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My Question to GM’s CFO Ray Young

January 22nd, 2009 | Posted in: Financial, GM Q and A, Original GM-Volt Interviews

GM just received last night an additional $5.4 billion in government loans bringing the total so far to $9.4 billion. They are expected to receive an addition $4 billion on February 17th.

While in Detroit, I had a chance to ask one question to Ray Young who is GM’s CFO. Ray noted that GM has to submit a plan to the government on February 17th showing its progress on how it will be achieving viability in exchange for the loans that have been received.

A major factor in GM being able to be viable in the future is for them to shed the massive debt they owe bondholders and the retiree healthcare pension or VEBA fund. They are trying to reduce unsecured bondholder debt from $28 billion to $9 billion, and a halve the $20 billion VEBA debt by turning it into equity.

My question to Mr. Young was as follows:

How confident are you that debtholders will accept their haircuts for reduced payments on the dollar, and that the UAW will agree to swap VEBA debt for equity?

On the UAW issue Ron Gettelfinger has indicated that they (the union) will come to the party and support the restructuring of our industry. They also indicated they wont be the only ones coming to the party and we need to make sure other people including the bondholders will too. So therefore we’re working on the different structures as to how to effect a debt to equity conversion or a debt to debt conversion or a capital restructuring of the company. And while its going to be challenging, its not going to be impossible.

We’ve actually got the smartest brains on Wall Street working with us on that. I spent 3 days in NY last week working with these folks and I’m confident we’re going to get something done here. The debtholders understand that this needs to be done and that the government wants this to be done too.

Posted by: Lyle

99 Responses to “My Question to GM’s CFO Ray Young”

RB Says:
January 22nd, 2009 at 7:41 am

Mr Young’s comment seems to say that nothing much has happened so far, other than waiting for the next government payment. In my little community, people are running out of patience.

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Herkimer Says:
January 22nd, 2009 at 7:47 am

The “Smartest Brains on Wall Street”? Oh, that makes me feel MUCH better….

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Eric C. Says:
January 22nd, 2009 at 7:53 am

#2,

Ditto!

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Earl Says:
January 22nd, 2009 at 7:53 am

It’s a good thing the people in RB’s community don’t have any say in the matter. I’m really tired of the dumb redneck solutions to GM’s problems.

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Joe Says:
January 22nd, 2009 at 7:53 am

May the UAW union bashing begin!!!

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Bearclaw Says:
January 22nd, 2009 at 7:54 am

NPR was reporting that the auto industry is not going to pick up until after the housing market is stabilized which could be years away. If true then a viability plan then would need to have scaled back production for years.

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Xiaowei1 Says:
January 22nd, 2009 at 7:55 am

#1 & #2, i could not agree more

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Jim in PA Says:
January 22nd, 2009 at 8:16 am

Thank god they are working with Wall Street’s best and brightest. What the auto industry needs in this time of crisis is an infusion of completely faulty conventional wisdom.

I have it on good authority that Wall Street has already devised a rock-solid way for GM to raise revenue. GM will write an insurance policy on each car sold, then write several insurance policies to cover THAT policy until the total policy values far outstrip the actual value of the one car that they all share as collateral. Then GM can sell some of these… oh I dunno, let’s call them “credit default swaps” for the heck of it… to Ford and Toyota. I mean, what could go wrong?

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Dave B Says:
January 22nd, 2009 at 8:20 am

Well, what I see is there isn’t much GM is suggesting besides toying with the books. Where’s the plan to sell more vehicles? What emerging markets and technologies are they going to push (hint, it isn’t hydrogen). Why not start with a waiting list for the Volt? Let’s just be careful not to pull a Tesla and raise prices 3 times on unsuspecting customers who put down deposits 2 years in advance.

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statik Says:
January 22nd, 2009 at 8:24 am

How confident are you that debtholders will accept their haircuts for reduced payments on the dollar, and that the UAW will agree to swap VEBA debt for equity?

On the UAW issue Ron Gettelfinger has indicated that they (the union) will come to the party and support the restructuring of our industry.
================================================

Here is todays Gettel-comment on it:

ON VEBA:
Gettelfinger also implied that UAW will resist the Treasury Department requirement to take stock instead of cash for the health care trust. He said he didn’t know what the value of the companies’ stock would be when the loan terms are finalized. (way to believe in the home team Ron)

ON PAY CUTS:
But Gettelfinger said Wednesday night that the UAW will go to President Barack Obama’s administration in an effort to change some of the terms, which he in the past has called unfair to labor.

The union, he said Wednesday night, should get credit for concessions it made to the automakers in 2005 and 2007, some of which have not yet hit the companies’ balance sheets. The health care trust and lump sums in place of pay raises were among the concessions, he said.
http://finance.yahoo.com/news/UAW-head-says-union-will-make-apf-14122100.html
—————————–
AS FOR THE BONDHOLDERS:
They came up well short of the bond conversion with GMAC, all the way to D-day…with Pimco leading the charge when they backed out of the debt conversion (not that they were ever in it), and the rest of the fence sitting bondholders finally said, ‘no…go bankrupt, I dare you’. Well it turned out GMAC could only raise 59%, not the 75% required…and the gov’t backed down, PIMCO was a winner. (Side note: PIMCO made a 83% return on their bonds in a day…while the guys who tendered got a big helping of cash down the drain).

Well your seeing that all over again…only this time PIMCO has precedence of being right, and you have to believe the others will be a lot less reluctant to do the conversion.

On Tuesday, Pimco withdrew from the ‘GM bondholder committee’ that was to negotiate with GM with this statement, “We’re just not good committee members…We have the interests of our clients more at heart than the interests of particular corporations or even the government, I guess, so it’s best that we simply look at the situation from afar as opposed to from inside.”

Pimco only owns about 140 million of the debt, but is seen as the leader in how to invest in the new world. Bill Gross’ Total Return Fund for Pimco beat just about everyone in 2008, and returned about 5%…he likes to invest in what the gov’t is going to bail out, lol.
—

Basically, the UAW has already called the bluff of no deal, go bankrupt, back in December. Additionally, the bondholders for GM are, for the most part, the same group that GMAC owned money to, (which they only got 59%)…with PIMCO and some others last time saying ‘go bankrupt..we ain’t doing it,’ then getting the paid bigtime for that call, the other bondholders are even more unlikely to deal this time.

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Dave K. =D~ Says:
January 22nd, 2009 at 8:31 am

The problem with Wall Street people is not that they lack brains. It’s that they lack soul. The “get ahead at any cost” mentality is killing this nation. The second highest drain are middle management in all fields.

=D~

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Bernie K Says:
January 22nd, 2009 at 8:32 am

I agree with Dave B.’s #9, we need to see something other than playing with books. Remember, ENRON had great looking books without any substance. This seems to be the insurance, banks, and wallstreet approach to everything these days.

Agreed GM needs some relief from UAW and bondholders, but it has got to go a lot further.

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statik Says:
January 22nd, 2009 at 8:35 am

Sorry here is a link to the bondholder/PIMCO backing out of the negotiating committee:

http://money.cnn.com/news/newsfeeds/articles/djf500/200901210139DOWJONESDJONLINE000303_FORTUNE5.htm

(Drives me crazy to see info without sources…I was going to link to the original article in Bloomber, but the site sees it as spam for some reason, there is a link to the full Bloomberg article at the bottom of CNN link)

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Bearclaw Says:
January 22nd, 2009 at 8:40 am

On a lighter note off topic Bob Lutz was just on WRIF radio in detroit and he said there will not be an electric Hummer. Sorry to disappoint everyone with the bad news.

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Rashiid Amul Says:
January 22nd, 2009 at 8:45 am

From the article:
We’ve actually got the smartest brains on Wall Street working with us on that.

=================
Ya, but do they have Statik?

Smartest brains on Wall Street? I think he is talking about the street sweepers. At least they are on Wall Street and still have a job.

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RB Says:
January 22nd, 2009 at 9:04 am

#13 statik — Thank you for the link to the Bloomberg story, indirect. Doesn’t look promising for any debt-holder agreement.

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Tony Gray Says:
January 22nd, 2009 at 9:08 am

Once again, this shows the problems when government gets involved with private industry.

First they contribute to the problem with expensive, confusing and sometimes conflicting regulation; then they mess up the financial system.

Then, riding to the rescue of the folks crushed by the situation they caused, demand specific, yet unformatted “turn around plans” that would probably expose proprietary information useful to the competition.

The entire deal stinks.

OK, rant off. I’d just love to know which models and brands actually MAKE GM money and which are money pits. That would be somewhat illuminating for us amateur critics.

It appears at this point that the bailout is only extending the time they have before they have to make the hard choices to remain viable…choices that would have been made already.

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Shawn Marshall Says:
January 22nd, 2009 at 9:09 am

15 Good one!!!

Client: Should I sell?
Wall street broker: Yes
Client: Should I buy?
Broker: Yes.
Client: Should I buy or sell?
Broker: Yes
Client: Should I hold tight?
Broker: Not to your money.

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Spin Says:
January 22nd, 2009 at 9:20 am

More lies from GM executives as they line their pockets with our tax dollars.

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N Riley Says:
January 22nd, 2009 at 9:56 am

It has been nearly a month since GM got the first installment of the loan and they don’t seem to be very far along in the process of getting people on board. GM, you can not wait until March to start having in depth meetings with the parties concerned. Let’s see some progress before we start losing faith in your ability to pull things together.

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N Riley Says:
January 22nd, 2009 at 9:59 am

“The “Smartest Brains on Wall Street”?”

Those are the brains that have suckered the U.S. government out of billions of dollars and are trying for trillions. That does not make me feel much better. That’s like saying you are working with the smartest brains in Washington, DC.

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N Riley Says:
January 22nd, 2009 at 10:01 am

#4 Earl

“I’m really tired of the dumb redneck solutions to GM’s problems.”
—————

Well, what do you propose? I am tired of people complaining about a solution without being specific as to what is wrong with it and not proposing a solution of their own. Just who is the redneck you are referring to?

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N Riley Says:
January 22nd, 2009 at 10:04 am

#8 Jim in PA

Good one.

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N Riley Says:
January 22nd, 2009 at 10:11 am

#10 Statik

This is one time that I hope you are wrong, but I believe down deep that you are 100% correct. Let me see, now. How many times or what percentage of times have you been correct versus being wrong. If I were a betting man, I would put all my money on you today.

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Redeye Says:
January 22nd, 2009 at 10:13 am

Why don’t the big guys at GM just read the Volt forum ?
People here seem to have all the answers.

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Cautious Fan Says:
January 22nd, 2009 at 10:14 am

Tesla claims they underpriced their cars, to the tune of $48K per car!!!

http://blogs.edmunds.com/straightline/2009/01/tesla-admits-huge-losses-on-roadster-juggles-prices-to-make-up-the-difference.html

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Cautious Fan Says:
January 22nd, 2009 at 10:23 am

#21 N Riley

I don’t fault them for suckering the U.S. gov’t out of billions of dollars. That’s called SMART business. Everyone tries to get the money, they happened to win.

Am I missing something here? What GM is needing are good negotiators, not creative financers.

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kent beuchert Says:
January 22nd, 2009 at 10:28 am

Don’t you just love the UAW – they (the ones who caused all of GM’s problems) are willing to take a hit if the innocent souls who were stupid enough to believe that a unionized company has any chance to survive in a competitive marketplace also take a hit. Now let’s see GM go and ever borrow any more money via bonds.

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statik Says:
January 22nd, 2009 at 10:31 am

#24 n riley

#10 Statik

This is one time that I hope you are wrong, but I believe down deep that you are 100% correct. Let me see, now. How many times or what percentage of times have you been correct versus being wrong. If I were a betting man, I would put all my money on you today.
=====================================

Thanks for the kudos Riley, but I don’t know that this is much of a guess/forecast. I think the press/public is still breathing a sigh of relief about just getting the last auto deal done and aren’t taking a real hard look at the next step…and have not yet started to ‘connect the dots’ on realty with the 2nd tranche here. They have had been bigger things on the front burner of late (inaugeration, banking collapse, etc.).

I’m fairly confident that the focus will be shifted back to this issue as the next deadline approaches and everyone will get worked up again. (C’mon ‘GSB-gov’t sponsored bankruptcy’, it is still bumming me out that I haven’t got the last piece right…yet, I made the darn acronym and everything for it, sheesh)

It is pretty hard to make the leap that the UAW and bondholders will agree to those last minute, hastily penciled conditions the “old gov’t” put in…especially seeing how the whole last minute/TARP bailout thing was initiated by UAW’s hardcore stance. (Then you have the FIVE time failed/deadline extension attempts by GMAC to get the debt conversion done..which it never did).

It is even harder to see them capitulating in such a short time frame (3.5 weeks), especially since there has been zero negotiations started with either of the parties (the bondholders being a group much harder to identify, seeing how they need most of them on board)…I’m not sure it is even possible at this point, unless some of the new EESTOR technology gives off toxic radiation that inadvertantly slows time.

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Cautious Fan Says:
January 22nd, 2009 at 10:54 am

#29 Statik

It is pretty hard to make the leap that the UAW and bondholders will agree to those last minute conditions the “old gov’t” put in…especially seeing how the whole last minute/TARP bailout was initiated by UAW’s hardcore stance.
____________________________________________________________

I agree Statik. I’ll be suprised if UAW gives ground here. For the added reason that the new administration wants to create (or save) 3 million jobs. Doesn’t look good on the resume to loose those old-boys-club manufacturing jobs.

Though I love to be wrong.

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N Riley Says:
January 22nd, 2009 at 10:55 am

#27 Cautious Fan

“What GM is needing are good negotiators, not creative financers.”
—————

Very good point. History seems to say they are terrible negotiators when it comes to the UAW, at least. Else why such bad contracts.

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Cautious Fan Says:
January 22nd, 2009 at 10:55 am

City of Newark is trialing battery operated cars returning power to the grid.

http://www.physorg.com/news151767267.html

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Jackson Says:
January 22nd, 2009 at 11:00 am

#27:

“What GM is needing are good negotiators, not creative financers.”

Bill Shatner is busy with those Priceline ads.

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N Riley Says:
January 22nd, 2009 at 11:06 am

#30 Cautious Fan

I don’t see the UAW giving ground on any of these things. They believe the Obama administration and the democrats in congress will come to their rescue if GM goes into bankruptcy or fails in some manner. More likely they probably expect the government to give them the money GM can’t to flesh out their health and pension plans and write more rules favorable to them. They just have too much clout in the the government and congress now to give up anything. Too many friends in the media, etc, etc. I don’t see a winning solution for GM no matter what course they take or are made to take. The UAW will come out in the driver’s seat no matter the outcome. Some in congress want to give the UAW a large amount of GM to control with board membership in sufficient numbers to insure the continuation of union control of the U.S. auto industry. Never mind what that would do to the companies. Might as well shut the doors now and save all that taxpayer money. But, it is not coming out of the congress’s pocket. The taxpayer has an unending access to cash. Or so they think.

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Red HHR Says:
January 22nd, 2009 at 11:07 am

Alas poor Volt, I knew thee well…

What will emerge out of the fog? A White Zombie…
http://www.plasmaboyracing.com/whitezombie.php
Entertaining jester of an electric car.

Red HHR (Hello Obama?)

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N Riley Says:
January 22nd, 2009 at 11:20 am

#32 Cautious Fan

Interesting story at the link you provided. Only thing I wish was different is that they had used an American vehicle instead of a Toyota. We need to think about those kinds of things in the future and “Buy American” whenever possible. Especially government entities should be required to “Buy American”. That certainly includes colleges and universities.

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noel park Says:
January 22nd, 2009 at 11:25 am

Well I want to see GM survive as much as anybody, but I think that GM, the Feds, the UAW, the bondholders, et al, severely underestimate the public backlash which will greet the next “tranche”.

I am not finding any ordinary private citizens who support advancing any more money to the auto industry, let alone the financial industry. In fact, the vehemence of the opposition is quite remarkable.

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chevonly Says:
January 22nd, 2009 at 11:33 am

Dear Comrades, new fearless leader Obama should continue grand five year plan of nationalization, first seize all foreign vehicles stinking up the ports on the east and west coasts, no one is buying them anyway, then take all of this distressed foreign cars that no one is buying and ship them to China, Dear chairman of great communist nation please accept high quality foreign vehicles in exchange for the trillion dollars US owes to your great nation, this will help lower our huge deficit and get rid of the autos clogging up the ports in the U.S. if Chavez can do it to the oil companies we can do it to the japaneese auto manufacturers.
Das Ve Danya comrades.

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GXT Says:
January 22nd, 2009 at 11:39 am

28. kent beuchert wrote:

“Don’t you just love the UAW – they (the ones who caused all of GM’s problems)…”

=====================================================

You have to be kidding me. Two main things caused GM’s demise:
1) The US’ lack of universal healthcare. Thank the union for having the guts to effectively fight for something that the average American has been tricked into not having.

2) GM’s short-sighted-bean-counter attitude towards building vehicles.

The actual additional cost for labour for GM to build a car as compared to Toyota/Nissan/Honda is ~$150. Average incentives per vehicle for GM is ~$4,000.

Tell me again what the real problem is?

I’m getting a bit tired of people taking shots at the UAW while the US engages in “fake socialism”. They give billions to capitalists who have failed while still denying the average person their RIGHT to universal health care. And you just know that when the whole thing colapses that “socialism” will take the blame.

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Casadore Says:
January 22nd, 2009 at 11:40 am

RIGHT ON, GO FOR IT.

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Bradley Says:
January 22nd, 2009 at 11:43 am

The whole “buy American” arguement simply doesn’t cut it with most people under 40. Its not even something anyone I know considers in their purchase. If GM wants a shot at sales, make a better product than the next guy at a better price. That’s the only way they will get sales and survive. People care about their own pocketbooks, not where something was made.

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statik Says:
January 22nd, 2009 at 11:47 am

I’d like to mention I feel badly for Ray Young, he is a journeyman GM guy (who certainly is not comfortable with public interaction like his peers on the board), who has been plugged into one of the worst CFO jobs that ‘big industry’ has to offer.

How do you even start to do this job? You have to do it so that your boss is happy, but also not lie your tail off and make yourself look like a total toolbag down the road?

Side note to noel: “tranche” is a awesome word is it not? It has so few bad vibes associated with it, unlike ‘installment,’ or ‘bailout payment’

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N Riley Says:
January 22nd, 2009 at 12:06 pm

#35 Red HHR

Go, Go White Zombie. Great link. Thanks.

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r22wink Says:
January 22nd, 2009 at 12:07 pm

RB Says:
January 22nd, 2009 at 7:41 am
Mr Young’s comment seems to say that nothing much has happened so far, other than waiting for the next government payment. In my little community, people are running out of patience
_________

Your totally right what is this moron thinking, not spilling his guts to a reporter about how they are turning around one of the biggest companies in the world in a three month time frame….Why dont you and your “community” worry about your every day problems and let GM worry about theirs.

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Joe Says:
January 22nd, 2009 at 12:11 pm

#39 Thank You!

I truly believe that the health care costs to businesses is the root to many of our systemic economic woes. If we can fix health care, many other good things will follow!

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CDAVIS Says:
January 22nd, 2009 at 12:12 pm

______________________________________________________
#37 noel park Says:
Well I want to see GM survive as much as anybody, but I think that GM, the Feds, the UAW, the bondholders, et al, severely underestimate the public backlash which will greet the next “tranche”.

I am not finding any ordinary private citizens who support advancing any more money to the auto industry, let alone the financial industry. In fact, the vehemence of the opposition is quite remarkable.

—–
I agree w/ noel park.

Repost…

Dear GM,

Is Joe going to buy his next car from GM?

The average Joe is forced to find a way to balance his own home and/or small business checkbook. GM is on the verge of alienating many of those hard working Joes that don’t understand why GM is not required to also find ways to balance GM’s checkbook. There are many Joes on the fence with regards to their support for GM. On one hand GM is to be admired for the leadership role it has taken with the VOLT Program and for GM’s impressive quality and fuel efficiency for much of GM’s current model lineup. On the other hand, GM is rapidly approaching the tipping point of many GM supports over the taxpayer funded bailout/loan issue.

The dance/standoff between GM, UAW, and GM Bondholders may zero out GM’s forward opportunity because of those parties failure to respond to the profound increasing negative public sentiment on the issue of government (taxpayer) bailout/loans used to underwrite GM’s operating losses. The vast GM executive organizational layer has also demonstrated its inability to make meaningful cost reductions within its own executive structure (through executive layoffs and compensation cuts) which does not help engender participation from the UAW, GM Bondholders, or anyone else asked to contribute in getting GM’s operating cost reduction.

Rather than GM executives maneuvering GM for another trip to the taxpayer trough, GM should be putting a presentation together explaining GM’s viability plan and explaining the anticipated means to pay back the taxpayers what has already been borrowed.

Sincerely,
A working Joe.
______________________________________________________
Electric Cars + Nuclear Power = American Energy Independence!
______________________________________________________

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N Riley Says:
January 22nd, 2009 at 12:12 pm

Tranche, for the uninformed, of which I am one: (From Wikipedia:)

“In structured finance, a tranche (misspelled as traunch or traunche) is one of a number of related securities offered as part of the same transaction. The word tranche is French for slice, section, series, or portion. In the financial sense of the word, each bond is a different slice of the deal’s risk. Transaction documentation (see indenture) usually defines the tranches as different “classes” of notes, each identified by letter (e.g. the Class A, Class B, Class C securities). The term “tranche” is used in fields of finance other than structured finance (such as in straight lending, where “multi-tranche loans” are commonplace), but the term’s use in structured finance may be singled out as particularly important. Use of “tranche” as a verb is limited almost exclusively to this field.”

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noel park Says:
January 22nd, 2009 at 12:22 pm

#39 GXT:

Well I don’t always agree with you, but you nailed it this time. Well said!

#41 Bradley:

When the end game comes it will destroy their pocketbooks. They just can’t see it yet.

#42 statik:

Yeah, I was going to add a remark about where the h**l did it come from, and how did it gain such currency (no pun intended) so quickly, but I figured that I had said enough already.

#44 r22wink:

Our communities are going to pay for it. We have every right to be involved. If these “viability plans” are not credible (LOL), Congress is going to be the least of these corporations’ problems.

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CaptJackSparrow Says:
January 22nd, 2009 at 12:23 pm

@ GXT 39

“Tell me again what the real problem is?”

Here’s part of the “Real Problem” which is the UNION.
http://www.thetruthaboutcars.com/unraveling-the-uaw-job-bank/

Full pay from GM for not working WTF?
The UAW sucks A$S. Their legacy costs are what’s killing the industry.
Funny how the majority of the mfgr businesses you hear about that are in dire need have Unions involved.

“The US’ lack of universal healthcare.”

Your statement really conotates “We don’t have socialist healthcare.”

I personally do not want to pay for anyone else’s health care. Why should I pay for operations and Emergency procedures for others who either made bad decisions or are not even US citizens?

Universal Health Care rewards NOT the ones who made good decisions. Those who made good decisions have to Pay.

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noel park Says:
January 22nd, 2009 at 12:25 pm

#46 CDAVIS:

Right. Thanks. What else is there to say?

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CaptJackSparrow Says:
January 22nd, 2009 at 12:27 pm

#35 Red HHR

I like the specs..

Range: At least 1/4 mile

lol……

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N Riley Says:
January 22nd, 2009 at 12:27 pm

I am not one to agree that the lack of universal health care is the problem with American industry. We are not alone in the problems we face today. Many of the world’s great nations face the same problems and most of those nations have “universal health care” in one manner or another. If we adopt universal health care in this country the cost of the program must be paid by someone. If the “government” takes on the burden of payment, where do you think it is going to get the money to pay for the cost of the program? If it is a combination of government, business and workers paying for it, does that mean the cost of health care will be reduced? No, I don’t think the cost of health care will ever be reduced in this country. It will continue spiraling out of control until businesses and workers can no longer afford coverage. That is happening to some extent now and what is the solution? Government run health care? I don’t have any ready answers and I don’t really think anyone in government truly has the “correct” solution. The government hasn’t done a very good job running the programs they have now. Why should we trust them with possibly the most important job to our families not including national defense.

Government is not the answer to our problems. But, what is? Personal responsibility. That was disposed of during the 1990’s and is no longer in vogue. So, tell me, what do we do?

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CaptJackSparrow Says:
January 22nd, 2009 at 12:44 pm

@N Riley 52

Understood.

The issue is if personal responsibility is not enough for someone to seek a job to help them get health care then what should be done? Is it right to force the general public of the working class to be taxed more so health care is available for those who can’t afford it and in many cases are not US citizens? Should we reward those people and punish the working public by taxing them?

If one deems them self not worthy of taking personal responsibility why should the government?

I can’t offer a solution but IMHO, those who pay for their health care shouldn’t be forced to pay for others. It’s considered financial punishment for your good deeds.

Wait a minute, I just though of something….
What if people were allowed a tax deductable “Donation” to a govt fund for not Universal Health Care but call it “Government Health Aid” or something crazy like that. This can be at Tax time/filing so one can look at the figures and determine how much to donate to “Break Even” on taxes……..lol….

OK,now I need to go get a Kahlua & Coffee……..

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vincent Says:
January 22nd, 2009 at 1:16 pm

Super Ditto ….smartest and Wall Street…LOL
Shouldn’t this guy be making Sushi in a supermarket…

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GM Volt Fan Says:
January 22nd, 2009 at 1:28 pm

In the next year or two, the government needs to implement some sort of “transactions tax” that is designed to curtail the excessive speculation and crazy, risky schemes that the Wall Street “investment banksters” have been doing to get rich in the short run at the expense of everyone else. That way, us taxpayers will recoup a lot of this money that we are having to dole out to THEIR companies! The same companies that CAUSED this huge economic mess! At the very least, I’m sure the government can close some tax loopholes that effect the Wall Street schemers somehow.

http://www.nytimes.com/2009/01/13/opinion/13herbert.html?_r=1&scp=1&sq=Where%20the%20Money%20Is&st=cse

It’s the COMPENSATION programs on Wall Street that are the biggest problem. It’s all about the Wall Street dudes making their bonus THIS year … whatever they gotta do to get it. That’s all they really care about. Gimme my BONUS!

It’s all about making as much money as possible on the latest bubble and then parachute out later on just before the whole thing implodes. It’s about getting the quick, fast money and retire to Florida or the Hamptons, etc. Let someone else clean up the mess. Who is going to clean up this huge mess that Wall Street caused? American taxpayers. You and me. The people who are getting laid off and their families. That’s who is paying for Wall Street’s greed and incompetence.

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JEC Says:
January 22nd, 2009 at 1:43 pm

“Ray noted that GM has to submit a plan to the government on February 17th showing its progress on how it will be achieving viability in exchange for the loans that have been received.”
=====================================================
But, but, but….Feb 17th is the same day we give them another $4 billion?

Ridiculous…ludicrous (like Space Balls….)..insane….etc…etc…

I want that “viability” plan NOW! If it is a bunch of BS, then so long to any more handouts (I would not even have sent out the first check, but that’s water under the bridge, right?).

Maybe I will protest 2008 federal taxex, on the grounds that the govt has no idea what the h*ll it is doing!

This is bad, and the continuation of handouts is making it worse (except for the few fortunate ones at the top, sucking this cow dry)

Bad day…sorry…bye.

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stas peterson Says:
January 22nd, 2009 at 1:50 pm

it was inside K Street Democrat POLITICOS who pretended to be Wall Streeters, and got appointed to their Jobs, through political connections. At Fannie Mae, Fred Raines looted it for $100 million. Fredie Mac’s appointed head, Tim Johnson raped it for $75 million, and Hutton’s Jamie Gorelick of 9/11 screwup fame who looted it for $55 million. They all carefully donated a million bucks of campaign contributions or so, of their ill gotten gains to the Democrats for “protection”. Chris Dudd, and Barney Fife protected them, despite calls to shut down their dangerous deal making. Obama ’s campaign took the money and made them senior campaign and transition consultants. Maybe they recommended the Tax Cheat the Felonious Mr. Geitner for Treasury Secretary!

What does the old proverb say? Birds of a Feather flocking together.

They learned the lessons of Enron, very well. Buy Protection! No talk of indicting these bastards at all. Even though Raines and Johnson put all that waste paper on hundreds of other Banks & Trust institutions bankrupting them and the taxpayers put up $750 Billion to rescue the wrecks they made.

It was sickening to see Fred Raines smugly shaking hands with Obama at the Inaugural stand.

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Cautious Fan Says:
January 22nd, 2009 at 1:50 pm

#52 N Riley

That’s a good point that I never thought of. Universal healthcare reduces business costs, and increase their taxes. Seems to be a zero sum game.

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Bob Says:
January 22nd, 2009 at 2:11 pm

GXT:

There are other problems with the UAW.

1) Work rules. If an engineer moves a PC from one desk to another the union files a grievance.

2) Strategic strikes. The union will strike at one key plant that shuts down whatever product line is profitable. The company has to shut down everything downstream. The workers at one plant get strike pay from the union. The others get GM pay.

Just-in-time inventory leaves the company particularly vulnerable to this.

The union resists building plants that assemble multiple lines of cars.

The big three do many seemingly crazy things to avoid problems with the union.

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Zach Says:
January 22nd, 2009 at 2:21 pm

#5,

lol.

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fredevad Says:
January 22nd, 2009 at 2:28 pm

#49 CaptJackSparrow
Why should I pay for operations and Emergency procedures for others who either made bad decisions or are not even US citizens?

———————
Not commenting on universal health care here, but could you please refresh my memory on how a 6 month old born into [most likely cycles of] poverty, has made “bad decisions”?

Many people living in poverty don’t have a choice.

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Casey Says:
January 22nd, 2009 at 2:28 pm

We keep dumping Billions of tax dollars into a failing company, its going to take years for the auto companies to recover even if they do, I’ve been saying all along, GM go into a prearranged chapter 11.

NO PLUG NO SALE, LJGTVWOTR, DBNGCMEME, (my house)=D~~~(my volt) .#33,772

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CaptJackSparrow Says:
January 22nd, 2009 at 2:37 pm

@fredevad 61
Many people living in poverty don’t have a choice.

It’s the parents, not the kids, they have the choice not to have kids or use contraception or “Pull Out” or Abstinence or Adoption. There are choices. It’s what they choose that costs everyone. The unfortunate thing is, just like you, they use “The Kids/Children” as a means of emotive coercion to help them and reward them by “Giving” them the health care.
So why dont YOU go give the big HMO’s some funds to pay for this.

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N Riley Says:
January 22nd, 2009 at 2:38 pm

#53 CaptJackSparrow

That is not a bad idea. Problem is the government (democrats, because they are in full charge again) will not accept that because it may not meet their “goals”. They would much rather just take your money and give it to those people who they have “purchased during the 1960’s, 1970’s 1980’s, 1990’s and this decade with benefits for non-production to our economy. They, the government, understands taxing (taking) and they do not understand contributing (giving) by taxpayers (except when we “give” our money to government for them to waste). They are now entering another period of “purchasing” people by extending benefits not earned to our middle class. Once they have the middle class on the hook, like they do the lower class “workers” there is no chance of their “style of government” ever being voted out of office. Do you vote for your “benefits” to be ended? Probably not.

Government is not the answer to our problems.

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GXT Says:
January 22nd, 2009 at 2:39 pm

49. CaptJackSparrow

I’m not going to defend the job bank. But as it is about to be killed and with all the layoffs and in comparison to GM’s real problems it doesn’t even rank. Also, you could argue that the only reason it was ever used was because GM’s bean-counters have caused GM’s product to be so bad that people don’t want to buy them. Therefore it is another management problem.

As for the “legacy” costs, they are due mostly to a lack of universal healthcare. I believe GM is the largest health care provider in the US.

Universal Health Care rewards everyone and everyone has to pay. It is an insurance policy that everyone (even the selfish and shortsighted) have a chance to benefit from. It is recognition that everyone has a right to some level of health care, EVEN IF someone else who is lucky enough not to be sick or have a job that has coverage has to pay a small amount to support it.

I hope that you never have a kid with some disease that is uninsurable. Or be laid off and have no health care. Of course, if that does happen, you can rest soundly at night in the knowledge that you SHOULD be on your own because you made such obviously horrible decisions. And isn’t that better than taking the risk that someone might take advantage of the system by purposely doing things to make themselves sick? I’m sorry you think so little of your fellow citizens.

I know the US has purposely kept their citizenry misinformed about universal healthcare so that the top 1% can make another buck, but you can implement it for your own citizens (after all, they paid for it) and charge non-US citizens. You can also make people pay for elective procedures (e.g. non-necessary plastic surgery).

Come, join the rest of the industrialized world:
http://www.gadling.com/media/2007/07/healthcareworldbig.jpg

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N Riley Says:
January 22nd, 2009 at 2:42 pm

#55 GM Volt Fan

One solution very commonly overlooked is putting those crooks in jail for a very long time. Somehow these investment banker and wall street traders can do these things and never get prosecuted. Could it be their money influence in Washington, DC? Surely not.

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Joe Says:
January 22nd, 2009 at 2:47 pm

I find it hard to believe so many on this site think they know how GM/UAW works together. It has to make me laugh. I can say this because I’ve got a whole lifetime of experience with that subject matter. If you people think GM and the UAW are sitting around waiting to get a better deal from Obama, you are dead wrong. .Americans are known to be laid back but the day of reckoning has arrived..GM will again be the technological leader in the future but at the moment,because of the incompetence in DC which caused the state of this economy, they will need temporary help.

Many concessions have been made at the last contract and more are to come.

http://online.wsj.com/article/SB123263734683006285.html

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GXT Says:
January 22nd, 2009 at 2:47 pm

63, CaptJackSparrow,

Wow. I take back what I wrote in the previous post.

I hope you do have a sick child that drives you bankrupt (why should someone else have to pay for your bad decision?), I hope you have a fire in your residence and the fire department doesn’t bother coming (why should someone else pay for your bad decision?), I hope you get robbed by someone and the police don’t show up (why should someone else pay for your bad decision?), I hope you get laid off and there is no social assistance (why should someone else pay for your bad decision?), I hope there is a natural disaster that hits you and there is no aid (why should someone else pay for your bad decision?), etc.

Personally, I blame your parents.

You seem like a horrible selfish person.

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CaptJackSparrow Says:
January 22nd, 2009 at 2:52 pm

@GXT 65
“Universal Health Care rewards everyone and everyone has to pay”

It will take my current premium and/or taxes higher and that’s a fukin reward?
If my current premium/taxes does NOT cost me any more then sure, I’m for it. But by saying someone gets but fuked so the less fortunate can get health care is plain stupid.

In all honesty, can you tell where this money will come from for this “Socialist Health Care”?
What are the people who are barely making it now going to be told? Sorry, bend your a$S over because Pookey down the street knocked up Jenny down the block and they need health care? We’re going up your premium and your married/single taxes.

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CaptJackSparrow Says:
January 22nd, 2009 at 2:58 pm

@GXT 68
You seem like a horrible selfish person.

Thanks. You probably haven’t read in previous posts that I’m TP (Trailer Park)….lol

BTW, what makes you think I haven’t made any bad decisions? I have made many many bad decision. I just learned from them.

lol…..
To wish ill will on someones alleged child/children (he11, I might have more) kind of puts you in my realm/caliber TP, but I’ve never done that.
Welcome and have a beer, my wife Brittany Spears will get it for you, have a seat [brushing beer cans off the ripped couch]…..

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truthguy Says:
January 22nd, 2009 at 3:02 pm

Solution to Health Care Problem: Medical Savings Accounts. It would be like a 401K Plan. Save when you are healthy. Let the market work in health care the same way it works everywhere else. Get government out of the health care business. Pay for medical costs out of pocket with high deductables. Have insurance kick in only for the rare high cost procedures. Perhaps a $5,000 per year deductable for a family of 4. Get business out of health care other than the companies that deliver health care. This is not perfect but offers us the best chance of a decent future. NO GOVERNMENT HEALTH CARE.

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N Riley Says:
January 22nd, 2009 at 3:06 pm

#59 Bob

“The big three do many seemingly crazy things to avoid problems with the union.”
——————–

Yeah, like giving in to union demands. If you cave in enough of times you can do crazy things and start to think of them as “normal”.

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Tagamet Says:
January 22nd, 2009 at 3:08 pm

“The “Smartest Brains on Wall Street”?”

He definitely should be really easy to find AND have time on his hands. He’s on “house arrest” in his multimillion dollar penthouse – right there in NYC.
Sigh, I guess this is one of those (many) times where the only comfort to be had is that “it’s going to be the way it was meant to be”.
Be well,
Tag

Let’s just start by hoping that GM survives.
And in any case, NPNS

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N Riley Says:
January 22nd, 2009 at 3:14 pm

#61 fredevad

“Many people living in poverty don’t have a choice.”
———————–

Sorry, but I disagree with that statement. We all have choices. Some have better circumstances to base their decision on and have better success rates because of their circumstances, but that does not negate everyone having choices. A poor person, and I grew up as one, can decide to work hard in school and get a good education. He or she may not be able to afford college or get grants, but they could decide, as I did, to serve our country in the armed forces (Marines, in my case) and then go to school on the GI Bill. Your life is a matter of daily, if not momentary, choices. Some of us make good decisions when it is time to decide on a choice and some of us take the easy way out. Some of us never try to climb out of the hole we find ourselves in. We just stand in our own sh*t and blame everyone else but the one person who is responsible. YOU, yourself.

No, that six month old did not have a choice, but its parents did. They made the wrong decision. I would never blame the kid, but I do heap my blame on the poor judgment associated with its parents.

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MarkinWI Says:
January 22nd, 2009 at 3:16 pm

#69: I may not agree with you much, but you’re better than that.

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CaptJackSparrow Says:
January 22nd, 2009 at 3:21 pm

@MarkinWI

Thanks

This thread went south. I’m partially to blame sorry bout that guys/gals.
(

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CaptJackSparrow Says:
January 22nd, 2009 at 3:29 pm

Tesla news. I’d be pissed if I put $6000.00 down for a car then this happens….

Tesla calls Townhall meetings after email fails to calm angry buyers
http://www.autobloggreen.com/2009/01/22/tesla-calls-townhall-meetings-after-email-fails-to-calm-angry-bu/

From above link….
It seems that even a new explanatory email from CEO Elon Musk has had little calming effect on the firestorm ignited by the increasing of prices for locked-in Tesla buyers. To avoid further damage from what is fast turning into a PR nightmare, the company is turning to a previously-successful approach and has announced a set of town hall meetings.

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Detfan Says:
January 22nd, 2009 at 3:31 pm

Well, I happen to think that GM is doing all the right things, with product, and with their business plan. If anyone has bothered to read their report to Congress, GM is on track with the money they may need. We’ll see how bad sales are over the next few months, but it looks like GM will make it with only $18B, with payback starting in 2012 at the latest.

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N Riley Says:
January 22nd, 2009 at 3:47 pm

GXT and others of the same opinion:

If you are really set in your mind that we all should “chip in” and pay for each other’s health care cost, I would like to suggest you make an additional donation to the IRS when you file your taxes. If you normally would be getting a refund, heck, just tell them to keep it. If the amount of the refund looks smallish to you, add some more to it and write a check out to the IRS. If you owe takes, just add more until the total amount of the payment comes to the amount you think it should be. That way you can support your efforts. One thing that we seem to find is that people who are really interested in spending some else’s money is usually not very interested in spending his own. Some of the worst charitable contributions come from the very wealthy liberal members of this country. It seems the poorer you are, the more you give in percentages of your income. Poor people know about giving. Some others only know about taking. IMO.

Now, let’s get back on subject. GM is a cooked goose. Right or wrong? And why?

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ccombs Says:
January 22nd, 2009 at 3:50 pm

#65 and #68

While your ideology sounds compassionate at the surface, unfortunately all it will end up doing is screwing over the poor even more. The USSR constitution, for instance, said every man had a right to a good job, health care, a plot of land, and a myriad of other noble things. I can see the appeal, but look how that turned out. Absolute economic catastrophe. And it’s not like the rich didn’t stay rich and the poor still weren’t screwed even in that supposedly “equitable” country.

Because I truly care for the poor, I want innovation and cost controls that only a free market can achieve, that will benefit everyone. True, most 1st world countries have universal health care- but they can only do so because they rely on US healthcare companies operating in a -somewhat- free market to provide them the innovations they need for modern health care. If we just emulate them and “care for our own” and stop innovating, I shudder to think what will happen in 3rd world countries. And what makes you think that rich people still won’t find ways to circumvent the universal healthcare system and get better care for themselves (just like rich Europeans go to the US to get their fancy surgeries done). In a socialized healthcare system, the incentive is gone to develop new technologies that will eventually benefit everyone, since there is no way to profit from them. And with the US no longer innovating, I believe that leaves…Singapore as the last free healthcare market that can innovate? And do you really want a situation like Britain, where the government is seriously considering refusing care to people it deems too likely to die anyway since it costs everyone else in society too much? It is so odd that we are talking about universal healthcare while the papers I read in Britain are lambasting it as a failure. Why emulate Europe’s mistakes when they have conveniently already made them for us?

Your economic philosophy reminds me of those who oppose sweatshops in 3rd world countries, not realizing that if they close them down then they *really* are going to hurt the people there. I have lived in Tijuana, Mexico and been to Haiti, and have seen the terrible poverty and lack of adequate health care there. The only thing that lifts them out is when new jobs are created by factories opening/etc. *not* by socialist systems like welfare and free healthcare. Equal healthcare for all usually just means lowering our standards so everyone can have care. It will all just go to the lowest denominator and inevitably lead to some sort of black market.

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DonC Says:
January 22nd, 2009 at 3:56 pm

Tim Geithner’s confirmation testimony yesterday was interesting on two points:

1. He said the main issue was that the industry had to be viable, and to be viable the UAW and all the other stakeholders would have to “come to the party”.

2. He said that the Treasury would bring its recommendations back to Congress.

One suggests that all the union haters can sleep easier, secure in the knowledge that Joe Sixpack Detroit will probably make only 2X the average rather than 2.5X the average. Two suggests getting UAW and bondholder approval will not ultimately be relevant.

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N Riley Says:
January 22nd, 2009 at 4:00 pm

#78 Detfan

Well, I hope you are correct. I am one of those who believe we will see an upswing in car sales. The big question is “who will benefit the most – GM or Toyota”. Or Ford, as far as that is concerned. Can’t count Ford out, for sure. They are a good company and should increase their market share with these new hybrids they are introducing.

Some one else on this post mentioned the problems people have in paying for their homes as a reason car sales will stay in the dumpster for the next several years. I don’t agree. How many times have you seen very expensive cars and trucks sitting in front of houses that probably would not bring enough money to payoff the vehicle parked in front? I am from the South and I see that all the time. You might live in a dump and you might not have health care, but, by golly, you are going to have a real “tricked-out” this or that vehicle. Don’t worry about paying the house mortgage bill or the child support, damn, I gotta buy something for my pickup truck. You may think I am being funny or ridiculous, but I see it all the time. It is the same way with some hunters. I see kids going with out good shoes or clothes or lunch money, but dad has a new hunting rifle and new hunting duds this year. Never mind the dead beat bought a new gun and hunting clothes last year. On this matter I speak of close association with a guy like this and I know of many, many others.

I see some pent-up demand coming during the spring that will revitalize the auto market to some degree. How much is hard to say, but enough to give us some hope. Probably not enough to help GM get out of the ditch they have dug for themselves along with the UAW. Nothing short of throwing in the cards and starting from scratch is going to help there, I am afraid.

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old man Says:
January 22nd, 2009 at 4:02 pm

Regarding universal health care. Do you know of any country that has it that United States citizens go to in order to get better health care. I know we sometimes go else where to get medicines that are not approved here, but not for a serious operation. Good grief, not even a less serious operation.
I wish I had the answer to health care but I do not. BUT I am certain that regaining our manufacturing base will have to be part of the fix. Some of us have made the decision to furthur our education but for some this is not what they want and I for one think we need manufacturing jobs to allow those to earn enough to get said insurance.
We need to protect our workers with import restrictions that are the same as those we trade with. Each country trade polocy with us is what ours is with them.
If they [china ] hold the value of their money artifically low then we put a tax on their goods to bring the value of their money in line with world standards for said money.
Just saying we are going to start to do more manufacturing won’t work. We must level the playing field, which will include cost our builders face to satisfy osha and the epa.

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N Riley Says:
January 22nd, 2009 at 4:05 pm

#80 ccombs

Very well stated. Thank you.

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N Riley Says:
January 22nd, 2009 at 4:13 pm

#83 old man

You are right about what you say in relation to manufacturing. We should add import fees (taxes, but a nicer word) on goods from countries such as China with monetary polices that benefit them in trading with us. If it is not a level playing field, it is up to the government to make it as level as possible. Problem is that government (democrat and republican) have been in the pocket of businesses and foreign interest who want to export American jobs to foreign lands. If we don’t have a strong manufacturing base in this country, we don’t have a chance of succeeding in the future. Our country has been sold a bill of goods and we, as consumers, are convinced we should always buy at the lowest price no matter where the product is manufactured. I try to not buy a product if it is made in China, but do you know how hard that is to do today? Nearly impossible. We have allowed our country to be sold down the river for lower prices and lost American jobs.

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notstatik Says:
January 22nd, 2009 at 4:19 pm

…just testing to see if I can get posts to appear, been having some trouble, lol

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statik Says:
January 22nd, 2009 at 4:24 pm

Test 2 of 3

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Frank B Says:
January 22nd, 2009 at 4:46 pm

Lyle,

Here’s a question you could ask. The Fed gave GMAC, GM’s financing arm $6 Billion awhile ago. Where there strings attached to that money which limited the use of those funds only to GMAC’s home loans or can it also be used for auto loans. Obviously if they could use it for auto loans it would certainly help GM.

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RB Says:
January 22nd, 2009 at 4:50 pm

#44 r22wink says to me
RB Says:
January 22nd, 2009 at 7:41 am
Mr Young’s comment seems to say that nothing much has happened so far, other than waiting for the next government payment. In my little community, people are running out of patience
_________
Your totally right what is this moron thinking, not spilling his guts to a reporter about how they are turning around one of the biggest companies in the world in a three month time frame….Why dont you and your “community” worry about your every day problems and let GM worry about theirs.
=======================================

Thank you for commenting on my comment.

The reason we are worrying about GM’s problems is that the Treasury is sending our tax money to GM. It is fine with us if GM worries alone about GM’s problems so long as it is GM’s money, but when GM uses our money it becomes our issue.

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Len Says:
January 22nd, 2009 at 5:25 pm

Every other advanced industrialized country has universal health care. It costs less than what it costs here. France pays half, they live longer and have lower infant mortality. There is several somethings wrong with our health care. We really need nationalized health care. It doesn’t matter to me, I am old enough to be on Medicare anyway, I am just sick of the insurance companies and hospitals sticking it to the people.

GM will either become nationalized or go bankrupt. The bond holders and union will not blink and Obama won’t play along.

A bunch of banks will be nationalized the shareholders wiped out and the CEOs fired with no golden parachute. They too are gaming the government and Obama won’t play along.

At least I hope Obama won’t play along. I really am tired of the taxpayers getting the shaft here.

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Jeffhre Says:
January 22nd, 2009 at 5:41 pm

ccombs 80
“While your ideology sounds compassionate at the surface, unfortunately all it will end up doing is screwing over the poor even more.”
___________
Have you ever stopped to actually see what the working poor really do about health care.

The results lead to billions of dollars lost in missed work days, missed school, unnecessary illness, unnecessarily prolonged illnesses, and unnecessarily severe illnesses. This is a backwards way to raise the next generation of America’s workforce. One way or another the private sector or government will provide a form of health insurance. Either systematically by enrollments or haphazardly through the emergency room to the county morgues. The second way is likely economically considered a drag on productivity.

Last I checked medical payments are made in dollars. Whether from insurance, private parties or the government, they are paid with actual dollars and dollars always act as an incentive for people with better ideas.

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statik Says:
January 22nd, 2009 at 7:03 pm

#88 Frankie B

Lyle,

Here’s a question you could ask. The Fed gave GMAC, GM’s financing arm $6 Billion awhile ago. Where there strings attached to that money which limited the use of those funds only to GMAC’s home loans or can it also be used for auto loans. Obviously if they could use it for auto loans it would certainly help GM.
=======================

Woohoo! Finance questions, I’ll take this one, lol.

There were no strings attached in so far as their lending operatings. As soon as they got the money 5+1 to convert to a bank holding they immediately got access to around 17.5 BILLION of gov’t backed debt to ’shore up its capital positions’ – thats FDIC insured bonds, backed up through the gov’t TLGP program.

(I’m sure your still with me at this point, so I’ll go on…I imagine you sitting on the edge of your chair, shaking with anticipation).

Mere moments after this delayed ‘Christmas Miracle’ for GMAC, they began recreating the mistakes of 2007/2008 that got them into trouble, by giving out credit to the creditless for a ‘Brand New Car’ ….thats a 620+ FICO score, or over 80% of the population, just slight down from the 770+ Wagoner said they cutoff was at the bailout hearings (about 10% of the population)

So, I would say yes, Frankie, that is certainly going to help sales for January 200 (and throughout the foreseeable future), GMAC financed almost 50% of car sales for GM in 2007…in November of 2008, they were down to 4%.

/I’m sure their ’surprising’ rebound to only being down 20 odd percent this year will be attributed to some kind of scrumtrulecent ‘turnaround plan’ though
———
Side note to RB #89: Your are darn popular around here the last few days! Welcome to the club, hehe. Just take it as a sign of approval, and keep posting like crazy…thats what I do, lol.

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Paul-R Says:
January 22nd, 2009 at 7:03 pm

Here are some radical ideas to fix this mess…

1) Repeal Sarbanes-Oxley, since it stifles innovation more than it regulates behavior. People who break the law can go to jail.

2) Eliminate the capital gains tax so that people with money will be eager to invest in brilliant technology. That should help solve the credit problem.

3) Flatten the income tax. Same percentage for everyone, period. Let’s say 25%, so that everyone starts to care how their tax money is spent. That should help cut down on government pork.

4) Add a $1/gallon gasoline (not diesel) fuel tax with the revenue to be used for one purpose: a $5K income-tax credit toward the purchase of any American-made automobile. Adjust these rates each year as needed, so that Detroit neither dominates or dies.

My plan may not be perfect, but it seems better than the socialism-now debt-later plan being pitched by Pelosi and the democrats.

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charlie h Says:
January 22nd, 2009 at 8:32 pm

#92, statik, “Mere moments after this delayed ‘Christmas Miracle’ for GMAC, they began recreating the mistakes of 2007/2008 that got them into trouble, by giving out credit to the creditless for a ‘Brand New Car’ ….thats a 620+ FICO score, or over 80% of the population, just slight down from the 770+ Wagoner said they cutoff was at the bailout hearings (about 10% of the population)”

I MAY disagree with you on this. If GMAC is requiring a substantial down payment and financing to only, say, 80% of real vehicle value (that would be the price after incentives) and considering only wholesale book on any trade in lieu of cash down payment, then approving a FICO 620 for buyers with good income under those conditions is probably reasonable.

Much of GM/GMAC’s problems came not just approving way low credit scores but from approving loans way beyond real vehicle value, especially playing games with residuals on leases. The declining value of the assets put everybody in the wringer.

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MarkyMark Says:
January 22nd, 2009 at 9:07 pm

Tax credits for buying American is cool,as long as GM starts building “in” America instead of around it (if you get my gist)

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Paul-R Says:
January 23rd, 2009 at 12:46 am

MarkyMark,

I get your point, although Canada and Mexico are technically part of “America”. I probably should have said “US-based auto companies” instead of “American made”. Either way, we’re pretty much talking about the big three.

Now it’s my understanding (since I’ve read it many times) that the sale of a GM vehicle assembled in Canada or Mexico still benefits the USA much more than a Toyota vehicle assembled in the USA. If that is wrong, I would love to see some evidence to the contrary.

And even as a US citizen, it’s hard for me to blame GM for having plants in Canada and Mexico. The US government has created a business environment in the US (high taxes, destructive unions, legal hassles, etc) that is not competitive. I blame the US government more than I blame GM.

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GM Volt Fan Says:
January 23rd, 2009 at 5:07 pm

You know what KIND of jobs are MOST in need of being created in the new stimulus bill? More WHITE COLLAR COPS! Put 50,000 new WHITE collar cops on the beat like we did for street crime in the 90s. Whatever it takes. America has a serious WHITE collar crime problem.

Wall Street has PROVEN that they cannot operate in the shadows with little or no regulations. Their greed and incompetence can cause FAR more damage to society than some punk who sticks up a convenience store. Obviously, the WORST “bad guys” are on WALL STREET these days. They deserve to be called “banksters”. They’ve earned it.

The new Obama administration and Congress need to have some MAJOR overhauls of the regulations on Wall Street. Major new laws “with teeth” like they say. If Wall Street schemers break laws or regulations they get HUGE fines. CEOs and their cronies GO TO JAIL for a LONG period of time …. 20+ years. Wall Street “banksters” need to live with a lot more FEAR when they think about bending regulations, cooking the books, and doing other fraudulent things. They need to be thinking about JAIL TIME, being put in the poor house, etc.

The guy who wrote this column is a Nobel Prize winner in Economics:

http://www.nytimes.com/2009/01/23/opinion/23krugman.html?ref=opinion

“This is, first and foremost, a crisis brought on by A RUNAWAY FINANCIAL INDUSTRY. And if we failed to rein in that industry, it wasn’t because Americans “collectively” refused to make hard choices; the American public had no idea what was going on, and the people who did know what was going on mostly thought deregulation was a great idea.”

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LeKaido Says:
January 24th, 2009 at 8:33 am

Are those the same Wall Street smartie pants who got us into the credit crunch in the first plase because they couldn’t see the forest for the trees? They better not be…

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Paul-R Says:
January 24th, 2009 at 11:47 am

I feel the root cause of this mess was government over-coercion rather than under-regulation.

Dating back to President Carter, the government has been coercing banks into making millions of toxic loans (they call them “subprime”), then backing these loans, making them appear to be reliable assets. So Wall Street and Main Street (predictably) treated them as reliable trustable assets. Worked fine until housing prices started to decline, then the whole house-of-cards came tumbling down.

http://en.wikipedia.org/wiki/Government_policies_and_the_subprime_mortgage_crisis

Blaming Wall Street for a collapse like this is kind of like blaming trees for a forest fire.

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