Is GM finished?

[Roadtoad]

Rhetoric. You've nothing to back your statements but a lingering myth that has been debunked over and over. The reliability gap closed in the mid 90's, at least to the point of American cars being competative. It's not manufacturing process, Union wages, or the Chevette that caused this problem, it's the sub prime mortage fiasco and the fact there is no more money to lend.

Partially true.

Detroit shot themselves in the foot with shoddy quality of a period of years. And while most consumers tend to have short memories in some areas, they have VERY long memories of Chevettes that broke down at inopportune times, of cars with paint that peeled off in sheets, of engines blocks that cracked, and at a particular Chevy dealer in Folsom, CA, (where a friend of mine worked), of pistons that would explode through the cylinder head and through the hood of the car, landing in a field across the road. When you spend twenty grand on a new Caprice wagon, and it doesn't even make it off the damned lot before things start going wrong, THEN get the condescending evasions and BS from GM management, that tends to stick in your memory, as well as your bank account.

 

[Furcifer]

Partially true.

Detroit shot themselves in the foot with shoddy quality of a period of years. And while most consumers tend to have short memories in some areas, they have VERY long memories of Chevettes that broke down at inopportune times, of cars with paint that peeled off in sheets, of engines blocks that cracked, and at a particular Chevy dealer in Folsom, CA, (where a friend of mine worked), of pistons that would explode through the cylinder head and through the hood of the car, landing in a field across the road. When you spend twenty grand on a new Caprice wagon, and it doesn't even make it off the damned lot before things start going wrong, THEN get the condescending evasions and BS from GM management, that tends to stick in your memory, as well as your bank account.

True. It's hard to forget when you end up paying double for a car before it's totally paid off. These things are lingering in peoples minds for years, years. And it's hard to fault someone for this, and I didn't. Unitl recently, when it became apparent that these memories may send us not into a recession, but a depression. Now I'm saying do a little research and you may find a Domestic car that meets your needs and is as reliable if not more than the Foreign counterpart.
If you can get a loan...
Or a job...

What a mess.

 

[Drewbot]

Why do i attract the attention of the ignorant? Misinformed statement? I could have agreed with childish in manor, but misinformed?....

If you think the Big Three had already gotten a bailout, and you cite sources that are either wrong, or misinformed themselves, then you are by definition, misinformed.

Chrysler got a 1.5 Billion dollar loan guarantee in 1980, but there has been no bailout of 25B for the Big three yet.

 

[balrog666]

Yes, it's true that I have a kneejerk reaction to unions - I despise them with every fiber of my being. And that is a result of my direct experience with them. My experience may be decades old, but it is no less valid for that.

And I simply can't believe that after losing money for years and years and years, these companies (and the UAW) have reached this nadir without ever even considering the slightest contingency plan at all. I can only assume they were looking to ride out the death of their business model all along (looting all the way, ) and/or that playing chicken with government officials for "loans" was the only business plan they thought was worth pursuing for the last 40 years.

And I think the bailout will finally kill them - the massive public backlash will mean a huge loss of domestic market share that will leave them unable to recover and they will have to do the massive restructuring they would have had to undertake in Chapter 11 bankruptcy anyway, but which could have been spun positively anytime in the last few years.

I don't think they are unaware of that either, which is even worse.

.

 

[Furcifer]

Yes, it's true that I have a kneejerk reaction to unions - I despise them with every fiber of my being. And that is a result of my direct experience with them. My experience may be decades old, but it is no less valid for that.

And I simply can't believe that after losing money for years and years and years, these companies (and the UAW) have reached this nadir without ever even considering the slightest contingency plan at all. I can only assume they were looking to ride out the death of their business model all along (looting all the way, ) and/or that playing chicken with government officials for "loans" was the only business plan they thought was worth pursuing for the last 40 years.

And I think the bailout will finally kill them - the massive public backlash will mean a huge loss of domestic market share that will leave them unable to recover and they will have to do the massive restructuring they would have had to undertake in Chapter 11 bankruptcy anyway, but which could have been spun positively anytime in the last few years.

I don't think they are unaware of that either, which is even worse.

.

I have yet to hear of a single business that for saw the sub-prime fiasco and made a contingency plan for it. The automotive industry, on the whole, is just the first and hardest hit because of it. Had it not happened there are vehicles, exciting ones, in development and preparing for production that were part of this so called contingency. That and massive "restructuring". Which I wouldn't argue too hard is kinda bogus. It's a catch word. The plus side to the bailout will be an actual "restructuring" at management and Union levels.

 

[davefoc]

If you think the Big Three had already gotten a bailout, and you cite sources that are either wrong, or misinformed themselves, then you are by definition, misinformed.

Chrysler got a 1.5 Billion dollar loan guarantee in 1980, but there has been no bailout of 25B for the Big three yet.

Not exactly I think

The truck and SUV subsidy was a tax plan designed to help the big three. It was obviously harmful to the country on various levels, but it was passed for political reasons.

In the end, that particular bailout may have harmed the companies more than helped them as it kicked the can down the road a few more years before they had to confront their institutional problems. Ford seems to have done something with the time it was provided. It is less clear that GM did anything much beyond hanging around and waiting for the next bailout.

In addition, the automakers have already been provided 25 billion dollars for retooling to help them adopt to building smaller cars as I understand it. So that seems like a kind of bailout to me.

The reality seems to be that the executives still don't get it. They're still drawing huge salaries and they're bragging about going to a dollar a year after the bailout is in place (the Chrysler guy is already at a dollar a year). What crap. These guys have been looting the companies for years with massive bonuses in the face of huge losses and now they brag about accepting a dollar a year? What do their stock option plans look like when they go to a dollar a year? Do they think they're going to set the option price at the price the stock is at now and then when the government bailout is in place they reap in another fortune?

What evidence is their that these are the guys that should be running these companies? They might be the first to go in a bankruptcy reorganization as creditors and other stakeholders look to get people in place that can actually run a company at a profit.

 

[Furcifer]

No a personal note balrog666; I have friends, family and collegues all working at various levels of your so called "Big Dumb 3". None of them are "dumb", having PhD's and Undergraduate Degrees in Automotive Engineering. The scale of the research and the money involved attracts some of the most intelligent people in the world to the profession, my friends included.

While you may find this witty, your calling them the "Big Dumb 3" could be taken personally. Show some respect. I'm not sure if you are American, but I don't call them "Stupid Americans", despite George W. Bush's best effort to prove otherwise. If your going to call them "dumb" because of their CEO's and Presidents what will I call Americans?

 

[Furcifer]

In addition, the automakers have already been provided 25 billion dollars for retooling to help them adopt to building smaller cars as I understand it. So that seems like a kind of bailout to me.

Is GOOGLE down out West or what? I'm not sure if you're misinformed or just wording this wrong. Try "Energy Plan" and "Bailout" in GOOGLE or whatever search engine you fancy.

 

[Roadtoad]

No a personal note balrog666; I have friends, family and collegues all working at various levels of your so called "Big Dumb 3". None of them are "dumb", having PhD's and Undergraduate Degrees in Automotive Engineering. The scale of the research and the money involved attracts some of the most intelligent people in the world to the profession, my friends included.

While you may find this witty, your calling them the "Big Dumb 3" could be taken personally. Show some respect. I'm not sure if you are American, but I don't call them "Stupid Americans", despite George W. Bush's best effort to prove otherwise. If your going to call them "dumb" because of their CEO's and Presidents what will I call Americans?

Consider this one, 3body: We have no evidence that anyone in middle and upper middle management was willing to tell the GM board that what they were doing was dead wrong, and could force the companies to close their doors. I'm not saying it didn't happen, I'm saying we have no evidence. If you have it, let's see it.

Degrees or not, it's patently stupid to allow someone from whom you derive your income to do things which could ultimately cost you your job. No, people with advanced degrees might not be lacking in "book smarts," but that doesn't mean they have common sense.

As to us being "Dumb Americans," we have elections for the House every two years, the Senate every six, and decide on our President every four. The system is designed to self-correct. It is not perfect, but we do the best we can. If you're looking for "Dumb Americans," perhaps you'll find them among the masses who decided they didn't need to vote.

 

[Furcifer]

What evidence is their that these are the guys that should be running these companies? They might be the first to go in a bankruptcy reorganization as creditors and other stakeholders look to get people in place that can actually run a company at a profit.

Yah, let's put 2.5 million people out of work and send us right into a depression to show them a lesson!

If these 3 guys are out of work for 10 years they probably won't blink. They are figure heads in these companies, and while they have say in what happens they cannot directly change these companies. You think Rick Wagoner actually makes the ultimate decision around GM? He may have a lot of say but he is subject to the fancy of the board as they see fit. Likewise he can't turnaround research or stop production on vehicles. This is a huge company. When he says "he" regrets not pursuing the EV1 he means the company, not himself. Do you really think companies this big are "run" by an individual?

If you mean should these bozo's have their jobs, or deserve the pay they get, the answer is no. Is selling the corporate jet going to save GM either? Hell no, and yet that seems to symbolize something to Congress? These other bozo's are just reeling because they just gave away $700 Billion and they have no idea where it's going or how it's being spent!

If you saw the Daily Show last night, he said it best. Americans got suckered in the sub-prime bailout and now all of a sudden attention is being diverted to the automotive industry. I wonder why...

 

[OneShotKi11]

I have done alot of reading on this and i could careless to debate it now, but from my understanding on OCT3. along with the bailout package was a program for $25 billion in low interest government loans for automakers as well as tax credits and such. I believe it was part of H.R. 1424 signed in by Bush. Look it up. It was all put in place to help the auto industry build more fuel efficient vehicles.

Takes alot of reading to figure your way through all the B.S. (Atleast for me)

To make things even shorter this all began sometime last year and was finally approved by the house in September of 08.
This is what i considered the first bailout, which many other people do as well even though it wasnt officially labeled one. They desperately needed this and during a time when everyone was occupied with the 700 billion plan for wall street, this got approved.

Correct me if im wrong, but im very tired right now and will type up a more in detail post on what i have been reading later. Links and all for all you lovable people...

H.R. 1424, the Emergency Economic Stabilization Act of 2008, Energy Improvement and Extension Act of 2008, and Tax Extenders and Alternative Minimum Tax Relief Act of 2008

I believe alot of the problem with H.R. 1424 lies with the fact that its going to take very long for them to receive the money. From my understanding ontop of wanting that money faster they now want this bailout as well. Again feel free to correct me if im wrong.
http://www.congress.org/mygov/webreturn/?url=/detroitchamber/issues/alert/?alertid=12136211

 

[Furcifer]

Consider this one, 3body: We have no evidence that anyone in middle and upper middle management was willing to tell the GM board that what they were doing was dead wrong, and could force the companies to close their doors. I'm not saying it didn't happen, I'm saying we have no evidence. If you have it, let's see it.

OK, I'll do some digging to provide some proof. As with any coporation middle management has no say. For the most part noone in the plants has any say in what product they get or what products come to market. I can't provide meeting minutes that will support this is what I'm getting at. But there were certainly people in the industry calling for smaller cars and higher gas prices to direct peoples "demand".

Degrees or not, it's patently stupid to allow someone from whom you derive your income to do things which could ultimately cost you your job. No, people with advanced degrees might not be lacking in "book smarts," but that doesn't mean they have common sense.

It doesn't work like that. It's not a democracy, you do what you're told. In the case of R&D you get put on a project. You don't have a say in what you do. I think that's obviou,. I mean even at the University you don't get to pick and choose your experiments, you ultimately answer to whoever gives you the grant. You don't really think the people working on the EV1 were like "We're done" or quit because they lost funding for the program do you? I mean it's one thing to be smart and have principles, it's another to be smart, have principles and be broke.

As to us being "Dumb Americans," we have elections for the House every two years, the Senate every six, and decide on our President every four. The system is designed to self-correct. It is not perfect, but we do the best we can. If you're looking for "Dumb Americans," perhaps you'll find them among the masses who decided they didn't need to vote.

"He's American you know, not that there's anything wrong with that..."

Some of my best friends are American, work in America or depend on Americans so I'm not partial to making any blanket statements based on GW being the pres. However, based on what you've laid out for me here I could require proof you voted for Obama in this election or against Bush in the previous one before having to retract my statement

 

[Furcifer]

I have done alot of reading on this and i could careless to debate it now, but from my understanding on OCT3. along with the bailout package was a program for $25 billion in low interest government loans for automakers as well as tax credits and such. I believe it was part of H.R. 1424 signed in by Bush. Look it up. It was all put in place to help the auto industry build more fuel efficient vehicles.

Takes alot of reading to figure your way through all the B.S. (Atleast for me)

To make things even shorter this all began sometime last year and was finally approved by the house in September of 08.
This is what i considered the first bailout, which many other people do as well even though it wasn't officially labeled one. They desperately needed this and during a time when everyone was occupied with the 700 billion plan for wall street, this got approved.

Correct me if im wrong, but im very tired right now and will type up a more in detail post on what i have been reading later. Links and all for all you lovable people...

H.R. 1424, the Emergency Economic Stabilization Act of 2008, Energy Improvement and Extension Act of 2008, and Tax Extenders and Alternative Minimum Tax Relief Act of 2008

I believe alot of the problem with H.R. 1424 lies with the fact that its going to take very long for them to receive the money. From my understanding ontop of wanting that money faster they now want this bailout as well. Again feel free to correct me if im wrong.
http://www.congress.org/mygov/webreturn/?url=/detroitchamber/issues/alert/?alertid=12136211

Yes, it does take a lot of reading to stay on top of what's going on. And to be fair, since Congress gave away $700 Billion, the term "Bailout" has changed
definition. Grants, loans, subsidies and bailouts all have distinct definitions and yet they seem to be interchangeable these days.

 

[WildCat]

Rhetoric. You've nothing to back your statements but a lingering myth that has been debunked over and over. The reliability gap closed in the mid 90's, at least to the point of American cars being competative. It's not manufacturing process, Union wages, or the Chevette that caused this problem, it's the sub prime mortage fiasco and the fact there is no more money to lend.

You can claim the quality gap was closed all you want, but too many people got burned by Detroit's sub-par products in the past to experiment with their $20,000-$50,000 to see if Detroit really has, honest, this time it's the truth, closed the quality gap. They screwed taht pooch long ago for many consumers.

It's pretty is to google "gas tax" and find several Econmics Professors and Automotive experts that disagree with you WC. Had Americans had an incentive after the gas tax hike in 1993 to purchase smaller more efficient vehiles the industry would have went that way (supply and demand). It would have helped the environmnt and urban sprawl.

It's pretty easy to figure out who didn't want gas prices to go up while consumption went down...

Please explain to me how a higher gas tax would have caused Detroit to make better vehicles.

 

[Furcifer]

Please explain to me how a higher gas tax would have caused Detroit to make better vehicles.

Detroit is making better vehicles.

Before cars got 100K miles and people rejoiced!

Now, cars don't get their first oil change unitl they reach 100K!

Now they are better then before.

The gas tax would have meant better, more fuel efficient vehicles.

High gas prices make people think "I want to spend my money on me, not gas, I will buy a more fuel efficient vehicle and save that money for me"

"We only have a few small cars, small cars are more efficient"

"Oh, yes please, that is what I want, a smaller more fuel efficient car"

"We are running out of small fuel efficient cars, we need to build more of them, our demand exceeds our supply"

To clarify I'll run the scenario without the gas tax

"I want to buy a vehicle"

"What kind of vehicle are you looking for, we have the highly acclaimed Buick (insert model)?"

"VROOM" "VROOM"

"Pardon?"

"VROOM" "VVROOOOM!"

"Gotcha "

It's not hard to figure this stuff out if you want to look at the data. There was a time when I wouldn't take a free Chrysler, now there's a few model I would consider. As it stands right now I don't have a car. I got rid of it and bought a bicycle when I went out West. If I was looking for a car right now, to be honest I'd be looking at a used car and I would be looking at a VW GTI, a skyline,a WRX Sti or a Caliber SRT4. Three foreign cars and a domestic, but I want a turbo car.

 

[balrog666]

I have yet to hear of a single business that for saw the sub-prime fiasco and made a contingency plan for it. The automotive industry, on the whole, is just the first and hardest hit because of it. Had it not happened there are vehicles, exciting ones, in development and preparing for production that were part of this so called contingency. That and massive "restructuring". Which I wouldn't argue too hard is kinda bogus. It's a catch word. The plus side to the bailout will be an actual "restructuring" at management and Union levels.

The subprime fiasco is not to blame here, it just made it worse. GM was losing money for a long, long time before all the financial fecal matter hit the fan.

The fact is that the spin off of GMAC only made sense as a move towards entering bankruptcy and restructuring over $200 billion in long term debt, trimming back redundant product lines, and sticking it to the UAW.

Then they chickened out.

I think it may too late to save them in any case.

 

[balrog666]

You can claim the quality gap was closed all you want, but too many people got burned by Detroit's sub-par products in the past to experiment with their $20,000-$50,000 to see if Detroit really has, honest, this time it's the truth, closed the quality gap. They screwed taht pooch long ago for many consumers.


Please explain to me how a higher gas tax would have caused Detroit to make better vehicles.

Well said.

Just as when you get food poisoning from a restaurant (several times even), hearing that they've "improved quality" yet again really doesn't interest you.

"Gas taxes" and mpg are just muddying the waters.

.

 

[Furcifer]

The subprime fiasco is not to blame here, it just made it worse.

You seriously think losing $700 Billion from the economy just made it worse? lol, that's an understatement.

GM was losing money for a long, long time before all the financial fecal matter hit the fan.

Again, rhetoric:http://query.nytimes.com/gst/fullpage.html?res=9406E5DD1F31F934A25752C0A9659C8B63

Back in 2003 a dollar was worth a dollar sunny. We had 2 GB iPods and we liked it. I had to use a 128 MB flash stick, I could barely fit my resume on it and we liked it. You kids and your wifi, we had ethernet cables all over the house and we liked it. We loved it I tell yah

You guys are a bunch of grumpy old men around here. 2003 was not a long, long time ago. Quit spouting non-sense

 

[davefoc]

Is GOOGLE down out West or what? I'm not sure if you're misinformed or just wording this wrong. Try "Energy Plan" and "Bailout" in GOOGLE or whatever search engine you fancy.

This is an article about what I was talking about.

http://www.breitbart.com/article.php?id=080928164938.dtc44u1c&show_article=1&lst=1

Do I misunderstand something here? It seems like the congress has already approved one large set of loan guarantees, albeit with some strings attached about using the dollars in some congressionally approved eco way I guess.

 

[davefoc]

The reality seems to be that the executives still don't get it. They're still drawing huge salaries and they're bragging about going to a dollar a year after the bailout is in place (the Chrysler guy is already at a dollar a year). What crap. These guys have been looting the companies for years with massive bonuses in the face of huge losses and now they brag about accepting a dollar a year? What do their stock option plans look like when they go to a dollar a year? Do they think they're going to set the option price at the price the stock is at now and then when the government bailout is in place they reap in another fortune?

What evidence is their that these are the guys that should be running these companies? They might be the first to go in a bankruptcy reorganization as creditors and other stakeholders look to get people in place that can actually run a company at a profit.

Yah, let's put 2.5 million people out of work and send us right into a depression to show them a lesson!

If these 3 guys are out of work for 10 years they probably won't blink. They are figure heads in these companies, and while they have say in what happens they cannot directly change these companies. You think Rick Wagoner actually makes the ultimate decision around GM? He may have a lot of say but he is subject to the fancy of the board as they see fit. Likewise he can't turnaround research or stop production on vehicles. This is a huge company. When he says "he" regrets not pursuing the EV1 he means the company, not himself. Do you really think companies this big are "run" by an individual?

If you mean should these bozo's have their jobs, or deserve the pay they get, the answer is no. Is selling the corporate jet going to save GM either? Hell no, and yet that seems to symbolize something to Congress? These other bozo's are just reeling because they just gave away $700 Billion and they have no idea where it's going or how it's being spent!

If you saw the Daily Show last night, he said it best. Americans got suckered in the sub-prime bailout and now all of a sudden attention is being diverted to the automotive industry. I wonder why...

I don't disagree with anything here, but I made have said what I meant more clearly.

1. Are they really working for a dollar a year or do they plan to sit on nifty stock options that will net them millions of tax payer dollars if a bailout happens?
2. Why aren't they working for a dollar a year now? Their companies are losing money hand over fist and their big sacrifice is to drive to Washington instead of fly?
c. From my perspective bonuses are ethically derived from profits. Bonuses that are derived by burning through capital are morally reprehensible on the part of the company leadership.
d. The boards have continued to support these guys. Why? Do people on the board care about the shareholders or were they just part of this grand scam where the companies were run in a way that was unsustainable while they could scam some bucks out of the company's capital?
e. Since these guys will likely be making zero, and their miscellaneous perks will be eliminated in the event of a bankruptcy, offering to take a dollar a year if it helps them retain a big chunk of their corruptly granted perks doesn't look like a sacrifice at all to me.
f. Where is the evidence that these are the guys to run these companies? In a bankruptcy run by the creditors the qualifications of these guys would be examined carefully and if the creditors thought they can do better with somebody else they'd be gone regardless of what their sweetheart boards had to say. No wonder they'd like to avoid that.

Whatever money these guys manage to scam from their various companies may be insignificant when it comes to looking at the total picture, but guys that have been taking their companies for whatever they could while their companies crash and burn may not be the kind of guys that you want running these companies. What is required here is are tough driven, youngish guys that are going to make hard choices and hard decisions. The time for the guys running the companies now may have passed them by. But maybe some of them are doing OK. Ford seems to be close to a turn around. Maybe he's done well enough to keep his job. But if Waggoner is part of the problem how is that problem going to get fixed if Congress bails out GM?