Today is truly a historic one for the US automotive industry, and for the dream of petroleum independence and the Chevy Volt.
After weeks of intense political wrangling and nail-biting financial drama, US President George Bush has agreed to grant low interest loans to GM and Chrysler.
As he just announced those loans will be sufficient to allow GM and Chrysler to operate until March 31 2009. GM will receive its first $4 billion on December 29th, and an additional $5.4 billion on January 16th 2009. It could get another $4 billion on February 17th if the second half of the TARP is released.
Bush said normally he wouldn’t have intervened and would have allowed the companies to fail, but cited the current finical crisis as being extenuating circumstances. He determined allowing the automaker to collapse would be devastating to the economy. Bush also agreed with the automakers that a disorderly bankruptcy would cause them to fail and liquidate as consumers wouldn’t buy their cars.
The automakers will be given until March 31, 2009 to prove they can restructure and obtain net positive value, but not necessarily profitability. They must obtain meaningful compensation from labor and debtholders. If they fail to meet those goals, the loans will come due and they will have to file for an orderly chapter 11 bankruptcy.
Government would take non-voting stock in the companies, and there would be limits to executive compensation. The Treasury would oversee the restructuring.
The following specifics have been published by Politico.com:
Binding Terms and Conditions: The binding terms and conditions established by the Treasury will mirror those that were voted favorably by a majority of both Houses of Congress, including:
—Firms must provide warrants for non-voting stock.
—Firms must accept limits on executive compensation and eliminate perks such as corporate jets.
—Debt owed to the government would be senior to other debts, to the extent permitted by law.
—Firms must allow the government to examine their books and records.
—Firms must report and the government has the power to block any large transactions (> $100 M).
—Firms must comply with applicable Federal fuel efficiency and emissions requirements.
—Firms must not issue new dividends while they owe government debt.
Targets: The terms and conditions established by Treasury will include additional targets that were the subject of Congressional negotiations but did not come to a vote, including:
—Reduce debts by 2/3 via a debt for equity exchange.
—Make one-half of VEBA payments in the form of stock.
—Eliminate the jobs bank.
—Work rules that are competitive with transplant auto manufacturers by 12/31/09.
—Wages that are competitive with those of transplant auto manufacturers by 12/31/09.
Dec 19th, 2008 (9:25 am)Lyle, not sure if you are getting your info from a different source, but the number appears to be 17.4 billion, not 17.6.
I just got finished here http://gm-volt.com/forum/showthread.php?p=17663#post17663 but can post my primary comment here as well:
Per http://www.politico.com/news/stories/1208/16740.html this debt will be senior to all other debt (as permitted by applicable laws). I like this move because it secures the taxpayer’s commitment in the event of a bankruptcy.
Also, with the firms being required to make VEBA payments in the form of equity and eliminate the jobs bank, this looks to be a big fight with the unions coming up.
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Dec 19th, 2008 (9:29 am)13.4 billion now
4 billion more available in february if they need it
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Dec 19th, 2008 (9:30 am)HOORAY!
GO GM!
GO VOLT!
NOW CHANGE THE WORLD OF DRIVING!
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Dec 19th, 2008 (9:33 am)I’m waiting to see what all the terms and conditions are on this; but so far this sounds like the best scenario we could have hoped for. Now I’m just hoping GM’s debts can be restructured in such a way as to allow them to actually compete in our market again. As bad as this whole quarter’s been, it could lead to the best times the auto industry has seen in over 10 years.
Since the transplants have come in without the historical overhead costs of the domestics, it’s been like watching a NASCAR race where all but a couple teams are running restrictor plates. Hopefully we can move forward on a level playing field into the future. If so, IMO things look very good for the EREV platforms.
Fingers crossed…..
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Dec 19th, 2008 (9:36 am)The 31 March Deadline and Orderly Bankruptcy is crap…here’s my reasoning….once the Dems get into congress…there is no stopping the money flow! They were supported by the unions for office…and now they WILL repay the favor. Bush is effectively “punting” the whole thing to Obama and his Admin. Again, the UAW and GM’s (and others) standard business practices will continue unless they file chapter 11. I’d love to see the volt too….but what’s the point of a $7500 tax credit when you and your kids will end up forking over the taxes to repay this mess! The whole term “Prove your Viability” means nothing….hell, I can BS my way into saying my future company will do well in the years to come too! It’s an empty promise. This will not go away…I’d put my life savings on it
Really disappointed:(
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Dec 19th, 2008 (9:40 am)Ya for socialism!
This is a sad day for America. Especially since we give our tax money to support Chrylser, funded the private equity fund Cerberus. It’s beyond ridiculous. All they’ve done is delay bankruptcy 3 months and waste another 17 billion of our tax money.
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Dec 19th, 2008 (9:42 am)This seems to be a good approach from my perspective. GM gets a loan and can continue business.
By the same token, lenders who are gouging GM with high interest rates, as well as the UAW, can’t continue business as usual. And the threat of bankruptcy looms large if meaningful concessions are not made.
I think GM will also have to trim its overhead, freeze or reduce wages for salaried employees, limit travel expenses, etc.
A few years from now, this may return big benefits for us, the consumers.
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Dec 19th, 2008 (9:42 am)I’m going to say this early about terms and conditions…THEY MEAN NOTHING.
Because this was not passed by congress, this is not a bill, there is no legal requirement to retain these conditions, it was a executive decision. Obama moves in Jan 20th and he can change all the rules on a whim (not that he will…but he can) and that is the problem with not having this go through convention channels. So really, there is no strings attached to this… and there is no muscle behind it.
(It is really only 13.4 billion…because by February it is a new administration and they can do whatever they want, they don’t need ‘authorization’ to spend 4 billion more, perhaps he was making some kind of ‘math reference’ to the amount remaining in the first wave of the TARP, I’m not sure yet)
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Dec 19th, 2008 (9:50 am)Does this mean there are no pre-agreements from suppliers and labor before getting these loans? If that is the case, this money only gives them operating capital through March 2009. They still have to get concessions from the suppliers and the UAW. Now, just how easy is that going to be? Tough! Tough!
Guess we will get more of the details later.
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Dec 19th, 2008 (9:52 am)The people of this country are overwhelmingly against this bailout in every poll taken. I predict massive boycotts of GM in protest. Congrats GM, you got my tax money. But I’m never buying a car from you again.
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Dec 19th, 2008 (9:58 am)Lyle, your headline SHOULD read:
kING GEORGE II OVERRIDES CONGRESS AND THE PEOPLE ONCE AGAIN.
There are NO checks and balances in America. The Constitution is dead, the Rule of Law is dead, and there are NO more limitations on THE EXECUTIVE’S power over the people.
Free market competition is dead, fear of failure is dead and REAL capitalism is DEAD!
WE ARE RULED BY FEAR MONGERING.
You morons MAY get your overpriced Volts, but you fail to see the larger problem!
Would you sell the liberty your forefathers died and suffered for just for a shiny new toy?
Some retards would….
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Dec 19th, 2008 (10:00 am)LarryJ
I understand how you must feel, but this is a LOAN. It is not a bail-out. Now, if they default on the loan, the taxpayers will collect as much as they can from the sale of assets. I do believe there is enough assets of GM worldwide to easily repay what is owed.
We should all hope for the best for all three companies and we should all make a commitment to try our best to purchase our next vehicle from one of them. We, as Americans, need to support our own companies where we possibly can.
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Dec 19th, 2008 (10:01 am)#11 Tim says (among other zany things), fearfully, “We are ruled by fear mongering”
Civility is dead
Hyperbole killed it
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Dec 19th, 2008 (10:02 am)Yay, the Volt will live….at least for a few more months until they need more money and we’ll have to repeat the process. I hope Barack can come up with a better strategy here because from how this looks, this one is nothing more than throwing money away and postponing the inevitable painful restructuring that is so glaringly obvious.
#8 Statik
I agree. This thing lacks teeth, and the Big 3 know it. Theoretically, they must be viable by March OR ELSE. Or else what? You’ll give them more money so jobs don’t get cut? They’ll play that game all day.
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Dec 19th, 2008 (10:02 am)First I want to say I have in my life time purchased over 12 GM manufactured vehicles.
Welcome to the UNITED STATES OF SOCIALIST AMERICA!
George W. Bush is no conservative. He might as well have joined the Democratic party. The national debt doubled from $5,000,000,000.00 to $10,000,000,000.00 during his administration. We the citizens of USA is going to pay for this. Who is going to bail out America…the Chinese, Russians, Saudis?
When I was in high school we were taught socialism and communism is no good…we are already a socialist state, how long will it be before our government becomes communist?
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Dec 19th, 2008 (10:05 am)Tim
The congressional leaders have been saying for weeks the administration had the power to give the loans through TARP. Congress passed TARP. I don’t see where President Bush did anything wrong and did do exactly what congress said he should do.
And using that sort of descriptive language for Bush is not helping. I hope the shoe is not on the other foot soon. What will you say when Obama makes what some will consider a bone-headed decision and people call him names. I hope it does not happen, but he will make bad decisions sooner or later to some people’s perspective.
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Dec 19th, 2008 (10:07 am)dbK, thanks for the link, I hadn’t been able to find the conditions anywhere else. It looks like the executives and the UAW both take a bit of a haircut, which is good. I despise the idea of our government bailing out a pair of corporations, but allowing them to fail now would be even worse. Elimination of the jets is window dressing, but useful, the limitations on executive pay is an important signal, if it is actually followed, that is. The elimination of the jobs bank, the reduction of UAW pay, making the work rules competitive and the reduction of debt are crucial, again, if it is actually accomplished and not finessed away. This could work, maybe…
_Binding Terms and Conditions: The binding terms and conditions established by the Treasury will mirror those that were voted favorably by a majority of both Houses of Congress, including:
—Firms must provide warrants for non-voting stock.
—Firms must accept limits on executive compensation and eliminate perks such as corporate jets.
—Debt owed to the government would be senior to other debts, to the extent permitted by law.
—Firms must allow the government to examine their books and records.
—Firms must report and the government has the power to block any large transactions (> $100 M).
—Firms must comply with applicable Federal fuel efficiency and emissions requirements.
—Firms must not issue new dividends while they owe government debt.
Targets: The terms and conditions established by Treasury will include additional targets that were the subject of Congressional negotiations but did not come to a vote, including:
—Reduce debts by 2/3 via a debt for equity exchange.
—Make one-half of VEBA payments in the form of stock.
—Eliminate the jobs bank.
—Work rules that are competitive with transplant auto manufacturers by 12/31/09.
—Wages that are competitive with those of transplant auto manufacturers by 12/31/09. _
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Dec 19th, 2008 (10:08 am)Good — perhaps even great — resolution given the short time frames available. As I believe Cautious Fan mentioned, for those concerned about oil dependency this is a better outcome because the money came from TARP and not the appropriation for the retooling loans. If the No Drama Obama team follows up and performs like it should the end result will be a well thought program that gets both companies on a path to success. Given what we can expect from Obama on the energy front, part of the deal will definitely be a commitment to the E-REV platform.
Statik my friend, I’ll have to disagree with you on the preferred track. I’ve always thought that TARP was better than the legislative one-off. TARP was designed for this and gives the Treasury the flexibility it needs to handle the situation. Decisions can be made quickly, Treasury can get the financial and industry expertise it needs, and there will be some follow-up as well as co-ordination with the financial assistance for the financing arms. The congressional route was a circus — endless discussions of corporate jets followed by the Sierra Club wanting to design cars and Bob Corker wanting to negotiate union contracts. Having said that, the more open legislative process did serve a valid purpose in highlighting and putting in focus the critical issues, many of which are addressed by the TARP plan. It’s just so painful watching how sausage gets made.
As for needing legal blessing, any deal that requires such blessing — and it’s likely one will not — can be introduced and passed quickly by congress without fanfare. This can be easily done since the votes will be there for two about reasons: (1) it’s not an appropriation so the sturm and drang about taxpayer money will be gone; and (2) the votes will be there given the make-up of the new congress. This is precisely analogous to what happens in a bankruptcy — the debtor in possession strikes a deal with stakeholders and the judge blesses it.
In any event, Merry Christmas to GM and Chrysler stakeholders. Happy new year too!
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Dec 19th, 2008 (10:10 am)# 4 DB Cooper
Hit the nail on the head.
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To the right-wing nutjobs—go back to listening to Rush.
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Dec 19th, 2008 (10:14 am)Further proof that Bush does not live in the real world… and rarely visits, either.
The only thing that Bush has protected is top-level executive salaries.
Look beyond GM…
Chrysler already issued a response (it must have been waiting at the laser printer, so we can presume they KNEW what the Bush Administration had decided), that includes this about their suppliers, ” [We are] mindful that they are going through a difficult period as well. But we must cooperatively find ways to further reduce our costs while maintaining normal operations. We will ask our suppliers to maintain their commitment to reasonable trade terms and normal fulfillment of orders for as long as the federal loan is outstanding.”
Chrysler has already been jamming their suppliers with terms, paying ever more slowly and driving the suppliers into their own cash crises. It’s just going to be more of the same there, to make sure Cerberus makes out. Memo from Chrysler to suppliers: “WE got the Bailout; YOU didn’t. We own you.”
That’s not concern for American jobs; that’s 100% allegiance to Cerberus’ profits.
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Dec 19th, 2008 (10:18 am)This is great news, even Bush does the right thing once in a while!
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Dec 19th, 2008 (10:20 am)#9 N Riley
Does this mean there are no pre-agreements from suppliers and labor before getting these loans? If that is the case, this money only gives them operating capital through March 2009. They still have to get concessions from the suppliers and the UAW. Now, just how easy is that going to be? Tough! Tough!
Guess we will get more of the details later.
===========================
No, nothing pre-arranged.
As for the ‘operating captial through March 09′…I doubt it. GM would need the whole 13.4.
Napkin math follows:
16,007,000,000 cash on hand on September 30th, 2008, with a 2 billion burn rate given by GM at the time, based on year over year revenue drop of about 20%
Since then, sales have dropped to -43%…with December sales still unaccounted for (but reported as ‘worsening’ by Wagoner), so lets put the burn at 2.5ish.
On top of the burn rate we also have the Dephi plan that was appoved by a bankruptcy judge in late September, that had GM cough up 1.2 billion to give the partsmaker ‘ample liquidity’ in its attempt to exit C11 this year.
http://www.mlive.com/kzgazette/news/index.ssf/2008/09/judge_oks_gm_deal_to_help_delp.html
Sept 08 – 16 billion
Oct 08 – 13.5 billion (2.5 cash burn)
Nov 08 – 11 billion (2.5 cash burn)
Nov 08 – 9.8 billion (1.2 Delphi agreement)
Dec 08- 7.3 billion (2.5 cash burn)
That puts them at least 5 billion below minimum by month’s end (assuming the magic number is about 12 billion). I didn’t even add in little things like delaying the 300 million they owe to dealers in incentives they gave them to buy more inventory. There is a lot of ‘persnickety’ items like that…but if you argue that the burn is still 2 billion like they said it was in September, I could throw all those things in the mix.
By the time Obama is in office Jan 20th, they would have been another 2 billion in the hole….7 billion below minimum standard.
Continuing the trendline (without bailout bucks…if that was possible)
Jan ‘09 4.8 billion
Feb ‘09 2.3 billion
Mar ‘09 -.2 billion
So they would need at least 12.2 billion of this 13.4 to make it to March 31st in my opinion.
GM wasn’t making up numbers when they submitted their plan. They wanted 4 billion in december, 4 billion in January and 6 billion more to draw on if the industry continued to trend below their baseline of 12.5 million vehicle…thats 14 billion total.
/the industry continues to deteriorate…currently at a rate of 10.2 million vehicles
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Dec 19th, 2008 (10:22 am)Lyle’s post says “The automakers will be given until March 31, 2009 to prove they can restructure. They must obtain meaningful compensation from labor and debtholders. If they fail to meet those goal, the loans will come due and they will have to file for an orderly chapter 11 bankruptcy.”
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EXCEPT, that near the end the text says that it is OK for any or all of these conditions not to be met, if GM gives a good reason. So actually there are no conditions at all, the $13B is simply a gift.
I will be embarrassed to drive home in my GM vehicle tonight as I am sorry to be associated with this company.
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Dec 19th, 2008 (10:22 am)#8 static “I’m going to say this early about terms and conditions…THEY MEAN NOTHING.”
Of course you are right but that is always true. Even if there had been a bill passed in congress, the new congress could pass another bill in three months. It’s a little harder that way but Congress can move pretty quickly if it feels that it must. TARP and The Patriot Act come to mind although those bills are also prime examples of why that is not a good idea.
How much of GM’s current cash outflow is non-recurring? If most of it is operating expenses, than they’re going to be in the same boat in March unless there is a large upswing in revenue. If, however, the plant shutdowns and concessions do reduces costs, than GM my not need another round. Or, if they do, the projections based on the “Plan” may show that there is a good chance at profitability. Gm doesn’t actually have to be profitable to repay the loans, They just have to have the cash flow to make the payments.
Static, I have a question that you may know the answer to. In 2007 GM had a huge loss. When I look at their 2007 report, it seems as though they accounted for that loss as taxes. I must be misreading the report. How did GM account for that loss and what was it really?
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Dec 19th, 2008 (10:22 am)Government money is a very powerful drug. I really don’t see them surviving without chapter 11. They need to bring the unions in line and dump the health care. Unfortunately the administration wont support this course of action because Ford would be as good as dead.
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Dec 19th, 2008 (10:23 am)#15, John Smith:
You’re missing a set of “000″ in each of those numbers (unfortunately).
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Dec 19th, 2008 (10:29 am)Bush punted so the Auto industry will fail in April 2009, and the delay will only cost 17:4 billion. Will the new administration require the UAW to agree to a date certain to compensation equal to the competition?
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Dec 19th, 2008 (10:29 am)TO: john1710a
TO: statik
TO: Cautious Fan
TO: JEC
Completely OT, but just wanted to thank you (and many others) for your participation here. John for his belief in parallel hybrids. Statik for his financial analysis. Cautious Fan and JEC for their “religious” belief in secular capitalism. LOL And all for their flyspecking of all claims GM.
Can’t say we agree on all the issues but your perspective is always thought provoking. Thanks!
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Dec 19th, 2008 (10:30 am)GM Selects Alcoa Forged Aluminum Wheels for Chevy Volt
http://www.alcoa.com/global/en/news/news_detail.asp?pageID=20081219005008en&newsYear=2008
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Dec 19th, 2008 (10:31 am)#24 marharguitar says “Static, I have a question that you may know the answer to. In 2007 GM had a huge loss. When I look at their 2007 report, it seems as though they accounted for that loss as taxes. I must be misreading the report. How did GM account for that loss and what was it really?”
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Giving this question a try, I think you are referring to the loss of tax credits. GM’s earlier losses had given them an income tax credit to be applied against future income . GM had (properly) carried on its books that amount as an asset. Making it an asset meant that GM’s statements looked better (losses did not appear to be as great), and GM could borrow additional money against that asset. Then GM’s external auditors decided there was no prospect that GM would earn enough in future years to use the tax credits. Therefore, the auditors said that GM had to take that asset off the books. That was what you saw reflected.
================================================
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Dec 19th, 2008 (10:31 am)Why didn’t they force GM (and Chrysler, or whoever needs a bailout to survive) to break up into separate, smaller companies represented by the brands.
So, Chevrolet Motors Co., Saturn Vehicles, etc.
Wouldn’t this create a more dynamic auto industry in the US and allow the free market to determine the winners and losers? It’d also break up the “too big to fail” crap that forces us into dumping tax payer money into these guys just for the sake of keep the whole economy stable.
I’m there are probably many reasons why this isn’t viable but it’d like to know what they are.
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Dec 19th, 2008 (10:34 am)By the way, we’ve been here before.
http://en.wikipedia.org/wiki/Conrail
We still have railroads in the country.
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Dec 19th, 2008 (10:35 am)Here is one good thing Bush has done. Too bad it seems like the only good thing.
Ford F150 and Chevy Silverado are the best selling vechiles this year yet people say they are not viable. Also Toyota and Honda are both posting losses for the year and if it continues they too will need a government bailout from Japan.
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Dec 19th, 2008 (10:37 am)Just a question here, but isn’t TARP NOT a loan but a flat out “Bailout” fund?
Either way,…
I WANT MY VOLT!
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Dec 19th, 2008 (10:49 am)As I think most people figured…a week to Christmas is not time to watch a half million people lose their jobs…not if you want a chance to get elected in four years.
I wonder if Toyota will ever have a version of the Volt, made by GM and sold with the Toyota nameplate, like the Vibe is made on the Matrix line, with a Pontiac nameplate?
To me, that would be a sign that GM is worth saving…if Toyota was willing to risk their reliability reputation on a GM product.
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Dec 19th, 2008 (10:49 am)I will be very surprised if the unions end up creating work rules and wages competitive with foreign transplant factories. They are merely kicking the can down the road, hoping the new Congress and President give them more favorable terms.
As such, US automakers will never be competitive with foreign transplants, and they will have to keep going back for more and more taxpayer money.
That said, we’ve taken one more giant step forward, so I will be thankful for the gains made.
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Dec 19th, 2008 (10:54 am)35 Jason:
They will. The all or nothing month to two month plant closures had their intended effect.
In Kokomo, IN and South Bend, IN the reporters are interviewing UAW line workers (not Gettelfinger or retirees) and its basically all the same: “I am getting paid 80% of my wages during this closure but…there is no guarantee there will be a job to come back to. I would rather work and have half a loaf than no loaf at all”
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Dec 19th, 2008 (10:57 am)#31 marharguitar says “By the way, we’ve been here before.
http://en.wikipedia.org/wiki/Conrail
We still have railroads in the country.”
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Yes, and there are remarkable parallels. Looking back, it was the Pennsylvania and New York Central Railroads that merged (similar to the proposed GM-Chrysler merger). Then, despite various subsidies, the merged railroad, the Penn Central, went into chaos. (Some funny things happened — people would steal their boxcars and then, because they had a resultant shortage of boxcars, sell the stolen boxcars back to the railroad.) Then, as now, inflexible and expensive union agreements were an important factor.
The Penn Central collapsed into bankruptcy, because it could not keep up with the competition from other railroads and trucking companies. The feds rescued the operating units of the bankrupt company by creating Conrail at first and then breaking it up and selling it. Notably, W. Graham Claytor, perhaps the greatest railroad administrator ever, was drafted to run Conrail, and did so brilliantly. Neither the Pennsylvania nor New York Central survived.
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Dec 19th, 2008 (11:01 am)#36, Morgan,
I sure hope so. I don’t mind paying competitive rates, even if they are premium, but non-compeitive rates, and especially the non-competitive rules, just kill productivity.
Again, this is an advancement in the right direction, so I won’t poo-poo it.
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Dec 19th, 2008 (11:02 am)Strategic question.
Does anyone see the Ford brand increasing it’s brand power since they’re not accepting the bailout? It does in my eyes, but I’m not sure if my opinion is representative.
Why else would Ford not take the money? It’s free money. Sit on it for 4 months, then repay it in March and the gov’t interference is gone and you’ve made 7% (annualized) on $3 billion…..70 million over a 4 month period?
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Dec 19th, 2008 (11:05 am)#24 maharguitar
Static, I have a question that you may know the answer to. In 2007 GM had a huge loss. When I look at their 2007 report, it seems as though they accounted for that loss as taxes. I must be misreading the report. How did GM account for that loss and what was it really?
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What happened was part of a ‘rehaul to the accounting standards’. The Financial Accounting Standards Board changed the way tax credits are handled. Basically , you can’t represent tax credits until they earn the taxable income to which it applies.
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Dec 19th, 2008 (11:06 am)#39 Cautious Fan says “Does anyone see the Ford brand increasing it’s brand power since they’re not accepting the bailout? It does in my eyes, but I’m not sure if my opinion is representative.
Why else would Ford not take the money? It’s free money.”
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Ford rises in my eyes also.
The reason for Ford to avoid taking the money is to avoid the stigma but also to avoid the voluminous government red tape that will come along with it. (Maybe people at Ford would rather work on cars rather than go to meetings about government edicts.)
GM will put 100 lawyers, accountants and secretaries in a box and have them do nothing but government relations. Ford’s decision probably is not as good as just taking the money and building a Ford box, but I understand it.
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Dec 19th, 2008 (11:11 am)The biggest hope I have riding on this whole thing is that something gets done with the retirees’ pension and health care costs. If we expect GM to downsize itself and move toward smaller (and hence lower margin) cars, there has got to be some kind of realistic plan for how this weight will be carried.
Personally, I think the whole thing needs to be offloaded and let the federal government pension insurance pick up the pieces. Not to say ’screw the old folks’, but things have changes so much since those agreements were made, that there’s no possible way the company can continue to keep those agreements. Hence the retirees are going to end up with the federal package eventually either way. The question is whether most of the domestic industry has to die first or not.
There are certainly other areas where they could pinch a few dollars, but carrying three or four retirees along on the back of each current employee is just not sustainable. Even cutting the VEBA payments in half will still probably not work.
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Dec 19th, 2008 (11:11 am)#28 DonC
TO: john1710a
TO: statik
TO: Cautious Fan
TO: JEC
Completely OT, but just wanted to thank you (and many others) for your participation here. John for his belief in parallel hybrids. Statik for his financial analysis. Cautious Fan and JEC for their “religious” belief in secular capitalism. LOL And all for their flyspecking of all claims GM.
Can’t say we agree on all the issues but your perspective is always thought provoking. Thanks!
==================================
Indeed.
Thanks for taking a minute to throw this out. I’d like to echo the same thing. It is always nice to just step back, hit the reset button and make sure everyone knows that this is a community and no one should take anything personally. (I think that is the ‘jist’ of what you were getting at)
We certainly do no always agree (that would be boring anyway), but I also appreciate differing points of view.
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Dec 19th, 2008 (11:12 am)Time for GM to start taking orders for the Volt. They should begin with members of this site.
I complete agree N Riley @ 12….THIS IS A LOAN. The money will be paid back. Get back to business.
Trim the fat–The union and retirees should cut their benefits for a while…
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Dec 19th, 2008 (11:20 am)I’m not sure if this is related, or the proper place for this, but because this 13.4 billion taps out the first wave of the TARP, Paulson said today that Congress will need to release the last half of the $700 billion.
—
He said he was confident that the Treasury Department, Federal Reserve and Federal Deposit Insurance Corp. had the resources to address a significant market event if one should occur before Congress approves the use of the second half of the rescue fund.
But it’s important for Congress to release the second half of the rescue fund “to support financial market stability,” Paulson said in a statement
Under terms of the $700 billion rescue fund that Congress approved on Oct. 3, when the administration determines the second $350 billion is needed it has to submit a report to Congress detailing how it plans to use those funds.
The money automatically will become available unless both houses of Congress pass legislation blocking the funds within 15 days of receiving the administration’s report.
http://biz.yahoo.com/ap/081219/paulson_rescue_fund.html
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Dec 19th, 2008 (11:23 am)N. Riley:
A loan that won’t be repaid or a bailout, what’s the difference. GM has shown it can’t handle money. A company that continues to loose money on it’s product would find out why it continues to loose money and make adjustments. Not GM, they continued to loose with products the public wouldn’t buy, Westinghouse was offering low interest loans to the Big 3 to get them back on their feet. But GM wants Federal Funds so the politicians can make excuses for it not being paid back. Do you ever hear the word Collateral mentioned by the Big 3 ? That is what backs a good faith loan.
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Dec 19th, 2008 (11:25 am)#44 Dave B says “Time for GM to start taking orders for the Volt. They should begin with members of this site.”
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I think GM could have done that very successfully some months back. At this point, having heard all the tall tales told in between, I think most of us are going to want to see a real car with “wheels on the road” before committing to anything. I have zero confidence any working Volts will be delivered to actual customers (will be happy to be proven wrong).
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Dec 19th, 2008 (11:32 am)WSJ says “But according to a White House fact sheet, the [bailout] targets ‘would be non-binding in the sense that negotiations can deviate from the quantitative targets…providing that the [company] reports the reasons for these deviations and makes the business case to achieve long-term viability in spite of the deviations’ .”
=========================
Means free money if you can tell a good story.
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Dec 19th, 2008 (11:37 am)#28 DonC
Cautious Fan and JEC for their “religious” belief in secular capitalism.
__________________________________________________-
Oh and likewise my friend. I admire your steadfast faith in the political process to achieve equitable solutions, even against the historical odds and the trainwrecks littering the landscape. You are truly a beacon of human optimism. Hehehe.
Merry Christmas
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Dec 19th, 2008 (11:40 am)#44 Dave B says “Time for GM to start taking orders for the Volt. They should begin with members of this site.”
—————–
#47 RB says, “I think GM could have done that very successfully some months back. At this point, having heard all the tall tales told in between, I think most of us are going to want to see a real car with “wheels on the road” before committing to anything. I have zero confidence any working Volts will be delivered to actual customers (will be happy to be proven wrong).”
=======================
I agree with you RB.
To reflect that, I changed my answer to the deposit question on the wait list survey here months ago—”If you would consider giving a deposit for your Volt, how much would it be? (in USD):”
It went from $10,000 to $300…and I meant it.
$300 dollars I figure is the smallest, but still meaningful number to show my commitment to buying. It also represents the largest amount that I am willing to light on fire…taking a chance it will ever be produced or GM will still be around to return my money.
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Dec 19th, 2008 (11:46 am)“Non-binding” targets. Thats the key phrase of the bailout langauge. This is free money with no strings attached.
This is an absolute outrage for all Americans. I don’t even want the Volt anymore, keep it. I’ll buy a Toyota.
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Dec 19th, 2008 (11:46 am)YEAAA!!
I am so happy.
So many wackey import owners people here who dont support this.
Every other country including japan gave money.
Stop being spoiled brats and support your country. Have some backbone.
Go GM
I wish them well. I am excited for the detroit auto show.
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Dec 19th, 2008 (11:47 am)I present — hard numbers:
Chrysler gets 4 billion of the 13.4 TARP package. I was just trolling GM’s and Chrylser’s media outlets, and there is a media release on Chrysler website that spills the beans early.
——
An Open Letter From Bob Nardelli
To Chrysler employees and other stakeholders:
We have received news that U.S. Treasury Secretary Henry Paulson will provide $4 billion of initial funding to Chrysler LLC from the TARP (Troubled Assets Relief Program) as a loan to help bridge the current financial crisis. We appreciate the Administration’s confidence in Chrysler
http://cgmedia.daimlerchrysler.com/newsrelease.do;jsessionid=F418B4162E80BDEEDBA6CF9AE66F5692?mid=1&id=8416
———
He also says some things like “Combined with our new products from our ENVI group, we expect that 500,000 Chrysler electric-drive vehicles will be on the road by 2013. “…and takes the opportunity to start smack talking the suppliers/dealers/UAW.
Side note: Detroit auto show looks like a real winner for Chrylser too, there is a quote about that, “We also sought the support of our local Detroit area dealers for the auto show…we will also appropriately scale back some of our presence at the auto show because of current business conditions. We have conserved costs in our press event with vehicle reveals that are product-focused and straightforward, and a simplified product display”
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Dec 19th, 2008 (11:54 am)#48 RB
Means free money if you can tell a good story.
______________________________________________
Did you suspect otherwise? Politicians have no incentive, nor the capability, to truly determine if it’s fact or fiction. Contrast that with a someone buying GM bonds, who at least as the incentive, and probably the capability. Statik sounded the alarm on the ridiculous nature of GM’s market forecasts for their congressional proposal, yet somehow that didn’t really come up in the hearings.
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Dec 19th, 2008 (11:55 am)I tell you what….I would be more likely to buy a car from them if they file chapter 11 as opposed to this loan….
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Dec 19th, 2008 (11:56 am)BTW GM is doing a press conference now in the GMnext display on the ground floor of the Renaissance Center in Detroit
If you have a satelliate you can watch it on a loop:
Satellite: AMC 15
Transponder: 2
Downlink: 11740 Horizontal
Analog, Ku Band
Audios: 6.2/6.8
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Dec 19th, 2008 (11:56 am)No trolls allowed on this glorious day
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Dec 19th, 2008 (12:02 pm)DUMB question boys–are GM & Chrysler joined @ the hip in this deal, or are they independant of each other?? I.E. If Chrysler does NOT show viability, and the feds “CALL” the loans in the spring, does Chrysler just go “tits up” only, and that doesn’t effect GM in the slightest?? Just curious……………………btw, FoMoCo doesn’t NEED the cash–even if it were “FREE” money, would you want to put your hand in THAT cookie jar with all the red tape involved??????
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Dec 19th, 2008 (12:03 pm)@Zack henery
“Every other country including japan gave money.”
But mom, every other country is jumping off the cliff…….
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Dec 19th, 2008 (12:06 pm)Thankfully i will not be buying the volt from the sellouts GM….I will be buying my EV from BYD
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Dec 19th, 2008 (12:08 pm)One article that I read stated that the concept of a car czar remains, and that the Bush administration would ask Obama to name someone, so that continuity is maintain during the transition.
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Dec 19th, 2008 (12:10 pm)Looks like Th!nk mat stay in the market…
http://www.autobloggreen.com/2008/12/19/think-hints-that-norwegian-government-aid-might-be-coming-after/
@TUT 60
Great for you my friend. Please let us know how it goes as I believe competition is always good.
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Dec 19th, 2008 (12:14 pm)Bush “Kicked the Can ” to the next President. We will have to endure this mess all over again next March.
Pre-packaged chapter 11 would be sooo much easier
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Dec 19th, 2008 (12:14 pm)Random news from Wagoner’s press conference, if you don’t have access to satelliate, lol.
Nothing. He said nothing. In the Q&A, they asked him about if he was going to leave/be fired and he said something like, “You think I stayed around and took all this the last 2 months to just go away now? Look, I think we have the best management team possible here at GM, and I am a part of that”
He also said that GM had been paying all his suppliers up until now, and they will continue to do so. If he said how much they were getting…I missed it, so I doubt he did. Wagoner did say he expected to get this ‘mystery cash’ by Jan 29th.
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Dec 19th, 2008 (12:15 pm)Folks, the three automakers should have merged. That is the true way for them to survive. This is insane.
“…
Today is truly a historic one for the US automotive industry, and for the dream of petroleum independence and the Chevy Volt..”
How can a $40K car end up bringing independence if almost no one can afford it?
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Dec 19th, 2008 (12:17 pm)Also the UAW asks Obama to reverse ‘unfair conditions’ to workers. So that took them all of 3 hours to start fighting against it:
—
“While we appreciate that President Bush has taken the emergency action needed to help America’s auto companies weather the current financial crisis, we are disappointed that he has added unfair conditions singling out workers,” said Gettelfinger. “These conditions were not included in the bipartisan legislation endorsed by the White House, which passed the House of Representatives and which won support from a majority of senators.
“We will work with the Obama administration and the new Congress to ensure that these unfair conditions are removed,” said Gettelfinger, “as we join in the coming months with all stakeholders to create a viable future for the U.S. auto industry.”
http://www.uaw.org/auto/12_19_08auto1.cfm
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Dec 19th, 2008 (12:17 pm)I love the photo of G.W. that you used for this one.
That is the look of a guy who doesn’t give a rat’s rectum about GM, The Economy, or the American People.
His “loan” just puts off real government leadership to the next administration.
I can’t wait to see what history chooses as the ONE THING he ever got right.
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Dec 19th, 2008 (12:18 pm)#45 statik:
#13.4 billion to GM and Chrysler justifies releasing another $350 billion for ??? “Retention payments” for AIG employees, no doubt.
Next stop, Grand Cayman, or wherever the the offshore banking haven du jour is this month.
Can successfully kicked. Turn in for all new episodes of “As The GM and Chrysler Turn”, introducing new star Barack Obama.
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Dec 19th, 2008 (12:21 pm)There really is a Santa Claus.
++++++++++++
hi Gordon #67,
“the look of a guy who doesn’t give a rat’s rectum about GM”
_____________________________
We could have some fun captioning the Bush photo. I’ll give it a shot.
“I haven’t had a bowel movement in 3 days and you photographers are asking me to smile?”
=D~
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Dec 19th, 2008 (12:27 pm)#8 static “I’m going to say this early about terms and conditions…THEY MEAN NOTHING.”
As it should be. If we want to call ourselfs a democracy, the party that lost soundly in recent elections shouldn’t be dictating terms.
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Dec 19th, 2008 (12:28 pm)“While we appreciate that President Bush has taken the emergency action needed to help America’s auto companies weather the current financial crisis, we are disappointed that he has added unfair conditions singling out workers,” said Gettelfinger. “These conditions were not included in the bipartisan legislation endorsed by the White House, which passed the House of Representatives and which won support from a majority of senators.
“We will work with the Obama administration and the new Congress to ensure that these unfair conditions are removed,” said Gettelfinger, “as we join in the coming months with all stakeholders to create a viable future for the U.S. auto industry.”
———————————————————————————————-
Tell you what… any of the UAW guys that feel they’re being taken advantage of… all you need to do is resign, brush up your resume’, and go get a job where you aren’t so undercompensated and picked-on. You are not slaves. You are not company property. The doors are not locked. You can leave any time you choose for any reason you choose. So stop play acting like you are being FORCED to accept anything. You are being OFFERED the OPPORTUNITY to keep a VERY GOOD job. 99% of everyone else who does production line work would kill and eat you for your job if given the chance. The drama makes you look so incredibly bad. I’m sure most of the UAW rank and file can see that plain as day, but they really need to reign in the whack jobs that are making all UAW workers look like CRYING BABIES. It’s NOT winning the auto companies or the workers (union or non-union) any credibility with the rest of the taxpaying public.
This kind of stuff is exactly why the conditions on the loans needed to be prerequisites to be met BEFORE any money is handed over. The more I think about it the more it looks like a blown opportunity; and an industry that’s just been put on life support without performing the needed surgery first.
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Dec 19th, 2008 (12:30 pm)#69
Good one! You could build a whole website on that premise alone, but we should probably stick to “GM Dreams and E-Rev VOLT Wishes”.
On another topic: Does anyone know whatever happened to the “skateboard chassis” that GM was working on? I think it was hydrogen powered…
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Dec 19th, 2008 (12:31 pm)#44 Dave B says “Time for GM to start taking orders for the Volt. They should begin with members of this site.”
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#47 RB says, “I think GM could have done that very successfully some months back. At this point, having heard all the tall tales told in between, I think most of us are going to want to see a real car with “wheels on the road” before committing to anything. I have zero confidence any working Volts will be delivered to actual customers (will be happy to be proven wrong).”
=======================
I agree with you RB.
To reflect that, I changed my answer to the deposit question on the wait list survey here months ago—”If you would consider giving a deposit for your Volt, how much would it be? (in USD):”
It went from $10,000 to $300…and I meant it.
===========================================
I actually agree with Statik that a small deposit is warranted in this case. It would do a few things for all parties. One, it would tie-in to GM’s overall plan which is to show the Feds that they have a plan. If they have deposits of 20,000 of Volts, it looks like a plan. Regarding amounts, didn’t $99 reserve the Smart which was an overwhelming success? Thus the buyers, seller, and Feds all benefit in the case of taking orders. It’s that time.
Plus it is a shift in overall marketing. Tesla sold nearly all of their Roadsters on the Internet, which is what the Volt is doing as we speak. No more showrooms or dealers. This saves dollars.
Thoughts?
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Dec 19th, 2008 (12:33 pm)Bush caption…..
“I have to rip one but the MIC is too close….”
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Dec 19th, 2008 (12:34 pm)The other 9.4B is for GM…nothing for Ford, of course they asked for nothing, lol.
Updated copy from AP includes the numbers:
http://biz.yahoo.com/ap/081219/meltdown_autos.html
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Dec 19th, 2008 (12:43 pm)George W. Bush saves the world! Unbelievable.
Years from now history will footnote his presidency but for this one act it will say how the world economy teetered on the bring of the second great economic depression. The collapse of the US auto industry was the boulder that WOULD have started an unstoppable landslide of unemployement and failing businesses not just in the US but around the world (yes, the world is “flat” thanks to globalization).
Thanks Mr. President. Your legacy is secure.
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Dec 19th, 2008 (12:51 pm)I posted this earlier this morning but it looks like it got stuck in “moderation”
GM Selects Alcoa Forged Aluminum Wheels for Chevy Volt
http://www.alcoa.com/global/en/news/news_detail.asp?pageID=20081219005008en&newsYear=2008
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Dec 19th, 2008 (12:51 pm)Photo Caption:
“Shoes up! Ready…. Aim…. Fire!”
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Dec 19th, 2008 (12:51 pm)I know the market is excited about the news, but I’m not sure why the stock is trading slightly up at this point.
The deal calls for 2/3rds of the debt to be converted to a equity stake. Just how much dillution of the share price is that?
I’m not sure they can even pull off this feat at 33 cents on the dollar. This sounds like a problem not that dissimilar to GMAC trying to qualify for bank status. GMAC can’t get a debt exchange done under the thread of eminent bankruptcy, I don’t see how they get to that point here either.
The big GM bondholders are already in motion. They have a legal team in place and are challenging GM’s recovery plan…saying it is unrealistic and in no way will they accept ANY percentage.
Here is there statement:
“The baseline scenario in the restructuring strategy GM submitted to Congress on 2 December, forecasts a pro forma EBITDA in 2012 to be USD 15.3bn, with a downside scenario of USD 12.1bn, according to a public version of the plan.
But that figure should be closer to USD 10bn of EBITDA while the reworked capital structure should be based around USD 8bn of EBITDA to provide for a cushion should conditions worsen, said one of the sources.”
And here is there big finish –> ” Bond holders have NOTHING to gain from swapping for equity in an unsustainable capital structure”
http://www.ft.com/cms/s/2/ca9c80a0-cdc5-11dd-8b30-000077b07658.html
======================
Apparently the bondholders are not mentally challenged, they realize that converting debt to equity is no different than just ripping up the tab, so they might as well see what they can get in liquidation. Who knows how many cents on the dollar these guys even paid for this debt?
/big, big hurdles ahead
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Dec 19th, 2008 (12:56 pm)#66 statik says ““We will work with the Obama administration and the new Congress to ensure that these unfair conditions are removed,” said Gettelfinger, “as we join in the coming months with all stakeholders to create a viable future for the U.S. auto industry.””
Blah blah blah blah blah. Hey, what is he going to say? He has to say this to show he’s fighting hard for his “voters”. I can’t really find anything in the conditions that singles out the UAW unfairly. It says competitive but competitive does not mean the same. There is some wiggle room. Hopefully the UAW workers will figure out that a job that pays twice the average beats no job that pays two point three times the average is still a good deal. It has to be a joint effort on all parts.
If the UAW thinks its going to get special treatment it will probably be sorely disappointed. This is Podesta’s deal, and he is not going to give the UAW a pass. So far Obama is really not following the game plan, which we’ve seen in the past, of pandering to his base. The furor from the gay community about the minister selected for invocation at the Inaugural and the complaints about Gates at Defense are probably just warmups. I hope that’s the case.
Finally I don’t extend too many kudos to Ford. I suspect Ford executives don’t want to take the money because it will crimp their executive pay and they figure that they can get the same deal from the UAW that Chrysler and GM get (this may even be contractual). However, if GM does restructure it will put a lot of pressure on Ford. Ford says it has restructured, and that is true to some extent, but to a larger extent Ford just encumbered its assets in a more timely way, before the financial meltdown.
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Dec 19th, 2008 (12:58 pm)@Gordon 72
I’m pretty sure it has been put on “pause”. The R&D team for shell design is less important at this time. As I understand it, the “Skateboard” is fully functional, not efficient though.
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Dec 19th, 2008 (1:02 pm)First of all I would like to thank the REAL
STAR of this exercise. Senator Bob Corker of Tenn, for cutting to the chase and analyzing what were the two crucial questions that were NOT being faced when all this started.
1) The issue of legacy and unequal labor costs.
2) The necessity for Balance Sheet restructuring, even if legacy and labor costs were equalized.
Without the first item, the US makers could NEVER put the same features into a car as the foreign competitors,for teh same price. Consumers would note the deficiencies, and spend their money as they have done, elsewhere.
This allows the US makers for the first time, to build all kinds of cars, and make a profit, so the nonsense of “They refuse to build good small cars”, as some kind of conspiracy, can be laid to rest.
Every single item that Senator Corker, and both (Republicans AND Democrats in Both Houses) then agreed with, has been codified into this Bush TARP agreement, including the necessity for labor rate equality, sooner.
I nominate Senator Robert Corker as Automotive Man of the Year!
Many here will cry and complain and say there are no teeth, but most of this will come to pass. It’s codified and can be overridden, but now those genuine issues are on the table, and will serve as the basis for all Mr. Obama’s work, now that the heavy lifting is done. Although Mr. Obama will kow-tow to the UAW, don’t forget that the UAW has ALREADY AGREED contractually, with removing legacy and moving labor costs to equality. They merely had 2010 as the earliest it could be done, but it was to be finished no later than the beginning of 2012, in any case. So all we are disagreeing with, is whether it happens on 12/31/2009 or 12/31/210. Furthermore the VEBA will have to take half corporate equity paper, instead of federal paper money, cash. In the next few years, that swings liquidity requirements by billions of dollars for all the automakers. ($15-20 billion by 2011?)
Merely Quibbles. Many have said you should never see sausage or laws being created. Corker’s’ line in the sand reinforced the needed conditions that MUST be met, to produce a viable domestic auto industry.
Masterfully, It even provided legislative coverage to both political Parties to vote to “protect” their constituencies. Democrats can go to the UAW and say see we prevented your wages from being cut immediately; (but they will be cut by the end of 2009 or 2010.) Republicans can go to their people and say see we stood up for free enterprise, (But like Conrail and Chrysler 1979), realities are addressed. American Pragmatism genius, at work.
Mr. Bush can take the opprobrium, but knows that he held out to the last minute for the best deal possible, before taking the hard actions necessary. Even laying out the guidelines and framework that Mr. Obama will have to operate under, That Senator Corker defined, even as Mr. Obama modifies them at the edges for his own political protection.
For the first time in fifty years, the US automotive industry will be able to compete on an equal footing. Profits will be enormous given the committed restructuring, and intrinsic leverage, when good times eventually return. Even enough to prepare them for the subsequent inevitable lean years. And also to fully fund the creation of the Electrification of
Ground Transport. They will have the money to bring in-house, the mass manufacturing of automotive batteries, just like Toyota, Honda and Nissan are doing. so the US will have a domestic US manufactured battery industry too. And even enough to pay for whatever cockamamie further crazy ideas the eco-wackos or safety nazis, dream up, too.
All the critics will still argue and criticize as is their wont. It will make no difference. Mr. Bush once again has done the unpopular but necessary. Like Truman, He fought and won an unpopular but necessary war, even if we won’t admit it yet. Muslim Terrorism has been dealt a blow that will take decades to recover from, even if they ever can. Their time is past to influence world events, as Oil, as a limited commodity controllable by them, will be gone.
The Oil availability conundrum will have been solved by then. By substitution, in the last large Oil market, Transport. The US automotive industry will have been, and has been salvaged, and made competitive once again. It will join the revitalized domestic US steel industry, as a world class competitor, which earlier went through a similar tough time.
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Dec 19th, 2008 (1:03 pm)#78 statik says “I know the market is excited about the news, but I’m not sure why the stock is trading slightly up at this point. ”
The market is excited because the immediate threat of losing three or four million jobs is gone. That’s a huge relief.
As for GM’s stock price, it has to be the lotto crowd. As we’ve discussed, there is no rational reason why the stock isn’t at zero. There is no equity value anymore. Ford stock might be different if you think Ford will be able to take a free ride on the backs of the GM or Chrysler deals, but GM stock?
Reminds me of Penn Central stock which still had value even after the bankruptcy made clear there was no value. Go figure.
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Dec 19th, 2008 (1:07 pm)#69 Dave K.:
“What, me worry?”
#73 Dave B:
Works for me.
#77 Corvette Guy:
LOL. Literally!
Have you seen shoeandawe.com? The story about it is still up under “strange news”, or whatever it’s called on the yahoo news site. LMAO.
#78 statik:
Yeah, sounds like everybody’s on board. UAW, bondholders, what’s the problem? I wonder what the suppliers will have to say?
There is one way to enforce it. No cash until we have a signed, enforceable, agreement, including all of the above. If they give out the cash without that, then it’s just raw political can kicking.
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Dec 19th, 2008 (1:10 pm)This is nothing but more wasted tax money pounded down a rat hole, in about a month Obama will give the automakers what they want to get through the recession, he already said he would give them what they needed to get through it. March 31st, farch 31st, means nothing but more tax money gone.
NO PLUG NO SALE, DBANGCMEMEV, LJGTVWOTR,(my house)=D~~~~(my volt)
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Dec 19th, 2008 (1:10 pm)Awesome. GM got the loan they needed.
The Volt is still on the way. Us Volt fans on this blog might have even helped make it happen. I wonder if the people in Washington ever read this blog and see that GM does have PLENTY of people supporting them. Plenty of people who are ready to buy their products.
Now that GM got their loan it’s time for the WHOLE COMPANY to roll up their sleeves and “get under the hood” and start fixing the company like Ross Perot used to say … from top to bottom. Clean out the barn … all those analogies that Perot used to say.
Get ‘er done GM! Make customers all over the world feel proud to own a GM vehicle. Make us proud of the American auto industry like we were with the space program in the 60s. Make more and more bestselling cars that win awards with the automotive press.
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Dec 19th, 2008 (1:19 pm)OK, they were awarded the money….
NOW BUILD MY VOLT!
Any more speculation on the price by chance?
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Dec 19th, 2008 (1:21 pm)#81 stas peterson – “First of all I would like to thank the REAL
STAR of this exercise. Senator Bob Corker of Tenn, for cutting to the chase and analyzing what were the two crucial questions that were NOT being faced when all this started.”
This is absolute BS. Now it may be true that you hadn’t figured this out, but that’s a long way from thinking that no one else had figured it out. Check out the white papers from the Center for American Progress. They lay out all the issues and the preferred approach, which has turned out to be very much like what we’re seeing here. And they did that at least six months ago. So if you think the analysis is important you should be looking to John Podesta.
Moreover you actually missed the problem completely. GM is not producing cars people want to buy. They can cut and restructure till the cows come home, but until they start delivering higher quality product they will continue to fail. It’s that simple. Lutz has been about as clear on this point as he could be, so I don’t understand this misplaced fixation with the cost side. At the end of the day the car business is all about the cars, and GM has simply failed to deliver the cars people want.
As for Corker, he and his fellows Republicans actually messed up big time. First they lost any control over the funding since the money will now come from TARP rather than congressional appropriation. Second they lost the battle to use the retooling loan money for this purpose.
Third they have completely marginalized themselves. The comment from the Dems after this failure was that it was unclear why they had bothered to negotiate since the Reps are always unwilling to do what it takes to make a deal happen. With a new congress the Dems will have 59 seats in the Senate. Getting to 60 will not be hard (seven Reps voted for the auto bill). What will now happen is that the Dems will negotiate with select Reps and Corker and the rest of the Southern block will spend a lot of time around the water cooler.
Since the Reps have more at risk senate seats in 2010, they can only look forward to being more marginalized in the coming years. And if they want handouts, and they all do, they may find lingering anger on the part of many of their fellow senators.
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Dec 19th, 2008 (1:21 pm)They must have finally put Bush back on his medications that he has not taken for the last 8 years. Sadly all he is doing is pushing the problem off to Obama.
To those that no longer will buy GM, well I guess that we will not see you posting on here any more. Also that just moves me up a couple spots on the wait list for a Volt.
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Dec 19th, 2008 (1:22 pm)#26, dbK
Thanks, you are correct…I left out three 0’s (000). A trillion dollar is mind boggling. Multiply by 10=$10,000,000,000,000.00 WOW!
Can someone please let me know who will bail out America?
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Dec 19th, 2008 (1:29 pm)#83 Noel Park says “There is one way to enforce it. No cash until we have a signed, enforceable, agreement, including all of the above.”
You’re missing that Congress can impose a decision with very few limitations. In bankruptcy proceedings you never have everyone agreeing. Some participants always object. But at some point the bankruptcy judge listens to the recommendations of the trustee, hears the objections, and then makes a decision. End of story.
Same here. If there is no agreement, the Car Czar submits the recommendations and Congress makes the decision. Just like a bankruptcy only the decision maker changes.
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Dec 19th, 2008 (1:35 pm)Today’s bailout is roughly equal to $1000 for every citizen of the USA who pays income tax. So that is $2000 for my wife and myself, or $6000 for our family if you count our married children and their spouses.
So the same dollar amount could have been used to give every one of us taxpayers $1000 each, along with a postcard we could send in if we wanted to forward our $1K each to GM and Chrysler.
If it had been done this way, how many postcards would have been sent in, would you guess? Our of the whole USA, would there have been 10, do you think?
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Dec 19th, 2008 (1:38 pm)#27 Van Says: “Will the new administration require the UAW to agree to a date certain to compensation equal to the competition?”
————————————————————————————–
Hi Van,
If they’re going to enforce this, they must have meaningful metrics of exactly what “compensation equal to the competition” means. For example:
1) The pay structure for the UAW and competition is different. If you just look at active worker hourly wages plus cash bonuses, the UAW says Toyota workers actually make a little more. But if you add all the benefits, payments to retired workers, etc., then UAW costs are much higher.
2) GM is going to have to lay off UAW workers. UAW rules say the first to go are those with least seniority. These are the workers who were just hired for much lower pay under the new UAW rules. So that will actually raise the average UAW pay rate.
That’s why they gave them till March 31 to figure all this out.
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Dec 19th, 2008 (1:38 pm)Anyone who thinks this means they will get a Volt is sadly mistaken. This was nothing but a delay tactic. They need 125 billion to survive according to most economists. The public will never stand for that much bailout money to be spent. GM will still fail, its just now a little later thanks to no one having the balls to fix the problem now.
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Dec 19th, 2008 (1:39 pm)I saw something on another site that says behind the scenes talks are firming up a GM/Chrysler deal.
GM gives up almost all their stake in GMAC in return for Chrysler’s automotive operations, including the bailout money. The resulting additional cash makes a huge bump in what GM can do.
After that is pure conjecture, but I see Jeep and Hummer being put in a package deal and sold. I see the Ram truck facilities being sold to Nissan and the minivan operation sold to VW. I think the rest of ChryCo will be an artifact.
Oh, and I see that the Detroit Grand Prix IndyCar event is toast. Maybe that frees up some of Roger Penske’s time so he can be the Car Czar (Tsar?)
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Dec 19th, 2008 (1:41 pm)#82 DonC says “… the immediate threat of losing three or four million jobs is gone. ”
=====================================
This number, growing ever higher, is vastly overstated.
Actual employment by GM in the USA is only about 100,000, and many of those would not have lost their jobs in a bankruptcy. GM is nowhere near as large an employer as, say, Walmart.
Jobs at auto suppliers depend on sales of cars to actual customers and will be maintained at a level commensurate with the number of sales. That will be true with or without this bailout.
The bailout is a major move to save the jobs of a relatively small (though highly influential) group of people, at public expense.
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Dec 19th, 2008 (1:56 pm)To #6 BostonBob:
“All they’ve done is delay bankruptcy 3 months and waste another 17 billion of our tax money”. It’s said very well.
Let’s put it this way: this loan is like a Christmas gift to all the hard-working American auto workers from all the tax payers.
I doubt GM and Chrysler will restructure to any thing better than they are now. And for those who sitll hope you can buy the Volt in near future, don’t keep your hope too high.
My 2 cents
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Dec 19th, 2008 (2:00 pm)this is all so insane
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Dec 19th, 2008 (2:05 pm)The UAW still “Don’t get it” as Getfingered is expecting a better deal from Obama.
Getfingered should be lucky they aren’t in chapter 11 and just shut his cake hole.
Getfingered of the UAW is so dumb – even a cave man looks like a rocket scientist by comparison – God help GM with the UAW.
Hope the Australian Volt we be made in a non UAW plant with a bit of luck!
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Dec 19th, 2008 (2:06 pm)#50 statik said “To reflect that, I changed my answer to the deposit question on the wait list survey here months ago—”If you would consider giving a deposit for your Volt, how much would it be? (in USD):”
It went from $10,000 to $300…and I meant it.”
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I agree and have done likewise.
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Dec 19th, 2008 (2:15 pm)Actually I think this was done as a Christmas present for Wall Street first, and the American people second. This should delay seeking out a new bottom into next year. A bankruptsy by GM could have precipated this, so it should not be as gloomy at Christmas as it would have been with the market crashing and talks of a depression reviving.
Happy Holidays
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Dec 19th, 2008 (2:21 pm)#90 DonC
It’s not just different decision makers. It’s decision makers who’s main goal is to get reelected, vs a judge who is more motivated by professional reputation. The czar is held accountable, and appointed, by a politician. Then the plan must be approved by 500 politicians because the czar has no authority (else congress must give them authority). The decision making incentives are night and day different and will yield very different results.
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Dec 19th, 2008 (2:25 pm)The only reason our “do nothing President” approved it is because he does not want to be known as the one responsible in bringing down the economy to the level of the great depression. He really did not do it to save our most important industry, because I don’t think he gives a hoot about our industries. A great majority of the politicians only think about the cheap products they can buy from foreigners. Japan and most other countries protect their industries, but here in the US, we hand them over with no resistance. An example at how stupid our government is, about a year ago, all DC government workers were urge through emails to buy Japanese cars. That would never happen in Japan and if it did, somebody would certanly lose their job.
The hand writing was on the wall when the US allowed the Japanese to assembled cars in the US when they had no legacy costs. Any other government would have done something to make it a more level playing field.
Click on the link below and find facts on how the Japanese stole our industries. It’ll make your blood boil.
http://www.uwsa.com/issues/trade/japanyes.html
Thanks for reading.
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Dec 19th, 2008 (2:25 pm)#99 RB said,
#50 statik said “To reflect that, I changed my answer to the deposit question on the wait list survey here months ago—”If you would consider giving a deposit for your Volt, how much would it be? (in USD):”
It went from $10,000 to $300…and I meant it.”
—–
I agree and have done likewise.
===========================================
It would be interesting to what the last 1,000 people put up as a dollar amount for that ‘deposit’ survey.
Here is the ‘wait list survey’ link again in case anyone wants to see it. I haven’t seen it mentioned lately…and I have no clue where the link is to it on this site, so probably a lot of people have never seen it before:
http://gm-volt.com/wait-list-data/
Current numbers:
Total People Currently waiting for a Volt: 45,756
Average an individual is willing to pay for the Volt (in USD): $31,370.90
Average deposit per individual (in USD): $2,673.48
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Dec 19th, 2008 (2:36 pm)Cautious Fan Says: It’s decision makers who’s main goal is to get reelected, vs a judge who is more motivated by professional reputation——last time I checked, most judges ARE politicians!!!
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Dec 19th, 2008 (2:42 pm)#76 Kent,
There are some leaders who have to do the tough things. There are others who have no need and can cruise through thier elected emperorhood, like Coolidge or Clinton.
I nominate Mr. Bush as one of those who faces and does the unpopular but necessary. Mr. Truman another good Leader and poor politician, left office with a 14% approval rating in 1952. There were plenty of equivalent idiotic comments to Mr. Gordon’s said then, amid roughly half the approval of what Mr. Bush has now. Both were good Leaders and poor politicians.
It took historians roughly thirty years to recognize the great things Truman did: like saving Greece, rebuilding prostrate Europe, including our defeated enemies, engaging in a Cold War, fighting an unpopular limited war in Korea to set a line in the sand, while creating the concept of containment. His policies were followed by all future Presidents, both Democrats and Republicans, through Reagan’s triumph and Communism’s collapse.
Mr. Bush has done similar. Like Truman he organized an international alliance and UN approval, and he faced anarchy and Muslim terroism and defeated it in the major Arab economy and oil power Iraq, where it was absolutely necessary. He removed the terroism regime land in Afghanistan that provided an R&R preserve for the terrorists. But that country is next to Haiti, the poorest and most irrelevant economy in the World.
He has brought Science and reality to the energy problem by revitalizing both the clean coal and fission nuclear industry, and reformed the laws to build the energy that any advanced society needs. Quietly, he kept the laws to clean up the environment and instituted international treaties to clean maritime pollution, MARPOL Annex VI.
Even as he paid lip service to the eco-wackos with their inane and idiotic ideas for their so-called renewable energy industries, that simply don’t scale, if adopted. Any reasonable person knows that it takes enormous subsidies to create even 1% of energy needs using their ineffeicient theories. What good does it do to electrify cars, if the price rises from $0.75 cents to $4.50 cents for the electricity? Instead the eco-wackos actually believe that the US should eliminate emitting a trace gas that has demonized as a source of all evil.
No one discusses or admits that the US already sequesters all the natural and manmade CO2 it emits, (1.3 petagrams per annum) and then some, (1.7 petagrams per annum), unlike almost all the other countries advanced or not. (Science Journal of the AAAS circa 2000)
The world is now cooling for a decade, not warming and it is becoming difficult to ignore by the most ardent Green. I am a scientist and facts are facts. Only polemeicists and religious fantics ignore reality.
Mr. Gore is NOT trained in Science, and IS trained in Elmer Gantry style sermonizing. “Inconvenenit Truth” shows that, as well as his cynicism, in purchasing a sea- level Mansion, even as he predicts it will be under 20 feet of seawater soon.
Mr. Bush restored the science and effort to develop true clean energy independence and truly scaleable and unlimited clean energy, by re-constituting the international consortia to fund Fusion research, and the building of ITER in France, that is now underway. Of course, he gets no credit for it. But by 2025 we will be glad he did. Just as by 2016 we will be glad that the US generates 35 % of its electricity up from 20% today, from perfected, pollution-free, fission-based, nuclear energy, and will be there to recharge the flood of electric vehicles.
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Dec 19th, 2008 (2:46 pm)102 – Joe
“The hand writing was on the wall when the US allowed the Japanese to assembled cars in the US when they had no legacy costs. Any other government would have done something to make it a more level playing field.”
That is a damn good point. The government had a pretty big hand in the union’s ability to get these generous retirement packages from the auto makers. The government had the power to saddle the foreign companies with something similar upon entering the market.
It stands to reason that this makes the government somewhat accountable for the decline of the domestic industry and the lack of any real competition in the smaller car market nowadays.
This is the only reason I feel a bailout may be appropriate. But damnit, if they’re opening up the coffers to prop up the domestics – address the problem that got them where they are today !
These changes are going to be painful and there will be a lot of resistance; so you have to hold the check in your hand and tell them they don’t get the money until the changes are signed off on by everyone.
Ironically, the UAW got these concessions by holding the company hostage – and the only way they will give them up would be to hold the UAW hostage. Allowing them to stall for time right now is not a constructive move; as it endangers an awfully large number of innocent bystanders unnecessarily.
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Dec 19th, 2008 (2:48 pm)ausmartin Says:@98
December 19th, 2008 at 2:05 pm
The UAW still “Don’t get it” as Getfingered is expecting a better deal from Obama.
Getfingered should be lucky they aren’t in chapter 11 and just shut his cake hole.
Getfingered of the UAW is so dumb – even a cave man looks like a rocket scientist by comparison – God help GM with the UAW.
Hope the Australian Volt we be made in a non UAW plant with a bit of luc
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to the misinform @98
It looks like you are very misinformed about what the UAW has given up so far. The jobs bank (which I thought never made any sense) is gone,, wages have been cut in half, they probably have the worst Blue Cross Blue Shield plan out there, and work rules are tougher than any other industries, Let me ask you, considering the job is tough or you think it isn’t, is 14 dollars an hour too much? Forget about the garbage you hear all over the news that they make $70.00 an hour….. that’s counting the retirees pension, social security benefits, and health benefits and God what else. The workers don’t benefit any from that. It just means GM has high legacy costs whereas the competitors don’t.The health care benefits for Toyota comes from the Japanese government and not one person from Toyota has retired, yet. How could anyone call this as being fair trade??
Oh! I don’t expect to get any responses because nobody can convincingly argue these points.
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Dec 19th, 2008 (2:49 pm)Okay… Just one more. (I can’t help myself.)
Photo Caption:
“therefore, I am ordering all press conference footwear be limited to just ‘bear claws’ and ‘fuzzy bunny slippers’ like the ones I am wearing today.”
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Dec 19th, 2008 (2:49 pm)Looks like a cave-in to the UAW. In order to get their check next week, the companies have to get agreements with the union on wages and work rules by Dec 2009.
How can you have a condition that comes into effect after the funds are already issued?
This makes it easy for the Obama administration to issue quarterly checks to GM and Chrysler to prop up the gold plated UAW contract in perpetuity. Each check will result in more warrants for the govt until GM and Chrysler become quasi govt entities like Amtrak and the USPS. Will the next CEO of GM be Barney Frank?
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Dec 19th, 2008 (2:55 pm)Joe has a point at 107 also.
The guys out on the line right now will not see the pension payments and health coverage after they retire, and their pay will be quite a bit less in a couple years when the new contract takes effect.
The ones that cost the company $70 an hour are all retired already. Those working for GM now are not nearly that expensive.
It’s not the actual wages; it’s the leftover costs from the domestic industry’s glory days. And back then these kind of compensation packages were not that uncommon. It’s just that most of the other industries that made these kind of agreements have gone bankrupt already.
It’s important to make that distinction in fairness to the current workers’ point of view. It’s important to be fair to the folks working the line today in order to understand the solution to the problem; It’s just too bad Gettelfinger is generating a lot of negative sentiment with his posturing.
But it’s also important to get the retirees’ costs off the company, since it cannot and will not make it otherwise. 100,000 working employees simply can not support 450,000 retirees. Plain and simple.
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Dec 19th, 2008 (3:03 pm)It looks like you are very misinformed about what the UAW has given up so far. The jobs bank (which I thought never made any sense) is gone,, wages have been cut in half, they probably have the worst Blue Cross Blue Shield plan out there, and work rules are tougher than any other industries, Let me ask you, considering the job is tough or you think it isn’t, is 14 dollars an hour too much? Forget about the garbage you hear all over the news that they make $70.00 an hour….. that’s counting the retirees pension, social security benefits, and health benefits and God what else. The workers don’t benefit any from that. It just means GM has high legacy costs whereas the competitors don’t.The health care benefits for Toyota comes from the Japanese government and not one person from Toyota has retired, yet. How could anyone call this as being fair trade??
———————————————————————–
Numerous kernels of truth here, so we will have to classify this as UAW propaganda, rather than UAW lies.
1. Job bank gone. Might be true, but I want to see an agreed to date for the last job bank check, not just an agreement in principle to end the job bank.
2. Wages cut in half. Only for new workers. The existing crew still gets $3-4/hr more that the non-union US producers, and will for the rest of their careers, unless more concessions are made.
3. Worst blue cross plan. See #2.
4. Toughest work rules. Who in the world believes that? They certainly do not have the standard American work rules:
Boss assigns work
Workers do the work
Boss pays workers
5. $70 per hour is garbage. It is true that this includes legacy costs which do not go into the workers’ pockets. And your point is? The reality is that it is socially unjust to tax Americans to pay these gold plated retirement costs, and that GM will be unviable until the legacy costs are eliminated.
Many GM workers started at 18, and are now in their late 40s. They are entitled to retire at 48 with full inflation indexed pension, and free lifetime health care for themselves and their families. the current agreement does nothing to change this for current workers and retirees. Healthy 48 year olds need to be working, not taking it easy for the next 30-40 years at taxpayer expense.
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Dec 19th, 2008 (3:04 pm)Ford has now taken a new place in my eye. My first Ford (and last) was a 1970 Ford Maverick.
I will definitely consider a Ford for my next car purchase.
PS: The Maverick was nothing to write home about.
PSS: I hate to show my ignorance, but I had to look up the definition of “secular capitalism”. Anyway, I never thought of myself in that manner, but be that as it may.
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Dec 19th, 2008 (3:08 pm)#94 Tony Gray
I saw something on another site that says behind the scenes talks are firming up a GM/Chrysler deal.
GM gives up almost all their stake in GMAC in return for Chrysler’s automotive operations, including the bailout money. The resulting additional cash makes a huge bump in what GM can do.
After that is pure conjecture, but I see Jeep and Hummer being put in a package deal and sold. I see the Ram truck facilities being sold to Nissan and the minivan operation sold to VW. I think the rest of ChryCo will be an artifact.
_____________________________________________________
Where are you getting this info from?
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Dec 19th, 2008 (3:09 pm)#105 Stas Peterson
You are so right about Bush, the reason most Bush bashers don’t know what he has done is the main media has been bashing him so much and don’t want the public to know what he’s done
NO PLUG NO SALE, DBANGCMEMEV, LJGTVWOTR,(my house)=D~~~~(my volt
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Dec 19th, 2008 (3:17 pm)DB Cooper wrote:
I’m sure most of the UAW rank and file can see that plain as day, but they really need to reign in the whack jobs that are making all UAW workers look like CRYING BABIES
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DB, I am not sure you are correct. I heard an interview with a Chrysler die maker on NPR last night. He was well spoken and articulate. And just as big a crybaby as Gettelfinger.
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Dec 19th, 2008 (3:25 pm)As much as I would like to see the Volt. i would much rather see and end to the UAW. I hope GM has to go bankrupt eventually. Then GM can shut down their U.S operations and move everything out of the United States until the United States proves it can become more business friendly. We are losing to the rst of the world because of Federal mandate. Why are we moving towards socialism?
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Dec 19th, 2008 (3:40 pm)#
Tom H Says: @111
5. $70 per hour is garbage. It is true that this includes legacy costs which do not go into the workers’ pockets. And your point is? The reality is that it is socially unjust to tax Americans to pay these gold plated retirement costs, and that GM will be unviable until the legacy costs are eliminated.
Many GM workers started at 18, and are now in their late 40s. They are entitled to retire at 48 with full inflation indexed pension, and free lifetime health care for themselves and their families. the current agreement does nothing to change this for current workers and retirees. Healthy 48 year olds need to be working, not taking it easy for the next 30-40 years at taxpayer expense.
****************************************************************************
So my write up is UAW propaganda? I would call yours as political propaganda. I don’t belong to the UAW but at one time I worked closely with them. All I am is a an American who’s concerned about losing our biggest American icon. When I was younger I raced GM cars and have always loved them. Corvettes were always my favorites. Ive had many and my latest is a 2007 convertible.. sitting in my garage.Yes, I’m an auto enthusiast and am retired from GM but I never belonged to the UAW. I do believe like you do that 40 years of age is too young to be not working, but I think the UAW will have to give that up, also.
You make a statement “it is socially unjust to tax Americans to pay these gold plated retirement costs”. Hey, not a single tax dollar was ever paid from tax dollars. If you are referring to the loan,.. well a loan is a loan. You are passing false information or political garbgage.
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Dec 19th, 2008 (3:47 pm)Regarding Ford in the hierarchy…remember Ford di not borrow money because their assets INCLUDING the BLUE OVAL wer mortgaged a while ago…meaning it already collateral…GM and Chrysler did not, but now its hard to get a loan..so Ford while better in liquidity, has leveraged assets, GM and Chrysler still have sell able assets..
Just something to consider…
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Dec 19th, 2008 (4:03 pm)Joe wrote:
You make a statement “it is socially unjust to tax Americans to pay these gold plated retirement costs”. Hey, not a single tax dollar was ever paid from tax dollars. If you are referring to the loan,.. well a loan is a loan. You are passing false information or political garbgage.
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Joe, thanks for replying to my post.
I do not think you really refuted anything I said. A loan is a loan. But a loan to company with negative net worth, the highest costs in the world, and almost the lowest quality in the world is a grant. It aint gonna get repaid. I repeat–the taxpayers are being required to fund a gold-plated union contract.
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Dec 19th, 2008 (4:09 pm)Michigan Passes $517.5M Tax Credit Package for Manufacturers of Plug-in Traction Batteries
http://www.greencarcongress.com/2008/12/michigan-passes.html#more
(I sure would love to have MY taxed reduced)
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Dec 19th, 2008 (4:10 pm)#107 Joe said,
Let me ask you, considering the job is tough or you think it isn’t, is 14 dollars an hour too much? Forget about the garbage you hear all over the news that they make $70.00 an hour….. that’s counting the retirees pension, social security benefits, and health benefits and God what else. The workers don’t benefit any from that. It just means GM has high legacy costs whereas the competitors don’t.The health care benefits for Toyota comes from the Japanese government and not one person from Toyota has retired, yet. How could anyone call this as being fair trade??
Oh! I don’t expect to get any responses because nobody can convincingly argue these points.
=========================
I’d like to take a stab:
Even $14 a hour is too much to work at a ‘operationally bankrupt’company if there is another man willing to work for $13…and thats the problem. This is 2008…there is millions of skilled laborers ready to go, just sitting at home.
At $14/hour GM would have a huge operational advantage over Toyota…and they need every bit of that edge to survive. I think saying they have to be ‘at par’ with foreign auto makers is not anywhere near good enough.
This is the new world, it is not about what is fair, it is about reality. Heck, a line worker ’should’ earn $25/hr, he works hard, he has to practically turn himself into a vegetable 8 hours a day to do it and is generally treated like a 12 year old, and he did make that…for a long time, but those days have to go away for awhile…maybe a decade.
We can debate right or wrong all we like, the reality is that it is going to happen. Either the UAW backs down and capitulates or GM goes C11 and it is forced on them…or maybe they get dissolved and the workers get $0/hour. Then Joe, you will be forced to support Toyota (or another foreign auto maker) because they will be the only game in town, unless you like walking a whole lot…just like the monitor you are reading this on was not ‘made in the USA,’ because like TVs, they don’t make them here anymore.
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Dec 19th, 2008 (4:13 pm)stas peterson # 81
I hope that the new agreement keeps Corkers idea of funding UAW health care obligations with stock. This will help to align them with thinking for the good of the company and it’s overall competitiveness instead of thinking only how much can we get from GM and flattening the stock price with every renewed negotiation.
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Dec 19th, 2008 (4:18 pm)hi JEC #112,
“My first Ford (and last) was a 1970 Ford Maverick.”
_______________________
I owned a 73 Ford Maverick Grabber. 302 V8, Doug headers, Mohawk Super Mag 60’s on the rear, leaf spring helpers, Gabriel Hi-Jackers, mini tubo charger, dual exhaust with bullet mufflers, in cabin controlled cut-outs. It was the menace of the back roads. Want to lay down a little scratch? It looked like this.
BTW>a gallon of 93 octane cost 40 cents.
http://garfwod.250free.com/Photos/maverick_grabber_bluebyyou.jpg
=D~
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Dec 19th, 2008 (4:24 pm)#11 Tim said, “kING GEORGE II OVERRIDES CONGRESS AND THE PEOPLE ONCE AGAIN.”
Actually, the Congress passed a bill, but the Senate Republicans killed it.
A more appropriate hyperbolic headline might read, “King George II defies his own party and the people yet again.”
And if you think President Obama would have done anything different, let me tell you about a bridge I have for sale.
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Dec 19th, 2008 (4:37 pm)GM made their bed and they should lie in it.
Good job, millions of dollars so they can build Hummers no one can afford to buy or drive.
Shame on GM and GWB.
I love the idea of the Volt as much as the next guy but this is ridiculous.
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Dec 19th, 2008 (4:41 pm)the reality is that it is going to happen. Either the UAW backs down and capitulates or GM goes C11 and it is forced on them…or maybe they get dissolved and the workers get $0/hour
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Unfortunately, there is a fourth alternative, and it is even worse than the three you cite. That is–the Obama adminstration keeps pumping bailout money into the Big 3, quarter after quarter, until the govt has accumulated enough warrants to own the companies outright. They continue to use tax funds to pay for the gold plated union contract, the CEOs of the companies are political appointees, and subsequent contracts exceed typical factory wages by an ever greater factor.
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Dec 19th, 2008 (4:44 pm)I wonder how many more things the the “Lame Duck of Failure” can screw up for us. SNAFU as usual!!!!!!!!!!!!!!
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Dec 19th, 2008 (4:49 pm)All I can say about a lot of these comments is: I will be glad when Obama is sworn in and we can move away from trashing George Bush. If some of you can ever turn that loose. You might should start asking yourself if you want the same type of treatment for Obama as you are giving Bush. He does not deserve any where near what you are heaping on him. He performs a thankless job and apparently most of you seem to only want to treat him worse than we treat our terrorist enemies. Thank you, but I have had just about enough of this.
Let’s try to stick to the Volt news and stay away from politics or this site is going to lose one more user.
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Dec 19th, 2008 (4:57 pm)I am so tired of hearing how this is socialism. This loan will be repaid one way or another. While GM may need more money in the coming years, if you want to talk about money, there is really nothing more important than protecting America’s ability to manufacture. This is our last stand against complete foreign ownership of our country, in the literal denotation and the competitive connotation of the word. We have seen our trade deficit spike out of control in the last few years due to American laziness. Buying hundreds of millions of foreign cars a year is not realistic without our country completely falling apart.
I would guess that the stock market fall out if Bush didn’t approve the loans would easily cost stock owners (anyone with 401Ks etc.) hundreds of billions instantly. Besides, either government loans GM the money to stay in business or pays unemployment to millions of workers for most likely years to come.
What you guys are suggesting is that America lose one of its last exports, causing millions of domestic job losses, just because they might default on a loan that is equal to about 4 hours of our yearly GDP output.
The UAW and creditors will take a hair cut and hopefully America survives another day.
If you really want to get mad at someone, read about the fact that Madoff’s Ponzi scheme is going to cost tax payers $17 billion! That’s more than this entire loan for both corporations.
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Dec 19th, 2008 (4:58 pm)Shawn in PHX..
Jesus H Chrisco…
Hummer is not GM..Hummer accounts for 0.91% of all GM sales…
meaning tht 99.09% of GM sales are NOT FLIPPIN HUMMERS.
Go kiss an artificial tree eco moron…
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Dec 19th, 2008 (5:10 pm)I’m a firm believer in capitalism but not in free trade. I believe in FAIR trade. When foreign governments (Japanese especially, but German, and French governments as well), subsidize their industries either directly through loans or grants, or indirectly by blocking competitive imports into their own countries, U.S trade policy should be adjusted by using tariffs on imports to balance out the disparities in the cost of doing business.
I know a lot of people loathe the “T” word, but frankly, our government was almost exclusively funded with tariffs for its first 120 years of existence. “Income” tax is a relatively new method of funding the federal government historically.
When the government used tariff’s to fund its operations several things happened. Companies sprung up to fill the need for imported goods such as furniture, watches, machinery, farm equipment, railroad equipment,,, everything. So called free trade has played a BIG role in running our great country into the ground. I have no problem with a 25% tax on imported items of all types. It’s better for the country, its better for the government, and in the long run it’s better for the consumer because he may actually have access to a manufacturing job that pays a decent wage. Frankly, it’s better for the environment when products are made in the U.S. under our EPA regulations. Look at China’s pollution problems. China looks like The U.S. in the 1940’s with its rampant uncontrolled pollution.
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Dec 19th, 2008 (5:23 pm)Are the screws finally going to be put to the unions, or are unions going to not budge and kill the Big 3 sooner rather than later? Unfortunately I vote the latter. They still can’t even admit GM workers cost significantly more than Toyota’s workers. They’re like the alcoholic that tells everyone he doesn’t drink much, rendering recovery impossible.
– Pete
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Dec 19th, 2008 (5:33 pm)As the debate has gone forward on the car industry bail out I have tried to understand both sides and reconcile my depraved desire for a Chevrolet Volt with the argument that the “inferior” American car industry should be let go. My predjudices obviously lie with wanting GM to be around long enough to accomplish my interest, but does my interest coincide with the best interests of the country as a whole? Yesterday one of the talking heads on the TV who was pontificating on what should be done mentioned Alexander Hamilton, G. Washinton’s Secretary of the Treasury. I didn’t know that Tommy Jefferson thought AH was a real retard so following Jefferson I had never read much from the Federalist Papers. But when I began tracking down the reference, a summary of which is attached here, I saw that what I have intuited through my horror of the export of manufacturing prowess from this country are in line with what Alex wrote 217 years ago. As I built this last house I was forced over and over again to use stuff (crap?) made in China. So the fundamental quarrel between the Whigs and the Democrats goes on. Which side has it right? My predjudice is that degading into a third world kind of nation is not what we ought to be striving to be. As we have moved to exporting our mined and recycled raw materials, become hopelessly dependent on importing energy in the form of petroleum, getting our manufactured materials from Asia, having had to borrow until we are a debtor nation, seem unable to afford or commit to educate our uneducated, been unwilling to protect our enviornment, and are tied to a culture that finds it all “cool” is hard to understand. It may well be that a good, searing, depression is what’s needed to get the donkey’s attention and the band aid of rescuing this last vestige of 19th and 20th century accomplishments is futile. So many facets to consider.
See http://www.blinn.edu/brazos/socialscience/hist/jgorman/1301/HAMILTON.pdf
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Dec 19th, 2008 (5:44 pm)123 Dave K.
Looks like a sweet ride.
My 1970 Maverick was purchased new by my mom. I have 3 older brothers and 1 older sister. The car was handed down to each of us, and I was the last in line. So, needless to say, she took a LOT of abuse, especially from a couple of my brothers. So, when I say it was nothing to write home about, I really was not meaning to bash the car, hey if survived my whole family!
I had an in-line six, and when you popped the hood you could of fit 2 or 3 more engine blocks in their. It was a dream to work on, since you had access to everything, and did not need to take 1/2 the engine components off to replace a part.
I tried to find a pic of what mine looked like, but this is as close as I could come:
http://jalopnik.com/400135/1970-ford-maverick
Mine was green with large racing stripes down the middle of the hood.
BTW: Here is a list of cars I have owned just for fun:
2000 Dodge Caravan (wife’s car…)
1) 1970 Ford Maverick
2) 1974 Plymouth Duster
3) 1964 Chrysler Simca (not many people have heard of this one…)
4) 1975 Plymouth Duster (Gotta love those Dusters…I stole the gas tank out of the first one, after I got this one)
5) 1979 Old Cutlass 442 (I really loved this car, until someone stole it, ran into a swamp, and insurance failed to pay me enough to fix it back up)
6) 1988 Honda CRX HF (Great little gas mizer car, I miss it dearly. Donated it to rawhide)
7) 1996 Nissan Altima (still driving it, 195,000 miles and going strong)
9) 2000 Dodge Dakota (sold this after 1 year…)
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Dec 19th, 2008 (5:49 pm)I just noticed this little artifact on the Home page of Lyle site:
Holy crap, Noel park you need to only post 31 more posts to pull ahead of Statik!
Not sure if this is like a weekly posting number or what?
Top Commentators
* Statik(1494)
* noel park(1464)
* Rashiid Amul(1349)
* N Riley(1307)
* Grizzly(1271)
* Dave G(1152)
* RB(970)
* Tagamet(886)
* Statik(864)
* Jim I(645)
* nasaman(575)
* DonC(562)
* ThombDbhomb(555)
* Tim(524)
* john1701a(463)
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Dec 19th, 2008 (5:52 pm)#128 N Riley:
Right on ! Thank you !
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Dec 19th, 2008 (6:07 pm)All positive news today! In two years VOLT owners will be posting the results of how many EV miles they are experiencing. The tips on how to extend the E range will be a separate section on the web site. Those who don’t have their VOLT will be able to print a PDF Owner’s Manual and count the days to their delivery day.
Merry Christmas and Happy New Year GM. Enjoy your loan from the taxpayers of the USA.
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Dec 19th, 2008 (6:09 pm)Lots of posts bashing GM and the UAW.
Here’s my view. I haven’t owned a GM car in the last 28 years. I’m not a union member, nor are my friends and relatives. But I think the UAW and GM are really getting a really bad rap on this one.
The UAW has known their benefits have been out of line for a while, at least the last 2 years. They addressed this in recent concessions, but these were supposed to phase in around 2010 or later. Now the UAW knows they have to make more concessions than they agreed to previously, and sooner. The UAW made concessions for the House bill. When the UAW sat down with Senator Corker, they made additional concessions and had a deal, but then after that some southern republican senators wanted more. Moving the goal line like this is one sure way to make a union negotiator walk out of the room. I think southern republican senators knew this. They wanted the bailout to fail, and figured the UAW would take the blame. Looks like it worked…
GM has been a lackluster car company for many years. GM executives and managers who were around for GM’s glory days refused to see this. They were in denial. Then the movie “who killed the electric car” came out, GM’s sales dropped, and some of GM’s execs started paying attention. Then gas went up over $4/gallon, GM sales fell sharply, and everyone at GM started waking up. Now, GM is literally begging the government for loans in order to avoid a probable chapter 7 bankruptcy liquidation. The days of denial are over. GM execs know they must change or die.
So I really think that once the credit crisis eases and everyone starts financing and leasing cars again, GM and the UAW will change their ways.
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Dec 19th, 2008 (6:11 pm)As I predicted, now that the heavy lifting is done, all the parties will come out, express their predetermined positions, pro and con. Meanwhile the Deal will go through and the major features and accomplishments will come.
Predictably, the Republicans like Mr. Kyl will utter their complaints about on-rushing Socialism; predictably the bond holders will hire their tedious legal mouthpieces, not say I’d rather liquidate and take 7 cents on the dollar if that, rather than 30 cents, as they seek a better deal, than 30 cents on the dollar. Predictably Gettlefinger will show his constituency he is fighting for them, and say it time to man the Barricades, even as he quietly acquiesces and seeks to win a concession or two, and a little delay.
Predictably, some Democrats will say “Never!”; we will have a big majority in the next Congress, we don’t need to do so. Then they will go along with a little modification, after ensuring the next UAW campaign contribution.
I expect Mr. Obama will say some soothing words too. (But recall, he DID say already a few weeks ago, that he wanted a viable auto industry as a basis for his support, or perhaps a prepackaged Bankruptcy would suffice.) So he will modify at the edges, only enough to get assurances for future campaign contributions from the UAW.
The eco-wackos will gesticulate, and posture, and demand Utopia today, as NJ decided to do, demanding 70 mpg for all vehicles including heavy trucks, by 2015.
When it doesn’t happen, they will pack their bags and just delay and demand the impossible a little later, like the CARBite idiots always do. Each time they cry Wolf, fewer listen to their threats.
Plunging oil consumption and cooling world temperatures continued by then, will undermine their ideological and pseudo-scientific prattle any way. Our liquid oceans of H2O GHGs an effectively infinite supply, have already created a “Saturated GHG ” world billions of years ago, on a planet such as Earth. Add a little more CO2, and subtract a little H2O, is how it works, or the reverse. And notice no Global Warming catastrophe.
Meanwhile the adults here, will continue to clean the air of genuine toxic pollution, as each US Administration has done without fail, to the point where we can declare Victory over air pollution. The US is far, far ahead of anyone else, as any visitor to the EU can readily attest,as they gag on diesel fumes. There are 56 models of ICE engined cars that are “zero pollution vehicles” by even the CARBite idiots own accounting, for sale in California and the US, in this past 2008 model year. More are coming, all the time.
The CARBite idiots are now off chasing butterflies, and lawn trimmers, and lawn edgers, as the sources of “major pollution” now. It shows JUST how far we have come.
Based on the three female eco-clods on the House and Senate committees, including the doofus that Barney Fife had to shut up, as he rolled his eyes and banged his gavel, ruling her out of order, as if to say “Why me Lord?” from that wing.
One loon Ms. Waters, D CA, thought this whole thing was dreamed up as a conscious Racist conspiracy to bankrupt a couple of Black auto dealers in her district.
Another looney toon, Ms. “?” , D- Manhattan NY, amidst all the troubles, wanted to move up and impose the 2020 CAFE standards in 2011, or she would have a temper snit right then and there,as if that would do anything.
They are ALL congenital idiots and don’t comprehend the real world. They can be safely ignored. Too bad their constituents didn’t see this threesome in action.
Posturing. All predictable Posturing.
I mentioned earlier that Senator Corker R TN, is the REAL Star here.
But kudos go to Mr. Bush and Senator Bennett Utah, as well as Mr. Rick Wagoner and Mr. Ron Gettlefinger, with a bow to Mr. Mullaly, Mr. Nardelli, and even Rep. Barney Fife and Sen. Chris Dudd.
Mr. Getlefinger and Mr. Wagoner recognized the need and did something about it, compromising and humiliating themselves, for the common good. Senator Bennet R UT, surfaced an implicit and heretofor unspoken assumption, and obtained a commitment from Mr. Wagoner that GM DID see a benefit in absorbing Chrysler.
What to do with Chrysler is a necessary and intrinsic part of any solution, as they are not viable long term, alone. Sen. Bennett even offered to make that merger a condition in the terms of the loans. But the principle is established, and on record, Chrysler goes into GM and/or Ford.
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Dec 19th, 2008 (6:13 pm)And sadly GM has never learned to operate with a profit because of this. Bailouts for everyone. Wonder if the money even lasts until March?
With the excess of American businesses, an the trim & effecient operation of foreign rivals, this situation will just repeat in a matter of months.
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Dec 19th, 2008 (6:17 pm)#126 Tom H
Unfortunately, there is a fourth alternative, and it is even worse than the three you cite. That is–the Obama adminstration keeps pumping bailout money into the Big 3, quarter after quarter, until the govt has accumulated enough warrants to own the companies outright. They continue to use tax funds to pay for the gold plated union contract, the CEOs of the companies are political appointees, and subsequent contracts exceed typical factory wages by an ever greater factor.
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The thought of endless bailouts for the next 2-3 years did occur to me…but I refuse to accept that as a possibility, lol.
#135 JEC
Good lord man, don’t go there. Last thing we need is for people to care about the post counts, heeh. We need to have that put in pica type, hidden in the bottom corner somewhere.
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Dec 19th, 2008 (6:17 pm)@Joe (107)
I see what you’re saying. One thing that gets me is many of these other countries have national healthcare paid for through taxes. This pretty much puts many U.S. based companies at a disadvantage which is a shame. I work at a school district and personally unions annoy the heck out of me. In my first hand experience all they do is block advancement and get greedy. I’ve never been in management either so this is coming from someone at the same level as most union folks. I’ve been in meetings demonstrating time saving software only to verbally raped by old union folks. I’ve been in so many situations with people going to cry to their union rep. I DESPISE most unions. What ever happened to keeping your job by doing a good job and not taking advantage. Don’t get me wrong, I don’t want the workers to be taken advantage either but when you block progress and tie a companies hands that is just wrong.
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Dec 19th, 2008 (6:17 pm)#139 stas on various purported accomplishments
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Except that, in the end, nobody agreed to anything, so we are at the status quo ante, as they say The government just caved in and gave GM the billions.
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Dec 19th, 2008 (6:20 pm)Again Hummer is not GM :
Read :
ue in part to the military HMMWV’s success in Desert Storm, AM General introduced a civilian version of the vehicle called the HUMMER in 1992. Known as “the world’s most serious 4×4,” the revolutionary vehicle has found favor with commercial users who appreciated the value of HUMMER’s long life and amazing performance, and individuals who seek the ultimate in toughness and mobility. In 1999, General Motors acquired the HUMMER brand worldwide and rebadged the original vehicle H1. In 2002, AM General began assembling the HUMMER H2 for GM in its new factory in Mishawaka, Ind. This vehicle was designed by and is marketed by General Motors. In 2006, production of the H1 ceased. Although GM acquired the HUMMER brand, they do not own any part of AM General.
from : http://www.amgeneral.com/vehicles/
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Dec 19th, 2008 (6:26 pm)I LOVE BUSH…
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Dec 19th, 2008 (6:43 pm)#135 JEC:
Naaah, there are two listings for Statik somehow, and I believe that both of them are one and the same. Maybe it’s because sometimes it’s statik and sometimes it’s Statik. So he’s at 2358. LOL. Anyway, no one is likely to pass him anytime soon. Plus, Rashiid, N Riley and the gang will pass me shortly, as I am slowing down from what I was.
Anyway, it’s pretty easy to run up the number when most of your comments are 1 or 2 words such as “Amen” or “Me too”, LMAO. Thanks though.
Which leads me to my exit line from this thread. As Popeye the Sailor Man always used to say:
“That’s all I can stans, ’cause I can’t stans no more!”
Catch you all on the flip flop.
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Dec 19th, 2008 (6:53 pm)Everybody complaining about Bush and the Republicans, conservatives, etc. Obama wants to save the domestic auto industry too. Who really thinks it’s a good idea for a major industry to crash in this country and that the fallout won’t hurt everyone else even more?
It’s not billions more, it’s redirecting money already appropriated for bailing out the financial sector. I’d rather my tax dollars went to some entity that actually makes a product, than the financial sector the invents exotic investments based on non-capital.
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Dec 19th, 2008 (7:01 pm)Hoo Ray for Bush he finally has done one thing right, now listen to the Republican cry babies BITCH. Republicans = welfare for the rich, Democrats=welfare for the poor, the poor increased as the Republicans trashed the middle class. Even if it is to late it is fantastic to listen to the Republican right wing cry about their wallet being picked, even if this does not work out at least the big three workers will be able to feed there families a little longer, now to get ready for the future and stay in touch with my two friends Smith and Wesson, keep on smiling America the future is bright!!!!!!!
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Dec 19th, 2008 (7:03 pm)Facts and fictions about the UAW. Most on this site think badly about the UAW so here’s the truth from an unbiased source.
http://money.cnn.com/2008/12/19/autos/auto_bailout_labor_issues/index.htm?postversion=2008121914
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Dec 19th, 2008 (7:06 pm)I have to chime in here. The public flocking of the domestic auto companies has been a healthy exercise for all. And today’s announcement by Pres Bush was the absolute right thing to do for the auto industry and the country – and history will prove it correct.
LarryJ @ 10 – you state “The people of this country are overwhelmingly against this bailout in every poll taken. I predict massive boycotts of GM in protest. Congrats GM, you got my tax money. But I’m never buying a car from you again.”
Well, I guess you won’t buy a car from Toyota, Honda, BMW, Mercedes, Hyundai, VW or Nissan – because they have all gotten HUGE taxpayer subsidies already.
Let’s face it; our free and open political system in the USA has caused much of the current dysfunction in the auto industry. Have you ever asked yourself why Toyota, Honda, BMW, etc chose to build assembly plants here in the USA? The country with higher labor costs than virtually any other country on the face of the earth? TAXES and INCENTIVES. Yes, our own government (mostly state government) set out in a bidding war over the past decade to attract these foreign companies to build assembly plants in their states to attract new jobs. They gave away property tax abatements, job creation incentives, enterprise zone grants and more.
The money granted today to GM and Chrysler amounts to an interest expense of about $16,000 per U.S. job at these companies. That is serious taxpayer money. However, last year VW got $288,000 per job created at their new plant in taxpayer subsidies. And Toyota got over $150,000 per job created at their plant in Texas. It’s time to wake up and recognize we have a problem here in the U.S. when individual states can create such inequities in our national economy.
Why is it that a foreign company can build a car anywhere in the world and bring it to sell in the U.S. with little to no tax or tariff, when a car built here in the U.S. will incur huge taxes and tariff’s should its manufacturer decide to export it to sell elsewhere?
Yes, there are many past sins to be resolved at GM, Ford and Chrysler. And yes, the UAW will have to swallow hard and move up the timeframe for new wages, work rules, and retirement benefits into this year. But there are far more hidden agenda’s and untold facts in this saga than has made the mainstream media.
In the end, I predict a renewed ‘buy American’ sentiment will come out of all of this. Americans should be proud to drive a vehicle built here in the USA by American workers – no matter which company builds it. And the more domestic content in that vehicle, the better. Our US based suppliers deserve the business as well.
Go VOLT.
Go GM.
Go America.
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Dec 19th, 2008 (7:11 pm)#139 stas peterson Says: “What to do with Chrysler is a necessary and intrinsic part of any solution, as they are not viable long term, alone. Sen. Bennett even offered to make that merger a condition in the terms of the loans.”
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This is just one of MANY details that require more time to sort out. All the deals that have to occur with this bailout are impossible to do in a week or two, especially when they’re worrying about how they will pay their next bill.
What Bush did is the best case scenario. Loan them the money now with the stipulation that they have to make all the deals to become viable by March 31st. If they can’ do it by then, they deserve to go under…
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Dec 19th, 2008 (7:12 pm)Let’s just keep giving the financial crooks on wall street billions so they can keep handing out huge bonuses without anyone questioning them. I thought they needed money in order not to go under, oh wait, it was becuase they needed more party money!
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Dec 19th, 2008 (7:14 pm)@omnimoeish 129
“This loan will be repaid one way or another”
Really How? The Volt is not going to be a money maker for a few years, some say at least 4 years, when it is released. Release date 2010? Maybe 2011? All the while they do not need to make the first payment back for 5yrs after the loan. What happens after the 5 years, 2-3 years after the Volt is released, and they have no positve inflow? All your $$$ gone. Research it!
The UAW workers do NOT make $70/hr. I have been there and done that from a floor monkey to management. more of 24-35$.
Everybody needs to quit B1tchin about Bush. He only does what advisors agree to as the best solution. Why do you think Obama has to pick his cabinet. I don’t like either of them.
This loan is essentially a bridge to nowhere. Consider your Great GM in this article out today..
http://www.autobloggreen.com/2008/12/19/spyshots-chevy-beat-spotted-on-the-wild/
Yes, GM will be producing/manufacturing NOT IN THE US. Sure it may be profitable but are you going to let the great GM slap every Americans in the face by keeping the jobs overseas? Give GM the loan, jobs will be lost……wah, wah, waaaahhh…
Decisions decisions.
I bet they’re not shutdown in South Korea?
GM needs to fold or file Bankruptcy. UAW is a leech that will suck the fund$ dry. With government bailout’s like this your only keeping the corpse alive to feed the leeches. The Unions had they’re chance to correct things and they have run their course. It’s time to end them. Job Bank….WTF?
As for those who think the Volt or Cruze can save them, I think not.
The introduction of the Honda Insight next year at approx $20 is far more financially viable solution for 85% of Americans, Toyota bringing the PHEV OEM in 2011/12 below $30K @ ~100mpg. Considering nobody will be buying cars for a while and especially the Volt at upper/mid $30K, it’s a JOKE.
Someone must be getting paid quite a bit for this site. PR hype folks.
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Dec 19th, 2008 (7:23 pm)#149 Joe Says: “Facts and fictions about the UAW. Most on this site think badly about the UAW so here’s the truth from an unbiased source.
http://money.cnn.com/2008/12/19/autos/auto_bailout_labor_issues/index.htm?postversion=2008121914
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Excellent article. Well worth the read.
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Dec 19th, 2008 (7:25 pm)#150 LeoK says
“In the end, I predict a renewed ‘buy American’ sentiment will come out of all of this.”
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Perhaps so “in the end” as sentiment over long time periods is hard to predict.
At the present time, I think all the Detroit cars are damaged brands, ones that may be chosen by customers if they get a sharply lower price, but not cars that will be considered otherwise. Your friends will look down their noses if you get a Chevy, and people find that hard to take. It’s a little unfair, but I think that at the moment that same sentiment carries over to Ford brands, even though they are getting no money.