Saving General Motors
Unless you live under a rock, you are likely aware that US automakers GM, Ford, and Chrysler are under tremendous financial duress.
Having to do with a catastrophic drop in consumer demand for cars, and trucks in particular, GMs North American revenue dropped by $10 billion in the first half of 2008 while they lost a staggering $18 billion. CEO Rick Wagoner has assured investors that GM has adequate liquidity to keep running through the end of 2009 assuming a “low” estimate of 14 million US auto sales per year and a market share of 20% thanks to massive cuts, asset sales, and workforce slashing. But, for July, the annualized sales rate worked out to be 12.7 million.
Reports are out that the US automakers have begun lobbying congress for $35 to $40 billion in low cost loans over the next 2 to 3 years for the purpose of retooling their plants to build next generation fuel efficient vehicles like the Chevy Volt.
In response to these requests, Rep. Dingell of Michigan has begun asking his colleagues to speed up the rules to quickly allow automakers $25 billion in low cost loans. Those loans had already been authorized by last year’s energy bill and the guidelines for their disbursement are supposed to be written by December of this year.
Per Mr. Dingell “It is essential for the department to undertake this effort with urgency,” and “providing the domestic automobile industry with targeted and timely assistance will help stimulate the entire economy.”
Apropos to this topic will be a documentary tonight on CNBC entitled Saving General Motors. It will appear at 9PM EST .
This program will include footage of Bob Lutz driving the Volt mule and the battery lab, among other things.
It might be interesting to discuss the broadcast in real-time right here in the comments section of this post, should you be so motivated, and don’t forget to make your self a snazzy avatar for the comments by going to http://www.gravatar.com . I’ve even taken the liberty of inviting the show’s host Phil LeBeau to drop by.
With respect to this monumental witches brew of bad luck and bad decisions besieging US automakers and potentially jeopardizing our beloved Volt, Detroit News Reporter Tom Walsh sums it up well, “It’s that serious.”
But lets hope that through the Chevy Volt, the support of people like us, and the mission of this site to spread the word, we can all play a role in saving general motors.
See you tonight.
Popularity: 5%
Related posts:
- Bob Lutz Impressed with CNBC’s “Saving General Motors”
- GM Submits Long-Term Viability Plan to Congress: $18 Billion Needed
- Can Green Cars and the Chevy Volt Save Detroit?
- Paulson Says Auto Industry Aid Should Not Come From Wall Street Bailout, Congressional Democrats Disagree
- GM CEO to Washington: Im Not Asking for a Bailout
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August 6th, 2008 at 12:13 pm
Optimist or pessimist. This looks like a interesting piece.
They have been showing clips from it all day on the network. So if you can’t watch tonight and you happen to have a few hours to kill (and you enjoy business news), you can catch glimpses of it.
I have already seen the segment on Bob Lutz and the video of his first drive. Not alot new to us there, but it is nice to see it first hand and in glorious ‘non-streaming’ video.
From watching the commercials and 5 minute ‘teaser segments’, it looks to be about 30 mins of GM-business related info, a good 15-20 minutes on the Camario (obviously since they have a Dale Jr. segment) and hopfully a solid 5-10 minutes on the Volt.
August 6th, 2008 at 12:24 pm
Reports are out that the US automakers have begun lobbying congress for $35 to $40 billion in low cost loans over the next 2 to 3 years for the purpose of retooling their plants
“to build next generation fuel efficient vehicles like the Chevy Volt”
So what was the previous generation of fuel efficient vehicles???
August 6th, 2008 at 12:24 pm
The US Dept. of Treasury should issue $35 - $40 billion in “Green Bonds” to fund the loans the big 3 automakers require to remain solvent.
August 6th, 2008 at 12:28 pm
Lyle, this is a good editorial point you have made as well,
“CEO Rick Wagoner has assured investors that GM has adequate liquidity to keep running through the end of 2009 assuming a “low” estimate of 14 million US auto sales per year and a market share of 20% thanks to massive cuts, asset sales, and workforce slashing. But, for July, the annualized sales rate worked out to be 12.7 million.”
I agree with this 100%. GM does have the cash needed to ride out a downturn to 14-odd million in US auto sales.
The annualized sales rate do show a further weakening.
The REAL measure will be what effect the end of leasing in Canada and the ‘virtual end of leasing’ in the US will do (no Yukahoes, large trucks, coupled with the 2% interest bump on Cadillacs and generally ‘realigning’ of residuals…making leasing a very unattractive alternative).
While leasing only accounts for 20% of US business, it accounts for over 40% in Canada (we like to write stuff off I guess). GM itself has pegged the ‘cost’ of the loss of leasing to 10% (which is pretty big…and decently accurate I thought).
The even larger question is that we know leasing accounts for a proportionally higher percentage of ‘higher margin’ vehicle sales. What does this do to GM’s profitability? Surely this will translate to the bottom line in a big way, and thus, does this not also increase the cash burn rate?
Moreover, even if they do indeed survive through 2009, how does GM overcome this additional hurdle as well as all the current challenges? More money from the government is nice, but even GM’s share of 40 billion (if they get it…and whatever amount it is) won’t get them much further down the road without a good exit strategy.
August 6th, 2008 at 12:41 pm
Why would “green bonds” be used for saving the world’s largest maker of gas guzzlers?
August 6th, 2008 at 12:43 pm
15-20 minutes on the Camaro??? Well my mother tried to teach us:
“If you can’t say anything nice, just don’t say anything at all.”
August 6th, 2008 at 1:10 pm
#5 “Why would “green bonds” be used for saving the world’s largest maker of gas guzzlers”
He asks as toyota is trying to push their new BIG truck that has worse gas mileage than any of the big 3, as is nissan, and as kia introduces the big SUV entry berago…
The big 3 (not just GM) maade what was very profitable market driven by consumer demand. and they have the largest line up of fuel efficient vehicles, many euro models pushing 60mpg.
get yer head out of your ..sand. Chrysler did it and paid it back with interest..
Look at the spin off damage if the big 3 go belly up there goes say 300,000 peoples incomes direcly, another 3 MILLION people indirectly, and another 30 million from the income spent from those jobs, then the downsizing in areas where the money they used to make and spend in that town, meaning other job losses.
If all 3 went under, the estimated job loss would affect about 50 miilion Americans and Canadians, and that is not the only fall out.
Loss of income tax, health benefits that the gov’t will cover, pensions, local taxes go up..
40 Billion is peanuts…
August 6th, 2008 at 1:11 pm
Fortune http://money.cnn.com/galleries/2008/fortune/0807/gallery.gm.fortune/index.html has put together an excellent piece on GM’s foibles over the past 25 years.
After failing to learn the lessons of the 1973-74 and 1978-80 oil crises, they now want taxpayers to foot the bill for their incompetence. If GM is worth saving, the market will provide a buyer or buyers. And for those who don’t recall, Rick Wagoner convinced the GM Board of Directors to reject an alliance with Renault, which resulted in writing down over $30 billion in tax losses.
GM, Ford and Chrysler made BILLIONS in the 1990s which were pissed away designing big, more capacious gas guzzlers which Billie Bob and his ilk flocked to like flies at a picnic. If GM couldn’t handle it’s finances well then, why should I as a taxpayer write them a check now?
When (not if) GM does go into Chapter 11, it will free itself from two huge taxes: union labor contracts, and the stranglehold its $4 billion of annual interest payments have placed on the company. It will also be forced to rationalize its bloated management and corporate structure, eliminate redundant brands and focus on operational efficiencies. We should hope Chapter 11 happens ASAP!
August 6th, 2008 at 1:22 pm
Bernie Tordik,
The big 3 are NOT asking for grants or subsidies, they are asking for loans which they will REPAY. Up yours.
August 6th, 2008 at 1:22 pm
Bernie..(#8)
They did well, and the union wanted its share, and share they did, big grandiose options in contract (like the job bank, paying 8000 people to stay home - gm only) raising the standard of the middle class, all good.
Now, times changed, but when they needed some things back, the union became the spoiled child saying “no..its mine!” and the big 3 let it rest, until it became critical, hence the historic contract talks that just finished.
Management in all 3 is not the ONLY problem. I know guys in the bank almost 18 YEARS!! getting full pay and benefits, and they are not doing a DAMN thing..that is a 800, million dollar a year drain at GM alone!, and the bank is over 20 years old.
Their fiscals would likely be better if the unions had more give and take, instead of take..better in the good years, relinquish a little in the bad…
it is simply not that easy..Hoping chapter 11 happens would be great for GM, BAD BAD BAD for the retirees and employees, an dAmerica in general..
August 6th, 2008 at 1:24 pm
Getting off the subject a little bit read this article and is someone can answer a few questions for me. http://www.technologyreview.com/Energy/21155/
So basically instead of gasoline, you add water to your fuel tank. The water is then turned into oxygen and hydrogen by use of solar power. The hydrogen is then used in maybe a hydrogen engine, or maybe burned to create power for an electric car.
I think this is a much better invention than any plugin ev or the volt.
Is this possible to put into a car?
If this is possible this is awesome, no need for infrastructure. All gas stations have water!!! I don’t care what anyone says, water is renewable, fresh water can be limited, but we can purify salt water.
If your worrying about no sunlight at night driving, install some batteries, or another alernator to run the electrolysis for the water. As i beleive it doesnt require huge ammounts of electricity for this to happen.
August 6th, 2008 at 1:25 pm
#7, Mitch,
Go look at GM’s sales and then go look at Toyota’s. Which one is 70% cars and 30% trucks and which is 60% trucks and 40% cars (even after the “collapse” of the truck market)? Which one has put a 48mpg vehicle on the road in mass quantities?
Now, tell me why we should issue “green bonds” for GM, rather than Toyota. What is GM going to do to justify “green bonds?”
August 6th, 2008 at 1:28 pm
Chapter 11 would be a horrific situation. It is not only affect the GM workers, but will trickle down to the suppliers as well. Imagine what would happen to American Axle or Delphi, for example, if GM no longer honored their contract. Pensions that the retired rely on would disappear. It would be a Great Depression in the Michigan area… Come on, GM, you have to pull through this!
August 6th, 2008 at 1:32 pm
#9 - Jason Hendler: if you can read and interpret a Cash Flow Statement and Balance Sheet, I suggest you read GM and Ford’s most recent masterpieces. Once you’ve done so, explain how they’d repay any additional debt. I also refer you to Cerebus’ recent announcement that their lenders didn’t renew several of Chrysler’s credit lines.
#10 - Mitch: Chapter 11 might be bad for some employees, but not much different than the necessary restructurings that have occurred in the IT industry and other industries. And it’s just a foretaste of what’s to come with Social Security. You can’t promise benefits that you can’t repay, borrow from future profits (as GM did from 1960-1980) and not expect to have trouble down the road. If the unions have to take a bullet, so be it.
August 6th, 2008 at 1:32 pm
I say no loans unless GM commits to a 100% EV portfolio (a la Mercedes)
August 6th, 2008 at 1:33 pm
If the hydrogen doesnt work… Use this: http://www.technologyreview.com/Energy/21125/
Thermoelectric. This will use the 1.4L ICE’s heat that is produced into more energy to charge the battery…
August 6th, 2008 at 1:34 pm
#13 - Aspherical: Detroit has been in a Depression for the past 30 years. The price of the average home in Detroit ($19.5k) is now less than the price of a new car ($22k).
August 6th, 2008 at 1:38 pm
GM doesn’t need saving, all is well in 2009!
GO GM, GO VOLT for 2010!
August 6th, 2008 at 1:41 pm
#12
Why would you want to give green bonds to a non-AMERICAN company. We need to protect our country first and not worry about others.
August 6th, 2008 at 1:42 pm
Heard a radio ad this morning from a local Dodge dealer…. 50% off MSRP on new full-size pickups. Ouch!
August 6th, 2008 at 1:47 pm
#16 - Sean: it depends upon what you mean by “an American company”. Last time I checked, the vehicles produced in NA by Toyota, Honda and Nissan had a higher domestic content than those made by GM, Ford and Chrysler.
That said, no handouts, period! If GM wants help, let them go into Chapter 11 and cut Rick Wagoner’s outrageous salary.
August 6th, 2008 at 1:47 pm
I like how this thread is going, we’ve gone from saving GM to giving green bonds to Toyota. I don’t recall anything about Toyota being in trouble or them asking for a hand-out (sorry Jason, I meant low interest loan that they will pay back with interest).
August 6th, 2008 at 1:54 pm
GM should offer the Volt at a fixed price, (kind of like the Tata’s 100,000 rupee car), except that the deal would be you have to pay 15 or 20% now, with guaranteed delivery and features by a certain date. If the delivery date is missed, the company would pay back the advance + 3.5% interest (with some kind of financial surety bond). I think it would raise at least a few tens of millions to help with development costs.
August 6th, 2008 at 1:54 pm
GM, and the other two, pushed SUVs as a way around CAFE - they first engineered the loopholes (mileage and emissions) and then convinced people they were reasonable family vehicles so they could fully exploit those loopholes, making their executives fat and happy in the process. For that, alone, they deserve every bit of trouble they’re getting - they made the Saudis a lot richer; made us a lot poorer; polluted more; heck - it’s hard to think of a bad thing today that can’t be linked to the decision to convince people they needed trucks rather than losing the contempt the Big 3 (especially GM) have had for people who actually wanted to buy small cars.
I view the decision to go that way as practically tantamount to treason - they made us so much more critically dependent on oil from people who are trying to kill us, just so they could avoid having to compete with the guys who really were trying to just build sensible vehicles.
So, no, they weren’t just satisfying consumer demand. Nobody wanted an SUV until Detroit tried to convince them they were cool and cars sucked. GM can go bankrupt for all I care - and this is from a guy whose first new car was a Saturn (which I really liked). Get real, folks; they don’t deserve a bailout.
August 6th, 2008 at 2:01 pm
What in a nut-shell is the 2010 labor agreement all about? I never see it refered to on this board. GM seems to want to make it thru 2009, like 2010 is the promised land.
August 6th, 2008 at 2:03 pm
Why not then make it a stipulation that the Green bonds must go to green projects. Mandatory seperate accounting for the funds, audits, then the $ go to green products like volt and 50mpg vehicles. set a standard for them, then stick it!.
I am not against it, it is accountability I require. Make it for any company going green, not just cars.
Letting them go under and saying if the union bites the bullet so be it is really bass ackwards thinking..the financial damage would be huge.
The information in #17 would be everywhere..Windor Ontario housing prices are dropping like a stone because of the auto layoffs, and they were not hit all that hard compared to many places. housing costs went back to 1994. (i I know because a buddy of mine there is moving to Oakville to keep his Ford job, and has to list below his purchase price..)
Thisnk of the mortgage defaults…the extrapolation is soo friggin big, no one wants to contemplate it.
August 6th, 2008 at 2:11 pm
GM does deserve a bailout. GM is a net positive for the US. They produce many jobs and pay many taxes. They also provide us with significant manufacturing capacity. I don’t give a crap about some foreign company that sets up shop in the US to save shipping costs. in the end, they are not a US company and will not have loyalties to the US. Our country needs companies like GM and we should help them through dips so that they are around long term. Tax money is pissed away on all sorts of things. Loans for a US company in need are not a big deal. There are industries that have big capital investments where there are only a few big players left. Would any thinking US citizen like to see Boeing go under and let Airbus take over. I hope not.
GM going bankrupt is something that any US citizen should care about. If we had 10 big car manufacturers, or 5, then it would not matter so much. But we have 2. This is something to give a damn about.
August 6th, 2008 at 2:13 pm
Implying a “green bond” for Toyota was an inadvertent mistake.
What I want to know is what justifies giving GM a “GREEN” bond? What has GM done to assert GREEN leadership? There are MANY projects that could be offered GREEN bonds instead that would advance GREEN causes much faster.
Further, these GREEN bonds could be handled as loans to individuals, rather than further enriching our largest corporations (and further lining their CEO’s pockets).
August 6th, 2008 at 2:16 pm
A new candidate for President suggests both new oil drilling and tax incentives for electric and hybrid vehicles.
See you at the debates.
August 6th, 2008 at 2:16 pm
GM, Ford Should Receive $25 BILLION in Plant Aid, Dingell Says
——————————————————————————–
http://www.bloomberg.com/apps/news?pid=20601087&sid=aviz2sm08FDg&refer=home
The loans were authorized in last year’s energy bill, and rules to free up the funding are supposed to be written within a year of its December passage, Representative John Dingell said yesterday in a letter to U.S. Department of Energy Secretary Samuel Bodman.
—————————————————————-
Detroit 3 ask up to $40 billion in loans
http://www.freep.com/apps/pbcs.dll/article?AID=/20080805/COL06/808050401/1014/BUSINESS01
Detroit’s three automakers are urging Congress to make as much as $35 billion to $40 billion in low-cost loans available during the next two to three years to assure that the companies survive long enough to retool and build a new generation of fuel-efficient vehicles.
——————————————————————————–
for those so inclined, here is the letter that Congessman Dingel wrote to Sec. Bodman:
http://energycommerce.house.gov/Press_110/110-ltr.080408.DOE.EnergyIndSecAct.pdf
Perhaps a campaign to support the Congressman’s efforts may help:
Written correspondence and phoning is particularly effective. Calls to Secretary of Energy Samuel. W. Bodman (phone: 202/586-6210 or 1-800-342-5363), by law, must be logged and returned or answered. There is no such requirement for e-mail or letters.
August 6th, 2008 at 2:17 pm
M1EK,
1970’s Jeeps, 1960’s land cruisers, 1990’s blazers, and 1980’s scouts were fricken awesome. The evil corporations didn’t need to convince me of that, it’s just the way it is. Riding mopeds is fricken lame, and I don’t care how expensive gas is. I’m not saying I won’t ride a moped if that’s what I gotta do, but given the choice I’ll take a 66′ land cruiser with a winch on the front any day. Don’t blame the big 3 for cheap oil. Don’t blame big oil for cheap oil either. There is a reason Europe has such a higher national gas mileage average than we do. They tax the hell out of gas and make it tough to own a car.
We can either tax ourselves to death or invent our way out of expensive oil with tech like the volt. You aren’t gonna find anyone on this site saying ohhhhh I hope they make an efex scooter because that would be LAME. We want our muscle cars, trucks, and suv’s, and we want domestic fuel too.
If you are against the automobile, this probably isn’t your forum.
I know I know PDFTT, but I had fun doing it
August 6th, 2008 at 2:17 pm
Now that there is talk of possible government back loans or bonds. There should be a guarantee from GM that if the Volt does get produced, The Volt should be available in the US in much more quantities than is currently promised. It is possible for a global brand like GM to divert these Volts to the market that is more profitable. Remember, the euro is a better bet in value, and will be for a while. I think this is a very important issue, please look into this Lyle. Thanks
August 6th, 2008 at 2:20 pm
Yes, Chrysler paid their government loan back, and good for them. They used the money to bring a new kind of vehicle to market; a vehicle type other carmakers had refused to make, even though there was public support for it: the Minivan.
What happened after that?
For my money (and as a taxpayer, it is my money), Chrysler had their shot. Offer the loans to GM and Ford. On second thought, offer the loan to the only one of those two who have agreed to bring a new kind of vehicle to market that the public wants, and that they and the nation drastically need.
Well, Ford does have the Escape. Maybe they can have a little loan
.
August 6th, 2008 at 2:27 pm
#28
“What I want to know is what justifies giving GM a “GREEN” bond? What has GM done to assert GREEN leadership?”
Google GM green initiative, I jsut did out of curiosity, 238,000 in 0.25 seconds, most not on a GM site., sites like the Greenblog, green world are praising GM saying it must “shake its fuel hungry suv image” and that image is what many see when they see GM,
(too many trees!!! where is the forest?!?!)
Not everything Toyota does is green (sequoia, tundra, FJ) neither is GM fuel pigs, (metro, G5, firefly)
August 6th, 2008 at 2:34 pm
M1EK:
I don’t even know where to start….SUV like vehicles were hugely popular before “SUVS”
August 6th, 2008 at 2:53 pm
#27 Nuclearboy - “… GM going bankrupt is something that every U.S. citizen should care about…”
Why? Apart from the obvious - GM has been technically bankrupt since late 2005 (negative net worth) - Chapter 11 allows a company to reorganize its affairs. It’s not the end of the line, if the opportunity is used wisely. Many airlines have done it, for starters.
I know it’s a stretch to use “wise” and “GM” in the same sentence, but it’s a possibility. The market would force GM to make some hard decisions its current Board continues to avoid, including shutting down Buick, Pontiac and Saturn. Maybe its union pensioners would be affected; maybe they wouldn’t. Either way, GM is forced to improve its cost structure.
If GM and Ford are given loans, where’s the incentive to become more efficient or make some hard choices? All that will happen is that the taxpayers will piss billions down the drain so that GM can buy itself a few more quarters and Rick Wagoner et al continue to collect their indecent (relative to performance) salaries.
I like the market-based solution precisely because it forces the inevitable to happen, without wasting my tax dollars.
August 6th, 2008 at 2:54 pm
Nice, another $40 billion sweetheart loan (bailout) straight out of my pocket, extorted by the IRS, handed over to those with the biggest lobbying budget, (and advertising dollars) begs the question . . . .
Lyle Dennis = EV Pundit or GM Pawn?
I’m a fan of the Volt technology. I am a fan of the free market. I am absolutely opposed to totalitarianism. The GM loan, along with several other recent fiscal events (Bear-Stearns, Fannie Mae, Freddie Mac) are rapidly moving us in the wrong direction. I hope the American Public was paying enough attention in their high school civics class to understand this.
August 6th, 2008 at 2:59 pm
All the problems GM face today have only one source: there are too many fake auto journalists and experts financial analysts in America, and as they have discovered that writing on GM help sell their papers, they only they do is invent and criticize GM. This is shame
August 6th, 2008 at 3:02 pm
#11 Brandon
>> So basically instead of gasoline, you add water to your fuel tank. The water is then turned into oxygen and hydrogen by use of solar power. The hydrogen is then used in maybe a hydrogen engine, or maybe burned to create power for an electric car.
Hardly. I understand you are asking a serious question and I’ll answer to the best of my ability.
A hydrogen powered engine (regardless of what its driving… car, generator, etc.) takes pure hydrogen and chemically combine it with oxygen in what is called an “exothermic” reaction. An exothermic chemical reaction is one in which two (or more) chemicals have energy bound in their structures. When the chemicals combine, the new chemical compound has less total energy then the original chemicals had. The excess energy manifests as heat which is typically used to perform work.
This is true of any exothermic reaction including the combustion of petrolium products (e.g. gasoline or diesel). What’s special about the hydrogen-oxygen chemical reaction is that the reaction result is water.
While the creation of water from hydrogen/oxygen to water is exothermic, breaking water in to hydrogen and oxygen is endothermic, which is the exact opposite. This process is called “cracking” and it requires external energy to make it happen and it’s going to take a LOT more energy than you’re going to get from any solar panel that will fit on the roof of a car.
OK, Enough of the basic chemistry lesson… sorry about that but it was necessary for what’s next.
You cannot put water into a car and expect to come out with hydrogen, oxygen and enough energy to make the car move.
What will actually happen in a “hydrogen economy”is that distilled water will be cracked in an appropriate faciltiy. Then the hydrogen would be distributed through some system that’s similar to the gasoline/diesel distrbution system we have now.
Interestingly, an “appropriate facility” could be a “Thorium Salt” nuclear reactor where hydrogen cracking is a secondary product of a nuclear reactor that’s been built to generate electricity. I’ve never really been a fan of hydrogen fuel because it takes substantially more energy to crack water than you will get back out of it to perform work. With a nuclear reactor, cracking water could be developed as part of the reactor’s cooling system. Kind of a free lunch.
One of the things that has bothered me about hydrogen cracking is that a byproduct of the process is pure oxygen (occuring as O2 ozone) and I’m afraid that large scale water cracking will result in the production of toxic/corrosive levels of oxygen. To keep that from happening, I believe the cracking facility would have to capture both the hydrogen and oxygen and distribute them as necessary to generate water with no excess of either element. If I’m correct, a hydrogen powered vehicle would necessarily have both the oxygen and hydrogen on board, otherwise the vehicle will literally be sucking the oxygen out of the air.
August 6th, 2008 at 3:05 pm
#27 Nuclear Boy
GM doesn’t have loyalties to America. They’re loyal to the dollar. That’s why they make tons of their cars overseas. So why should I, a taxpayer, be loyal to them just because the founder was American? I wouldn’t expect GM to do me in favors. They’re job is to make money.
To your Boeing example, as an engineer at Boeing I’d be depressed at night if I knew that I had to be subsidized to stay in business. Hopefully I’m worth my pay and if I’m not, I need to find a new job. If Boeing can’t make an airplane that competes with Airbus, we absolutely should go out of business. Then I’ll go work for Google or Microsoft.
August 6th, 2008 at 3:12 pm
I would not give them a cent!
Inefficient GM management - not worth saving.
August 6th, 2008 at 3:13 pm
#39 Thom
But can we fill the trunk with lemons and use that as an auxillary power source to seperate the H2 from the O? that is what we did in school..
LoL
August 6th, 2008 at 3:14 pm
Want to save Big $$$$ ?? GM should become more streamlined from the TOP Down…. there is no way on earth that one of the ( HOW MANY ??? ) senior vice presidents deserve a multi million dollar salary… with the “bonuses”….. I’ll bet that 2/3 ’s of therm don’t even show up for work more than a couple of days per month..
Reduce the top end of the company by 30 % (save BILLIONS).. get the Volt out in the fall of 2009…. at a reasonable price….with a failsafe warranty…..
Apply the technology to the larger cars (just increase battery size to make up the extra milage)
Then do it to the SUV’s and Trucks.
Problems solved
August 6th, 2008 at 3:26 pm
ThomC
Mostly right, but Ozone is actually a molecule containing 3 oxygen atoms (O3). The kind we breathe is a molecule containing 2 oxygen atoms (O2), which is pretty harmless unless you light a match in a pure atmosphere of it. Monatomic Oxygen (just the single atom) acts as a “free radical,” a highly reactive form which can cause breakdown of/damage to complex hydrocarbon compounds (like those found in people), and so would be a health risk. I don’t know which form results from cracking, or electrolysis.
There is a (new!!!) method for using sunlight to chemically split water into hydrogen and oxygen,
http://gizmodo.com/5031810/new-way-of-storing-solar-energy-discovered
… but as you correctly say, you’d never be able to make enough useful hydrogen from the sunlight that falls on a car to be practical.
August 6th, 2008 at 3:28 pm
To #43 Ray Says
It is like asking GM CEO to fire himself to save millions instead of firing millions to save a buck. The former ain’t gonna happen!
August 6th, 2008 at 3:30 pm
#40.
but they do get bail outs…
http://www.progress.org/tcs04.htm (boeing)
http://seattlepi.nwsource.com/business/39369_boeingweb.shtml (airlines)
and here boeing was asking for 24Billion : http://news.bbc.co.uk/1/hi/business/1550262.stm
Gee..seems that another great American company had troubles, needed help, and are now back on board the well run list. but it hurt..like the big 3 are now..read it over..replace boeing with GM (or Ford, or Chrysler), and it looks pretty familiar.
August 6th, 2008 at 3:35 pm
And furthermore, how about this blast from the not so distant past:
Life in the Slow Lane: Tracking Decades of Automaker Roadblocks to Fuel Economy, (2003)
http://www.ucsusa.org/clean_vehicles/cars_pickups_suvs/life-in-the-slow-lane.html
In regards to fuel economy, the american auto industry (and public) is like a spoiled child. He’s been told over and over not to tease the dog, but he screams, cries, doesn’t listen, and keeps on teasing the dog. Finally, the dog bites (again, just like in ‘73 and ‘79). Giving GM a loan would be like blaming the dog and pacifying the child with a donut.
August 6th, 2008 at 3:45 pm
The one who could answer our question about how oxygen is emitted when hydrogen is made from water is nasaman.
I like Thorium. Thorium is our friend (only Australia has larger reserves than North America). It’s a pity that no one has been willing to launch the 20-year research program that it will take to get working reactors built, here. I guess Congress had more important things to do. Jimmy Carter, as president, was quoted as saying that the US nuclear industry needed to be based on the Thorium cycle; but as far as I know, he never lifted a presidential finger to make it happen. How different things might be today, if he had.
(#47):
Your doughnut and dog analogy is flawed IMO; you are actually deciding whether or not to send the injured child to the emergency room before he bleeds to death.
August 6th, 2008 at 3:56 pm
I listened to Paris Hilton’s response to McCain. Amazing, she made more sense than any of our polititians.
August 6th, 2008 at 4:02 pm
RLM - “polititian” - a Freudian mispelling?
August 6th, 2008 at 4:03 pm
Brrrrrrr…..I stuck my toe in the water of this post, and I think I will stay out until it warms up a little.
Maybe there is to much chlorine in the postings?
August 6th, 2008 at 4:04 pm
#8 Bernie Torbik
#14 Bernie Torbik
#17 Bernie Torbik
#21 Bernie Torbik
#36 Bernie Torbik
I just had a nice 4 hour afternoon cat nap…it was glorius. Then I come back here and your ‘bringing the noise,’ keeping it real…and all that. I’ve read the thread and don’t feel I have to comment at all, other than to send a shout out.
With you ‘manning the fort,’ hardcore style, I think I’ll take the family out to supper and see the new Batman movie. (I know I should have seen it ages ago, leave me alone, I’m in my 30s now I don’t like crowds anymore…I wait 3-4 weeks and go on a Wednesday, lol).
Catch you later…keep the faith.
August 6th, 2008 at 4:08 pm
For those who want the Gov’t to save GM, I’d like to propose a another idea. Buy GM bonds. If you want to support an “American” company, the free market has given you a perfect way to do it. Plenty of folks believe they’re actually a good buy too.
Using the Government to loan the money is simply forcing me, and every other taxpayer to do it against our will, even though I believe that it is not in America’s best interest. Some think it’s in America’s interest. So do your patriotic duty and buy their bonds yourself. Don’t pass the buck onto me.
August 6th, 2008 at 4:19 pm
Governments around the world subsidize and incentivize their auto, and other, industries in one way or another. It is their public policy as part of their efforts to try to expand and maintain their industrial bases as they seek to expand and maintain their economies.
Does anyone believe that Japan, Korea, Germany or France would allow their auto industries to slide into oblivion without taking such steps as these? I understand that Renault, which in turn owns Nissan, is a direct creature of the French govenrment.
I direct bloggers’ attention once again to the books of Professor Chalmers Johnson, the so called “Blowback Trilogy” - “Blowback, The Sorrows of Empire”, and “Nemesis”. Professor Johnson maintains that we have “hollowed out” our manufacturing base by allowing the huge negative balance of trade with countries which allow us basing rights for our imperial military.
So, while I take a back seat to no one in criticizing Detroit for its disastrous product decisions, the US government’s hands are not clean either. When we finally get to some tipping point level in our manufacturing economy, we will cease to be a First World country, with all of the ramifications that such will have for our children and grand children. We waste more than this every year in military cost overruns and procurement of weapons of war which never perform their intended functions.
According to Lyle’s post, these loans are supposed to be tied to tooling up for the next generation of fuel efficient vehicles. Hopefully, there will be some controls included to make sure that such is what the money is used for, and that it is not squandered on executive bonuses, stock options, and develoment of vehicles irrelevant to the goal. And yes, I do include the Camaro as one of the latter. This is not the time or the place.
So, as much as I hate this, my suggestion is that we hold our noses and JUST DO IT. The alternatives are even worse.
August 6th, 2008 at 4:28 pm
I don’t know were to start.
Why is it that most people here simply will not take responsibility for their vehicle choices? Why is it “GM’s fault” Americans bought SUV’s in the past? This is immature thinking, at best. NO ONE made me buy anything.
We have grown so spoiled in this country that we won’t take responsibility for our actions. It’s an epidemic everywhere. IT’S NOT GM’s fault we bought SUV’s!! We wanted them!! Case closed.
Else:
I guess then it is Anhieser Busch’s fault we buy budwieser and become alcoholics.
I guess its RJ Reynolds’ fault we buy cigarettes and get lung cancer.
Constant comedy by some of you “adults”. I’d be laughing if it wasn’t so pathetic.
August 6th, 2008 at 4:35 pm
Let’s re-write history. Here’s a hypothetical conversation that takes place in GM headquarters in 1990:
GM Marketing VP: We can sell all of the big SUVs and Pickups that we can make and at a huge markup.
GM Sales VP: There are lines running out the door waiting for Suburbans and Tahoes.
GM Visionary CEO: Don’t these people know that we are almost at peak oil and they should be buying fuel efficient cars. What if we discontinued the big gas guzzlers and only sold high mileage and alternative fuel vehicles?
GM Sales VP: Our fuel efficient cars are gathering dust on the lots and we only make a nickel on each one.
GM Marketing VP: What alternative fuel? Fuel cells are 30 years away and current battery technology gives you 50 miles per charge for a golf cart. Who’d pay for that?
GM Visionary CEO: I know that I’m right. What about hybrids?
GM Marketing VP: Who’d pay $3000 extra to save $1000 on gas? Our customers aren’t idiots.
GM Visionary CEO: California is making us go electric, what about that?
GM Marketing VP: We’ll do electric for California but they’ll be expensive. We’re planning a test lease program. Maybe I’m wrong and there will be a huge demand.
GM Sales VP: Remember guys, If we don’t sell the SUVs and Pickups, they’ll go straight over to Ford and buy them there. Our dealers are screaming for more trucks. Plus, we make a killing on each one.
GM Visionary CEO: What would our market share have to be to be profitable if we sold mostly high mileage vehicles?
GM Marketing VP: Current figures indicate that we’d have to be at least 60% of the market to break even.
GM Sales VP: That’s a lot of cars and we aren’t selling those right now. They’re just sitting on the lots.
GM Visionary CEO: I don’t care! I know that I’m right. Let’s make GM the technology leader. If we build them, they will come.
The CEO was good to his word. GM ceded the SUV and Pickup market to Ford. GM dealers sat on thousands of unsold cars. The EV1 was too expensive and was a technological dead end. GM’s hybrids cost $3000 more than an equivalent ICE only car and it would take 10 years to make up the difference in fuel costs. Since almost all of their automotive profit came from truck and SUVs, GM was never profitable again. Their market share plummeted, R&D budgets were slashed, Factories were shuttered. GM didn’t make it to the year 2005.
August 6th, 2008 at 4:43 pm
THOM #2
The previous generation of fuel efficient cars were built by the Japanese. The way the article is worded it sounds like GM ?
August 6th, 2008 at 4:48 pm
maharguitar #56
You must have been the proverbial fly on the ceiling for this one.
August 6th, 2008 at 4:50 pm
#34, Mitch,
Metro? Firefly? Are those at my local Chevy dealer?
Tundra - Max 200K/year. Right now, they’re doing just about 10K/month.
FJ Cruiser - probably 50K/year
Sequoia - 800 units last month. That’s right, less than 1,000.
In addition to all their other small cars, close to 200K Priuses/month. None of their big bruisers currently sell as well as the Prius. Toyota makes small cars and they make money on small cars. That’s what they do.
GM has been trying very hard to upsize the American consumer for well over a decade and they’ve been doing it perfectly cynically to game a system they lobbied to be defective in particular ways.
August 6th, 2008 at 4:51 pm
I don’t want to criticize GM “too much” because they gave the people what they wanted (trucks, Escalades, etc…). The problem is that the market (the price of oil) changes much faster than an auto company can. It is easy to criticize GM right now, but they are in process of transitioning to a more diverse portfolio which will be more resistant to market fluctuations (at least, I hope). The media is beating them while they are down…
August 6th, 2008 at 4:53 pm
Noel #54
I intended to answer Jason #9 and I finally decided just to say this :
If the loans are low cost, somebody must pay the difference between the market interest rate and the subsidized one. Who ? The taxpayers, us.
So that, if even the car makers repay their loans, they will be subsidized.
The question is I think : is it the last time they will ask for help ? Will they really change their behavior in the future ? Better forecast what are the real needs of the consumers in a true (not dreamed of) economic system ?
As usual, the move of the US car makers is as old as the world is : trying to privatize the profits and socialize the losses.
August 6th, 2008 at 4:55 pm
The problem with GM is their mocking of hybrids years ago, proclaiming them a wasteful “stop gap”.
In other words, they broke a fundamental business rule by not staying diverse. Now they are paying the penalty for putting all their eggs in one basket.
If they would have also been developing a high-efficiency technology while selling large quantities of monster-size guzzlers, things could have been different. But instead, they delayed taking any action until it was absolutely necessary. Now, something to competitive to sell is still years away.
August 6th, 2008 at 5:04 pm
No one can save GM from bad management. Their vehicles are not selling because folks are buying vehicles from other car makers. I hear the Prius is selling well.
Nissan just announced it is investing in lithium battery production facilities, but has GM?
Every time we turn around we get the feeling GM is slow playing Volt development while it looks at its lineup of fuel efficient vehicles and sees they just do not compete with Toyota, Honda, Nissan and others.
I hope the UAW and all those voting for the “no to drilling Democrats” are happy.
August 6th, 2008 at 5:11 pm
Maha,
That hypothetical GM boardroom conversation was pure genius. Everything’s clear to me now. GM really had no choice.
Hey, while your at it, could you put together your version of what happened in the early 90’s at Toyota’s boardroom when they were thinking about developing the Prius? Oh wait a minute, never mind. I can read about it here,
in Fortune magazine:
Toyota: The Birth of the Prius
http://money.cnn.com/2006/02/17/news/companies/mostadmired_fortune_toyota/index.htm
Maybe your hypothetical conversation could get published in Mis-fortune Magazine
August 6th, 2008 at 5:23 pm
If GM goes bankrupt, it will cost this country a whole lot more than 40 billions, and GM is only asking for a loan…. not a giveaway.
http://www.pbgc.gov/workers-retirees/benefits-information/content/page13181.html
If GM retirees lose their pension, the US government will have to pay sixty percent of the retirees pension. Sixty percent of approximately 500 thousand retirees comes to a huge huge amount and it’s paid until the pensioner dies. There is no doubt in my mind that our government will have to pay one way or the other. In a way the US government brought it upon themselves when they allowed foreign auto companies into this country with huge advantages over the domestic auto companies. Decades ago GM tried to establish themselves in Japan and never succeeded. The US government could have done the same as what Japan did.
http://www.uwsa.com/issues/trade/japanyes.html
August 6th, 2008 at 5:28 pm
53 Cautious Fan:
Okay, I do, and tit for tat then you should not be eligible for any tax credits for purchasing any sort of house or car: Volt, Prius, or anything else.
After all…why should I have to subsidize your purchase of a house I don’t live in and a car I don’t drive? Right?
August 6th, 2008 at 5:32 pm
What ever it takes to get GM and Ford and Chrysler converted to electrics is a necessary expense. I don’t care whose fault it was that we stayed on gas way too long, get off it now and buy the battery electrics we can fuel with homegrown fuel, US fuel. Make those cars better than the Japanese or any other country can and we can sell em worldwide. We have looked beyond tomorrow or next month and the answer is electric, not inefficient, hard to store Hydrogen. Help em retool and they will help us out of the recession we are not in according to some. Half the people who buy these cars will refuel them with homegrown solar. We solve the economy problem, the air pollution problem, and the Terrorist problem all at the same time with no war required. TED
August 6th, 2008 at 5:49 pm
64 Carcus:
Toyota had a domestic population that could support the development until foreign markets were ready for the vehicle and their domestic market has always been about small cars. It was also heavily subsidized by their government and, to a certain extent, ours.
The same was not true for GM. GM whose domestic markets LOVE big cars contrary to Dagwood et al saying differently. Before SUVS, it was Vans, before Vans, Station Wagons, before Station Wagons it was land yachts and muscle cars
Why the HATE for a freakin company I don’t know. Conversely, the smug Toyota love drives me crazy.
Here is a fun truth for everyone:
No Haggle at Toyota merely locks in the dealer’s profits they make money from you AND Toyota.
and
That GM dealer who you swear screwed you only made money from GM on your purchase (dealer holdback, no profit from you)
August 6th, 2008 at 5:50 pm
To #54 Noel Park- Well said. We all must realize these corporations are global! If the US engages in tax payer backed loans for GM’s survival, we MUST demand that GM sell Volts first and formost domestically. They must be available for the all Americans that want to make this important transition. I have not been a consumer that makes buying decisions based on brand loyalty. That is what marketers prefer. I purchase the best product I can afford. I do want to see GM succeed with the Volt, as the economic impact and benefits will benefit us all in many ways.
August 6th, 2008 at 5:56 pm
GM is a great stock to trade…All the news good and bad churns the stock…MY plan is to have GM buy me that Volt….I pick up $1000.00 a trade….And by the time 2010 rolls around I`ll have my Volt…Thanks GM….I have no worry of GM going under any time soon
August 6th, 2008 at 6:11 pm
69 Morgan,
May I suggest your read the article I linked on #47 post.
Life in the Slow Lane: Tracking Decades of Automaker Roadblocks to Fuel Economy, (2003)
http://www.ucsusa.org/clean_vehicles/cars_pickups_suvs/life-in-the-slow-lane.html
It may pull you out of your vacuum and serve as a reminder that foreign oil dependence has been a huge sleeping dog with big teeth. We’ve known for decades that we should find something better to play with. GM has been a facilitator in getting us (the short sighted public) into this mess.
I don’t hate GM, I just hate bad decisions, especially when they’re repeated.
P.S. Four of the five cars I’ve owned have been US made, the other is German.
August 6th, 2008 at 6:16 pm
#55 MetrologyFirst
I don’t think anyone blames GM for selling cars that people wanted to buy. No issue there. However, GM and the other US automakers went to the mat — and spent many dollars and expended a lot of effort — to do stop the increase in CAFE standards. That’s a different point. Our oil consumption was flat between 1980 and 1990. Then the automakers worked to kill the CAFE standards — Carl Levin and Jessie Helms were the stars — and consumption spiked.
This might also be OK but now the automakers want discounted loans so they can survive the consequences of their own bad decisions. Let there be no doubt that they have really screwed up: their businesses are in the crapper while Honda — which is focused on efficient cars — is the most prosperous manufacturer.
I’m in favor of limited help for the automakers, but we should at least recognize their responsibility for the current set of circumstances. They weren’t helpless victims.
August 6th, 2008 at 6:29 pm
71 Carcus:
Nope, I am not in a vacuum at all. I know all those arguments. GM fought CAFE and was wrong to do so. They have a slight point in that increasing CAFE would have disproportionately cost GM more than any other automaker and, in fact, provided exactly the kind of competitive advantage to the foreign domestics that they enjoy now.
I wasn’t referring to you in the hate department, I should have clarified, there are a substantial number who post here however that actually seem angry at GM without spending the least amount of time pondering the consequences of a US without GM.
August 6th, 2008 at 6:33 pm
I will NOt buy vehicles from any distressed companies, whether it is American or Japanese, PERIOD. BTW, My 2009 Toyota Corolla had low-quality interior, maybe Toyota is becoming Japanese GM. Ironically, Chevy Malibu looks so gorgeous, but its reliability has NOT been established, so I have to ignore it when I bought my new car 3 month ago! Sorry, Detroit!
August 6th, 2008 at 6:35 pm
As we wait for the CNBC special I ran across this piece which asks the question: is one Volt worth two Priuses? The underlying question of course is: why are GM’s costs so high? Maybe the special will shed some light on this question.
http://wheels.blogs.nytimes.com/2008/07/14/1-volt-or-2-priuses/index.html?partner=rssuserland&emc=rss
August 6th, 2008 at 6:41 pm
Bernie Torbik #36
“Why? Apart from the obvious - GM has been technically bankrupt since late 2005 (negative net worth) - Chapter 11 allows a company to reorganize its affairs. It’s not the end of the line, if the opportunity is used wisely. Many airlines have done it, for starters.”
Bankruptcy is an opportunity? Are you kidding? You see this as a means of reciprocity for their past mistakes?
You are decrying GM’s past decisions and recommending they screw over nearly everyone they have obligations to. Chapter 11 Bankruptcy is supposed to be a lifeline for a company that has no alternatives and allows for some means restructuring without everybody losing everything (except the lawyers
). It is NOT supposed to be an opportunity anymore than someone welching on their debts is. If a low interest loan gets them through the day without chapter 11, everybody (including Joe taxpayer) will be MUCH better off. Chapter 11 for GM will cost the taxayer a lot more, not to mention their creditors and others directly associated with their operation.
August 6th, 2008 at 6:52 pm
john1701a #62
True!
August 6th, 2008 at 6:58 pm
DonC #72
Right on! and perhaps it should be accompanied by a big corporate-wide haircut (union along with execs).
August 6th, 2008 at 6:59 pm
#76 Koz - Fact: GM is already bankrupt. Chapter 11 is a means by which they can take the necessary actions to ensure their survival beyond the next few quarters, albeit in a greatly reduced, but profitable, size. I don’t see it as “reciprocity”, but as a necessary step if they’re to survive.
Your statement assumes that GM is going to be able to repay its bondholders, honor its labor agreements, and become profitable. Wishing for it to happen won’t make it so. GM has several billion $$ worth of debt obligations coming due in 2008-09 that it has little chance of refinancing. Don’t take my word for it: check the yield on some of the shorter term GM debt, which is selling at a fraction of what its face value is. Clearly, the market doesn’t place long odds on GM’s ability to repay.
If you need further evidence, check out yesterday’s Wall Street Journal report on Cerebus’ inability to have several billion $$ worth of Chrysler’s bank loans extended. If the market doesn’t have any confidence in GM, Ford or Chrysler, why should the taxpayer?
You state that Chapter 11 is for a company with no alternatives. My question to you is: what are GM’s alternatives? FIFTY BILLION dollars of losses in three years, negative net worth of $40+ billion, debt trading at a fraction of its face value. There don’t seem to be many alternatives to me.
I ask again: why should the U.S. or Canadian taxpayer bailout incompetent management, greedy unions and others who have raided the store for fifty years? Anyone now buying GM stock in anticipation of day trading profits or debt is taking his/her chances, and should know better. If they get burned, so be it. Better them than the U.S. taxpayer.
August 6th, 2008 at 7:00 pm
I have absolutely nothing to say other than I want GM to survive and make the Volt and turn their entire line into EREVs. If they need a loan, okay with me. Personally, we give away too much money to foreign governments and not enough to Americans here at home.
Well, I guess I had something to say after all.
We spent billions of dollars in Iraq for what? We tax payers already got screwed out of that money. If we are going to get screwed again, might as well be by the big 3 and not some other country.
August 6th, 2008 at 7:03 pm
#73 Morgan,
So you’re essentially saying that automotive imports/exports is a 1 way door as far as u.s. manufacturing is concerned. GM/Ford/Chrysler can only sell in the u.s. and have no chance in heck of selling anything in Japan (or europe, etc…). Imported autos, however, can compete and dominate here. And the reason is ???
I suppose you’re going to say unfair taxes on our exports, or can’t compete with foreign government subsidies, or can’t compete with cheap foreign labor. If this is/were true, then THAT is where the high paid lobbyists (and presidential staffers (i.e. Andrew Card)) should have been putting their efforts. THAT is what government is supposed to do for its citizens and businesses in the interest of favorable trade through protective tariffs.
August 6th, 2008 at 7:03 pm
In regards to the flap being raised by some over the so called Detroit bailout, it should be remembered that every dollar that the US consumer has to spend on gas is a dollar that isn’t spent on a car.
August 6th, 2008 at 7:13 pm
81 Carcus:
No, because they didn’t have any product they could ship over there that would sell in any numbers.
The small cars shipped over there were more money for less and the large Trucks and SUVs that are GM’s well engineered nice vehicles aren’t exactly the vehicle for those markets. Currency exchange rates have never really been favorable either.
Those are the primary reasons.
Let me ask you….do you think the US is on a fair trading status with other countries with subsidies, taxes on exports and the like?
August 6th, 2008 at 7:21 pm
#44 Jackson - “There is a (new!!!) method for using sunlight to chemically split water into hydrogen and oxygen,”
This is doubtless a very exciting development, no question about that. However, as I’m sure you understand, the new development only relates to splitting oxygen from water. It doesn’t make any new breakthroughs relating to sunlight or splitting water in to hydrogen.
The PV panel which provided the electricity has existed for a while. Nothing new here — in fact they could have used an electrical outlet. Splitting the water into hydrogen using platinum as a catalyst is likewise well established and not new. Finally, combining the hydrogen and oxygen is not new. That’s just a basic fuel cell.
The revolution was being able to use cheap catalysts to separate oxygen from water with 100% efficiency at ambient temperatures and ambient pressure. The efficiency, cost of catalysts, normal temperatures, and normal pressures are mind boggling.
August 6th, 2008 at 7:28 pm
shorter Bernie Torbik:
1) GM declares bankruptcy
2) Employees work for free!!! Yay for America!!!
3) profit!!!!1!1!!1
Your plan is so full of WIN
August 6th, 2008 at 7:32 pm
#21
it is not about having the most domestic content or anything like that. (Last time I check GM has the highest domestic content not the big Japan 3). the problem that I Have with helping non-american companies is that it is our tax dollars that pay it not theres. Japan protects there companies from outside companies in there country and helps subsidize the development of projects like the Prius which Japan did for Toyota.
Today a report came out that says that Iraq has a surplus of money from oil of about 79 billion dollars. They have only spent about 7 billion on reconstruction in Iraq while the US has paid about 50 to 100 billion for the reconstruction. I don’t know about you but i would rather that tax money stay here and support OUR AMERICAN companies then those that are abroad that really don’t give a damn about us.
August 6th, 2008 at 7:49 pm
#85 Lurtz - If GM’s going to survive - a doubtful proposition, at best - they need to become profitable. Chapter 11 is their only recourse. If they can’t reduce their cost structure, they’re done before the middle of 2009. Someone with a lower cost structure can buy the R&D GM has put into the Volt, and put it into production. Either way, GM won’t be around in its current form past the middle of next year.
#86 Sean - I would prefer that no company receive any assistance, but face facts: nearly every state or provincial government attempts to bribe (municipal bonds, property tax forgiveness, outright grants) companies - automotive or otherwise - to make investments for the sake of job creation. Investments made by Japanese, Korean and German companies have been much better, in large part, because their cost structure is lower, they’ve located in the non-union South and they make vehicles the market wants.
I am as appalled as you are about the waste that is the Iraq war and subprime mortgage mess. All the more reason why I don’t want to see any of my tax dollars sent down a rathole at GM, Ford or Chrysler. If the Volt really is as good as it appears to be, someone will make it. If that’s Toyota or Honda, via a pickup of the technology at a bankruptcy auction, fine by me. At least it’ll be well made, and probably, less expensive.
August 6th, 2008 at 8:09 pm
83 Morgan,
“Currency exchange rates have never really been favorable either.”
As far as u.s. exports go, the exchange rate hasn’t been this good for foreign buyers in a long time (maybe ever). The U.S. greenback has tanked to the tune of 30%+ over the past 5 years.
“Let me ask you….do you think the US is on a fair trading status with other countries with subsidies, taxes on exports and the like?”
That’s a huge question. You could spend your life trying to answer that one, but . . . .
Here’s a recent article that shows u.s. automotive exports are on the rise
http://midwest.chicagofedblogs.org/archives/2008/07/auto_exportskli.html
My point is, I just don’t believe that the u.s. absolutely cannot compete against imports and can’t export either because
a. Japan’s population supports R&D of the types of autos that are exportable and the US population won’t.
b. The U.S. manufacturers can’t produce a product that will sell “over there”
c., d. e. f. etc…. ad infinitum
If that were true, then we might as well either close the borders or stick a fork in it.
However, if I had to pick what I consider to be the biggest handicap, it’s paying for retirees pensions and healthcare, as the “chairman” spoke about at length in his “letter”
(too bad, looks like that post got yanked, it was a good one)
August 6th, 2008 at 8:09 pm
#86 Sean
I think that Iraq is trying to save as much money as possible so they can clean up the mess we leave behind. The U.S. needs to spend at least another $200 billion in Iraq just to remove our bases and support infrastructure. We cannot afford to bailout Auto companies when we have important missions overseas. There is only so much money to go around. Iraq will need all their money when we leave so we must not force them to use their own money at this time. You have to see the BIG picture here. GM can handle their own problems.
August 6th, 2008 at 8:15 pm
In the first 15 minutes, the main point was Mr. Lutz saying that GM quality is back, for Chevy and for Cadillac.
August 6th, 2008 at 8:18 pm
huh…it is sort of hard to remember that just in 1996 China was nowhere near the consumer market that it is today
August 6th, 2008 at 8:21 pm
I would much rather see that $40 billion go to pay raises for our American soldiers putting their lives on the line. Our defense budget is less than a trillion dollars, this is not enough to support our global mission. Spending money to bailout corporate america is a waste. We need all government appropriations to be going to National Defense. We are at war people, I know many of you are in denial, but this is going to be a long and co$tly war. The next President will need to raise another $500 billion just for our Middle East adventures. We do not have the funds to help GM at this time in history.
August 6th, 2008 at 8:24 pm
The main point of the next 8 minutes was that GM and Rick Wagoner made a farsighted investment in China in 1996 with results that now are very successful for Buick, Chevy, and Cadillac.
August 6th, 2008 at 8:25 pm
To be clear.
I would like to see GM survive. I would love to see the volt produced, affordable and in large volumes, but I would hate to see another government bailout.
#87 Torbik may have the painful prediction correct: Chapter 11 and dump the retiree benefits, just like the airlines did.
I don’t want to see the retirees lose their benefits. But I don’t want to pay for them, either.
Maybe there’s a compromise solution in there somewhere.
August 6th, 2008 at 8:28 pm
The muslim brotherhood needs $40 billion more than GM does. This is about priorities. America is a world power and we expect help from our American friends. I think GM has stockholders that can give them money. The U.S. government dollars are wisely spent to help muslims create a better world to live in. America has global obligations that must be met and should not be involved in private corporation funding.
August 6th, 2008 at 8:33 pm
I think Halliburton Corporation should be granted $40 billion for helping to win the war in Iraq. The brave men and women at Halliburton have done a great service and should be rewarded appropriately.
August 6th, 2008 at 8:35 pm
The next 10 minutes was about Dale Earnhardt Jr, the new Camaro, and its designer.
August 6th, 2008 at 8:39 pm
I think GM should go bankrupt. They would emerge a leaner meaner company and better able to compete. I think the only reason they won’t is because current leadership (if you can call it that) doesn’t want to cede control. Since when you file for bankruptcy, the current management is screwed in the decision making processes. It’s all about power and control.
August 6th, 2008 at 8:40 pm
http://www.cnbc.com/id/15840232?video=807139236
Is this the video? Can’t watch it at work….
August 6th, 2008 at 8:46 pm
The next 10 minutes was on GM’s bottom line and Mr Wagoner, who said that over the last 10 years things had changed tremendously. Done with a light touch.
August 6th, 2008 at 8:49 pm
saving general motors OR saving general public …from extra money from bailout ?
August 6th, 2008 at 8:56 pm
The final10 minutes on the Volt concept and the Volt’s importance. There were a few video’s of Mr Lutz getting into and out of the Mule.
A price of $45K was mentioned. Nothing new here that I saw.
August 6th, 2008 at 8:57 pm
In between segments were some GM commercials from years gone by. I enjoyed those — fun to watch and good reminders.
August 6th, 2008 at 9:01 pm
Overall the program was a good summary of points already known by Volt Nation, done with some good video especially of China and the Camaro.
One might have come away wondering how a company with so many products that are new and successful all around the world could possibly be in financial distress That part was not explained.
The Volt was presented in a postive and promising way but if anything new was presented, I failed to detect it. That’s ok — for the general audience it made informative points.
August 6th, 2008 at 9:02 pm
Overall kind of a neutral message I thought. Kind of wait and see, a lot of nervous tension though.
Its amazing the access that Phil LeBeau got..he even got to drive the Volt mule.
Nothing new except the 15K battery price quote, don’t know if that was confirmed by GM.
August 6th, 2008 at 9:02 pm
well that was a nice enjoyable bit about GM.
August 6th, 2008 at 9:05 pm
Yeah, I watched it myself. A little disappointing, they practically showed 90% of it in previews throughout the day.
#1 Statik
“From watching the commercials and 5 minute ‘teaser segments’, it looks to be about 30 mins of GM-business related info, a good 15-20 minutes on the Camario (obviously since they have a Dale Jr. segment) and hopfully a solid 5-10 minutes on the Volt”
Seems about right.
I don’t think we really learned anything here, but I guess that is to be expected, a good portion of that show has been ‘in the can’ for several months…and we seem to be ‘up to the second’ for updates here on the site.
Side note: I had to fight for control of the TV over “So You Think You Can Dance,” for the record I’m going to take Joshua as the winner, lol.
August 6th, 2008 at 9:10 pm
It was a good summary of GM. As Statik said, I don’t think Volt fans learned a lot about the Volt program, anyway. I do wish they has spent more time on the Volt. But, I was surprised at them mentioning the $40’s price and $15k battery. Last I heard was $10k for the battery. I was hoping for a car price somewhere in the $30’s. Actually I still am.
Lutz’s test drive went pretty well. Didn’t come out as exciting as I thought it should have. Aside, I wonder why Lyle hasn’t had his drive yet?.
It seemed the show started off more positive with the international market, and then even with the Volt at the end, came across as a bit of a downer.
I know it could have been much more negative, and was actually more fair and balanced then I was expecting.
All in all, I thought it was positive for GM, but with not enough emphasis on what a breakthru the Volt / E-Flex is / going to be!
Wonder why my avatar didn’t show?
August 6th, 2008 at 9:14 pm
after watching the cnbc docu , the gm volt has another name …the gm silver bullet ! bob lutz said so !
August 6th, 2008 at 9:15 pm
#105 Lyle
“Its amazing the access that Phil LeBeau got..he even got to drive the Volt mule.”
Woohoo, Lyle. Into the threads tonight.
I think the access that Phil LeBeau got has a direct relation to the fact that CNBC is owned by GE…and of course the Volt is ‘chalk full of cutting edge GE products’ (as per Bob Lutz during his big unveiling speech for the Volt last year).
That relationship (GE owning CNBC) may have also tainted the bias of the program somewhat…and also the fact that CNBC’s revenue stream from the constant running of Cadillac commercials all day long between business news has to be massive. Although I did not notice it too much overall.
I guess the bias perhaps shows itself in the amount of negative energy that wasn’t shown that potentially could have been…or in the concept of the program in itself, the title was “Saving GM” after all, lol.
Overall Rating:
3 lightning bolts out of 5
Enjoyable, light fair…kind of like the old GM commercials they showed.
August 6th, 2008 at 9:24 pm
People do not understand the Volt yet. It will take a long time for that to happen. When we were building my version of the Volt back in 1974 the dean of the school of engineering got it killed. It still sits in my back 40.
Take Care
Arch
August 6th, 2008 at 9:30 pm
Frankly, I found the show discouraging. GM still thinks that all it has to do is can trucks, build better quality luxury cars and … a muscle car? A Pony Car?! The numbers on any Camaro wouldn’t have been meaningful in themselves; there’s only so much market for such. The value was the panache that it added to the rest of the line. I submit that in these days of ever increasing oil cost, the muscle car is irrelevent, and adds something … other than panache … to the rest of the line. All that effort and money for a new version of something Ford invented in the mid-sixties, so that GM can catch up to … Chrysler? There won’t be a Chrysler in ten years!
So, if they do the things listed above, the Volt is something they can ease into with limited numbers. And I hadn’t heard that $45K estimate, I thought $40K was the ‘new’ target, and maybe some government rebates like they offered for the Prius. Looks like even $7000 is going to be a flash in the pan.
The Volt for anyone not the officer of a company is starting to show similar chances as EEStor being real.
Someone will do it. Someone will fulfill the initial promise of the Volt. But not for a long, long time.
August 6th, 2008 at 9:33 pm
Arch, did your car use lead-acid batteries and the auxiliary turbine generator from an airliner?
August 6th, 2008 at 9:36 pm
110 Statik:
Now there is an interesting connection. General Electric.
They could purchase GM right now with pocket change and they are the leaders in just about any type of electric motor drive train and have been for years on power generation.
August 6th, 2008 at 9:45 pm
DonC (#84):
I realize that a system such as the one you describe has been developed, and your points against it are valid.
Uh, unless I read the story I linked wrong (short as it is), it refers to some method of using sunlight without PV cells. Also, if you split Oxygen from water, don’t you get Hydrogen?
There wasn’t a lot of detail in the blurb I saw, so if this is, in fact, that same system, then yes; we’re still waiting for a way to use sunlight and chemistry directly without PV cells.
As to fuel cells, did you happen to see this link I posted in a recent thread?
http://gizmodo.com/5032327/much-cheaper-fuel-cells-on-the-way-with-new-prototype
The gist: someone has made a fuel cell without platinum … it uses a form of conductive plastic instead. Cost: hundreds, not thousands.
I’m not a fuel-cell fanboy. But these two items (announced this week), has forced me to downgrade my estimate of the time remaining before hydrogen for automobiles is practical from 50 years to 20 years. There’s still the important matter of practically storing the hydrogen on-board to sort out.
August 6th, 2008 at 10:00 pm
#113 Jackson:
“Arch, did your car use lead-acid batteries and the auxiliary turbine generator from an airliner?”
I don’t know about Arch, but MINE was a starter/generator from jet bolted to the transmission of a British Austin Marina and a hand-soldered controller, with 18 six volt golf cart batteries… in 1981 !
I sold it to a member of the SEVA (Seattle Electric Vehicle Assoc) when I lost my job.
August 6th, 2008 at 10:01 pm
First of all I want to say that our troops are great to us and what i was really trying to put forth in my comment was that we need to invest in our own country first. The world expects us to bail them out of hard times and now that we need the help we don’t seem to be able to help ourselves. I would rather the money that we have here stay here and take of ourselves before we start giving to the rest of the world. I understand that we have an obligation to help out but let make sure that we can take care of ourselves first.
Have a good night and please pray for our troops to come home and safely.
thank you.
August 6th, 2008 at 10:06 pm
#66 Morgan
Actually I agree with you. Gov’t subsidies would be more efficiently spent if they didn’t take it from the people in the first place. I don’t blame GM for asking for money, who wouldn’t want below market loans. But I don’t think its efficient for the gov’t to try and manipulate me to do certain things by giving me my own money back. I should be able to decide for myself, as should you and everyone else. Usually subsidies just turn into giveaways. They are not an efficient way of doing things.
August 6th, 2008 at 10:08 pm
I happen to think GM’s retiree and healthcare obligations are a huge deadweight to the bottom line. General Motors *was* the largest employer in the country, after all - but now they’re fulfilling those obligations as a much smaller company.
But callously flinging those retirees and current workers’ healthcare needs into the libertarian maw isn’t the answer. GM and American corporations had a social contract with Americans: Do good work for us, we’ll take care of you. As long as you had a job, you would be taken care of. That was the deal. We rejected European socialism in favor of employers taking care of their employees.
America has slowly moved away from that, as well as seeing union membership decline to all-time lows. We now have defined-contribution retirement plans instead of defined-benefit plans. Employees bear more of the burden of healthcare costs. But as a shrinking corporation, GM still has retiree and healthcare burdens that don’t shrink (accounting schemes aside). If GM were a perpetually growing company it wouldn’t have these difficulties.
I think we both agree that GM would be a lot more solvent if it “got out of the retiree and healthcare business”. In fact, none of it’s international competitors pay for retirement or employee healthcare: Those are paid by their respective governments. GM has said as much as, too.
I’m for getting American corporations out of the retiree and healthcare business — let’s adopt the European model, and let our companies eliminate that liability from their balance sheets. Because the middle road - dumping retirees on the curb, and ending all healthcare benefits - is only fitting for a third-world country and would be to the detriment of us all.
August 6th, 2008 at 10:08 pm
OK, I watched the program on CNBC and was not impressed. Why? This is what I heard: “Whoo Hoo! look at us! We’re on our way back into the forefront… with the new CAMARO MUSCLECAR!”
Dale Earnhardt Jr: “She sure has a sweet V-8 !”
Well, You can’t go home again. - Dylan Thomas
R. Wagoner: “Sales to the Chinese are gonna be our saviour… if the Japanese don’t beat us to it”
Rick, at the snails pace you’re moving at now, the Japanese are gonna whup yo @$$.
August 6th, 2008 at 10:25 pm
All in all not a bad prese