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Washington Likely to Give GM Loan To Help Build Electric Cars

September 11th, 2008 | Posted in: Financial, Politics

The US auto industry is going through especially difficult times as sales have plummeted along with the sagging economy and rising gas prices. The Detroit 3 have been struggling to make ends meet, and have been hemorrhaging money. Although GM has plans for maintaining liquidity into 2010, time for a hopeful turnaround, they, Ford, and Chrysler are pressing Congress for a collective $50 billion in low interest loans.

On Friday Rick Wagoner will provide testimony to a Senate panel on energy independence, in which he will appeal for the loans. Today he was involved in discussions with legislators via telephone.

Last years energy package appropriates $25 billion but the big three want to up it to $50 billion.

GM spokesperson Greg Martin specifically tied to the Volt to this loan, saying “Certainly a program like the Volt would qualify under the guidelines”

Chrysler vice-chairman James Press similarly stated “I think it will allow everybody to bring electric cars, plug-in electric cars, and hybrid cars to market sooner,

The congress has just 3 weeks to put this loan package into legislation, but house speaker Nancy Pelosi indicated the loan plan is a “high priority.” She goes on to say “we certainly will have it (the loan) in something (a package)” and “it is very essential to the industry, and it goes in the right direction of new technologies. And so there is great support for it. What vehicle it is in just is a question of what will pass and what will be signed by the President.”

It is reported that both McCain and Obama support the loans. President Bush has not issued a position.

Source (Detroit News) and (New York Times)

Posted by: Lyle

147 Responses to “Washington Likely to Give GM Loan To Help Build Electric Cars”

Jimmy Says:
September 11th, 2008 at 8:18 pm

I believe it is extremely important for our government to support our auto industry to help us make the shift off of oil. It is a heck of a lot cheaper than funding our military so we have access to oil …not to mention helping our environment and trade deficit.

P.S. GM can you please offer a sport version of the Volt with flared fenders and larger wheels?

Thanks,

Jimmy

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Katsuaki Watanabe Says:
September 11th, 2008 at 8:19 pm

This is a BAILOUT. If it walks like a duck, acts like a duck then it is a duck. This pig has lipstick all over it. I am tired of this country bailing out incompetent CEOs. Not just auto executives, but ALL of them, including Investment Banks, Airline companies, Hedge funds, etc. These CEOs should be serving JAIL TIME, instead they are served GOLDEN PARACHUTES and laughing all the way to the bank. Outrageous. Only in America !!

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vincent Says:
September 11th, 2008 at 8:20 pm

Good…they need the loans.
New management at GM should be a requirement for the loans approval. Bob gets to stay.
When these loans happen the management should be paid minimum wage until they prove their worth. No bonus, no stocks, no private drivers etc.
Man Up Boys….right now… your a joke at best.

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Jackson Says:
September 11th, 2008 at 8:22 pm

I feel very strongly that Chrysler should be excluded from the proposed loan. They’ve had their trip to the well. Following their unprecedented rescue twenty years ago, (and after paying off the loan, it should be noted), they eventually went to foreign ownership before finally ending up as an LLC owned by a holding company. They had their shot, and they blew it. They won’t get to an electric car until after the EREV and BEV have broken through.

More for GM & Ford, who are much better prepared to use the loans for the intended purpose.

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Jeff M Says:
September 11th, 2008 at 8:28 pm

Maybe the federal government should just take over GM and Ford, they seem to be in the mood for doing such things

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vincent Says:
September 11th, 2008 at 8:34 pm

Ditto on Chrysler. These clowns bought a shit company. Let them pay the bills. If they can not turn it around thats their drama.
These guys want to spend their money on re doing the Sebring. Wow, just brilliant. Sheeeesh.

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Albert Einstein Says:
September 11th, 2008 at 8:43 pm

The U.S. is rapidly moving away from Capitalism and more toward Communism. Sad but true. We are being run by an Oligarchy. We should be letting companies that are run poorly FAIL and let economic forces create other companies that would automatically fill the void. Instead the privileged few are protecting their good ol’ boy network at the expense of the average citizen who in the end is going to be forced to pay to clean up this corporate mess. Eventually the larger lower class will rise up and destroy the elites in this society once they have had enough. History always repeats itself.

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DB Cooper Says:
September 11th, 2008 at 8:46 pm

I agree the infusion is needed to lubricate the process of bringing the next generation of technology to market more quickly.

But if there’s going to be American taxpayers’ money changing hands here, we damn well better have an agreement that this money is spent inside the US. I EXPECT THIS CONTRACT WRITTEN IN BLOOD !!. It better not be spent sourcing parts out of asia so GM can afford to blow a fortune on assembling a bunch of Chinese parts; and slap a ‘Made in USA’ label on it.

As long as all this loan money stays in the US (development, engineering, tooling, supplied parts, assembly) then it’s okay with me.

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DonC Says:
September 11th, 2008 at 8:50 pm

Key point would be that, as Pelosi says, “it is very essential to the industry, and it goes in the right direction of new technologies.” Hopefully “new technologies” means exactly that and not warmed over porridge.

What strikes me is that having a US based auto industry is like winning the gold medal in basketball. It’s not strictly needed but since it is our game the national psyche rests better with it.

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NZDavid Says:
September 11th, 2008 at 8:51 pm

Well, it seems only fair that they waste massive sums on the auto industry, everyone else is in the trough. This thread is hand made for Statik. lol.

It would have been a lot cheaper to wait until the big three went chapter 11 and then bail out the new technology’s. JMHO.

And just for the Grump.
LJGTVWOTR

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Lee Iococca Says:
September 11th, 2008 at 8:58 pm

This sounds a lot like Chrysler II – The Bigger Bailout.

I think Chrysler got Jimmy Carter’s gang to pony up (pardon the pun mustang fans) $1.2 BILLION in federal loan guarantees, that sounds like chump change compared to this $50 billion dollar scam they are cooking up now. LOL

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Grizzly Says:
September 11th, 2008 at 9:00 pm

NZDavid #10

“It would have been a lot cheaper to wait until the big three went chapter 11 and then bail out the new technology’s. JMHO.”

*** *** ***

This isn’t about just the Big 3. Allowing them to go Chapter 11 would have hurt too many other industries in the process. The economy isn’t about lone companies it’s about industries and how they affect other industries and so on.

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Nikola Tesla Says:
September 11th, 2008 at 9:17 pm

I would much rather see the Fed take $50 billion and just give it to a small startup like a Tesla, rather dump it into big corporations that have broken business models that have been burning through cash faster than old Rome.

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Bail Me Out Says:
September 11th, 2008 at 9:22 pm

bailout
bailout
bailout
bailout
bailout
bailout
bailout
bailout
bailout
…. repeat 50 billion more times…

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terryk Says:
September 11th, 2008 at 9:25 pm

My requirement is that if the US government gives money or backs loans, that money can only be used to assist the US markets and production facilities. If GM needs assistance in Europe they can ask the EU. Same for Asia. Same for Canada.

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gieso Says:
September 11th, 2008 at 9:32 pm

Pretty cheap compared to the $10 Billion a month for the Iraq war.

If we didn’t need the oil in that region of the world, I doubt we would have got in that war in the first place. WMD or not.

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Tagamet Says:
September 11th, 2008 at 9:33 pm

Re the Grump = Good one! LOL

LJGTVWOTR!!

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terryk Says:
September 11th, 2008 at 9:34 pm

#16 gieso:

Of course not. We want to surround Iran and ensure the flow of oil to the US, Europe and Asia.

I agree that the $1T could have funded some incredible research towards alternate energy.

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Ron Says:
September 11th, 2008 at 9:41 pm

Communism in action. And that’s not necessarily a bad thing in spite of Americans being programmed to yell “BOOO” when that word is spoken.

I agree with the previous sentiments of “make sure the money is spent in America!” This bailout could easily boost the economy far more than the welfare checks we all got this past summer.

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Arch Says:
September 11th, 2008 at 9:43 pm

Sure they need a bailout. That is what happens when you let the bean counters design a car. JMHO

http://www.edmunds.com/insideline/do/News/articleId=131856

Take Care
Arch

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jediwompa Says:
September 11th, 2008 at 9:43 pm

This is a bailout. I agree with the above comments that Chrysler should certainly be excluded from this if it does make it into law. They have already failed once and been saved and they didn’t learn their lesson. And of the big three I hear the least about alternative fueled vehicles from them. They clearly are not prepared for the future and should bite the bullet if they can’t make the economic judgement for the future of their industry.

Ford has tried a little, so I could maybe let them slide in this.

GM should have no part in this as well, though. They clearly are making a slow, but concerted effort to get on the bandwagon and have already invested the money to make the volt happen. Why give them more money to squander. If anything I’d prefer the government to provide an incentive along the lines of: Get the Volt to market by mid 2010 and we will ensure/back a 0% loan for each one bought for the consumer. This will provide GM with many financially capable consumers and give the consumers an affordable chance of getting one. Perhaps even go to the extreme of requiring multi-car households to purchase at least one green car.

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terryk Says:
September 11th, 2008 at 9:57 pm

Arch 20:

What does that have to do with bean counters?

Not that I am a fan, they are the ones that usually have to break the news to everyone that you aren’t going to make a dime on the product unless you reign in the costs.

But I don’t get what it has to do with the Volt design.

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DB Cooper Says:
September 11th, 2008 at 9:57 pm

Jedi -

“They clearly are making a slow, but concerted effort to get on the bandwagon and have already invested the money to make the volt happen. Why give them more money to squander.”

GM has not yet begun to shell out for the tooling for production of the Volt. For every supplied part, GM foots the bill to the supplier for any tooling and machinery that is specialized for that part. A good example would be the ‘tombstones’ or machining fixtures – the suppliers use them, but GM owns the tooling.

With any new platform there is a big investment in all this kind of stuff. This is where a cash infusion will ‘grease the slides’ and help bring the finished product to market earlier. I can understand it in terms of investing the (loan) money in future energy independence. But I repeat – ONLY if that money stays inside the US.

“If anything I’d prefer the government to provide an incentive along the lines of: Get the Volt to market by mid 2010 and we will ensure/back a 0% loan for each one bought for the consumer. This will provide GM with many financially capable consumers and give the consumers an affordable chance of getting one.”

I do like the idea about the loans to build the consumer base. A ‘bailout’ for the little guy, if you will.

“Perhaps even go to the extreme of requiring multi-car households to purchase at least one green car.”

I have an 86 Fiero GT that I had painted deep emerald green… does that count ? Sorry, I just can’t agree with telling anyone what to buy. That’s a bridge too far IMO.

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Dan Says:
September 11th, 2008 at 9:57 pm

This will only cost the government money if one of the companies default. If they repay it, there is no cost to the government whatsoever. These loans make a bankruptcy far less likely.

So your options are:

1. Lend money to the Big Three specifying it be used for re-tooling for more efficient vehicles, and give them a fighting chance of a resurgence.

2. Don’t lend them the money, with the likelihood of at least one of the companies going bankrupt. It also reduces the speed with which they can pursue fuel-efficiency.

A bankruptcy would be expensive for the US economy. A resurgence of the big Three based on cars like the Volt would be hugely beneficial for the US economy, lessening the reliance on foreign oil.

To me, this is a no-brainer. It is a loan, probably at no cost to the government, which could dramatically improve America’s energy security and the financial prospects of the country’s largest manufacturers.

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Bryce Says:
September 11th, 2008 at 10:04 pm

Terryk, GM is an international company with branches all over the world, but it is based in the U.S. It is silly to think that other countries would be willing (let alone able) to bail out an AMERICAN auto maker. That would be like us bailing out Toyota or Nissan for something, or the Japanese government bailing out Chrysler. That would be quite silly.

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ksuhwail Says:
September 11th, 2008 at 10:09 pm

#2

1st off, I believe the auto industry is the largest domestic manufacturer of goods. For every person that one of the detroit 3 employ nine other jobs in our economy are supported. If GM, Ford, Chrysler go down…then we will have a giant economic problem to deal with. While I do agree with not bailing out bad CEOs, the corporations MUST survive.

Also, if you are driving a foreign car (Toyhondasan or German) you are a part of the problem that has caused this.

Do I have you, or anyone else for that matter that drives a foreign car, to thank for having my hard earned tax money be used as an economic crutch?????

I wish someone who is an “import-only” buyer could explain to me why they feel they must sell us out. Would a tax refund check financed by these buyers be too much to ask for? It is because of these people, we have to bail out our own economy!

I don’t understand it….I travel a ton with my job and I have had the oportunity to see the world. 90+% of the cars in Korea are Korean, 90+% of the cars in Japan are Japanese. 90+% of cars in Germany are german or french. Why are less that 50% of cars in the US american?

I am foreign born(arab) but drive a Chevy….I don’t understand it! If I am wrong then PLEASE tell me but I can’t see this as anything but positive (other than setting an unfortuante precident).

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jefro Says:
September 11th, 2008 at 10:15 pm

A strong nation must rely on trained workforce. It must have a strong industrial base and fair trade.

After NAFTA I think Congress needs to rethink how they spend the money. Hopefully it would put American workers to work building American goods and exports.

Any comparison to another country is flawed. Japan and others have unfair trade and tax and environmental laws. Why do you think Japan’s Prius car makes the batteries in China. No environmental or OSHA laws. Nice to have fair trade with a country that doesn’t care about the people or land.

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ksuhwail Says:
September 11th, 2008 at 10:28 pm

#27 makes a very good point.

I know many of my friends in Japan would be interested in American cars over there (one actually owns a mustang) but the Japanese government applies a huge tarriff on imported vehicles. They sell their cars here freely but they don’t let us sell ours there freely! Thats not free trade at all!

I say lets charge toyota, honda, nissan, bmw, audi etc…..a $10k tarriff on every vehicle not produced in the U.S. and see how the market will correct itself.

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GmsAJoke Says:
September 11th, 2008 at 10:33 pm

I think the government should just give everyone in the a million bucks and be done with it.

What the hell, inflation will make the volt cost 500,000, but then again it will cost 10,000 for a loaf of bread. I think we all will need government cheeze soon if they keep up these bailouts.

WELLFARE FOR ALL. WE ARE ENTITLED TO IT.

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Bob LutzLier Says:
September 11th, 2008 at 10:33 pm

Stupid, they should get their own money, if they can’t, they have bankruptcy court to help them!

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DB Cooper Says:
September 11th, 2008 at 10:37 pm

ksuhwail -

I see exactly where you’re coming from – firsthand. I happen to be one of those nine others that are in a job because of the auto makers. Also, living in Michigan I see every day what happens when a large industrial base dies on the vine. Everything around it rots and it radiates outward from there.

That said, I don’t see the new production models coming out of Michigan. The UAW has succeeded in putting fear into the auto companies. They are moving their assembly plants out of here and probably won’t be coming back.

Fortunately the salary (non-union) management and design centers have remained near Detroit, and that has allowed some suppliers to remain around here. Believe it or not, the supplier I work for is actually growing.

I’m not completely sure which arcitecture the Volt is designed on, but there’s a good chance we have a hand in the front suspension. So I’m no position to complain about my taxes supporting the domestic auto industry; It’s not like I don’t have a dog in this race.

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Grizzly Says:
September 11th, 2008 at 10:43 pm

ksuhwail Says: #28

“I say lets charge toyota, honda, nissan, bmw, audi etc…..a $10k tarriff on every vehicle not produced in the U.S. and see how the market will correct itself.”

*** *** ***

They’d just shift all their production to the US from plants they were able to afford to build during the unfair trade years (1945-present) and then continue to sell cars. We’ve always believed in free trade, and there’s nothing wrong with that, but sometimes you’ve just got to insist on unilateral agreements. Our government is in many ways responsible for this as well as the mess we’re in with the largest transfer of wealth in history!

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DB Cooper Says:
September 11th, 2008 at 10:47 pm

At least it would bring those assembly jobs in to the right-to-work states.

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Statik Says:
September 11th, 2008 at 10:49 pm

Couple of things here:

The 25 billion was already passed last December in the 2007 energy law. What Pelosi is talking about being a “high priority” is not approving the ‘other’ 25 billion in the compressed 3 weeks to get it legislated, but rather the issue is for congress now is to approve 3.8 billion from the ‘kitty’ to cover the default risk…by Sept 30th.

There is no way to get the 50 billion through in time I don’t think, it’s just too hard, too much of a hot button issue…it could be attached to the ‘in the works’ second stimulus package, but it seems unlikely.

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Grizzly Says:
September 11th, 2008 at 10:49 pm

#33

It is, that’s what I was referring to.

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Paul-R Says:
September 11th, 2008 at 10:52 pm

ksuhwail is right.

GM’s bean-counter management of the 70s, 80’s, and 90’s is only half the problem.

The other half of the problem is protectionism. The Japanese government protects their companies from competition. The USA government does not. Toyota plants are allowed in the US, but GM plants are not allowed in Japan. So even if GM and Toyota make cars of equal quality, design, and specifications, GM is destined to lose because the Japanese government protects Toyota.

The Toyota/Honda cheerleaders on this board don’t seem to get it. This is not about Toyota/Honda vs GM. This is about the Japan vs USA in an economic battle. GM employees are the economic “troops” in this battle, and you want them to tank? Not wise.

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bruce g Says:
September 11th, 2008 at 10:53 pm

Katsuaki Watanabe,

So nice to hear from you,

But should you not be more cautious before insulting your fellow CEO?

After all, every corporation has its day in the rising sun and a long period in the sunset, even yours. Remember, Hyundai is on your tail.

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cautious fan Says:
September 11th, 2008 at 11:11 pm

# 8 DB COOPER Not sure why you expect GM to keep all the money here in the U.S. Its a mulitnational. Even If the gov’t finds a way to structure this, it just means GM moves other money overseas they would’ve spent here.

I though GM was developing the Volt because the market wants it. Why does it need a subsidy then. Dell doesn’t need one. They produce what the market wants. And if the market wants a Volt (I do), then why does it need a subsidy? Sounds to me like pork.

Just want to straighten out a common misunderstanding. The gov’t can’t create jobs out of thin air. When they take MY money, and give it to someone else, it just means that rather then me creating jobs with my own expenditures, they first run it through a terribly inefficient bureacracy, waste some, and then create some jobs. Net effect is job destruction, not creation. So while this may create more jobs in Michigan, it takes a few from every other state and the net effect is bad for the U.S. economy.

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Grizzly Says:
September 11th, 2008 at 11:17 pm

cautious fan #38 Says:

“Net effect is job destruction, not creation. So while this may create more jobs in Michigan, it takes a few from every other state and the net effect is bad for the U.S. economy”

*** *** ***

If GM or any of the big 3 fail, do you have any idea how many companies in how many industries in how many states will be affected? It just isn’t that simple.

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Frank D Says:
September 11th, 2008 at 11:22 pm

It seems our entire economy is getting bailed out these days. My concern is that if GM gets a loan or bailout, there will be no provision of making sure GM sells all Volts here in the US instead of shipping more of them off to other countries. As tax payers, we should demand this before our tax dollars are used for a bail out. I hope someone else besides me realizes this.

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DonC Says:
September 11th, 2008 at 11:43 pm

#20 Arch – Let us not forget that all these experts thought the Aztek a breakthrough design.

#34 statik – When reading your post I didn’t notice it was you (no avatar) and was thinking “who is this guy with the facts ruining all the fun?” LOL

I think the authorization bill for the $25B was passed last year. That was step one. But the process has two steps and Congress still has to appropriate the money. That’s what is on the table now. Actually it’s a done deal. Michigan is sort of in play this presidential cycle so no one is going to whack off the good humor man.

In a related vein, one thing which is so interesting to me is that with all the moaning about the bailout no one is screaming about MMS taking drugs and sex from the oil companies in return for cooking the books on royalties. All this sturm and drang about communism and no outrage about thieving. It seems so odd. It’s like screaming about the loans and then not worrying when they’re not paid back.

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Statik Says:
September 11th, 2008 at 11:43 pm

#10 NZDavid

“Well, it seems only fair that they waste massive sums on the auto industry, everyone else is in the trough. This thread is hand made for Statik. lol.”

——

Why is it on all things negative I get mentioned? Hehe. Do I pop into too many of these type of discussions? Am I the Hugo Weaving/Agent Smith of gm-volt.com?

I’ve already given my 2p on this subject…I’ll let sleeping dogs lie tonight.

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Statik Says:
September 11th, 2008 at 11:48 pm

#41 DonC

#34 statik – When reading your post I didn’t notice it was you (no avatar) and was thinking “who is this guy with the facts ruining all the fun?” LOL

I think the authorization bill for the $25B was passed last year. That was step one. But the process has two steps and Congress still has to appropriate the money. That’s what is on the table now. Actually it’s a done deal. Michigan is sort of in play this presidential cycle so no one is going to whack off the good humor man.

In a related vein, one thing which is so interesting to me is that with all the moaning about the bailout no one is screaming about MMS taking drugs and sex from the oil companies in return for cooking the books on royalties. All this sturm and drang about communism and no outrage about thieving. It seems so odd. It’s like screaming about the loans and then not worrying when they’re not paid back.

——-

I know, I missed your icon a few times myself.

Sorry, my words got a little messy there–> ‘to approve 3.8 billion from the ‘kitty’ to cover the default risk…by Sept 30th,’

It’s worded badly, but thats what I meant, pass the appropriation in time, lol. I’m going to blame the lateness of the hour on my choppy diction.

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Statik Says:
September 12th, 2008 at 12:03 am

#41 DonC

In a related vein, one thing which is so interesting to me is that with all the moaning about the bailout no one is screaming about MMS taking drugs and sex from the oil companies in return for cooking the books on royalties. All this sturm and drang about communism and no outrage about thieving. It seems so odd. It’s like screaming about the loans and then not worrying when they’re not paid back.
———–

Yeah I don’t know. Just seems like their is so much going on alot of stuff that would normally be important is falling through the cracks.

Unrelated: I didn’t realize it, but Ike is a oil producers nightmare right now, that thing is cutting right through oil’s heart and it’s such a huge system. I know alot of offshore rigs are evacuated…but geesh.

The sticker is hurricane coming through Houston, Pasadena etc. I figure a good 20% of the US refineries will be shuttered for awhile.

I know prices have been in retreat somewhat, even in front of Ike, but I wouldn’t be surprised to see a significant spike.

What the heck is the wholesale charge coming out of refineries right now? People will be getting a surprise tomorrow and the next day I think at the pump.

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Carcus Says:
September 12th, 2008 at 12:18 am

Pure insanity.

Just a few years ago, and under the same leadership, GM fought tooth and nail to NOT have to build more fuel efficient vehicles.

While lobbying hard against CAFE standards,

GM dropped the ball on electric cars.
GM dropped the ball on battery technology (Nimh)
GM dropped the ball on hybrids.

Now, the same leadership has the gall to tell congress they need government loans to become more fuel efficient.

It’s pathetic.

Hey Wagoner, why don’t you grow some , admit your mistakes, and dig your company out of this mess WITHOUT HANDOUTS.
Either that, or pull the rip cord on your golden parachute and let someone with more foresight and integrity give it a go.

By the way, maybe the board of directors needs some new blood as well.

Rant complete.
——————-
DAM,BIATSH
Don’t Ask for Money, Build It And They’ll Stop Hating

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andy Says:
September 12th, 2008 at 12:20 am

Paul-R , Protectionism is ok if its in US interest but wrong if its in someone else’s interest. In my country the trade barriers have been reduced and it seems to benefit everyone else except our employees! lol. Your country plays hard ball on primary products so don’t be surprised if it hits you back somewhere else.Your country does protect its own. Ford australia cannot export our fords to america because of barriers set up by unions and ford. The US engineers would be shown up for what they are worth.
American cars compete with japanese cars? its an oxymoron. Face the facts, your engineers are not as good as the japanese. Their fit and finish is so much better than yours. They seem to have a good eye for detail.
I hope the VOLT works because, GM don’t have a lot of brownie points left.

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Carcus Says:
September 12th, 2008 at 12:25 am

Rick Wagoner, World-Record Holder

http://executivesuite.blogs.nytimes.com/2008/08/06/rick-wagoner-world-record-holder/

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andy Says:
September 12th, 2008 at 12:28 am

Carcus, you are absolutely right about the stupid behaviour shown by GM in the past. However, they are on the cusp of a motoring revolution, maybe they should be given a chance. Don’t get sucked in by the “chicken little screams” because they are for real this time. lol

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DonC Says:
September 12th, 2008 at 12:30 am

#44 statik

Yes, a lot of the refining capacity in the US is south of Houston. Ike shouldn’t be a problem per se but the refineries are sure to be without power for some period, and the roads may be flooded as well.

I think I read earlier today that prices had spiked at least a dollar a gallon in the Gulf region at the wholesale level. Price hikes will filter through to other parts of the country. However, just like with Katrina, this is likely to be a spike that quickly comes down.

Hopefully omegamann66 will be OK. I know he said they were still recovering. Ike is a long way away but it’s wind field is absolutely huge. He’s one big system.

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Grizzly Says:
September 12th, 2008 at 12:55 am

Carcus #47

Given the management of GM throughout the 80′ and late 90’s it’s no secret that the realignment of the business model is going to be a painful process. The BOD understands this and that’s why they retain Wagoner. If GM had really put short term financial performance ahead of LT business model they could certainly have squeaked out a ST paper profit. That’s not the goal, and not only would it be more of the same of the 80’s and 90’s but it would be the sure road to ultimate destruction.

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Mike J Says:
September 12th, 2008 at 1:01 am

While I agree that GM has made some bad decisions, the problems that they have today are primarily due to decisions that we made a very long time ago. My parents generation looked at toyota and honda cars (vs. motorcycles) as cheap junk and the great cars were the US brands. Then for many years, domestic manufacturers made a really bad product compared to the foreign competition. They lost my generation; everyone that I know believes that American cars just aren’t as good as Japanese and German.

But really, for the last decade or so, many domestic cars have actually been quite good. The volt and its decedents can win the next generation of car buyers, which will be great for the US in the long run. The loan (or whatever you want to call it) will be great for the industry long term. When you compare it to the cost of the war, it is a bargain.

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GXT Says:
September 12th, 2008 at 1:20 am

26. ksuhwail,

What a load of crap! GM makes horrible product and it is my fault because I didn’t buy it? Been there, done that, won’t do it again, and I am enjoying not having to go to the dealership every few Saturdays to get the GM repaired. I know communist USA is into bailing out companies that don’t deserve to exist but I still believe it is the consumer’s responsibility to spend their money in a way that rewards the good and punishes the bad.

The Volt is a PR tool. That was always obvious. But can there be any doubt given the leak of these pictures shortly before Wagoner’s testimony?

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GXT Says:
September 12th, 2008 at 1:30 am

51. Mike J,

Failure to make a competitive hybrid is a bad decision. The Volt is a bad decision. Spending extra money to rush out the last round of trucks and SUVs is a bad decision. These are all things that GM has done in the past few years.

I’ve owned a post 2001 GM and it was so horrible that never again would I consider owning one. They are only now starting to make a couple of cars (Malibu, CTS) that are at all competitive in terms of design and it still too early to tell about reliability and depreciation.

This isn’t ancient history. And the Volt goes to show that they are still screwing up. Just you wait and see how badly they mismanage your 50 Billion dollars.

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Ed M Says:
September 12th, 2008 at 1:30 am

Jimmy #1

The government will always have to fund the military a large military because there are enough jerks in the world that aren’t connected to oil that are a real threat to America.
Bailing out GM and other auto makers is state socialism, not a lot different than Communism. In GMs case, they may deserve a helping hand because they’re trying a new technology. As for Ford and Chrysler, do we really need them ?

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A Chrysler Owner Says:
September 12th, 2008 at 1:36 am

I couldn’t agree more about Chrysler. They had their trip to the well. They blew it bigtime. Their cars may have been good in my grandfathers day but they’re crap cars now. Let ‘em fail.

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Ed M Says:
September 12th, 2008 at 1:38 am

Mike J #51
“I’ve owned a post 2001 GM and it was so horrible that never again would I consider owning one.”

Your part of the problem. If Americans had stopped buying large pickups, GM would have been forced to make competitive small vehicles.
How can you say the Volt is a screw up when there’s not one produced yet ?
Now let me see, you bought an oversized truck in 2001 and now you want another gas guzzler for styling but you wouldn’t consider a Volt. Your logic escapes me.
How about those oil prices everyone ? Consumptions down a little and the price of oil crashes. Just wait until the ev’s come fully on line, and watch those prices drop.

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Confused Says:
September 12th, 2008 at 1:56 am

Of course the feds are going to give them the money, they can blackmail them with the fear of massive layoffs in an already down economy. That’s not the interesting part of this post. What I find the most interesting is the picture. Even though we have plenty of pictures of the production Volt, Lyle is photoshopping the concept Volt into the picture. I assume this means Lyle prefers the concept as well?

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Jack Says:
September 12th, 2008 at 2:15 am

DO NOT GIVE THEM MONEY. If we give auto industry money, then what’s to stop the steel industry from asking for more? GM and Ford had their chances in the early 2000s to develop more fuel efficient cars. Instead Ford blows several billion on costly stock buy-back program (to pay corporate executive stock options, among other things), and GM release one gas guzzler after another.

if Big 3 cannot meet market needs, then let them fail. It won’t be the end of the world. Besides, big-3 is too laden with pensions and healthcare costs to compete effectively in a globalized world. we ought not ask our grand children to pay for our mistakes. Companies fail all the time, or get acquired. New companies like Tesla will spring up to replace them, or perhaps Japanese firms like Honda will buy them out. At least Honda seems to sell cars people want to buy.

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Marcus R (WL #5275) Says:
September 12th, 2008 at 2:15 am

nah, it means Lyle’s had that picture around for whenever the Volt/Bailouts/Fed $$$ & Washington are the topic

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greg Says:
September 12th, 2008 at 2:18 am

Giving money to GM is a great idea.

I rather have my money go towards our future in auto manufacturing than going after oil,

I really hope our US car industry gets stronger and kills off Toyota and Honda.

It was funny today the American Insurance institute Honda and Toyota the worst rating for min impact crashes. That means if you Toyota or Honda gets hit by a shopping cart it will fall apart. The Ford focus was rated the best car.

So for all the Japanese car drivers out there finally someone found the truth that they are building cheap cars to just make more money. The safety is that they crumple not for safety but so they can use less metal.

So go GM.

PS work on the Grill a little on the volt design ?? needs to be taken out or blacked out.

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Marcus R (WL #5275) Says:
September 12th, 2008 at 2:21 am

You know, I love Tesla too. but innovative as they are, they can’t replace any of the big 3 anytime soon. If you think the economy’s bad now, wait until NO ONE in the american auto industry has work. I hate to say they’re too big to fail, but its really close. I wouldn’t object to a shakeup at the top like what happened at Fannie/Freddie but to watch some of our oldest companies go down in flames would not be a great day in America. I fully believe it would more adversely affect our ability to thrive in the future if we allowed these companies to fail than shelling out the tax dollars to save them. Do we want to do it? HELL NO. Should we? Yes.

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Darius Says:
September 12th, 2008 at 4:56 am

I think the US government is under stress. Let to go bankrupt and no measures against high energy prices or take risk with GM. Being US government I would take risk. But, of course, under certain conditions. US gorvenment objectiv is not to keep GM, Ford or Crysler afloat. The US goverment objective is motor fuel consumption reduction. Being US government I would claim for decision making during loan guaranty period or even restructuring of the company, board EV manufacturing production plan approval with production targets to be met and etc..

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Arthur Morrison Says:
September 12th, 2008 at 5:42 am

It seems to me that the car industry bailout loans should really be funded by new windfall/’carbon’ taxes on the OIL companies. They have acted to stall and sabotage the electric car industry as illustrated in the ‘who killed the electric car’ film. Why should the taxpayer underwrite such loans? Let Chevron, Exxon, BP et al do it.

Also the loans should be predicated and released against a schedule of development and actual deployment of electric vehicles. Finally the US government should ensure they are not funding expensive duplication of research and development in areas such as batteries and drive trains.

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ETM Says:
September 12th, 2008 at 6:09 am

First a couple of disjoint thoughts:

The poll of “is styling important” think leaves a lot of interpretation to the range of meaning on the word ‘important’.

I don’t think that the styling, as we have been shown, of the volt is radical. But I think that the majority of the people will be able to deal/ like the styling. If you are wedded to the style of the concept… I can see that you might be disapointed.

I think the overarching rule(s) to these loans should be that the gov gets paid back and developement jobs are here (USA), and manufactruring jobs are here (USA), and export parts from here (USA), export cars from here(USA).

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Jim in PA Says:
September 12th, 2008 at 6:10 am

#58 Jack

Why does everyone assume doom and gloom for American manufacturing? Of course the steel industry would not ask for a handout. Why? Here’s why (From the July 29, 2008 Pittsburgh Post Gazette)…

“U.S. Steel shares soared today after the Pittsburgh steelmaker said profits doubled in the second quarter, reaching record levels on rising steel prices that continue climbing in the current quarter.

A 20 percent increase in the steelmaker’s quarterly dividend also helped send the stock higher.

Net income totaled $668 million, or $5.65 per diluted share vs. earnings of $302 million, or $2.54 per diluted share, in the year-ago quarter. Sales jumped 60 percent to $6.74 billion as double-digit increases in the prices customers paid for steel offset climbing raw materials costs. Shipments increased 28 percent to 7 million tons as the steelmaker’s mills in North America and Eastern Europe operated at near capacity.”

Summary: American industry can still kick ass with a combination of good products, good workers, good management, and the right market forces.

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Rashiid Amul Says:
September 12th, 2008 at 6:13 am

If the government loans are contingent on changing the fleet over to EREV or BEV, then I’m for it. As I have said in the past, it is cheaper to loan $50B to American companies, than it is to fund a war on foreign soil.

If I had to choose where my tax money goes, I choose to save our soldiers lives and keep the money here at home. We do not need any future war over oil.

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RB Says:
September 12th, 2008 at 6:26 am

There are 3 reasons given here and elsewhere to justify the bailout:

1. To improve the lives and working conditions of GM. its workers, and its contractors.

2. To increase the competitiveness of US versus non-US industry.

3. To diminish the use of oil in the US.

The reason that the bailout will pass is number 1. Michigan and Ohio are competitive states in the US Presidential election. Both D and R candidates (and thus both parties) favor a bailout in the hope of winning those states in November.

A bailout might do numbers 2 and 3 to some degree, but the goals are distinct and in many respects the best plan for one is bad for another. For example, to get to number 3, it might be better to give a big incentive immediately for the purchase of a high-mpg car from any company. That would mainly benefit Toyota and Honda, but it would save the most gas the fastest. A more direct plan would be to institute a $5 per gallon gas tax.

But we all know that congressional action on the $25B or $50B (and congress can move fast if it wants to) is about #1, not #2 or #3. The Volt concept car has become the cover page for the bailout effort. (Essentially, the promise is “give us the money and we will build electric cars like this”.) This one sale to the government is what the Volt is all about for GM. Once the bailout has happened, the Volt is likely to become much less visible, whatever its styling.

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Joe OBrien Says:
September 12th, 2008 at 6:49 am

As long as they don’t piss away the loans designing new Corvettes and Escalades. And advertising for the Hummer.

They sure love throwing money away on these vehicles.

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Darius Says:
September 12th, 2008 at 7:00 am

#67

But we all know that congressional action on the $25B or $50B (and congress can move fast if it wants to) is about #1, not #2 or #3. The Volt concept car has become the cover page for the bailout effort. (Essentially, the promise is “give us the money and we will build electric cars like this”.) This one sale to the government is what the Volt is all about for GM. Once the bailout has happened, the Volt is likely to become much less visible, whatever its styling.
_________________________________________________

It is always like this – contractor says “first money and after may be things”, and you try to push “first things and after money”. So no hurry for the bailout.

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Scottie Says:
September 12th, 2008 at 7:00 am

I have been saying this for months!!!!!!!

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NZDavid Says:
September 12th, 2008 at 7:02 am

#44 Statik

For all you want to know about IKE and oil. Scary stuff!

http://www.theoildrum.com/node/4517

The Wunderground site is pretty good as well. Especially the WunderMap.
Could be raining up your way on Monday.

Cheers

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Carcus Says:
September 12th, 2008 at 7:07 am

On betting the volt will save GM:

Assuming Honda Insight comes in at $18,500 and 60 mpg, then a head to head volume production competition between it and a $40,000 volt means the volt won’t even get off the bench.

Consider the numbers at 15,000mi/yr.

15,000/60 = 250g/yr

$40,000 – $18,500 = $21,500

6% interest on $21,500 = $1,290/yr

$1290/250g = $5.16/g

Conclusion: the interest alone on the cost difference would pay for all the gas a new insight would burn at $5.16/g. This is before we’ve even started to consider interest on a car loan or fuel/electrical costs to operate the volt.

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Carcus Says:
September 12th, 2008 at 7:18 am

Your don’t like my assumptions? You don’t like the way I think? Wait till you see the way Washington “thinks”. And they’re “thinking” with your money.

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THOM Says:
September 12th, 2008 at 7:32 am

The volt is a horse / pony show. First to get investers, then when that didnt work, GM has to go to the taxpayers.

There is no real NEW technology going into the volt that hasnt been around for at least 20yrs (except batteries)….and they still cant acheive the all electric mileage of the ev-1.

Toyotas synergy drive system is far more efficient than the volt motor/genset design with the engine running…just add up the losses, and extra weght of the batteries.

As you can see, 2011 is pretty far away to be “bragging” about how good something is going to be.

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RB Says:
September 12th, 2008 at 7:35 am

#71, #72 Carcus

I agree with your assumptions and the outcome if the goal is to get a new high-mpg car at the lower cost

If the goal is to get plug-in electric cars on the road asap, a handout to GM will do more, faster.

But more to the point of today’s post, a handout to GM will do much more between now and November for a large number of voters in Michigan and Ohio than any model comparisons over years. Many of us, not being a part of those groups, see giving jobs to people in those states as incidental and helping one candidate or another to get elected as a diversion. However, for those directly affected, whether in Michigan, Ohio or in Washington, it is the goal of highest importance.

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Morgan Says:
September 12th, 2008 at 7:48 am

68 Joe:

you mean that 30 MPG Corvette? (verified on a 2001)

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Tim Says:
September 12th, 2008 at 7:49 am

There is NOTHING Congress won’t do to reward their friends & supporters in big business and the military-industrial complex for bad behavior. Even debasing our currency and thus destroying our country is not beyond them.

We have NEVER before seen so many political prostitutes in the halls of Congress. Are there any Statesmen left?

America USED to be about unlimited opportunity from accepting Risk to gain Reward. Now America is about shifting financial responsibility onto the helpless taxpayer and yet to be born children.

What’s become of the Constitutional LIMITS on the Federal Gov’t power?

What’s become of the Land of the FREE and Home of the BRAVE?

How did we get so lost?

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Rashiid Amul Says:
September 12th, 2008 at 7:59 am

Tim #76 asks,
How did we get so lost?

———————
Corruption, lobbyists, and voter apathy. Not necessarily in that order.

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Carcus Says:
September 12th, 2008 at 8:02 am

To those unfortunate folks in Ohio and Michigan,

It ain’t easy, living free . . . .

http://www.youtube.com/watch?v=fsDpznl8eIs

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Dave B Says:
September 12th, 2008 at 8:27 am

So much for free economy. Folks, we do not live in a capitalistic economy… We get what’s coming to us when we ask government to get involved. Prepare to pay the price.

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Randy Says:
September 12th, 2008 at 8:29 am

Ironic GM and the Govt helped kill the electric car now hey want the taxpayers money to bring it back.

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Gsned57 Says:
September 12th, 2008 at 8:46 am

#27 ksuhwail,

I am an American who owns an 86 VW Vanagon and a 2005 Prius. Growing up in the 80’s and early 90’s my parents had cars from pretty much every manufacturer around. The 2 American cars I remember best were an early 80’s buick something and a scout. The buick was a lemmon from the start and they were grateful to finally unload the POS. The scout was a lot of fun but also had lots of problems including rust issues after only 2 years.

American quality was crap up until a few years ago. American or not I won’t spend big $$$ on an inferior product that isn’t going to last. Cars are a huge purchase.

I bought my Prius because of the technology. Very much like why I want to own a Volt. If GM were to have come out with the Prius I would have bought it from them.

If the American consumer blindly buys American products what is the incentive to improve your product? I won’t buy anything from harbor freight anymore because all they sell is worthless crap. Sure I can get tools there at a quarter the price of sears, but the tools won’t last me more than 1 job if that. It is not helpful to reward bad business.

I personally have never owned a GM product and not until hearing about the volt have I considered it. Their products from 1995 through 2005 (years I’ve been driving) have been boring, unattractive, unreliable, gas hogs. I’m sure there are exceptions and I’ll be the first to admit I never looked that hard at them before. But the volt has really got me to look a lot closer. I think the Saturn Vue is the best looking cross over on the road, the solstice is a much more beautiful car than the Audi TT or the BMW roadster, and I think the new Malibu is a great looking car and far nicer than a civic or accord.

I’m excited to possibly buy a new American car for the first time. I’m excited to reward an American company with my business because they created a technological achievement, improved quality, and have a good looking product. I’m excited to see GM regain their former glory with an entire lineup of EREV’s.

I realize this is a longer response than you were looking for, but this is my auto journey. I won’t be buying any NEW vehicle until I can drive my daily commute all electric. If the Volt never comes out and toyota has a plug in prius that does 20+ AER I’ll trade my prius in and buy that. I’ll be dissapointed because I’m rooting for the home team, but I’m not going to spend $40K to reward a company that isn’t representing its country as well as it should.

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Jim Says:
September 12th, 2008 at 8:49 am

Sorry-
If I couldn’t afford an electric car- you wouldn’t sell it to me.

If you can’t afford to build an electric car- sorry, you can’t build one.

Your poor decisions led to your companys position.

Deal with it.

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Cautious Fan Says:
September 12th, 2008 at 8:53 am

#39 Grizzly

I agree with you, it is very complex and difficult to know all the costs. If GM goes into bankrupcy it doesn’t mean the end of all the jobs. GM at its peak had 600,000 employees. Their down to 100,000. America is still running fine. Chapter 11 bankrupcy also doesn’t mean that GM dies, just reorganizes. American Motors died in the 70’s but other companies moved in and took over. The doom-and-gloom forecasts are just used to stir people up. If GM dies, those current designs and current manufacturing plants have value. Someone will buy them.

With all bail-outs, there is a significant, but impossible to quanitfy, moral hazard. If you’re a large company, and you get into trouble, the taxpayers bails you out. This safety net encourages poor behavior and suboptimal risk taking. When the risks payoff, investors pocket the money. When things fail, taxpayers foot the bill. Refusing a bailout is like disciplining your kid. It hurts more now, but it pays off.

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DB Cooper Says:
September 12th, 2008 at 9:01 am

#78 Carcus –

What does this bailout have to do with Mich ?

If it creates lots of new jobs, they will be down in Tenn or Ky.

The auto makers are leaving Mich; not because of slumping sales – but to get away from the all-D state government and strong UAW history up here. Their ridiculus labor costs and legacy costs are what’s killing them.

Even the big 3 know better than to consider launching assembly of a new vehicle here. At best it might avert some more cutbacks at GM corporate and the tech center; but that is not all that many jobs to begin with. And I sure don’t see them posting any new want ads…

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Tim Says:
September 12th, 2008 at 9:04 am

I blame the ONE party system. They ALWAYS promise “change” during EACH election cycle, but we always get stuck with MORE of our freedom and responsibilities going to the Oligarchy in Congress.

The FIRST thing McBama will do once he get’s into office is to ignore his OATH to defend the Constitution by IGNORING the 10th Amendment. READ THE DAMN THING!!!

THIS is why the 1st and 2nd Amendments are SO very vital. So we can speak out AGAINST them and then defend ourselves freedoms FROM them.

History Repeats…

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randy Says:
September 12th, 2008 at 9:13 am

To ksuhwail comment #81
I had the same experience as you did with the buick but my lemon was a 1999 toyota tacoma, a sorry excuse for a truck with so many problems and design flaws,ill probably never buy another toyota again. after 30 years of exellent service from my GM trucks ill stick with what works.

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Tim Says:
September 12th, 2008 at 9:16 am

I’m angry and this is “on point”, so please bear with me…

How to Reign-In Congressional Spending by Abolishing the Federal Reserve AND bringing back SOUND Constitutional money.

http://www.youtube.com/watch?v=nNumEm2NzQA&NR=1

Google: American Monetary Reform Act.

1) Pay off the Federal Debt & interest bearing Federal Reserve Notes with Interest Free United States Notes & save over $1.4 Bil./day in interest to the Fed.

2) Abolish Fractional Reserve Banking and increase reserve requirements as Constitutional United States Notes replace Federal Reserve Notes.

3) Repeal the Federal Reserve Act of 1913 and National Banking Act of 1864.

4) Withdraw the U.S. from the IMF, the BIS and the World Bank.

The labels (Conservative) and (Liberal) were made up by the Oligarchy simply to confuse and distract (We, the People) from the FACT that they are ignoring the limitations placed on them by the U.S. Constitution to create a Fascist state.

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randy Says:
September 12th, 2008 at 9:17 am

Only if no companies exec is paid a higher salary than the president of the USA should any loan or bailout proceed. I am guessing $500,000 per year, the prez salary?

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RB Says:
September 12th, 2008 at 9:37 am

For those of us interested in electric cars ASAP, a GM handout likely will be a positive.

The economic interests of US citizens as a whole would be better served by less government involvement in industry, rather than more, in my view. That said, we look back and see federal government action tied to most every aspect of US transportantion, whether railroads, by air, or by highway, airplanes, tractors, trucks or cars. What is happening is not that unusual. We need not get overheated.

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Neutron Flux Says:
September 12th, 2008 at 9:40 am

I see a couple of problems:
1) Any government loan guarantee should be conditional on Mgmt . reform and elimination of golden parachutes, why should tax payer be on hook for incompetence? What happened to Free Market?
2)Read between the lines, this will not be about saving the Auto Industry per NP it will be about passing some left wing legislation the Republicans are diametrically opposed to so they can use it in the election to say Republicans killed the Auto Industry.Hence the phrase what is left to be determined is what legislation it will be attached to. It is funny how politicians are interested in politics but Statesmen are interested in what is best for the country. If it can stand on its own two feet it should not be used as a pawn in the election or to put millions of peoples jobs on the line to serve some political purpose. It should be offered as a stand alone bill or attached to something that is politically neutral.

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Pino Says:
September 12th, 2008 at 9:53 am

#3 – Could not agree with you more
#5 – Right on the money

Not to change the subject, but why is the Government bailing out private companies? The problem we are having in the private sector has less to do with the market and all to do with poor management. When you have executives making $20 million bonuses I think there is a problem. I mean, come on; How much money do you really “NEED”? They should be reinvesting those hundreds of millions of dollars into their respective companies. When the government starts “owning” (call it bailout if you like) private sector entities thats called….(come on class)….. COMMUNISM! I, being a Cuban know exactly what that leads too. Also, while I’m on this rant; Is the Government going to bail you out of your MORTGAGE if you can’t pay it! What if you did like the companies did and you just mispent your money elsewhere. Are you going to get bailed out? Not no, but Hell NO ! I would have a very brief loan document setup for these companies requesting loans from US (it is our tax dollars after all). They would receive a loan with interest,(at whatever the interest rate is). Required Section: All management and board members are excluded from salaries… your previous bonus money should cover you for a while, and if you bought an ISLAND with that money… go live there for now. The entire Board of Directors should be removed and replaced with a new third party board selected by the stockholders. The only employees that will receive a paycheck are the ones building the vehicles and the designers and engineers….thats it. It makes me sick to think that these people are supposed to be super genius college grads and they can completely vandalize their own companies and then come running to the government for a free hand-out. If you’ve put your company in such a mess you need to return all that bonus money you took. I am pissed at these people to no end. Why don’t we all start companies and steal, then ask for a bailout. The Government is setting a really bad presidence on this bailout deal.

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terryk Says:
September 12th, 2008 at 10:00 am

# 25
Bryce Says:

I didn’t say it was workable but GM like many multi-nationals will throw Americans under the bus as fast as anyone else, so regardless of where they are based, US loan guarantees should be limited to US improvements as much as possible.

I agree that is difficult but if they want the money, some auditing is in order.

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Tom M Says:
September 12th, 2008 at 10:02 am

Please know that GM is not the only one standing in line for government loans. I read last night that the CEO of Chrysler is also going to the banquet table for about $25B. I’m waiting to hear from Ford.

I am not for this because who is going to bail me out if I make bad decisions in my business ??

The other side of the coin is that we cannot loose our mfg. capabilities. We are damned if do and damned if we don’t.

Foreign car manufacturing companies have been subsidised for years and this is what has made the playing field uneven.

God Bless America.

Tom

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mitch Says:
September 12th, 2008 at 10:07 am

I find it interesting throughout this thread that it seem almost everyone ASSUMES that GM is getting all 50 Billion,and it is coming from the government. Research folks. The internet is GREAT for it. try it someday (Statik can teach you..)

Fact: the government is not lending 50 Billion. In fact it not LENDING a penny..only authorizing funds to underwrite if failure to repay…

Fact: GM is not receiving all of it

Fact: Japan protects its manufacturing base. GM can sell as many cars as it wants, but it pays to ship them there, increasing the costs.

Fact: US congress is voting to under write the loans, not lend the money (see #1)

Fact: total obligation for all 50 Billion is about 7.5 billion, IF THEY FAIL TO PAY OUT

Fact: 1 in 7 jobs inthe USA is directly related to the Big 3 (about 15%)

Fact the economic spin off of CH 11 for the big 3 WILL be devastating. CH 11..think about this..would you buy a major product like a car from a company in CH11? will your warranty be honoured? would you take the chance? I didn’t think so, so CH 11 while good for re-organizing would result in any of the big 3 never emerging. and the economic cost is WAY more than the 7.5 billion congress is considering.

Fact: The loans will be from private sources, banks etc, the underwriting allows better rates of interest.

Fact: CAFE was fought vigourously, because it is STUPID. Research CAFE. all is does is mandate improved efficiency, well and good but why? it is fleet average. It would force better economy, without any incentive for the public to purchase. GM has many high efficiency vehicles in Europe, why? the cost of fuel via taxes promotes economy cars. In Aerica, there was no incentive for purchasers to buy those small cars…
Americans wanted big trucks and SUV’s, now that the cost of gas is almost 50% of what Europeons pay..OMG!!! where are the fuel efficient cars?!?

I would bet that if gas went back to $1.50/gal..the big 3 would HAVE to run up production again for full size trucks and SUV’s

All of you that say the big haven’t learned from history need to look in the mirror. After EVERY gas crisis, you all went back to the big gas guzzlers. They built what YOU wanted and asked for. I would bet the house on the fact that if the big 3 built good small cars, and told people sorry, we do not want to sell too many gas guzzlers, people would scream but I want big trucks, and praise be heaped on who ever built them.

The big truck / SUV amrket was (when gas was cheap) one of the BIGGEST and IS the MOST PROFITABLE market in the USA,and ALL wanted in..that is Nissan and Toyota built them, its was why friggin KIA has an 8 poassenger full size SUV.

Hello mr auto manufacturer…please don’t build too many full size trucks and SUV’s because people want them and you make a sh*t locker of dough…make small cars..you think the ford focus will unseat the F150? the F150 was the best selling for what 30 years? and it was a profit generator.

Get real..the American public is as much to blame as is the ignornace of why the big 3 are here…it is everyones fault to an extent,and right now they need help. Restrictions on the loan? hell yes. spent here, on products develloped here! and do like the japanese, no plants HERE…no tariffs, just you pay to ship.

Wake up people…I am not saying the big 3 are not responsible, but thay are not alone.

All this big 3 bashing makes me puke…if you are so pissed at them..get your name off the waiting list and move your sorry ass to Japan. I won’t miss you.
I have had all kinds of cars, and rentede countells others from all makes and models..they all are good, and they all have things I do not like..but my rental profile has “prefered vehicle..GM” They have been the most comfortable for any long haul driving I do (and I do a LOT) fit and finish is better? BS!! maybe off the lot, but take a good look after 2 years..they loosen more.

Typical “not me” attitude.

Grow up… and..

JGTGDVWOTFR (just get the g*d D**ned volts Wheels on the friggin road) Opologies to the original

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GerryD Says:
September 12th, 2008 at 10:12 am

I heard today the Govt is considering a $7500 tax credit for plug-in electric hybrid cars……..that would help sway many toward the volt vs prius.

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Jimmy Says:
September 12th, 2008 at 10:20 am

Where is Waldo? Did anyone notice Lyle put a picture of the Volt in the above picture?

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Grizzly Says:
September 12th, 2008 at 10:20 am

Cautious Fan #83

“Chapter 11 bankrupcy also doesn’t mean that GM dies, just reorganizes. ”

*** *** ***
CF

No question about Ch 11 reorganization and what it means. But the reality is that we’re dealing with an oligopoly that is the auto industry, not a monopolistically competitive one and there are significant differences. The result of chapter 11 will be catastrophic in that despite the fact that it is not straight liquidation, many suppliers and companies GM deals with will never be paid which could impact their own liquidity and hence survival. The news of this alone would have a tremendous effect on consumer confidence and hence the stock market. There are no fair comparisons of scale between GM and AMC.

The fact is that unfair competition and unlimited help on behalf of the Govt of some of GM’s competitors have contributed greatly to the position GM is in today. This Govt help came not as a “bail out” but an incentive to dominate world industries.

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hermant Says:
September 12th, 2008 at 10:22 am

Just stop the insanity. No more kiting checks for the “domestic” automakers (whatever that means); no more government bailouts (mostly to lousy business leader without a clue); no more Chrysler (like anyone would notice); no more selective socialism (I don’t think I’ve ever been bailed out!). If you lose your job, go plant corn in Ohio. If you need retraining, try to borrow from a bank to pay for the schooling. I hear Disney is hiring seasonal workers; $7.50 an hour (chew on that) If you don’t like it, the door to Mexico and Canada is wide open. The US already protects its imports with illegal tariffs just as much as Japan and other countries. We subsidize farmers. We bail out bad brokers and bankers. Now we want to bailout inept auto makers? That’s just another illegal tariff compared to countries where they make their automakers EARN their revenue. I say let em all rot in hell. If GM can’t afford to come out with the Volt, the Feds should take over the project and rename them Freddie Volts (for guys) and Fannie Volts (for chicks). If you claim to be a free marketer, then act like one. If not, admit it, you’re a socialist. Enough of this crap. Stop the insanity.

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Statik Says:
September 12th, 2008 at 10:53 am

Wow, generally live for economic threads or ’state of the union’ GM fiscal debates, but after just reading through all of this, I have no where to start or end. I don’t think any useful information could be successfully conveyed regardless of merit….and it makes me sleepy.

Maybe if Wagoner et al say something of interest today it needs to be revisited. (Again, perhaps in a different thread, hehe)

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nasaman Says:
September 12th, 2008 at 10:53 am

96 Jimmy….. “Did anyone notice Lyle put a picture of the Volt in the above picture?”
——————————————————————————————————————
…..And did anyone notice that the Volt in that picture has 1/4th of each front wheel MISSING?!? (I guess it’s just the automotive bailout equivalent of the proverbial “pound of flesh” Congress will exact from GM to line their own pockets!!! [This thread needed a little comic relief!]

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eisemann-theater Says:
September 12th, 2008 at 10:58 am

98 Hermant,

You are forgetting that we are a free marketer but the other guys are not playing by the rules.

WE have trade restrictions and fair trade with Japanese manufactures that are not enforced.

The Japanese don’t allow us to even sell many cars in Japan.
So my feeling is the American Government helping the American industry is perfect. In the past Washington has supported GM

Toyota pays so much money to lobbyist in Washington is horrible.

Why should we support a foreign takeover of unfair trade practices and deceitful company practices of Toyota and Honda trying to make cheap cars?

http://www.autoblog.com/2008/09/09/iihs-praises-ford-focus-for-cheap-crash-repairs/

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Statik Says:
September 12th, 2008 at 11:00 am

#44 Statik

The sticker is hurricane coming through Houston, Pasadena etc. I figure a good 20% of the US refineries will be shuttered for awhile.

I know prices have been in retreat somewhat, even in front of Ike, but I wouldn’t be surprised to see a significant spike.

What the heck is the wholesale charge coming out of refineries right now? People will be getting a surprise tomorrow and the next day I think at the pump.
—————-
#49 DonC

Yes, a lot of the refining capacity in the US is south of Houston. Ike shouldn’t be a problem per se but the refineries are sure to be without power for some period, and the roads may be flooded as well.

I think I read earlier today that prices had spiked at least a dollar a gallon in the Gulf region at the wholesale level. Price hikes will filter through to other parts of the country. However, just like with Katrina, this is likely to be a spike that quickly comes down.
————————

Just a quick update from my neck of the woods. Prices here in Toronto jump decently overnight. I got gas yesturday morning at $1.22/l and this morning on my way through Tim Hortons it was at $1.36. So 12 percent overnight bump.

I agree that it will be a very short lived experience, as underlying pricing certainly does not support it. For the GTA (Greater Toronto Area) $1.36 is a all-time high…although I should reference my source on that factoid was the guy ahead of me in line at the Tim Hortons, but thats good enough right? He had a honest face.

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DB Cooper Says:
September 12th, 2008 at 11:01 am

The same exact arguements could be made about all the crap we buy from China. With the exception that Japan isn’t a communist country with an abominable environmental and human rights record.

All the same, I’d like to hear those arguements addressed.

The only good answer I can think of is the Civic GX (CNG) car… because nobody else sells a car that would get me to work and back without the need for gasoline.

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GM Volt Fan Says:
September 12th, 2008 at 11:07 am

Japan and Germany intervene and help out their auto industry all the time. Low interest loans, R&D … all sorts of things. How is GM supposed to compete with that? What do you do when your stiff competition like Toyota isn’t playing by the ideal capitalism “rules” that you expect?

Ever hear about Japan’s “keiretsu system”? It’s a bit like the 5 families on New York in the Godfather movies. They all scratch each other’s backs … often at the expense of Japanese consumer’s pocketbooks. Japanese consumers just sort of go along with it since they are so nationalistic and all that. They just want to be #1 and beat American company! China is the same way. They don’t think about capitalism in Japan like we do. Same thing in Europe in a lot of countries. Sometimes the governments of Asian countries just decide they want to dominate a particular industry and they use taxpayer money to make it happen … at the expense of American companies.

GM is only asking for a lower interest LOAN because our banking industry is totally screwed up because of their GREED and incompetence with these mortgages and mortgage backed securities. It was one big “ponzi scheme” basically. It looks like long established investment banks Lehman Brothers and Bear Stearns were bought out by other firms at bargain basement prices because of it. GM can’t get a decent rate on the loan because of this mess. The banks are also arbitrarily raising people’s interest rates on their credit cards for frivilous reasons in order to make up for their screwups with mortgages. Even people who have been religiously making their payments on time.

Wall Street and the financial services industry are the ones that Uncle Sam keeps having to bail out. It seems like this happens every 10 years or so. Then the lobbyists in Washington talk the politicians into de-regulating and then they do the same thing all over again. Hopefully, the American people realize what’s going on THIS time. Wall Street and the banks NEED to be regulated or they’ll continue to create these big financial messes. If they don’t, you might see a Depression like 1929 the next time. No joke.

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Bernie Torbik Says:
September 12th, 2008 at 11:08 am

Talk about throwing money down a rathole. The market has determined that GM, Ford and Chrysler’s collective ability to repay their existing loans is practically nil, hence, their junk bonds are yielding in excess of 14.0%. If Uncle Stupid, i.e, the taxpayer, does pony up for these loans, it has no chance of being repaid.

I’d rather Toyota, Honda or Nissan buy the (very) few desirable parts of GM or Ford (forget Chrysler, there’s nothing there) and do the development work without my money. There is a far higher probability of the vehicles being well built, and the corporate entities surviving past the warranty period.

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Bernie Torbik Says:
September 12th, 2008 at 11:12 am

#104 GM Volt Fan – “… GM can’t get a decent rate on the loan because of this mess…”

You’ve been drinking too much of Obama’s and GM’s Kool-Aid. GM can’t get a loan at a decent rate because the company is worthless. That’s the price of $50 billion worth of losses since 2005. The various parts of GM are worth more than the company as a whole.

GM’s 100th anniversary party ought to be planned as a wake, or a going out of business sale. It’s going to happen sometime in 2009.

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GM Volt Fan Says:
September 12th, 2008 at 11:32 am

One of these days …. GM is actually going to be able to play on a level playing field with their foreign competition. Once they do, they better look out.

Detroit has been competing against them with plenty of disadvantages. Things like health care costs. We have good health care in America but maaan is it EXPENSIVE. The health care industry needs to be reformed bigtime. It’s getting way out of hand. The health care industry needs to get way more efficient or something or it’s going mess our economy up. Our foreign competitors don’t have health care costs nearly as high as we do.

We need to start taxing cigarettes and booze more or something. Junk food too maybe. Too many people out there are eating like in that movie “Super Size Me”. It’s an eye opening documentary.

http://www.imdb.com/title/tt0390521/

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Dave Says:
September 12th, 2008 at 11:34 am

What a bunch of BS. Why doesn’t Wagner and all the GM executives, Managers, supervisors take pay cuts and bobus cuts? If your going to help out these companies you mine as well help out every company in America which is BS! You start your business, you run your business, if you can’t, you go out of business! What happened to the billions these car companies made? where did it all go? If they chose to give it out to all the Executives in bonuses instead of investing it then they need to collapse. I’m tired of hearing how all these comapnies can’t make ends meet yet when times were god they were laughing their asses of all the way to the bank. Remember who pays for all these bailouts, YOU! through taxes. This country is in trillions of debt all because of the morons running this country into the ground. If this keeps up, the US will become a third world country, makr my word. Maybe that will cause all these illegals to flee back to where they came from since the government doesn’t want to do their job in getting them out. Sorry for venting but I remember growing up back in the 70’s to a great country and a bright future. I’m afraid what my grand daughter will have to face as she grows up.

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GM Volt Fan Says:
September 12th, 2008 at 11:36 am

One of these days …. GM is actually going to be able to play on a level playing field with their foreign competition. Once they do, they better look out. Detroit has been competing against them with plenty of disadvantages. Things like health care costs. We have good health care in America but maaan is it EXPENSIVE. The health care industry needs to be reformed bigtime. It’s getting way out of hand. The health care industry needs to get way more efficient or something or it’s going mess our economy up. Our foreign competitors don’t have health care costs nearly as high as we do.

We need to start taxing cigarettes and booze more or something. Junk food too maybe. Too many people out there are eating like in that movie “Super Size Me”. It’s an eye opening documentary that should be shown on the TV news channels a few times a year.

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DB Cooper Says:
September 12th, 2008 at 11:56 am

#108 Volt Fan –

I have two words for the health care system… “Tort reform”.

In short, we have too damn many lawyers. Ambulance chasing is probably the #1 reason the health care system is so screwed up.

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Len Says:
September 12th, 2008 at 12:05 pm

The Pontiac Aztec was manufactured in Mexico. You buy GM and you haven’t a clue where it was manufactured. Their management sold out American workers long ago. Wake up. The only way GM should get a loan is if management was vetted.

Unions are part of the problem. They served a purpose once, but when people that start out sweeping the floor and making as much or more money per hour than an engineer who has been working for 30 years, something is not right.

I have worked for a few companies in that time and never have had a retirement plan. The few folks I know anymore who do, either work in upper management or for the government. I will work until the last day I can, not because I want to, but because I have to. It is not so bad though, it keeps you young keeping up with technology.

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Nelson Says:
September 12th, 2008 at 12:12 pm

In 1955, Rosa Parks, an African American woman, refused to give up her seat on the bus to a white man. The move was emblematic of a larger struggle against racial segregation. Civil rights leaders, among them Martin Luther King, Jr., knew that a boycott of the bus system by Montgomery African Americans had the potential to bring the city to its knees financially. The key was ensuring that African Americans did not break ranks and ride the bus. After nearly a year, Montgomery, Alabama relented.

http://boycott-thieves.blogspot.com/2005/11/boycotts-famous-ones-tips-for.html

Had the Federal Government intervened and funded Montgomery bus system during that boycott, Montgomery, Alabama might not have changed its policy as soon as they did.

Federal funding of the automotive industry removes the impetus for quick change. If they get this funding we won’t see the Volt until 2015.

I suggest the automotive industry start making and selling what the public wants and needs.

Find the funds within:
1. Across the board pay cuts. Using Fed Tax table to calculate % cut. The more you make the bigger the % pay cut.

2. Stock bonus take-back penalty for executives who get stock bonuses.

3. Avoid customer confusion. Discontinue production of non-hybrid models where a hybrid is available. Why make a regular Malibu when you have a hybrid version. Same goes for Aura and Escape.

4. Stop the refresh entire line at the same time mentality. Learn from Microsoft. If you have a new plug-in hybrid like the VUE. What are you waiting for? Start selling it now.

Customers are waiting for new technology vehicles. Stop making excuses and start making and selling the cars we want and need.

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Mark Bartosik Says:
September 12th, 2008 at 12:18 pm

on c-span now

http://www.c-span.org/watch/cs_cspan_wm.asp?Cat=TV&Code=CS

(may be duplicate post)
Hope someone can record

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George K Says:
September 12th, 2008 at 12:56 pm

I would feel better if the loan was for the big “2″. I’m concerned that there isn’t enough revenue for 3 major US Autos to remain healthy.

So, who should be the straw man?

Well, I believe Chrysler is privately held. Not sure the Gov. should be propping up a privately held company.

Ok. Who has the best technology to compete in the 21st century. GM hands down. Second, one could argue Ford with the Escape hybrid. Chrysler is last to come to the hybrid game, with 2 models coming out this year.

Lastly, should they get the same $$$$?

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Tagamet Says:
September 12th, 2008 at 1:12 pm

Well, this horse is dead (pokes carcass with sharp stick – no response). Yep, it’s dead. Nothing to see here… move along…

Be well,
Tagamet

LJGTVWOTR!!

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DaveP Says:
September 12th, 2008 at 1:25 pm

#81 gsned57: Right on.
#94 mitch: Also right on.

Execpt for the part about where I went back to buying gas guzzlers. I, personally, didn’t. Which is a short answer to #26 ksuhwail. The American car companies never made the kinds of cars I wanted to buy. If you ignore the quality for a moment (which is hard to do, but unnecessarily complicates the issue because the cars fell far short even beside that) the short answer is they focused on low tech solutions to creating cars. These cars were cheaper to build but more expensive to operate. That is an equation I almost never support in my purchases. I will happily spend MORE for a car than I will likely save in gas, which is why I’m still interested in the \Volt, despite its cost. I consider it insurance against future upheavals. It’s paid off very well for me, thank you.

When gas went up 4x in this last surge, I hardly noticed.
True, I went back to driving my FX16, but that was mainly to help everyone else out by conserving as much as possible.

My car history? I come from a family that loves cars, and I do, too. We had dozens of cars (about 8 simultaneously) many of which were American cars and many of which were Japanese. To keep it short, in a nutshell, the American ones were pretty crappy. I must say I really liked the ‘85 sedan de ville, however. It was definitely a high point. The low point was the ‘72 Ford F250 pickup. I learned a LOT about fixing cars because that thing was broken down every weekend. (I was stranded a LOT) in it.
The car I drove the most back then was a 81′ Toyota Corolla. We had a pair of them. Sold them with 250k miles on one and 350k on the other (These were real workhorses. A frined of mine had 500k on hers).
When it came time to buy my first car, I bought a used ‘87 Toyota Corolla FX16. I AM STILL DRIVING IT. I get 28 mpg in the city, driving it like I’m stealing it. 0-60 in 8 seconds. It was made in America at the New United Motors joint venture plant between GM and Toyota. NUMI uses UNION labor, by the way.
For my second car purchase, I wanted something much quicker (while I was still young and figured I could heal . I was considering either the Eagle Talon TsiAWD or the Mitsubishi Eclipse GSX. I wan’t fond of the Talon’s styling compared to the Eclipse, but I would have bought either. I found a used ‘96 GSX for an incredible bargain so I bought that. It was made in America at Diamond Star Motors, a joint venture facility beween Chrysler and Mitsubishi. It does 0-60 in 6.6 seconds and gets 22 in the city (uses premium)
After that, I got addicted to the AWD and wanted even more horspower and hoped to replace the FX16 since admittely it’s a total tin box and what with everyone driving huge SUVs around I was starting to feel a little uneasy.
So, I bought a Subaru WRX wagon, preordered before they even hit the shores. There wasn’t ANY competition to this vehicle, really, American or otherwise (although, now there is). 0-60 in 5.6 seconds. Gets 20mpg in the city (uses premium). I was disappointed in the mileage I got from this car, given the similar 2L turbo arrangement as the GSX.
Last car I’ve bought was because I wanted to haul my new family around and I vowed to do better on the mileage. It was easy to decide. Flipped through the back page of Car & Driver looking for a car that got 30mpg in the city and could crack 0-60 in 300hp and AWD, but I’m willing to compromise a bit. The \Volt is close enough. First American car I’ve seen where I’ve been able to say it is superior to any other car.

One other small point. I travel once or twice a year and each time I rent a car, I get some random late model American sedan. Universally, these cars have been HORRIBLE to drive. Last one I got was an Impala in the fall of ‘07 (not sure which model year, but it was practically new). The seat was shaped to support someone who just took a ‘38 slug in the back! It’s CONCAVE! Who drives all hunched over like that? The accelerator had two positions, sluggggish all the way until you hit the floor, then the engine finally came on. The steering was mushy. The brakes are mushy. Not to pick on the Impala (it’s just freshest in my mind) because some Chevy I got 2 years ago was worse. These cars make my back hurt just driving for an hour or two. I used to drive the FX16 TWENTY hours from Seattle to LA with no back ache at all. It has awesome seats.

I sure hope the \Volt has decent seats.

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Aspherical Says:
September 12th, 2008 at 1:28 pm

#113 Tagamet

Poke. Poke. Kick. CLEAR! ZAP!

Yep. It’s a goner. Poor, poor horse. Now, when is the next one arriving?

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RDP3422 Says:
September 12th, 2008 at 1:52 pm

While the auto industry should be left to rot in the mess they made for them selves, they are too big to let that happen. Bankruptcy would mean their creditors don’t get paid. And the auto industry has some BIG debts.

So as long as this money comes with some conditions (retool for alternative fuels, new fuel efficiency standards…something) I’m all for it.

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Tagamet Says:
September 12th, 2008 at 1:58 pm

Aspherical,
Glad you tried the paddles. Good move. At least we’ll eat well for a while (g).
We’ll get another horse to beat when the next thread is posted.
Be well,
Tag
LJGTVWOTR

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DonC Says:
September 12th, 2008 at 1:59 pm

Can we just stop the hyperbole and just look at the facts?

We have two facts: (1) GM competes well internationally; (2) GM competes poorly in NA.

Obviously NA operations are messed up. Not because of unfair Japanese practices or any other externality. The simple fact is that the NA operations produce cars that cost more and have a lower perceived quality (as shown by resale values) than those produced by other brands. Consequently, these operations need not a band aid but a serious overhaul, and the country would be better off if GM entered Chapter 11 and then got the loans. That would allow many of the necessary reforms and give GM a good chance of flourishing in the future.

In this regard, the loans will just enable GM to continue with business as usual. This is not a good thing. Look what happened to Saturn. The Saturn line was supposed to be revolutionary from the cars to the dealerships to the lack of GM bureaucracy. It was for a while. Then GM simply forgot about it and turned Saturn into just another brand. This suggests that the loans will just allow GM to do the same thing with its new technology like the Volt. It will take the money, produce the Volt, and the not follow through. In a few years we’ll be back to where we are now.

We need, however, to be realistic. Allowing GM to go into Chapter 11 before getting the loans is not going to happen. The UAW and GM management aren’t really interested in real reform, and in a presidential cycle in which Michigan and Ohio are swing states neither the Democrats nor the Republicans have the stomach for a fight. Complaining is not going to change this.

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mitch Says:
September 12th, 2008 at 2:33 pm

#114 DAve P

I did not mean you personally lol, but truth be told Most Americans did. And from another post, here it IS intersting that really only Americans think American car quality is inferior. GM and Ford compete very well globally, Weird…must be the automotive “journalists” and “inpartial reporting” like consumers digest that gave Toyota’s a buy rating without even testing…hmmm..yep..real excellent journalism..

Any who, just one of those days where everyone spews drivel like its knowledge..(here’s your order of crap with a side of horse s**t) god..no wonders lawyers do so well in America…Nothing is ever anyones fault…

Pardon I am off for the day..going to puke lunch up now.

Have a good weekend all..and if you get hurt, look for who else is liable and call a lawyer…

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Storm Says:
September 12th, 2008 at 2:39 pm

Rick Wagoner should contribute $15M per year to help bail out his company. A million $ per year should be enough for him to live on.

A little austerity at the top would be refreshing. Why must all cost cutting be at the bottom?

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NASA-Todd Says:
September 12th, 2008 at 2:39 pm

Companies should have to make it on their own and NOT get to USE MY TAX MONEY AS A LOAN. Remember it’s not Washington giving GM a Loan. ALL OF US JUST GAVE THEM THE LOAN…. I could have used that money to buy my VOLT….

Still a Volt fan, but 1st and foremost I’m a capitalist.

Here is Fisker Karma for those of you interested in seeing the $80,000 competition to the Volt. They are designed in the US and being built in Finland at the same factory that builds the Porsche Boxter. They will go 50 miles on a charge and 0 – 60 in 6 seconds. They are slightly ahead of the Volt, but expensive. Should they get a Loan..? Maybe they could bring that price down if the government tossed a low interest loan to Fisker..? See my point..? It is not good to have the Gov. get into this type of activity. Who gets to decide who is worthy of needing the bail out / loan..?

http://www.fiskerautomotive.com

Go Volt and Go Karma

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benson Says:
September 12th, 2008 at 2:44 pm

Ladies and Gentlemen, it’s Friday afternoon in my part of Michigan, and here, gas prices just went to over $5.00 a gallon. Yes, I know oil went below $100 today. Yes, I know Hurricane Ike hasn’t done any damage yet.

Go Volt.

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wbk Says:
September 12th, 2008 at 3:06 pm

Im not sure why the American auto makers find it necessary to get loans from the US Govt. They made a fortune on SUV’s, what happened to the profits, and from poor planning and greed, they made so many SUV’s, that they are now setting on the overstock. But, if you look at the foreign car makers, they are not having such a problem. Why because they diversify. Foreign car makers have been developing cars that gets fantastic fuel mileage for years. So, its simply a matter of the US auto industries lack of vision for future products, and greed. I do not see that it is the govt responsibility to bail the US auto industry out of its misery. They dug the hole, now they should try to dig out. Its simply ignorance and greed. Poor designs, poor implementation, poor vision. The VOLT looks good now, but 2 years from now, it will look outdated. They are to slow to bring products to the market that have a life span of 5 to 10 years. The auto makers of america, are simply blind in every aspect.
I say, no, do not give them a loan or bail out of $50 Billion, they are a business, let them live and learn from there poor management and mistakes.

And to the person living in Michigan, $5 for gas, Honda and Toyota make hybrids. Why not take a look at them. They are stylish, and available

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Len Says:
September 12th, 2008 at 3:09 pm

Whoa – they are still $3.69 here in central FL. Top off time.

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George K Says:
September 12th, 2008 at 3:10 pm

#122 benson
“Ladies and Gentlemen, it’s Friday afternoon in my part of Michigan, and here, gas prices just went to over $5.00 a gallon.”

Well, that sums up the problem! Who would have thought??!

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DaveP Says:
September 12th, 2008 at 3:28 pm

#119 mitch:
Yes, I know you didn’t mean me personally. We’ve written about the rise of appetite for gas, before.
I think part of the difference in perception around the world of the American car companies is there is a big difference between what the Amercian car companies sell in America than in other places. For example, I would have loved to get my hands on one of those Focuses that they race in the FIA World Rally Championships! (The WRC uses basically production cars, modified slightly for racing) Even after the success of the WRX and Evolution (and copycats) in the US, still no sign of it in the US.
But a lot of that is changing. GM for example has been importing cars designed in Korea, Australia and Germany so perhaps the world perception and the US perception will be a more close match in the future.

#114 DaveP:
That’s weird. I swear that paragraph looked OK when I submitted it… For the record:
“Last car I’ve bought was because I wanted to haul my new family around and I vowed to do better on the mileage. It was easy to decide. Flipped through the back page of Car and Driver looking for a car that got 30mpg in the city and could crack 0-60 in less than 7 seconds. Again, no competition. Only one car could do it. The Hybrid Accord, so I bought one of those. 0-60 in 6.7 seconds on regular gas.

Next car? Electric. I really want aboutt greater than 300hp and AWD, but I’m willing to compromise a bit. The Volt is close enough. First American car I’ve seen where I’ve been able to say it is superior to any other car.”

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The Anti-Oil Jihadi Says:
September 12th, 2008 at 3:31 pm

I’m undecided, but I lean towards GM and the others NOT getting loans unless collateral is provided.

Instead, the government should fund a battery production line then sell it later on after the technology is proven.

The government should also place large bounties for certain technology, such as batteries.

Capitalism should be fully utilized.

death to oil http://www.oiljihad.org

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DaveP Says:
September 12th, 2008 at 3:32 pm

#122 benson:
Well, that’s a sobering happening. I wouldn’t have expected that so close to elections. Just kidding.

#117 Tagamet:
Ew.

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John D. Rockefeller Says:
September 12th, 2008 at 3:34 pm

Wooo Hooo !

OIL JUST DROPPED BELOW $100/barrel

I think I will have to cancel my Volt and order that new 2010 CAMARO with 6.2L V8 and TAP shifting !!!

VROOOOOM

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Glenn Says:
September 12th, 2008 at 5:18 pm

What the feds should do instead of loaning any money is contract to buy 10,000 Volts a year for the next 5 years. That way GM can go get their own loans against the contracts. After 5 years GM should be producing and selling these in large enough quantities to keep them afloat and the technology will have proven itself.

That way we can be sure that the money coming from the government will go towards cutting edge technologies and no to designing trucks and suv’s.

No plug no purchase

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DB Cooper Says:
September 12th, 2008 at 5:24 pm

#129 Glenn –

Nice idea. It would allow the government to replace a lot of their ‘company cars’ with Volts and actually show some ability to lead by example.

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Nelson Says:
September 12th, 2008 at 6:34 pm

#129 Glenn -
Your idea is worthy of sending to Congress for consideration.

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LeoK Says:
September 12th, 2008 at 6:50 pm

Wow we have a lot of emotion running today…

Mitch @ 94 has it right – everyone needs to get the facts. I guess I can understand the anti-bailout sentiment here, but this is NOT a bailout.

Does anyone here realize that our Government (I include STATE government here) has given more TAX BREAKS (read cheap loans) to the imports – Toyota, Honda, Mercedes, Nissan, VW, etc – in the form of 10 and 20 year tax abatements to lure them to build new plants in particular states. How do you think GM feels after decades of paying taxes to every state in the union and to the federal government?

Yes, I know taxes are not GM’s only problem. But the state of the auto industry in the US is the result of the cumulative effects of events over several decades. Yes, much of it has been self-inflicted by GM and Ford – clearly they could have built better products in the past. But today’s reality is that they build vehicles of equal or better quality and fuel economy. The real problem today is that they do not compete on a level playing field here in the US. They are doing fine overseas, but here at home they are going up against import manufacturers who have modern, new facilities operating efficiently and taking advantage of numerous tax breaks and incentives, while the domestics struggle with serious legacy costs and a serious public perception gap on their products.

The ‘loans’ being discussed by Congress are simply a bridge to help get GM and Ford through a very difficult time – and to help save very good jobs here in the US.

I do agree on one point made early on today by Jackson @ 4 – Chrysler had their day. In fact, in hindsight, it is ironic that had the government walked away from Chrysler in the 80’s and let them die on the vine, we may not be talking about loans today. It is entirely possible that the void left by Chysler back then would have been filled by GM, Ford and others making the auto industry stronger for the long haul. But we can’t look back… we need to look forward…

Go VOLT!!!

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LeoK Says:
September 12th, 2008 at 6:55 pm

Glenn @ 129 – a novel idea, but think about it – do you really want the government buying 10,000 VOLTS per year? You’ll have a better chance of buying one at an Army surplus sale than at your local dealer.

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Glenn Says:
September 12th, 2008 at 7:36 pm

I’d rather GM decide that they can comfortably increase production numbers knowing they have solid contracts (ala Boeing, LockheedMartin or NorthrupGrumman). Accelerating economies of scale will bring these cars sooner and cheaper to the masses.

Anyone think they can take a stab at how many cars the (non-military) federal government owns?

I think GM should leverage their knowledge and expertise in trucks and produce a 40 mile ev range re-ev Colorado. That’s where the real potential is.

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Canuk Says:
September 13th, 2008 at 8:19 am

DB cooper said:

But if there’s going to be American taxpayers’ money changing hands here, we damn well better have an agreement that this money is spent inside the US. I EXPECT THIS CONTRACT WRITTEN IN BLOOD !!. It better not be spent sourcing parts out of asia so GM can afford to blow a fortune on assembling a bunch of Chinese parts; and slap a ‘Made in USA’ label on it.

You wanna know DB, that this is exactly what will happen. The North American corpratocracy is so far down the offshoring path that keeping these sort of manufacturing jobs here in America is just not likely to happen. Just too much money to be made by using the “slave labour” in the asian countries.

So, if you’re fearing that more jobs will be supported in China with your tax dollars, you don’t want these companies to getting more of your handouts.

Canuk

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Hydrogen Advocate Says:
September 13th, 2008 at 7:57 pm

If it’s not hydrogen/electric, I won’t buy it.

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Hydrogen Advocate Says:
September 13th, 2008 at 7:58 pm

offer a hydrogen /electric version of volt and i will buy it.

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Jay Says:
September 14th, 2008 at 1:18 pm

First of all I have zero sympathy for General Motors…watch the documentary “Who Killed the Electric Car”.
Face it General Motors and Ford have taken advantage our the American People’s loyalty long enough. If GM wants to manufacture an electric car then they should bring back the EV1 that they destroyed because there sales of auto parts would have diminished.
If the Federal Government wants to spend my hard earned money I would prefer they give(loan) $50 billion to Phoenix Motor Cars…it’s about time we let a small, upcoming, and fresh new face get a chance and let General Motors fund themselves.

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wbk Says:
September 15th, 2008 at 1:30 pm

I agree with Jay #142.
The US government should give $50B loans with low interest to companies that are already innovative. Not to GM, FORD or Chrysler.
The have had 100 years to perfect there business. But due to the greed and blind vision and of the ancient business men and the practices, they are barely keeping pace with the rest of the worlds car makers. They have never been able to top or come close to japanese or german perfection, development, or insight. But, we also have to accept that the US government is no longer a people voting controlled government, its a government that is controlled by big money and corporations. Thus why they are bailing out companies. The US government is now a corporation. Its not owned by the american people, its owned by the big business’s.

I just want the government to answer this, will they bail me out if I make bad business decisions.

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jriverat Says:
September 17th, 2008 at 9:07 am

Give them (not just GM) the cash, Insure that this product will be the next “Folks Vagen”.. I am not sure I’d like the slap on the face, when I see a $25K price tag on a 4-seater commuter.
Not asking for much, If the industry invests their money, they should reap the benefit of the gamble. If the GOV infuses the industry, let the tax payer reap the benefit. j

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c w Says:
September 17th, 2008 at 6:42 pm

I agree that the $1T could have funded some incredible research towards alternate energy. STOP OIL.

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bowtie Says:
September 22nd, 2008 at 1:38 pm

I do not support the help of GM at all. Concerning GM reasons.
They want support for providing alternatives, claiming difficulty. OK google keyword: EV-1. GM scrapped/crushed an entire fleet of fully developed (with customer satisfaction no doubt) electric vehicles. That is a shame two more years of r&d could be on the books right now making that model mostly by now real good. HMMM
At the same time working 6 years of r&d and money on there new Camaro Z28 gas guzzler platform that was discontinued in 02′. Its just plain bad business planning for future. They should assume the fate for there actions on this matter. Know your market provide a product that sells or fall like the rest. Why should we be sympathetic…search EV-1. And then ask yourself why?
That being said had GM followed through with the proper initial plans they had for an evolving market. Contiued to devolope the EV1 platform they would IN FACT be giving the Toy Prius’ a run for the money right now! IN SALES Idiot mistakes like this dont make a bail out just IMO.

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Ed M Says:
November 19th, 2008 at 8:31 pm

We’re all being too hard on the automakers. Its not their fault that congress passed a lot of laws that favored union greed. Who do you think the unions leaders are thinking of when they extort money from companies; themselves, the workers, the companies ? If you didn’t say themselves, you don’t have a good understanding of how unions work.

Congress should take a lot of the blame, if you ask those 3 questions about congress its also overwhelmingly themselves.

I also didn’t see congress trying to do anything to head off the current crisis, they were too busy trying to get elected. Some saw this mess coming for sometime, John McCain for example and tried to do something about it 2 years ago but congress just ignored it.

A pinch of prevention is always worth more than a pound of cure.
I would also give the media a fair share of the blame. They were too busy going gah-gah over Obama to report the truly important news.

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