
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