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Report: White House to Send GM into Bankruptcy Next Week

May 22nd, 2009 | Posted in: Financial

The Washington Post is reporting that “sources familiar with the discussion” say the Obama administration is planning to send GM into bankruptcy as early as the end of next week. The government also expects to lift Chrysler out of bankruptcy at the same time.

The plan for GM bankruptcy would also give the automaker just short of $30 billion in additional aid.

That $30 billion figure is a starting point for the government negotiations, and if realized, would bring the total government aid GM would receive to $45 billion dollars.

At the onset of bankruptcy proceedings, it is expected a new GM would be formed immediately and given the best performing assets and the billions in aid. The government would get a 50% stake, the UAW 39%, bondholders 10%, and shareholders 1% of that new company. The UAW has just reached an agreement to accept VEBA concessions, and it is expected the new GM will still be headed by Fritz Henderson. The new company would then be spun off in 30 to 60 days, and GM’s bad assets would remain in the courts for a prolonged liquidation process.

Presently, the only obstacle for out-of-court GM restructuring is the unwillingness of bondholders to accept forgiving $27 billion in loans for the aforementioned exchange in equity. If bondholders do not acquiesce by June 1st, the GM bankruptcy is expected to proceed, although it could be in the first week in June.

Talk of bankruptcy may be rather unsettling to some here who are eager to buy a Volt, however it is widely agreed that this type of restructuring may be the only hope for GM to survive and prosper. Along with it, of course, the Chevy Volt and its progeny. Obama has federally guaranteed the warranty of all GM products should bankruptcy occur, and company operations would proceed without interruption, including Volt development.

Source (Washington Post)

UPDATE 4:43 PM EST: The New York Times is reporting that the bondholders have reaffirmed their decision not to accept the debt for equity swap. GM has said it must receive the approval of 90% of the debtholders for the swap by next Tuesday in order to avoid bankruptcy.

Posted by: Lyle

169 Responses to “Report: White House to Send GM into Bankruptcy Next Week”

Keith Says:
May 22nd, 2009 at 6:07 am

Bring it on , we need to know what is happening and the sooner the better for everybody .

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jdsv Says:
May 22nd, 2009 at 6:20 am

This is _great_ news, because Keith is exactly right: the sooner the better! GM cannot afford to hold off this inevitable thing, then be left piddling around in bankruptcy when the economy picks back up again.

Let’s hope this is quick and surgical (well.. not TOO surgical, especially with that excessive pricetag!).

P.S. – If there’s a firesale, dibs on Wagoner’s old chair!

NPNS!! =D~~

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FME III Says:
May 22nd, 2009 at 6:21 am

This whole episode reminds me of that ancient Chinese curse: “May you live in interesting times.”

I’ve been reading reports for some time that many economists agree that a structured bankruptcy is GM’s best bet to survive, yet it all seems very unsettling, especially with Uncle Sam owning 50 percent of the company.

It makes me wonder if they will every be a truly private company again.

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koz Says:
May 22nd, 2009 at 6:34 am

What about existing GM card earnings in CH11? I assume they are wiped out

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statik Says:
May 22nd, 2009 at 6:35 am

The Washington Post is reporting that “sources familiar with the discussion” say the Obama administration is planning to send GM into bankruptcy as early as the end of next week.

————————–

I read this as, “sources” familiar with how to read a calendar, noted that the end of the month is a sunday, so therefore next friday isboth the last business day of the week and the month….and planned news like this almost always drops on a friday after the market closes.

/but you know me…maybe I’m just glossing over some deep salient point that makes the reason why friday at 4PM is not glaringly obvious

Sidenote: Do we count total aid to GM at 45 billion now, or do we add in the 14 billion given to GMAC already…and the 17 billion in guaranteed gov’t loans to underqualified customers of GM?

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Gsned57 Says:
May 22nd, 2009 at 6:37 am

I like that the volt is going to keep going, but I want to know the exit plan for my tax dollars. I DON’T want the US to have a %50 stake in the company. If my govt is going to give them the money anyway I guess I’d like to get something for it (%50 stake) but I want an exit plan. When GM starts making a profit again I want to start selling that stake as common shares. Lets say %10 out every year for the next 5 years. This may flood the market with new GM shares but on principal I don’t want our country turning fascist (Fascist in the sense of Govt owning business).

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statik Says:
May 22nd, 2009 at 6:42 am

BTW Lyle,

Your link only goes to the homepage, then limits access to the article (dunno maybe you did that on purpose…legal stuff, I think the content is free until it goes into the WP archives).

Here is the direct link to the article:

http://www.washingtonpost.com/wp-dyn/content/article/2009/05/21/AR2009052104467.html

If this is a ‘faux pas’ please feel free to wipe this post.

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Neil Says:
May 22nd, 2009 at 6:51 am

>I don’t want our country turning fascist

Or socialist. But the ship may have sailed a bit already on that. I know one thing, this whole mess makes me think much more highly of Ford.

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statik Says:
May 22nd, 2009 at 7:02 am

#Gsned57 said:

I like that the volt is going to keep going, but I want to know the exit plan for my tax dollars. I DON’T want the US to have a %50 stake in the company. If my govt is going to give them the money anyway I guess I’d like to get something for it (%50 stake) but I want an exit plan. When GM starts making a profit again I want to start selling that stake as common shares. Lets say %10 out every year for the next 5 years. This may flood the market with new GM shares but on principal I don’t want our country turning fascist (Fascist in the sense of Govt owning business).

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

There is a ‘exit plan’ for the first 15 billion already given. Remember it wasn’t a “bailout,” it was a “bridge loan” right? We had all those posts about not calling it a bailout and GM will pay it back….well, it is ‘forgiven’

I guess if you had a really ‘wide’ perspective you could consider the XX billions in money not as loans anymore, but converted to ownership. However, that would be a stretch…or fair compensation for money paid…as Fiat got a big hunk of Chrysler for just allowing them to rebadge a couple of their small cars…and the ’street’ value of GM (’new’ or ‘old’) is fractional to the amount that has been given to them.

…your better off looking at this as money spent and gone for the (possible) ‘benefit of the country’ (even if you believe it or not…it is not like it is up to you anyway, lol)

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Brian Says:
May 22nd, 2009 at 7:07 am

If they were going to go into forclosure why the billions of bailout dollars. I have a really hard time believing this wasn’t in the cards all along. What has that money been used for and where has it gone? Pooff!! Now you see it now you don’t!!

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Dave B Says:
May 22nd, 2009 at 7:09 am

Neil @ 8,

That was my thought EXACTLY.

“Reinventing the ownership experience”? Why not “Reinventing the Constitution.”

There is no justification, no legal justification for the Feds to make a “loan” which is in fact a purchase (of all of GM’s viable assets) and then screw shareholders to the wall. I’m thinking this is a crock, oil independence or not, this is socialism at its core. Knock us for being crazy, this is not right and I’ll take my money elsewhere assuming I have a CHOICE.

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GM Outsider Says:
May 22nd, 2009 at 7:10 am

Good news for long term viability of auto industry in this country, possible bad thing is UAW will control it!

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Tim Says:
May 22nd, 2009 at 7:12 am

So much for the Constitutional right of contract….

(rights/responsibility balance dies without a whimper)

Another brick built in the USSA’s wall.

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User Name Says:
May 22nd, 2009 at 7:16 am

Hoping & praying the Volt will survive GM’s bankruptcy.

In the current economic climate, the Government overlords that are overseeing GM’s bankruptcy could very well restructure GM such that only those brands that will absolutely sell will be produced.

Although, this would not be in keeping with the Obama Administration’s push to improve mileage & effiency in transportation of which the Volt would be an integral part.

Wait and see.

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BillR Says:
May 22nd, 2009 at 7:18 am

Personally, I don’t think it will happen. I know, I know, but I don’t believe everything I read.

First, the bondholders hold $27 billion in GM debt. If the government puts in $45 billion, why do they get 50% while the bondholders only get 10%? Seem somewhat unfair?

I believe the stage is set for a negotiated settlement without bankruptcy. The UAW has already agreed to a new contract with GM. GM has laid off employees, idled factories, and cut expenses. They can now survive with fewer sales. Saab, Saturn, and Opel are for sale, and Canada and perhaps Germany are offering loan packages as well.

In addition, as a settlement, it looks like the new climate bill will now include up to $50 billion in governement loans to auto makers for new fuel efficient car production instead of the original $25 billion proposed.

http://www.bloomberg.com/apps/news?pid=conewsstory&refer=conews&tkr=GM%3AUS&sid=atMB.vwThfvM

All these factors, along with a recovering economy, I believe may give GM the balance sheet they need to continue without going through bankruptcy.

The only stumbling block is getting the bondholders to agree to a settlement. I read the other day that their counter proposal was that they should receive about 55% of the stock.

But given the option outlined above, they may have to accept something less.

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Gsned57 Says:
May 22nd, 2009 at 7:23 am

#9 Statik,

There is a ‘exit plan’ for the first 15 billion already given. Remember it wasn’t a “bailout,” it was a “bridge loan” right? We had all those posts about not calling it a bailout and GM will pay it back….well, it is ‘forgiven’

I guess if you had a really ‘wide’ perspective you could consider the XX billions in money not as loans anymore, but converted to ownership. However, that would be a stretch…or fair compensation for money paid…as Fiat got a big hunk of Chrysler for just allowing them to rebadge a couple of their small cars…and the ’street’ value of GM (’new’ or ‘old’) is fractional to the amount that has been given to them.

…your better off looking at this as money spent and gone for the (possible) ‘benefit of the country’ (even if you believe it or not…it is not like it is up to you anyway, lol)

—————————————————————————-

I have already written off the “LOANS” as my taxes pissed away. I can deal with the country burning cash for votes ( been done long before Obama came in office). But My main concern is the government having a vested interest in Company X over Company Y. As soon as you do that you no longer have a market driven economy and are much more susceptible to corruption and conflicts of interest.

I feel the same with the Tarp bank money too. I can understand that gov’t felt they needed to intervene to save the world. But now we have banks wanting to pay the money back and I say let them do it ASAP. And for the banks that we have preferred stock in we should be selling it over the next few years until we no longer have a financial stake in any company.

Back to the $15 Billion we’ve loaned out, I gotta say that I am impressed with how quickly Obama is bringing Chrysler and GM into bankruptcy. I think it would have been easier for him to have continued dolling out Cash for at least another year before the public got even more PO’d. I’m not saying he worked quick or shouldn’t have just let them go into bankruptcy from day 1 but for gov’t I think things moved quicker than I would have expected.

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Bill C Says:
May 22nd, 2009 at 7:25 am

If I really read this, it’s up to the bond holders. If you are willing to bank on the future and exchange for equity there won’t be a bankruptcy. If there is, you get 10%. I don’t know, 10% doesn’t seem like a very good deal. Uncle Sam gets 50%. That worked so well for British Leyland. Not!

So the US Government can fire your CEO (doesn’t matter if you liked or hated him), force you into bankruptcy, and then take control of the company (of course while handing a big hunk to those that voted for the current government). Hey nice thought for those celebrating the true meaning of Memorial Day.

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k-dawg Says:
May 22nd, 2009 at 7:31 am

15 BillR

I liked the bondholders counter proposal better than GM/Gov’s proposal. I wish they’d just go that route, or maybe some middle ground in between. Maybe i’m a minority… but i dont like the CH11 route. (I dont really like banruptcy in general, I think its sort of a scam)

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Ted in Fort Myers Says:
May 22nd, 2009 at 7:44 am

I can’t think of a better investment to make than the revitalization of the American auto industry.
Take Care,
TED

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Todd Says:
May 22nd, 2009 at 7:55 am

Does anyone find it unsettling that the government will own 50 to 55% of GM and there’s little talk of them getting out as quickly as they can from ownership? Socialist back door BS. I think I’ll just stop paying my house payment now and forget about my excellent credit score by no longer paying the monthly payments there too. Then I’ll qualify for a lower interest rate on my house and I’ll let those people who actually honor their commitment to paying their bills on time help pay my credit card debt when the credit card makers raise their rates to cover their loss over the dead beats like me. My liberal co-workers says this is spreading the wealth. That could be because he just had his house payment re-financed from an ARM loan into a 4.5% loan because he was stupid when he purchased his house. He went crying to the loan company and of course mentiond BK. Now he has a better deal than I have, and I pay my bills! Of course getting into a bad loan situation was not his fault according to him. All of this is becoming a major socialist slide. Those who think Ford is in great shape better think again. Ford is surviving off of credit they have, not profit. They are digging themselves into a hole too! If the economy doesn’t turn around, and it certainly doesn’t look like that’s going to happen anytime soon, Ford will be in bad shape very soon and asking for a hand out. Then we’ll have an Italian American car company and two socialist government owned car companies.

I would love to have a Volt. I think the concept is great. I’ve even warmed to the altered design, but enough is enough with this bail everyone and their neighbor out and rewarding the majority of debtors (businesses and individuals) that buried themselves out of their own stupidity and or greed.

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Dan Petit Says:
May 22nd, 2009 at 7:56 am

Don’t be unsettled for things that are unsettled. Things that are unsettled contractually are precisely the things that keep expansion of the Voltec programs from proceeding. The practical mechanisms that will separate the highly productive aspects from the unproductive
“quagmire” aspects of the business are to be settled quickly and decisively.
As far as the *temporary stewardship* of any ownership of a private company (for the effective transition of those productive and good aspects) to remain in the capable hands of those who would keep those jobs, etc, in place), this temporary stewardship is what a bankruptcy is. It is only VERY temporary.
Don’t buy-in to some of these “talk-radio blimp-jaws” who call this highly-efficient process of bankruptcy-code and laws, “socialism”.
It just aint so.
Also, there is a widespread notion that America has to have
“strong everything”, while these same talk-show types do not know that having a weaker dollar is precisely what keeps more of our jobs *here*. Since talk shows have all that air time to fill, it is not surprising that a great portion of it contains “circular logic” in order to have listeners become fearful and under their verbal control.
Fear is your enemy where it is sourced from the unfounded talk.
Fear is a powerful controller where the listener fails to calmly go get additional information which negates the fear-mongers.

Well-founded facts ALWAYS remain to dispel fear-mongers. But it is the open-mindedness of listeners which lets them tune-out and turn off talk show power-grabbers. (Sometimes I happen onto an auto repair shop that has one of these people talking at the very highest of adjustable volume. One in particular sounds like he is on an excessive dose of ritalin or something unlawfully-equivalent (I know the comparable logical deficiencies apparent in auto diagnostics when I see it), due to a continuous vent of circular logic and non-stop fallacy of very shallowly-expeditious false associations. These always-shallow fallacies, always yelled loud enough, and always yelled long enough, can and do insidiously penetrate the overly-trusting and kind-persons mind who has it on long enough).
“Socialism” is their apparent favorite.
What matters most is that the best efforts be brought about where the entrenched-past is eliminated by law, as REQUIRED by law, so that there may be increasing chances that we can
continue to exist for the efficient adaptations that will be required of us by the environment in the relatively-near future. The facts always remain.
Voltec production *en mass* is one of those adaptation vehicles.
And, it is very clear that many MANY more Voltec production plants must be funded, constructed, and,
* staffed *.
Dan Petit Austin TX

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Tom Says:
May 22nd, 2009 at 8:06 am

Statik

This is just the tip of the iceberg:
They, meaning the Obama administration is now planning on taking our IRA’s and 401 K’s, other retirement funds and converting them into a National Retirement Fund.
Controled by , you guessed it, Big Government.
How does that set with everyone???

Have a Blessed Day,
Tom

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ronr64 Says:
May 22nd, 2009 at 8:13 am

Todd you are correct about Ford. The dripping irony here is that 3 years ago Ford was in the worst shape of all the automakers. They were losing money and had little new product in the pipeline. So they accessed the credit markets and put up even the “blue oval” trademark for collateral. What a stroke of genius – actually blind dumb luck that turned out to be! Next came high gas prices knocking the wind right out of the sails – and sales for GM and Chrysler with their new products and then came the credit crunch followed by recession. So the irony is that Ford is in the position of not needing govt loans because they were in such bad shape before the oil/credit/economic crisis. And now they are riding a wave of goodwill because they are not taking govt assistance. Which all proves the old adage – better to be lucky then good sometimes!

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ThombDBhomb Says:
May 22nd, 2009 at 8:19 am

#16 Gsned57

As you said, many banks want to pay the TARP money back. So, back when TARP money was going out to those banks, those that took the positions that; 1) the TARP money was gone, 2) the idea was stupid, and 3) we are socialists; should “person-up” and admit some error in judgement. They probably won’t. I’m reading the same anti-socialists opinions again. Perhaps GM will repay loans when they become strong again. Perhaps GM will once again contribute to the benefit of our economy. Perhaps history will, once-again, expose those knee-jerk anti-socialists.

As far as bankruptcy, there will be settlements. Some will be hurt by the settlements. I hope the hurt doesn’t go too deep.

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old man Says:
May 22nd, 2009 at 8:19 am

I DO NOT LIKE SOCIALISM!! But I think fault lies with the government for our manufacturers being unable to compete. They sign trade agreements with countrys that hurt our companys. Such as no restrictions on what comes in to our country while that trading partner limits our products. If we do not get fair trade rather than free trade we will only be able to manufacture as a socialist country.

Just think of all the products that were invented here and manufactured here, then go to whichever store you like to shop at and try to find them under the made in the USA label.

We have the NEEDED protection of the EPA and OSHA which add mega cost to our manufacturers and then the government signs a trade agreement with countrys such as China, India, Mexico which have , if any, only token over sight and cost.

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MarkinWI Says:
May 22nd, 2009 at 8:44 am

Tim @ #13 – Funny, when conservatives talk about the “constitutional right of contract,” it always seems to exclude union contracts. What’s good for the goose is good for the gander, right?

Anyway, below is a link discussing some possible variations here. There is a suggestion that Bankruptcy could happen even before June 1st. There is much carping about how unfair this is to bondholders who have been intransigent. As you all know (and as most of you loathe) my take is that if the bondholders are not willing to compromise, then I hope they get screwed. It looks like my wish may be coming true.

I know LauraM, you’re concerned about the small bond-holders, and I agree, you have a point. They have a legitimate gripe. However, they represent only about 20% of bondholders at this point. The other 80% are bailed-out banks and speculators, many of whom bought these bonds for as little as 10 cents on the dollar, and now don’t want to take 30 cents on the dollar. We’re all in this together, whether you want to call it capitalism, or socialism or whatever. There needs to be some equity in the resolution of this mess.

http://www.marketwatch.com/story/us-government-front-runs-a-gm-gm-bankruptcy

P.S. Tom @# 22 – You got a source for that, or is this right up there with the, “Obama is a muslim” and “he was born in Kenya” internet garbage?

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ThombDBhomb Says:
May 22nd, 2009 at 8:50 am

…or, maybe not:

Fri May 22, 3:23 am ET
WASHINGTON (Reuters) – The Obama administration has no plans to push General Motors Corp into bankruptcy next week and the outcome of the automaker’s restructuring efforts may not be known until a June 1 deadline, a source familiar with the situation said early on Friday.

Earlier, the Washington Post, citing sources familiar with the discussions, reported that the Treasury Department would steer GM into bankruptcy next week under a plan that would provide the company just short of $30 billion in new federal loans,

A U.S. Treasury spokeswoman declined to comment.

The Treasury is continuing to work with GM on its restructuring, and while the situation could change, there were no plans for a GM bankruptcy filing next week, the source, who was not authorized to speak publicly about the matter, told Reuters.

The government task force overseeing GM and Chrysler restructuring has given GM until June 1 to restructure its operations and prove it can be viable without government aid or face probable bankruptcy.

On Thursday an Obama administration official said the task force was continuing to work with GM and all of the stakeholders involved.

“I think that in terms of the outlook, I’m not going to speculate on the bankruptcy question, but I will say that the administration is committed … to standing behind GM and is confident that the company will be able to restructure over a short period of time,” the official said.

“GM faces a number of hurdles and it may well be that a court process is necessary to effectuate the restructuring, but the administration is committed to standing by the restructuring process whether or not that occurs,” the official said.

GM officials could not be immediately reached for comment. While the company has indicated a bankruptcy is probable, there has been no indication from the automaker, its advisors or the government that a filing would occur as early as next week.

GM must still address a number of concerns before any filing, including payments to suppliers, receiving ratification of proposed labor concessions and sorting out a complex proposal with its bondholders to further reduce debt.

If General Motors files for bankruptcy, as widely expected, its healthy assets will be quickly sold to a new company owned by the U.S. government, a source familiar with the situation told Reuters on Tuesday.

The source, who was not cleared to speak with the media and asked not to be identified, said the U.S. government would pay for the assets by assuming the automaker’s $6 billion of secured debt and forgiving the bulk of the $15.4 billion of emergency loans that the U.S. Treasury has provided to GM.

The company on Thursday reached a sweeping deal on concessions with the United Auto Workers and has given its bondholders until next Tuesday to agree to a plan that would reduce the company’s debt.

(Reporting by David Lawder and John Crawley; Writing by JoAnne Allen; Editing by Peter Cooney and Jackie Frank)

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nuclearboy Says:
May 22nd, 2009 at 8:52 am

Old man says. “I think the fault lies wtih the government”

You are right.

A business here has to follow 1000’s of pages or rules and is subject to inspection and fines.

So to make sure product X is produced to all the US standards, we set up all these rules. These rules result in less saftey and a bigger enviromental impact since the rules make is easier to produce product X at far-far lower standards of saftey and far higher environmental impact in some overseas area.

Myself and others have argued before on this site that the world as a whole in engaged in economic warfare. Call it a game or competition or whatever you like. The US is losing. A primary reason is that our Govt is asleep at the wheel.

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ThombDBhomb Says:
May 22nd, 2009 at 8:58 am

“It’s the governements fault” is a K.I.S.S. approach, with heavy emphasis on the last “S.”

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nuclearboy Says:
May 22nd, 2009 at 9:00 am

To #26. On the 401K issue. Congress is hearing about this in hearings.

“Teresa Ghilarducci, professor of economic policy analysis at the New School for Social Research in New York, testified before Congress last month, proposing that 401(k)s and IRAs be confiscated and converted into universal Guaranteed Retirement Accounts (GRAs) managed by the Social Security Administration.”

There is much written on this subject. I doubt they will be able to take over our existing accounts. They might start some mandatory savings program going forward (very much like G. Bush’s private SS accounts concept except the Dems are calling for it to be mandatory).

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nuclearboy Says:
May 22nd, 2009 at 9:07 am

29. ThombDBhomb.

I have been in the Govt for about 25 years. I have worked at 3 separate agencies in the DC area.

I can honestly tell you that those who look to the Govt for solutions are fooling themselves. The depths of waste, fraud, and abuse in the government are hard to describe.

To add injury to this insult, the Govt is extremely hard on internal whistleblowers. If you want to screw up your Govt career, then just complain and try to stop the fraud going on in the Govt around you.

Side note: Whether you like Sarah Palin or not etc. etc. The story of her confrontation of Govt officials in Alaska is very impressive. These stories could be told all over the country but most are too weak to move forward.

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GLV Says:
May 22nd, 2009 at 9:08 am

The founding fathers of our great nation must be rolling over in their graves right now…

I love the Volt and feel it is just the kind of new technology this country needs to turn the tide of dependence on foreign energy around and provide our nation with the ability to independently pursue our collective futures.

However, the more I see Big Government tipping the playing field by helping some companies out while letting others die, the more I realize that, left unchanged, this tactic will only further the decline of our country.

The Constitution of the United States put forward a wonderful proposition…that all people are given inalienable rights from God…and we pass some of those rights on to local, state, and federal governments for the benefit of all The People.

What we have now is a federal government that feels it has its own rights and that The People only have the right to pay more taxes and do as the government tells us…for our own good of course…

Thomas Jefferson wrote the Constitution with a lot of help from Benjamin Franklin, and Jefferson had this to say about governments…

“When The People fear their government, there is tyranny. When the Government fears The People, there is liberty.”

My fear of the government has been growing steadily over the past few months… This GSB news does little to calm me.

That being said, I pray the Volt and technologies like it succeed and allow our nation to prosper for the benefit of all.

God bless us all.

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k-dawg Says:
May 22nd, 2009 at 9:13 am

Some countries still appreciate American quality. I should take a suitcase full of American jeans to Russia with me next month. They’ll sell like hot-cakes and I could make enough rubles to pay for my trip.

The big problem I see though, is that some of our best & most valuable products are intellectual property. And that’s the easiest property to steal (I’m looking at you China).

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nuclearboy Says:
May 22nd, 2009 at 9:16 am

GLV.

The govt has been growing at an accellerated pace for years. After 9/11, the govt growth has been unbelievable. G. Bush and the associated congresses really expanded the size and scope of Govt. Obama has simply taken the batton and is running it further (maybe in a different direction).

Govt programs are easy to start and very very hard to stop.

They typically start with some initial amount and then as they get started they request to grow and grow to fully meat their mission.

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ThombDBhomb Says:
May 22nd, 2009 at 9:18 am

#31 nuclearboy

Government can be inefficient, but I’d hate to be without one. Waste, fraud, and abuse occurs in private business also. The only point I tried to make earlier is that blaming only the governent seems too simplistic.

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CDAVIS Says:
May 22nd, 2009 at 9:22 am

______________________________________________________
Lyle Said:
“…The government would get a 50% stake, the UAW 39%, bondholders 10%, and shareholders 1% of that new company…”
—-

This will result in far reaching consequences that will go way beyond GM.

The Government has declared that the Government is willing and able to step into private industry and through heavy handed maneuvering arbitrarily void out established security positions.

Capital markets will no longer be able to rely that their placed investments are subject to an orderly established security position protected by statue (rule of law).

I understand the argument of the Government stepping in to support GM to preserve the in-country GM manufacturing base (as a national security issue) and also preserve the significant GM in-country employment base (as an economic issue) but where the Government went way off-rail is in taking advantage of their extending help to GM as an opportunity to give the UAW’s less senior secured position priority over other more senior secured positions. That type of Government voiding out secured equity positions is better left to Presidente Chavez.

http://dyn.politico.com/members/forums/thread.cfm?catid=1&subcatid=4&threadid=2428973

I remain a huge fan of the GM Voltec Program but am very conflicted with Lyle’s above quote.
______________________________________________________

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SteveK Says:
May 22nd, 2009 at 9:31 am

When someone supports ‘laissez-faire’ capitalism they offer the contrast of ‘Presidente Chavez’. How about President Sarkozy? France seems to be doing quite well these days, even though it is an evil socialist state.

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GLV Says:
May 22nd, 2009 at 9:36 am

nuclearboy @34:

I agree…this isn’t a Republican or Democrat issue…this is a Government Issue.

In the Gettysburg Address, president Abraham Lincoln in speaking about the terrible price that was paid there said this, “…It is rather for us to be here dedicated to the great task remaining before us — that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion — that we here highly resolve that these dead shall not have died in vain — that this nation, under God, shall have a new birth of freedom — and that government of the people, by the people, for the people, shall not perish from the earth.”

It is my firm belief that we have moved away from a “government of the people, by the people, [and] for the people…” And now have a government of the government, by the government, for the government, paid for by the people.

Your experience in government positions and my own in the military tell me this is so. I fear for our nation if this does not change.

But hey, this is a Volt site and I’m all for the Volt… =)

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k-dawg Says:
May 22nd, 2009 at 9:37 am

GM stock: UP 32% yesterday, UP another 10% this morning, now DOWN 10%… just a little volitile

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old man Says:
May 22nd, 2009 at 9:37 am

#35 ThombDBhomb

The difference is that if I run my business with grave waste, fraud, and abuse occurring, you as one of my competitors can take advantage of it and put me out of business if my business practice does not change. The government can change the rules and give advantage to a foreign competitor and there is nothing you or I can do to regain our market position except to also put our manufacturing off shore. The government looks good for doing it as products are now cheaper while you and I as business owners are called greedy and uncaring for yeilding to the cost pressures to go off shore.

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k-dawg Says:
May 22nd, 2009 at 9:43 am

Why a GM Bankruptcy Would Be a Disaster

http://www.businessweek.com/lifestyle/content/may2009/bw20090521_006557.htm?site=cbs&campaign_id=djm

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ThombDBhomb Says:
May 22nd, 2009 at 9:47 am

#36 CDAVIS

If the US governement didn’t take an action on GM and Chrysler, it would have resulted in far reaching consequences that will go way beyond GM or Chrysler. …Damned if you do/don’t.

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nuclearboy Says:
May 22nd, 2009 at 9:48 am

#35 ThombDBhomb.

I agree with you. We need a govt. I would hate to live without one too.

I am just pointing out that Govt. Wastes money and is inefficient. Having Govt do somthing for you means that it will cost you far too much. They unfortunately are also corrupted by many influences. They pick winners and losers. When they fail, they just collect more money and keep going.

Lets face it, as Govt customers, we are forced at gunpoint to pay whatever they demand. If you doubt this, stop paying taxes. After a bunch of letters, etc.. someone with a gun on his hip will show up to take you away.

As for businesses, when they screw up, we can go somewhere else or start our own business.

The Govt is good for protecting us from businesses when they are corrupt. This is a valuable role of Govt.

The problem is who will protect us from the Govt. when they are corrupt.

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k-dawg Says:
May 22nd, 2009 at 9:52 am

43 nuclearboy

“The problem is who will protect us from the Govt. when they are corrupt.”
———-
Chuck Norris!

j/k.. i dunno, the voters?

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ThombDBhomb Says:
May 22nd, 2009 at 9:55 am

#40 old man

But the US consumers want the cheaper products. Why not blame them for supporting off-shore products? Why does the blame go only to the government?

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nuclearboy Says:
May 22nd, 2009 at 10:03 am

#35 ThombDBhomb.

Blaming the Govt is not too simplistic.

The Govt sets up a regulatory framework within the US and trading regulations for outside the US and it is this Govt. established playing feild that our businesses compete in.

Within this enviroment, the Govt has stood by and let our industries basically dissapear and let our national debt increase to unbelievable levels.

The Govt is the only entity that can control and steer this big picture process in the right direction. They have let the country slide in the wrong direction for many decades.

For this reason, they are to blame.

Quiz:

Q: What fool thinks you can earn $100, borrow $40, and spend $140 every single day. (many zeros left off because I cannot count that high)

A: The US Congress. The very people we voted for.

Partial credit given if you answered General Motors…

As US citizens, we should all be mad as hell at these idiots. The fact that govt continues to expand while many in the country are suffering is an insult to the poeple who actually work to produce things and pay taxes. Many people are losing jobs but the Govt is hiring people they don’t need who will have safe jobs for years to come. Govt workers produce nothing that makes money (paperwork, taxes, and the CFR manuals do not make money). They are simply a tax on the economy that must be paid for by people who do produce something.

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ThombDBhomb Says:
May 22nd, 2009 at 10:06 am

#43 nuclearboy

First, thanks for not getting mad and yelling.

Second, health care costs a lot. it seems to have a lot of waste. It is not government run. Competition hasn’t made it any cheaper.

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CDAVIS Says:
May 22nd, 2009 at 10:07 am

______________________________________________________
#37 SteveK Said:
“When someone supports ‘laissez-faire’ capitalism they offer the contrast of ‘Presidente Chavez’. How about President Sarkozy? France seems to be doing quite well these days, even though it is an evil socialist state.
—

I do give the French a lot of credit for two things in particular:

1. France has largely avoided the banking/credit implosion we are experiencing here in America because “the French are great savers and most have not taken out unaffordable mortgages or spent heavily on credit. Household debt as a share of GDP is less than half that in Britain or America.”
Source: http://www.economist.com/displayStory.cfm?story_id=13610197

2. Because 75% of France’s electricity comes from Nuclear Power Plants, France enjoys the economic benefits of Nuclear Energy: http://www.arevaresources.com/nuclear_energy/datagb/economie/indexnucleaire.htm

As the Electric Car Revolution takes hold, France will enjoy an added substantial windfall benefit from their investment in Nuclear Energy.
______________________________________________________
Electric Cars + Nuclear Energy = American Energy Independence!
_____________________________________________________

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MarkinWI Says:
May 22nd, 2009 at 10:13 am

Nuclearboy@#30 – So some Congressman on a committee invites an economics professor to Congress, who talks about an idea to make retirement funds less volitile (BTW, we already have this – its called Social Security), and today the “American Thinker” posts a paranoid article about how the Democrats have “slipped up” and revealed Obama’s secret plot to steal your 401(k)? I don’t see any evidence that there is the political will to push this idea to fuition, absent a complete market crash, which would mean your 401(k) was worthless anyway. But, by all means, let’s encourage Congress to not explore ideas (and thereby show their weaknesses) by creating conspiracy theories in the blogosphere every time they do. To be clear, I’m not saying that this is what you are doing Nuclearboy, but this is what the “American Thinker” was doing. Folks, be a Critical Thinker before you buy into anyones conspiracy theories.

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noel park Says:
May 22nd, 2009 at 10:15 am

I have tried very hard to stay positive recently. Even so, it is hard to see where any of this is going to stop the downward spiral if there is no product out there that people want to buy.

Our family car is almost 14 years old. It runs just fine, thank you very much, even if the gas mileage ain’t much. There is nothing in the GM lineup right now which gives me the slightest motivation to buy. What’s going to change that? The Cruze in a year? Maybe. A few piddly Volts in late 2010 or 2011?

So who is to say that, despite bankruptcy, restructuring, or whatever happens, the massive negative cash flow will not continue? It can’t go on forever. I am just saying that it looks to me like the public will finally cry ENOUGH! before magic new products (if any) arrive in sufficient quantities to turn the cash hemorrhage around.

The kind of numbers I see here are beginning to wear out my patience, I’ll tell you for nothing. Sorry to sound so glum, but it’s getting harder and harder to see the end of this.

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ThombDBhomb Says:
May 22nd, 2009 at 10:16 am

#46 nuclearboy

I could be wrong; maybe it is all the government’s fault. They are all idiots. You should teach a macroeconomics class. I think I could get a good grade if you were my teacher. You really know how to explain a complicated system.

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Adrian Says:
May 22nd, 2009 at 10:19 am

#8 Neil
#11 Dave

Socialist-fascist… same thing with different masks. All are statist-progressives in nature.

A sad statement which pains a guy who has bought or been part of a family who GM since ‘84… GM, I officially state you have lost my business until the day you don’t have any % of government ownership. I will follow the development of the Volt and other cars/SUVs you build hoping by the next time I buy a car you will be a truly private company again.

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Bigcitycat Says:
May 22nd, 2009 at 10:21 am

Sure give the UAW everything they want and screw the private citizens who bought bonds. The UAW is the reason these companies can’t survive to begin with. You know a lot of these bondholders are just regular Americans.People who invested a couple hundred thousand for their retirement and are getting pennies on the dollar for it. It’s good to know Obama cares about these Americans as much as he does the UAW. Obama has no problem forcing U.S tax payers to pay UAW workers. I’m sorry but I have no intention of buying vehicles made by the Government and the UAW.

It doesn’t matter. These companies won’t survive in the long run. There is no way the Government and the UAW can compete with Toyota or Honda, and I am off the Volt bandwagon. Other car companies will use this same idea and even better and I will be looking to purchase from them.

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ThombDBhomb Says:
May 22nd, 2009 at 10:22 am

#50 noel park

I wish I could say something to buoy your spirits. I’m down too. All I have is hope and faith. That carries many people through difficult times. Then things eihter get really bad, get better, or stay depressing. Nonetheless, find beauty and cherish it. How about that good woman of yours? or your kids? or your vitality?

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Adrian Says:
May 22nd, 2009 at 10:26 am

GM was trying to survive as a bloated company with too little reserves. They could have taken on the bloated parts of the company before the floor fell out but didn’t do enough soon enough. They (and all of the Big 3) were ripe to fall.

The government didn’t have to do what they did. The same outsome could have been had by letting a natural Ch11 occur. The job losses would have happened quicker, but the company still would have survived. It is truly obivious the government for the last 20 plus years has wanted to grow in power and only held back in any measure by Reagan and the conservative revolution of 94-98. All politicians are at fault as well are the people who vote these dolts in office.

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George K Says:
May 22nd, 2009 at 10:27 am

“Last year(2007), Hugo Chavez kicked off another term as Venezuela’s president by announcing all oil majors in the lucrative Orinoco region would be forced to partner with PDVSA, Chavez’s inept national oil company. This was a surprise to no one. The oil majors had already seen most of their Venezuelan holdings nationalized; the Orinoco announcement simply represented the coup de grace in a long series of legalized thefts.”

http://www.321energy.com/editorials/casey/casey030108.html
- – - – - –

Meanwhile, back in the US…
The Government would get a 50% stake, the UAW 39%, bondholders 10%, and shareholders 1% of that new company.

Silly me. I’m a shareholder.

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nuclearboy Says:
May 22nd, 2009 at 10:28 am

47:

This is an area of Govt that I have another issue with. it is the area of risk. Because the Govt has set things up in a way that risk is not tolerated or accepted, costs go way up. Health care is very heavily regulated.

One area the Govt could weigh in is in the area of TORT reform. John Edwards (presidential candidate) is worth millions of dollars because of this. His millionare status is a tax on healthcare. He sued doctors. We all paid it in our medical visits because all doctors need very expensive insurance because of all the John Edwards types out their milking the system.

It is well documented that this issue alone has forced many doctors out of business or into large practices with high overhead (legal, billing, etc.). Baby delivery is a prime example. Because of insurance costs, many of these docs simply cannot do it.

I for one would rather take risks and pay less.

Back to cars… This is an area I am interested in. I would like to be able to buy cheap cars that don’t have to pass govt tests for crashing etc. etc. I would like to see ratings from the insurance companies and know what I am buying but I would like to be able to buy a “risky” car. (think of taking an 800 Lb golf cart to the local store vs. taking the 4500 Lb minivan) .

The Govt will not allow this. This drives up the cost of my car and cuts down on innovation. There should be small lightweight cars on the market but the Govt will not allow it. They must pass our saftey standards. God forbid we allow the ignorant citezens to take a risk for themselves.

The funny thing is, I can buy a 250 Lb. 100cc motorbike and ride that around without a helmet in many states. I just cannot get a 1000Lb lightweight vehicle with 4 wheels. Thanks Washington….

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k-dawg Says:
May 22nd, 2009 at 10:38 am

Are we the only ones at work today? My office has tumbleweed rolling through it.

Tomorrow I’ll check out the Volt Bar in the Ren Cen, and let you guys know how it is.

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nuclearboy Says:
May 22nd, 2009 at 10:46 am

51: ThombDBhomb:

I am assuming you are kidding.

Truth usually lies somewhere between the two sides of an argument.

49 MarkinWI Says

I was just pointiing out that this is a real news story. I had heard about it from more than your reference. I was supporting someone else who brought it up.

I personally think that private social security accounts are a good idea. I hope they are not mandatory but I would like to see more of this.

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statik Says:
May 22nd, 2009 at 10:48 am

GSB next friday or not…the biggest problem is still not even being considered because headlines of ‘taxpayer dollars’ and ‘bankruptcy’ are more flashy.

Lets pretend this is september, GM is out of bankruptcy! Huzzah! Everything is perfect now right? Hehe. Same problem as before….GM has to sell cars and make money.

On the newly negative side:
GM has little new product to offer, almost nothing for all of 2011….and no pipeline upgrade on tap for existing product. And they just reduced the SAAR/outlook (again) for the rest of 2009.

On the newly positive side:
By my napkin back calculations, maybe 2 billion/year saved on the servicing of debt, maybe a billion saved with the dealer closings and streamlining the system, and about $100 car on the labor or 1.7 billion-ish, another half billion in white collar salaries and misc…thats a significant amount in total, around 5 billion per year.
—-
Saving 5 billion is great, and if this was 2004 with the SAAR (annual car sales) north of 16 million, it would be awesome…but this is 2009, the SAAR is going to end up around 9 million WITH the average ‘cash on the hood’ bonus of $3,000 per vehicle (+ financing deals). The ‘old GM’ loses about 30 billion a year in that environment. Maybe ‘new GM’ only loses 15 billion, but I don’t see the light at the end of the tunnel here.

I guess if the checkbook is always open, making money really doesn’t matter…and I really can’t see how the gov’t can close it at this point and walk away, but I think this is the very real problem going forward.

…I really don’t see the endgame here.

But I do see what happens to the USD Index on the backs of all this ‘free money’ being giving out on the government’s line of credit when the impression is that the world economy is stabilizing:

http://www.fxstreet.com/rates-charts/usdollar-index/

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noel park Says:
May 22nd, 2009 at 10:56 am

#54 ThombDbhomb:

Thanks for your concern. We’re fine. I’m just sad because I can’t fathom the future of our beloved Chevrolet. We are just going to have to bide our time and see where it all ends.

It’s a 3 day weekend. We are going to take it easy and rest up for the big push next weekend. Next weekend we are going to take our newly restored 1917 Chevrolet Speedster to Infineon Raceway (nee Sears Point) for its very first vintage race. How’s that for Chevy loyalty? We are used to running up front with our Corvettes, so this may be a bit of a culture shock. There are 3 Bugattis, a 1916 National which would appear to be a sister to an Indy 500 winner, and ’20s vintage Ford based sprint cars too numerous to mention. We have the only Chevy though, even if we finish last, LOL. So things are exciting.

I was thinking as I opened up this page this AM how funny it is that GM-Volt.com has sort of morphed into “GMFinancialCrisis.com” before our very eyes. Then I read down the comments and realized that it has morphed again into sort of “PoliticalFoodfight.com”. A bit of a metaphor for the discourse in our whole happy nation today, IMHO.

Anyway, many thanks for your kind regards. Same to you on all counts.

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DonC Says:
May 22nd, 2009 at 10:58 am

#15 BillR says “First, the bondholders hold $27 billion in GM debt. If the government puts in $45 billion, why do they get 50% while the bondholders only get 10%? Seem somewhat unfair?”

Not really if, rather than thinking about the $27B face value of the bonds, you think about their real value. The bonds have been trading for five cents per dollar of face value recently. They haven’t traded at face value for quite a while. Once you start thinking about actual value instead of face value then the 10% starts looking more than fair. The comparison is more like $45B versus $1.3B, so under your analytic approach the bondholders should get more like 2%.

The only real question is whether 10% of the new company is worth more than what the bondholders would get if GM was liquidated.

What’s interesting is that GM has been the exception to the rule that shareholders and bondholders make make money at the expense of the workers. In GM’s case it’s been the opposite. However, this is hardly the fault of the Obama Administration. Wagoner did this when, over the last fifteen years, he had GM borrow $45B so it could plow $100B into the UAW pension plan. The restructuring plan is simply the last act in a play written years ago.

There is irony in seeing those who lament Wagoner being given his walking papers expressing sympathy for the bondholders.

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CaptJackSparrow Says:
May 22nd, 2009 at 11:03 am

WTF is wrong with you people!

First things first for this weekend. I want to thank everyone who has serverd in our US Military in every branch for all their hard work and dedication to keep our grand country FREE!!!

Without you my sorry lazy 4 eyed geeky fat a$$ wouldn’t be able to continue live my life in this FREE country.

Thank you….
Thank you…
Thank you…

OK, I had to say that today because I don’t have internet at home and the holiday is coming……lol.
Back to Kahlua & Coffee…

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Jason M. Hendler Says:
May 22nd, 2009 at 11:04 am

Remember, these are loans, which can be repaid as the feds liquidate their stake.

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Mike-o-Matic Says:
May 22nd, 2009 at 11:10 am

@ #44 k-dawg,
>> Chuck Norris!

I wish!

>> j/k.. i dunno, the voters?

Not when 80% of them are clueless, beyond that which serves their own comfort, benefit, and convenience.

Sheyitt, most people can’t even drive without a cellphone glued to their ear half the time… and would rather skip work go to Six Flags, when they wouldn’t take time visit a sick aunt in the hospital.

BTW… thanks for the BusinessWeek link in #41, I’m reading that now.

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CaptJackSparrow Says:
May 22nd, 2009 at 11:11 am

@Jason M. Hendler 64

“Remember, these are loans, which can be repaid as the feds liquidate their stake.”

Aw man, that’s what everyone kept saying when the first few installments of the 16.xxx BILLIONS (Carl Sagan saying it…) that was as you say it “a LOAN”. Am I right? Back then it was “a LOAN”. So then tell me what happens to “LOANS” in a chapter whatever? I admitedly know jack sh|t on this so please tell me? We have already heard that gubment is going to write it off. So will this be the same type of “LOAN”?????

WTF rock were you under?

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LauraM Says:
May 22nd, 2009 at 11:14 am

#26 MarkinWI

I’m concerned about everyone here. I’m concerned about the small bondholders.

http://online.wsj.com/article/SB10001424052970203771904574179840660558888.html

But I’m also concerned about the long term effects on the bankruptcy code, and basically the rule of law in this country.. Under bankruptcy law, the bondholders are entitled to their pro-rata share of the equity. This has to have an effect on the credit markets in general.

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Zen Says:
May 22nd, 2009 at 11:23 am

#57 nukeboy-

This is exactly why we need government. You are making bad choices. GM is in crisis because people can choose to buy another brand of car. Some people eat too much at McDonalds. Some people buy SUV’s. Some people wear real fur. Some people smoke. Some people climb mountains and fall off. Some people drive over the speed limit. Some people listen to conservative talk radio far too much. Some people drive when they could walk or bike. Have YOU converted to CFL bulbs yet?

Clearly, there is a lot the government could do to help people help themselves, IF we let it. President Obama and Helen Pelosi are standing by, ready to help. The government is your friend.

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ThombDBhomb Says:
May 22nd, 2009 at 11:24 am

#57 nuclearboy

It doesn’t sound like the GM bondholders are accepting the fruits of their risk. At least the workers made concessions.

Just what we need; “unsafe” cars on the road. “Unsafe” cars affect people other than the “unsafe” car driver.

#63 CaptJackSparrow

You’re right.

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DonC Says:
May 22nd, 2009 at 11:35 am

#60 statik says “But I do see what happens to the USD Index on the backs of all this ‘free money’ being giving out on the government’s line of credit when the impression is that the world economy is stabilizing:”

So you would have everyone believe that the world financial markets care that a government that is spending $100B a year in Afghanistan, $350B a year in Iraq, $180B on AIG, and almost another $1T on defense, is spending $50B on an auto industry? You have got to be kidding. The auto industry is a pimple.

Personally currency trading has never made sense to me and I stopped doing it years ago.

#67 LauraM says “Under bankruptcy law, the bondholders are entitled to their pro-rata share of the equity”

Not exactly. You’re looking at this as though it’s a standard bankruptcy. It most certainly is not. If this were a standard bankruptcy then everyone is entitled to get what the guy with the bag of money, aka the “provider of DIP financing”, agrees to give them. Normally that guy is a financial institution intent on maximizing its return and cares not one whit how the rest of the pie it doesn’t get is sliced.

Here there isn’t a financial institution willing to provide DIP financing because there is no real prospect for a financial return. As a consequence, it’s accurate to say the government is providing charity rather than financing. And the over riding rule is that a charitable donor gets to dispense the largesse according to any formula it chooses. In common language this rule has been enshrined as the adage that “you should never p*ss off the good humor man”.

The only question is whether the bondholders get more under the reorg than they would if GM were liquidated. If no then they have a beef. if yes then they don’t.

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Vincent Says:
May 22nd, 2009 at 11:39 am

#63 Absolutely. Thank you to all the veterans and their families.

Now for my meaning less comment…

“Hello…McFly….(brisk knocking on the forehead)…hello McFly anyone home…you didn’t know GM was going to drop the B Bomb!

We all knew this was coming way back when Bob retired.
So whats new…lets move on to the good stuff.
oh yeah….GM cranking out 100,000 Camaros the V6 making 29 MPG with 304 HP and more quality products coming on line.

Here comes the New GM and in a few years Jobs back in Detroit.

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kent beuchert Says:
May 22nd, 2009 at 11:45 am

I have to blame Rick Wagoner for this entire mess. Now you see what happens when a meek CEO tries to finagle his way out of a
losing situation. I also blame Bush for not withholding funds and forcing the union to reduce their preposterous $20 billion dollar retiree health plan, which foolish Rick Wagoner had promised in order to avoid a strike years ago. Now you see what cowardice brings about. Wagoner will go down as the fellow who wanted to be
liked and ends up being despised by everyone who once admired General Motors. This is no longer a corporation. It now is a conglomeration of disparate interests that are highly uunlikely to agree on anything and will use a Fritz Henderson, a man of extremely modest executive abilities. Think of him as a corporate George Bush. Now let’s see… The govt forces automakers to employ non-competitive , price fixing unmion workers, which has transformed what was once the largest and most advanced automaker in the world into a company making bets on a car that, clearly, is economically non-competitive, and now that govt owns most of GM, along with the destructive union, that owns the other half. The two entities that destroyed GM now own GM. Sound just to me. Of course, GM will never sell me another car. They are no longer worthy of my support.

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k-dawg Says:
May 22nd, 2009 at 11:59 am

60 Statik
But I do see what happens to the USD Index on the backs of all this ‘free money’ being giving out on the government’s line of credit when the impression is that the world economy is stabilizing:

http://www.fxstreet.com/rates-charts/usdollar-index/
—————–

Looks like its gone up 17% since about this time last year. Down big since 2001. It’s kickin’ the crap out the ruble right now.

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LauraM Says:
May 22nd, 2009 at 12:03 pm

#70 DonC

By your standard, the government should get everything as the DIP financier. Unless you think that the UAW qualifies as charity case? Because I certainly don’t. If you make $100,000 a year (and I don’t care how much overtime that involves), you don’t qualify for government largess. At least not in my book. And I would imagine that most people would agree with that. Nor do I think it fair that UAW retirees are getting gold plated health care (Viagra, lasik, etc.) at government expense while there are 47 million Americans that don’t have any health insurance.

But that’s not the point. The point is that it looks really bad that a politically powerful group is getting 39% of the company for 10 billion in debt while the bondholders are being stuck with 10%. (The same thing with Chrysler.) Even if the government is acting as DIP financier–the government is supposed to at least pretend to be impartial. It’s not supposed to play favorites based on who made the most campaign contributions.

Besides, would they get more in liquidation? Who knows? It’s hard to see them getting any less. The point is that the assets obviously have some value to someone–even if that’s the government. And they should pay something for that. And choosing who gets the payment looks like abuse of government power to me.

It also makes the whole GM/Chrysler rescue look bad. This is supposed to be about saving American industry. Not helping out a one of the big donors to the Democratic political party. But if that was the case, they would have liquidated Chrysler since I see no long term benefit to the US economy from that fiasco under any conceivable scenario. Best case scenario–the US taxpayer gets paid back, and we have yet another foreign transplant in the US to compete with Ford and GM. (And that’s a pretty unlikely scenario.)

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LauraM Says:
May 22nd, 2009 at 12:17 pm

#72 kent beuchert

This is not Rick Wagoner’s fault. I’m not saying he was a great CEO. But GM’s been functionally bankrupt since before he even took over. There were at least 10 strikes in the 90s when he was head of North American operations. Each of them costing GM billions.

Basically, the union didn’t care if GM was in trouble. They wanted their benefits, or they were willing to see GM liquidated. Well, guess what?

Besides, the bulk of the unfunded pension plans that cost them all that money were already pledged before Wagoner even took over. Funding those is why GM took on all that debt in 2003. (I don’t have time to look up the exact numbers.) Retirement at 48 was never realistic even when it was promised. But now? Why do you think so many of the states are in so much trouble?

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noel park Says:
May 22nd, 2009 at 12:20 pm

#71 DonC:

As to your response to statik, I could not agree more. Well said.

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solo Says:
May 22nd, 2009 at 12:22 pm

statik #60

I tend to agree with you. G.M. (And Chrysler/Ford) need to sell cars.
After the BK smoke clears, both G.M. and Chrysler will have substantially less dealers. Toyota/Honda/Nissan are actively shopping those closed dealerships. Believe it or not, many people buy cars from local dealers because they are …..LOCAL. You don’t have to drive to another city to get service because the dealer is in YOUR town. The dealer owner probably goes to your church, buys services at your business, etc.

The small little dealers that the government told the auto makers to get rid of are now going to be selling another foreign make. This alone will cause substantial loss of market share. Add to that Chrysler’s engineering team was completely gutted by Daimler and G.M. is probably paper thin too, you have a scenerio where, no matter how much you want to support the home team, you can’t buy their car in your home town and the product designs are going to be a model generation behind in technology for the quite some time.

G.M. and Chrysler may wind up as small niche players in a car world dominated by the new big 3 (Toyota, Honda, Nissan).

I guess I’l have to put my hat on backwards and wear baggy pants to fit in with the ‘tuner’ crowd at car shows. YUCK!!!

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Bud Says:
May 22nd, 2009 at 12:26 pm

I thought I gave four years of my life to the military so we wouldn’t have a socialist dictator.

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nuclearboy Says:
May 22nd, 2009 at 12:32 pm

69 ThombDBhomb

Unsafe cars.

How many times have you heard “that car cannot be sold in the US because it does not meet US safety standards”.

I am arguing that “unsafe” should be allowed in becasue they are cheaper to buy and probably would use far less gas (assuming the market is opened up and small suppliers could build light weight cars).

Take away govt regulations on what can be driven and you might find that you could buy a 4 wheeled electric vehicle for less than 15,000 dollars with a battery that you could replace. How is this imaginary “unsafe” car a bother to others.

I can ride my 10 speed on the road with no helmet. I can ride a small moped, I can ride a 100 CC scooter. 4 wheeled “unsafe” cars are not allowed.

I recently spent a week in the netherlands where I biked around all over. I was amazed at the variety of small (unsafe by US standards) cars that I saw. Basically, they seem to be able to drive anything that goes. Some of these things made a SMART for two look large. They also drive scooters all over the place (no helmets by the way). They take the risk and they save enourmous amounts of gas. Why can’t we?

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old man Says:
May 22nd, 2009 at 12:36 pm

#79 Nuclearboy

Dang, I really want to debate this with you but you present your view very well.

I will think on it and hopefully in a week or so will come up with sound points for my side.

One thing I can think of is a small scooter can pull over to the eswike of the road and let me pass saftly.

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jeffhre Says:
May 22nd, 2009 at 12:44 pm

#59
nuclearboy

I personally think that private social security accounts are a good idea. I hope they are not mandatory but I would like to see more of this.
_______________
That sounds wonderful. Allowing investment bankers, $3 million dollars off the top fund runners, and nearly anonymous hedge funds to do to every social security recipient what they have done to Wall Street. Whooo Haaa happy days are coming here again!

Private investment accounts are available everywhere you look. I don’t even like the idea of employers roping me into bad retirement account options (eg Enron etc) why do I need govt. to do that by law? Just give me the tiny security of social sec. and I’ll use my own judgment for everything else, thank you very much.
__________________________________

#74
LauraM

By your standard, the government should get everything as the DIP financier. Unless you think that the UAW qualifies as charity case? Because I certainly don’t. If you make $100,000 a year (and I don’t care how much overtime that involves), you don’t qualify for government largess. At least not in my book. And I would imagine that most people would agree with that.
_________________________
That sounds good. What about “government largess” for the folks who make millions or billions? Subsidies grants, aid, tax rebates and forgiveness, forgiveness of taxes and fees for facility siting or job promises, targeted sponsored research, Govt. grants toward restricted research, enterprise zones, redevelopment zones; aid to farmers, agriculture and industry that costs taxpayers billions? Antitrust exemptions for owner billionaires to negotiate contracts free of govt intervention with athlete millionaires? It’s all good, as long as it happens to folks in a really nice neighborhood?

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jeffhre Says:
May 22nd, 2009 at 12:53 pm

#
nuclearboy

Unsafe cars.

How many times have you heard “that car cannot be sold in the US because it does not meet US safety standards”. Why can’t we?
_____________________
When I was a kid I used to look at the documentaries and specials on US wars. The carnage was appalling. Then I saw the statistics for US highway deaths. It was like 3/4 of all the losses in Vietnam. Only EVERY SINGLE YEAR for my entire life. I think that the police and firefighters that pull mangled bodies from vehicles and roadways would have something to argue with you about the subject.

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nuclearboy Says:
May 22nd, 2009 at 12:54 pm

81 jeffhre

The theory of the private accounts only makes sense to me if I am able to use my social security tax money to fund it.

Right now I pay social security and the government tells me it is for my future but they spend it right away just like it was a tax. All I get is an IOU. They could change the rules at any time.

If they are forcing me to contribute, I would rather be able to direct the money myself and know where it is and how to get at it.

I work for the FEDs now. They have the Thrift savings plan. It works well. This program is well liked by the FEDS in general.

My vision of private social security accounts is basically thrift savings for everybody.

They are taking your money anyway.

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CaptJackSparrow Says:
May 22nd, 2009 at 12:54 pm

@Nuclearboy 79

Case in point, the Metro Buddy….

http://www.autobloggreen.com/2009/05/22/metro-buddy-officially-launched-will-invade-europe/

This is an awesome little city dewller and even suburbs. Easily user servicable. If you can pull out a 12V car Lead Acid batt you can service this thing. If it were allowed here in the US and on streets posted to 55MPH or even just 50MPH this would sell. But the problem is that everyone is afraid to get hit by a big SUV/Truck. Is it really a small death trap or is the large SUV/Truck the Grim Reaper? I pick the later.

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nuclearboy Says:
May 22nd, 2009 at 1:01 pm

80 old man

Don’t think too long. I have a short attention span.

There could be some drawbacks but they could be worked out. For instance, if the unsafe car could not do 60 mph it should not be on the highway. Our population is generally in cities and smaller cars would be great for city dwellers.

The Netherlands is a good example of a country where saving gas is a serious priority. The small “unsafe” car model does not seem to be a problem for them.

For now, I will continue to drive my 4500 Lb minivan to the local store when I have more than my bike can handle.

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MarkinWI Says:
May 22nd, 2009 at 1:01 pm

Nuclearboy @ #59 – I hear you. Sorry to all if I’m extra-crispy today. I’m looking forward to a weekend with the in-laws. I’m already tired of the successionst/civil war/conspiracy theory insane wacko stuff, and I haven’t even gotten there yet. I’ve got several friends who have worked or are working at the statehouse, and I can tell you that there are all sorts of dumb ideas that float around everyday, some of which even get written into bills, that never come close to becoming law. I imagine that Congress is no different.

LauraM @ #74 – I agree with your stance on the rule of law, but as a lawyer I also know how complex and subtle the “rule of law” can be. I also know first hand that the public often blames “politics” more than is warranted. In any set of laws there are distinctions, categories, rules, exceptions, and room for exercise of discretion. No offense, because your comments always display a good knowledge of facts (even if I don’t agree with the pictures that you paint with them), but I just don’t know how anyone other than an experienced corporate bankruptcy attorney that has reviewed this situation can be so sure that the bondholders are entitled to better under the rule of law. That is why I phrase my statements in terms of hope. I hope that small bondholders don’t get killed, just like I hope that the retirees who depend on the UAW don’t get killed, and just like I hope that speculators who are holding up a restructuring deal don’t get rewarded. And not that I’m against speculating – I made 30% by speculating on GM stock over the last 6 months myself, but I always knew I was playing with fire, and was always willing to accept the consequences. The news reports that I’ve been reading (mostly Wall Street Journal) lead me to believe that the speculators are expecting more than they really have any kind of equitable cause to claim. In my view, discouraging expectations in the market that speculators can feast on a dead carcass with impunity, and then expect to be treated like all other bondholders, is not a bad thing.

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k-dawg Says:
May 22nd, 2009 at 1:04 pm

GM down 25%.. weeeeeeeee

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Shock Me Says:
May 22nd, 2009 at 1:06 pm

I love the idea of the Volt. However:

Currently I drive about 4400 miles per year.

2000 of that is a in-city, stop-and-go driving just begging for an EV.

The other 2400 is long-distance, single-tank, interstate driving at which my current fully-owned ICE vehicle excels (30 mpg).

Given a bluebook value of under $5000 for my current car which uses about $632 worth of gas at $2.30 per gallon, why would I:

Spend an additional $1200 per year to rent a garage with a plug.

Spend nearly $9600 per year in car payments for four years assuming I can even get a loan.

Spend an additional undetermined amount saving to replace the battery should it fail before resale to whoever is willing to take a chance on an old battery pack.

Pay the insurance on a vehicle which costs 15 times what I can expect to get for a perfectly fine 12-year old ICE car in good condition with about 100,000 miles on it.

All of this to save $400 per year (that’s right $400 per year) on gas.

Not saying I wouldn’t blow $100K just to poke sand-hillbilly in the nads, but don’t tell me this will ever pay for itself even if there were already a plug installed every 10 feet.

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Joe Says:
May 22nd, 2009 at 1:07 pm

Good luck to GM, I hope that the Volt and its technology will be expanded to many GM models by 2015. Hopefully in the future we will have the regulations in place to prevent another unregulated BS securitization of the financial world and better controls on the wild speculation of oil and other commodities.

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k-dawg Says:
May 22nd, 2009 at 1:07 pm

What an ecletic group on this site.

Young people, Old-man people, people from all over the world. Its run by a neurologist and there’s posts by engineers, laywers, economists, clothing manufacturers and trailer park maggots.

At least every angle of the debate will be covered.

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nuclearboy Says:
May 22nd, 2009 at 1:08 pm

84 CaptJackSparrow

Thats what I am talking about.

I saw cars even smaller. Some looked like they were 10-20 years old. The Dutch have been on the saving gas bandwagon for a long time..

From the Netherlands…(not me in picture)

http://zeuropes.free.fr/paysbas/ptitchar.jpg

Not only do they save gas but their production and disposal is easier.

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CaptJackSparrow Says:
May 22nd, 2009 at 1:10 pm

@jeffhre 82

“was like 3/4 of all the losses in Vietnam. Only EVERY SINGLE YEAR for my entire life.”

So do you really think it’s working?
The problem is basically “Sh|t happens”. Murphy’s law. So when a drunk driver drive off a cliff it’s because of lack of regulation? Or if someone tries to out run a Train at the crossing and looses it’s lack of safety regulation. Or when someone is on the phone texting and slams into a pedestrian it’s lack of regulation? Or if the massive SUV plows into a Honda CRX and the kenetic energy/force is diplaced upon the CRX and kills the driver and passenger of the CRX it’s because of lack of regulation? and or they died because the CRX didn’t meet the regulations? Cmon, there got to be a stop at some point. Trying to protect someone from themself is just saying your irreponsible therfore we (Gubment) will regulate what you have/drive.
Where’s the self worth and “Personal responsibility”? Do we always have to rely on the gubment?

I agree with a past poster in that he indiaceted that these large SUV/Truck/Hummer type vehicles dhould be taxed way more and their insurance jacked way the fukc up because they do more dmage than the smaller cars both environmentally and life.

If you ask other’s,Soccer moms mostly, they like the percieved “Safety” their big SUV gives them. Never mind the smaller cars other people are in, screw them.

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Mitch Says:
May 22nd, 2009 at 1:21 pm

#92 Capt JAck…

“they like the percieved “Safety” their big SUV gives them. Never mind the smaller cars other people are in, screw them”

The American way though isn’t it?

In God we trust (all else pay cash)
Life Liberty and Justice (only if you’re famous) and
Me First…

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Monroe Says:
May 22nd, 2009 at 1:22 pm

The gov’t is getting shares in exchange for aid. A rational move from the taxpayer’s perspective. Hopefully in the long run this means recouping our investment plus some. The gov’t does not have an interest in owning GM forever.

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jeffhre Says:
May 22nd, 2009 at 1:22 pm

nuclearboy

I have a feeling that if you ask the people who depended on Lehman Brothers and the failed investment banks, they would much rather have your employers IOU than nothing at all.

captjacksparrow

Aren’t neighborhood electrics allowed in lower speed limit areas any way?

It stops at FMVSS and obviously it’s not designed prevent every loss of life possible. Look at the stats your self. See the trends for your self. Know the stuff yourself so that if you ever bump into a congressperson you can demand changes from your superior knowledge on behalf of the rest of us.

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nuclearboy Says:
May 22nd, 2009 at 1:23 pm

82.. jeffhre Says

Well, we could all be safer if we drove around in very large vehicles and we reduce the speed limits to 40 mph. If we all bought hummers and drove slowly, we could be fairly certain that we would not die in an accident.

Or, we could design small cars that are safer by using more expensive materials and develping a much stronger crash cage. They might double in cost but we could do it.

Risk is a sliding scale. More risk, less Gas and money. Less risk, more money and gas. You are arguing that we stay where we are or remove risk futher. I am arguing for choice. I want it all. You can buy your $80,000 car with a full roll cage and 72 air bags. your risk goes way down. I want that option along with the option of a $10,000 car with no air bag and plastic side panels. My risk goes up.

In a bad accident, the EMTs won’t have to work as hard on me. no need for the jaws of life. I will be dead and the car will be spit opened already. This could be a big savings.

I would rather take the risk of driving a small car and screw the oil man. I already ride my bike on the road. I would feel safer in a car. Any car..

Life is full of risks.. Thats what makes it interesting. The govt or insurance companies could help by making crash test videos and reports available. That way you could go into your small car with eyes wide open. Or avoid it at all costs and buy a safe car.

I am just arguing that getting off of oil would be helped if people had the choice of buying smaller cars that our Govt says are unsafe…

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MarkinWI Says:
May 22nd, 2009 at 1:25 pm

Capt @ # 92 – On the one hand you preach personal responsiblity and ask, “Do we always have to rely on the ‘Gubment.’” On the other hand you say that SUVs should be taxed because of they do more damage to life. You my friend need another beer.

Cheers for the weekend folks. And when it comes to the Vets, don’t just talk the talk, go walk the walk this weekend.

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Tall Pete Says:
May 22nd, 2009 at 1:27 pm

CDAVIS @ 48

I do give the French a lot of credit for two things in particular: (…)
——————————————————————————————————————
I think the French deserve credit for more than these two (valid) points you are making

a) The have a universal health care system that covers every citizen and is remarquably efficient – more efficient than what we see in North America and even in Britain. That’s run by the gov’t.

b) The have a pension plan system that covers every worker that ever worked there. Again, run by the gov’t.

c) They even had the wisdom to try and discourage George W. Bush to declare war to Irak; at the time, the American people were furious and were breaking champagne bottles in the streets, renaming the fries to call them liberty fries and so on. How fool were the French back then ?

Maybe socialism isn’t completely evil after all…

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statik Says:
May 22nd, 2009 at 1:31 pm

#70 DonC said:

#60 statik says “But I do see what happens to the USD Index on the backs of all this ‘free money’ being giving out on the government’s line of credit when the impression is that the world economy is stabilizing:”

So you would have everyone believe that the world financial markets care that a government that is spending $100B a year in Afghanistan, $350B a year in Iraq, $180B on AIG, and almost another $1T on defense, is spending $50B on an auto industry? You have got to be kidding. The auto industry is a pimple.

Personally currency trading has never made sense to me and I stopped doing it years ago.
=====================

Actually, I wasn’t just speaking about the auto industry, I was speaking about the whole thing (like the things you mentioned) put together….because your right, that is where the world financial markets care. The auto industry is more or less just a symbol of the US not allowing domestic industry to fail at any cost.

By my calculations, the total ‘auto bailout’ including this current salvo is a lot more than 50 billion…I figure with this new number, it is about 130 billion, and counting.

We re looking at about 15 billion all in for Chrysler/CF, 45 billion for GM (15 billion +30 billion getting out of C11), 14 billion for GMAC, 17 billion in guaranteed car loans to the undeserving, and another 10-15 billion for auto suppliers/secondary makers…and we ‘could’ add on the 25 billion still available in ‘development’ loans that Chrysler/GM can’t get right now…but will access about 10 seconds after they come out of bankruptcy, even though they have zero credit -or- ability to pay it back (can you imagine if a person could file for bankruptcy then get a major loan only weeks after…crazy). We just get them out of debt, and GM is going to put 10 billion back on the books, sigh.

We also don’t know the ‘going forward’ cost to the government on GM -AND- we haven’t even got started on Ford…they are assuridly going to be going the same route by year’s end, if not shortly after. I figure another 50-75 billion on top…so we are probably going to be close to 200 billion by year’s end.

You are right currency trading is a odd thing, you have all these very specific technical markers, but then you have this sudden trend wave that plows under years of data mining to obliterate your position if your not careful.

I’m just happy I re-adjusted when things started to get really bad in the fall for the US, I thought it would jump right then…but the panic was so bad, people fled to the US dollar. Our Canadian dollar had been flat since then around 78 cents…but has moved 12-14% in the last month as the indicators ‘levelled off’….it is almost at 90 cents now, that would have been a bad hit considering I’ll be lucky to get 5% for the year. That is a unprecedented move….and bad for all of us (US, Canada and the world)

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CaptJackSparrow Says:
May 22nd, 2009 at 1:36 pm

@MarkinWI 97

“On the other hand you say that SUVs should be taxed because of they do more damage to life. You my friend need another beer.”

Arrrrr matey, point taken, it’s miller time……

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DonC Says:
May 22nd, 2009 at 1:51 pm

#74 LauraM

Just a couple of points. One is that your idea that the government is a DIP financier fundamentally misreads what it’s doing. It’s not acting as a DIP financier. it’s acting as a charitable organization. And charitable organizations get to dispense dough in any way they want.

Two is that, as I’m pointed out before, using the face value of the bonds as a benchmark for what the bonds are worth is silly. The bonds are trading at five cents per dollar of face value. So bondholders hold something like $1.5B, not the $28B you keep mentioning. (This also gives a pretty good idea of what the bondholders might get in a liquidation).

As far as “looking bad” goes, don’t you think it looks bad when private equity managers making billions pay a top income tax rate of 18% and their secretaries pay at twice the rate and the rest of us pay 40%? Don’t you think applying capital gains rates on assets held for only 18 months looks bad? Don’t you think letting banks issue bogus financial statements about the value of their assets looks bad? Don’t you think giving unjustified investment tax credits to big oil companies looks bad? Don’t you think it looks bad to pay billions of subsidies a year to large agribusinesses? Yes it would be great if the rich and powerful didn’t have undue influence in DC — we can agree there. It’s just that with all the problems in this area, making a big deal out of the exception where workers are getting a better deal than financiers seems strained.

While I have no dog in this fight, I’m personally finding all this outrage over the UAW getting a very good deal amusing. In this regard, I found all the expressions of sorrow at the Finance Committee Hearings over Wagoner losing his position — he did of course walk off with $23M — a howler. You’d think the PTF had just evicted a widow with seven children and forced them into the street to starve. Surely we can have a more realistic view than this.

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nuclearboy Says:
May 22nd, 2009 at 1:57 pm

99 statik,

Is Ford really in that much trouble too?

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BillR Says:
May 22nd, 2009 at 2:01 pm

I noticed the debate regarding politicians and the government being at fault for our problems.

To this I respond, “The Alpha Strategy is alive and well.”

http://www.biorationalinstitute.com/zcontent/alpha_strategy.pdf

Pugsley, the author, contends the politicians are merely servants of the people, and until the people vote for change (meaning change for a more responsible behavior), then theft by the government will not change.

Here is an excerpt from his book:

The Problem:

“The culprit is theft—particularly that insidious, nearly undetectable plunder carried out under the cloak of legality. Here businessmen, laborers, and consumers all stand guilty, for by blocking competition through regulation, and stealing through taxation and inflation, the manipulators of government force have toppled the economy of every society in history, just as they are bringing down our economy today.”

On Politicians:

“Pretend for a moment that you have cultivated a cabbage patch on your island, and Maynard has some goats. Every night Maynard opens your gate and lets his goats into your yard, and each night they feast on your cabbages. You decide to approach the problem by appealing to reason. You put together your arguments about how this is ruining your garden, stifling your incentive to grow cabbages, and will hurt the whole neighborhood in the end. You then walk out of your house, march down to your garden, and have a heart-to-heart talk with his goats.

A ridiculous approach, you say? Of course. While the goats are the ones who eat your cabbages, Maynard is the one who milks the goats. In the end, he is the beneficiary of their theft—he is the culprit who must be dealt with. Even if you find a way to communicate with the goats, it will not help. No matter how many goats you succeed in winning over to your point of view, the moment a goat sees the light and agrees to stop eating your cabbages, Maynard will stop getting milk. Immediately, Maynard will rid himself of that goat and replace it with another one that will eat your cabbages again. So it is with politicians. Even if you convince one to stop plundering you, he will be quickly replaced.”

Essentially, the public has decided they can VOTE for prosperity rather than work for it.

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Shock Me Says:
May 22nd, 2009 at 2:02 pm

#101 DonC:

As far a “looking bad” goes, don’t you think it looks bad when private equity managers making billions pay a top income tax rate of 18% and their secretaries pay at twice the rate and the rest of us pay 40%?

____________

Where did you find that figure? Not on any tax table I’ve ever seen.

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David K (CT) Says:
May 22nd, 2009 at 2:05 pm

Off-Topic:

It looks like a journalist finally explained the operations of the Volt correct!
==========================
http://money.cnn.com/galleries/2009/autos/0905/gallery.fuel_economy_tech/8.html

Range-extended electric – Chevrolet Volt

2011 Chevrolet Volt
General Motor’s answer to the electric range problem is to add a gasoline engine to what is, otherwise, a purely electric car.
The gasoline engine isn’t connected to anything except an electric generator. Should the Volt run low on battery power, which will happen after about 40 miles of driving, the engine will generate more power for the electric motors while the battery provides an extra jolt for acceleration or hill climbing.
That “40 mile range” has already caused confusion – and become a target for critics – more than a year before the Volt enters production. It sets up an ugly comparison. The other guy’s car goes 100 miles on a charge, yours goes 40.
Everyone agrees that most drivers go less than 40 miles on a typical day, though. So the question becomes “On days you want to go farther, which would you rather have?”
For drivers who’d rather have 60 miles of gas-free driving before they conk out, a battery-only car is fine. For those who’d rather not worry about range, or who don’t want to have one car for around town and another for long trips, the Volt is the way to go.
The Volt will cost substantially more than a battery-only car. That’s the price you pay for having one car that can fill both short and long-range duties. That will cut into sales. With its triple-digit fuel economy, though, the Volt could still go a long way to helping GM meet its mandate.

By Peter Valdes-Dapena, CNNMoney.com senior writer
============================

Hurray!

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Mike-o-Matic Says:
May 22nd, 2009 at 2:12 pm

*** OFF TOPIC, observational meta-comment follows:

I think the depth, breadth, and sheer variety of comments on this message board is PROOF that intelligent life still exists somewhere on Earth. Well, most of them, anyway!

(And this phenomenon also reveals a huge, pent-up demand for constructive ways for bright people to express themselves publicly.)

—–
PS.: RESPECT and THANKS to our veterans this weekend… and always!

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Edwin Mang Says:
May 22nd, 2009 at 2:21 pm

I just watched Tesla sell 50 million in cars at 50,000 each in just seven days . For some strange reason GM keeps asking if there is a market for the Volt . They had one internet site and a spot on Leno . They sold 50million in the little sportsters all that they could put together .

Can you explain that to me ?

If you do not make what I want and need you are correct I will not buy it .

It is not a credit crunch it is a I do not need what you make crunch .

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Victor Says:
May 22nd, 2009 at 2:29 pm

Wow, all this blame for the Governement.

Did the Governement make crappy cars? No, GM did.

Did the government make those generous deals with the UAW? No, GM did.

Did the government miss calculate the consumers response to changing fuel prices? No, GM did.

Did the government make bad choices in the product mix? No, GM did.

Did the goverment kill the EV1? No GM did.

Did the goverment get into shadey fancy financing to finance its own products for people who could not afford them in the frist place? No, GM did.

No people, the Government did not do this to GM. GM did this to themselves. And it was GM that came hat in hand looking for a handout.

I am amazed at how people can just forget what has happened for the past 40 years to the American Automobile companies. 36 years ago, in 1973 we had the first of many oil shocks and the public responded with a 180 degree shift to small cars. The same happened again in 1979-80. Then in 1985, Roger Smith famously said, ” The Job of GM is not to make cars it is to make MONEY”. I knew back then that GM was a lost cause.

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carcus1 Says:
May 22nd, 2009 at 2:30 pm

Statik @ 99,

“By my calculations, the total ‘auto bailout’ including this current salvo is a lot more than 50 billion…I figure with this new number, it is about 130 billion, and counting.”
_________________

Why not a simplified plan?

According to wiki, in 2008 Chrysler had 58,000 employees and GM had 123,000 (in North America).

Let’s just have the gubment cut a check for $718,232.04 ($130B/123k + 58k) to each of GM’s and Chrysler’s employees and call it a day. They all walk away and the lack of competition will leave enough business for Ford to keep operating. Problem solved.

/I’m a freakin’ genius.

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statik Says:
May 22nd, 2009 at 2:32 pm

#102 nuclearboy said:

99 statik,

Is Ford really in that much trouble too?
=================

Yes.

Ford is just where they are now (and not right beside GM) because Mulally decided to mortgage/get liens on everything when people actually thought automakers had value. So don’t go out supporting Ford strictly on the basis that they are not ‘on the take’…they will be soon enough.

Ford is on the exact same track. For instance, in September of 08 GM drew down 3.5 billion from their last line of credit for fear the banks would take it away from them as benchmarks where not being met. This past January Ford drew down its last 10.1 billion dolar line completely for the same reason.

Sept 19th, 2008 – GM draws down last 3.5 billion
http://www.mlive.com/business/index.ssf/2008/09/gm_to_draw_down_35b_credit_dur.html

Janurary 29th, 2009 – Ford draws down last 10.1 billion
http://uk.biz.yahoo.com/090130/244/if5jz.html

/zero difference…only the date on the calendar

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jeffhre Says:
May 22nd, 2009 at 2:34 pm

#
Edwin Mang

I just watched Tesla sell 50 million in cars at 50,000 each in just seven days . For some strange reason GM keeps asking if there is a market for the Volt . They had one internet site and a spot on Leno . They sold 50million in the little sportsters all that they could put together .

Can you explain that to me ?

If you do not make what I want and need you are correct I will not buy it .

It is not a credit crunch it is a I do not need what you make crunch .
___________________________
Tesla has sold 470 of it’s currently $109,000 Roadsters since organizing in 2003 as a start-up. It has pre-orders of over 1000 for it’s Model S due in 2012 and another approximately 500 orders for the roadster currently in production.

Perhaps you are referring to the dollar amount pre-sold for vehicles that have not yet been produced?

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MarkH Says:
May 22nd, 2009 at 2:35 pm

#103 BillR

Nice analogies, but how exactly do you vote for changes? There are only two parties in the American system and both sides have been bought by corporate interests. Voting for left, right, democrat, or Republican hasn’t really mattered since the majority of Americans have been old enough to have a vote.
Elections in the States are not won with votes or policies. They are won by putting staggering sums of money into advertising campaigns. Matters have reached the point where the largest financial backers now control both parties. Fail to repay your campaign contributions AND those of your rival and you won’t be able to finance an effective campaign next year.
Goldman Sachs has won every election I’ve ever observed.
Jefferson and Jackson feared the sale of elected offices far more than the particular view of their opponents on any issue.

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David K (CT) Says:
May 22nd, 2009 at 2:37 pm

jeffhre @ 111

I think he ( Mr. Edwin Mang) was speaking in terms of a parallel universe.

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statik Says:
May 22nd, 2009 at 2:45 pm

#111 Jeffhre said:

#
Edwin Mang

Tesla has sold 470 of it’s currently $109,000 Roadsters since organizing in 2003 as a start-up. It has pre-orders of over 1000 for it’s Model S due in 2012 and another approximately 500 orders for the roadster currently in production.

Perhaps you are referring to the dollar amount pre-sold for vehicles that have not yet been produced?
=====================

Your a brave man to contradict Mr. Edwin Mang
…aka ‘the tiger’

/prepare for a tsunami of pain

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jeffhre Says:
May 22nd, 2009 at 2:50 pm

#113
David K (CT)
jeffhre @ 111

I think he ( Mr. Edwin Mang) was speaking in terms of a parallel universe.
____________________
Well those can be nice too! Discounting the possibilities of creating a disastrous matter/anti-matter collision though!

I’m actually hoping he put his money where his mouth is and actually ordered a Model S, because the idea of someone screwing around with the end of the world in a parallel universe is just too depressing!

(Quote)
Edwin Mang Says:
May 22nd, 2009 at 2:54 pm

OOOPPPSSS

Make that $250 million in the sporster .
I droped the 2 .
Hay that is what the factory cost .

(Quote)
jeffhre Says:
May 22nd, 2009 at 2:55 pm

Thanks Statik. I think I’ll just take a shower and go to work, I’m not prepared for a “tsunami of pain”. Time for me to make my exit – wish I had time to do what CaptJack usually does in these situations!

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jeffhre Says:
May 22nd, 2009 at 2:57 pm

#116
Edwin Mang

OOOPPPSSS

Make that $250 million in the sporster .
I droped the 2 .
Hay that is what the factory cost
_____________________
Arrrrrrrrrrrrr!

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N Riley Says:
May 22nd, 2009 at 2:57 pm

I want to see a healthy U.S. auto industry as much as anyone else on this site or anyone else in the world. But, I don’t see ripping out the hearts of the bondholders and giving them little to nothing in the new company. I don’t see the government or the UAW having any rights to ownership in the auto industry unless it is on a temporary basis until the auto company can re-pay the money owed to the government. I don’t see where the UAW gets everything it has at stake while the investors are getting crap for their investments. I know that if I were an investor (which I am to a small extent), I would put my money in investments where it would be a lot less likely the U.S. government could get control of the industry.

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N Riley Says:
May 22nd, 2009 at 3:04 pm

Those of you who are saying that this is great and to hurry and bring it on are not being very wise, in my opinion. I don’t believe you really understand what obama is doing to this country’s financial future and the way we have operated in our capitalistic society for all of our history. We are seeing the end of capitalism as we know it. It will never recover again if we don’t stop this madness soon. If you really want to live in a socialistic society, you are very welcome to migrate to one of the European countries where a lot of those citizens are fed up with their governments. To tell the truth, I am fed up with ours now, myself. This is not the change that most of the people who voted for this socialist thought they were going to get. I know that he said all along that he was going to do much of what he has put into place and what he is proposing for the near future, but most of the voters didn’t believe it or just were too dumb to know or care. I greatly suspect the latter.

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statik Says:
May 22nd, 2009 at 3:08 pm

#119 N Riley said:

I want to see a healthy U.S. auto industry as much as anyone else on this site or anyone else in the world. But, I don’t see ripping out the hearts of the bondholders and giving them little to nothing in the new company. I don’t see the government or the UAW having any rights to ownership in the auto industry unless it is on a temporary basis until the auto company can re-pay the money owed to the government. I don’t see where the UAW gets everything it has at stake while the investors are getting crap for their investments. I know that if I were an investor (which I am to a small extent), I would put my money in investments where it would be a lot less likely the U.S. government could get control of the industry.
==================

I feel especially bad for that line of credit of 3.5 billion GM drew down in late september. They did that just days before they had to publicly release their quarterly numbers which would have triggered a miss of pre-negotiated terms of the credit line, which would have closed that account…then they said they were broke about 30 days later, and are now defaulting on the whole thing.

I think that is borderline criminal…if not outright criminal.

They took that money with no intention of repayment, and also at a time when they were ineligible to draw it down…the only reason they still could is because they had not ‘publicly’ disclosed the numbers, so the banks didn’t know yet and/or have legal grounds to shutter it.

/good idea about controlling your own money though…right now, cash is king, and unencumbered dollar bills are going a long, long way. Why tie yourself up/take a risk to make a extra 1% or 2%? Easier to sleep at night when you control your own future, lol.

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nuclearboy Says:
May 22nd, 2009 at 3:09 pm

110 statik,

Thanks for the information.

We surely live in interesting times.

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Edwin Mang Says:
May 22nd, 2009 at 3:09 pm

I like that but I still have that black hole to plug and the cash to do that with . But if you do not make what the public wants and needs it will bite you in the ass . Just like GM .
Forn started making what the public needs and wants and will be in better shape in a few weeks or months .
They ripped out 40% of my holdings and I am not a bond holder .

(Quote)
Edwin Mang Says:
May 22nd, 2009 at 3:13 pm

FORD .
I do not ripp out hearts Just want someone that has been holding out for the last sixty years to start giving back .

GOD BLESS

(Quote)
Edwin Mang Says:
May 22nd, 2009 at 3:16 pm

Of the one trillon spening package that expires in June 10 billion has been spent . Look around people it sounds worse that it is .

(Quote)
nuclearboy Says:
May 22nd, 2009 at 3:18 pm

108 Victor

I think the argument about the Govt was wider in scope. GM screwed itself surely.

The point of some of the arguments was more general. Basically, look at the US balance sheet and decide if the Congress is doing a good job. Our money has been piling up in foreign banks for decades. We spend more than we take in almost every year for the last few decades.

The system is not sustainable in its current form.

The solution that I have observed as a long time critic.

1. Talk about looming financial crisis
2. Spend more money
3. Promise tax cuts.
4, Debate abortion, torture, or flag burning,(topic of the week).
5. Go back to step 1 and repeat

The people running the circus should be blamed.
The voters should be pissed.

(Quote)
Edwin Mang Says:
May 22nd, 2009 at 3:19 pm

I have seen many boats and campers heading to the weekend partys and no one is standing at the local store with a sign saying will work for food .
You pay too much attention to the media and not to the area that you live in .

(Quote)
Edwin Mang Says:
May 22nd, 2009 at 3:22 pm

Farmers do not spend money on airail spraying unless the they have money to spair . and they are .

(Quote)
statik Says:
May 22nd, 2009 at 3:24 pm

Sidenote: Daewoo is out of cash and looking for more money out of Korea (or anyone who will give them more).

What does this mean? Well, Daewoo makes 25% of all of GM’s cars…so thats not good. And also, the replacement for their ’small car’ line (aka Aveo in NA) that was supposed to come out next april…is now delayed forever…ok, thats a lie, until early 2011 (but they might as well say that, because that translates to, ‘we have stopped everything to do with this car’).

Obama didn’t think the trade deal with South Korea was all that hot…and campaigned against it, saying that it was unfair to US, and now SK is not as inclined to help out Daewoo/GM (although that is a lot of jobs…so they probably will, lol). An insolvent Daewoo is a big problem.for GM.

…another way a GM bankruptcy is not anything like Chrysler, because it (unlike Chrysler) is international, it is hard to control/maintain

http://www.reuters.com/article/reutersEdge/idUSTRE54L10G20090522?sp=true

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Edwin Mang Says:
May 22nd, 2009 at 3:32 pm

The one in twenty on wall street that are thieves are causing the others to be looking over their shoulders because the know the thieves . Each time one gets caught the market drops from fear that the others are implecated . And going to jail . The only way to get to the criminals is to go by the good ones that are in the way ergo TARP , is a trap for the criminals .

K Dudes and Dude ets

GOD BLESS

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StevePA Says:
May 22nd, 2009 at 3:44 pm

To all our resident economists, attorneys, financiers, neurologist(s), engineers of every stripe, technicians, other professionals, working folks of all kinds and our venerable retirees – male and female, carguys all – have a great holiday weekend.
To all of you who have served in the military – an echo of other posts – thanks for doing so. Perhaps someday when the economy gets off its back and grows again, some of this direct government intervention in the economy can be reversed. I believe Obama intends ultimately to get the feds out, but if not – the ballot box is there to remedy that situation – one of the good things you vets have preserved for us all.

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CorvetteGuy Says:
May 22nd, 2009 at 3:44 pm

It sucks to be in the car business.
At least this month it does.

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ThombDBhomb Says:
May 22nd, 2009 at 4:16 pm

I stayed away from this site for a couple of weeks. After checking back in today, I agree that we have some quality posters. Thanks people. That last one by StevePA (#131) was especially well-spoken and fair.

Despite its problems, the US is a fine country. Is it too socialist? I guess it is for some people. They have the freedom to gripe, vote, or move to a less socialist country. Can anyone list some countries that are less socialist? Somalia comes to mind.

Let’s try to find common ground, despite our differences.

Go Volt!

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ThombDBhomb Says:
May 22nd, 2009 at 4:17 pm

BTW, Lyle’s graphic that accompanies this post was LOL

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CaptJackSparrow Says:
May 22nd, 2009 at 4:29 pm

Off topic, well at least off this political bankrupty topic…

Raser shows a new video for their EREV H3 Hummer. It also has a great explanation on how an EREV works.

http://www.autobloggreen.com/2009/05/22/americans-need-big-trucks-says-sen-hatch/

They said you will be able to power other stuff to with the generator.
But 700VDC?!?!?!?!
DAAAAAANNNGGGGG!!!!!!!!!

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Dan Petit Says:
May 22nd, 2009 at 4:35 pm

During the process of reorganization, there ought to be a mandate somehow for the provision of far more Voltec production plants.

As well, more directives ought to favor conversions of more and more of the production of all vehicles to Voltec. If GM desires the capabilities to convert more production plants over to Voltec technologies in order to meet or exceed (and I mean FAR exceed) the new CAFE standards with Voltec technologies across-the-board, then, I think that there ought to be money made available to do just that.

Whatever your thought process is regarding technologies, I believe that the Voltec technologies, for the re-organization opportunity at hand right now, that, the requirement and funding for Voltec production vehicles be driven right across the board within this re-organization process.

That way, there will be an enormous set of competitive pressures induced into the marketplace what will force other OEM’s to stop any and all “foofy and goofy” expenditures such as silly cartoon ads that say absolutely nothing, optionally-unnecessary equipment, silly “marketer” misdirection and the historically-unwise advice excessively prevalent nowadays to OEM board members and upper management.
We have run out of time for arguments to the contrary. Loud proclamations on talk radio that sound like they are coming from some “lush” who has a bad habit of projecting ridiculous arguments that get no-one anywhere fast, have just got to be ignored and tuned-out.
There must be a dedicated expansion of Voltec technology production plants however GM sees fit. These must be funded with proper loans to GM. The only opposition to this seems to be coming from the fearful OEM competition with “kicking & screaming” commentary as is frequently seen here.
I am not going to buy anything else except a Voltec vehicle period. PERIOD,
Other OEM’s need to wake up and smell the coffee pronto.
For other OEM’s to listen to advice that they can not compete with the Voltec technologies, then, I say this:
************************************************************************************
YOU ARE IN DEEP TROUBLE IF YOU DO NOT GO EREV!! SOON!
************************************************************************************
Dan Petit Austin TX.

(Quote)
ccombs Says:
May 22nd, 2009 at 4:37 pm

I am no alarmist, but this is scary stuff.

(Quote)
Dan Petit Says:
May 22nd, 2009 at 4:53 pm

#137 ccombs.

I’ve seen this before, and, while it is unsettling, it is a very good learning experience for us all. At the same time, these vast changes in the structure of GM are also a direct reflection of the kinds of changes that are, in fact, right now, an outstanding opportunity for technological advancements and positive changes if we don’t mess it up.
We would mess it up by not contributing the very best of our ideas from ourselves and from everyone here, to help promote the very finest and wisest of changes on behalf of GM.
As future customers of Voltec vehicles, *now* is our chance to share very thoughtful ideas that may make their way up the “chain-of-command” to upper management at GM, and, this is the finest site with which to do that. This has always been one of the things that I’ve always treasured regarding this site. It really makes me satisfied when I can occasionally share some idea that might have some technical merit for GM. I hope others feel this way too.
Dan Petit Austin TX.

(Quote)
carcus1 Says:
May 22nd, 2009 at 4:57 pm

ThombDBhomb @ 133 says:

“Can anyone list some countries that are less socialist?”
___________________

These fellers already made a list. (and conducted a study)

U.S. falls in economic freedom rankings
http://electriccityweblog.com/?p=3756

1. Hong Kong

2. Singapore

3. Switizerland

4. New Zealand

5. United Kingdom

6. Canada and Chile (tied)

8. Australia

9. Ireland

10. United States

(Quote)
carcus1 Says:
May 22nd, 2009 at 5:32 pm

It really doesn’t bother me that our country appears to be swirling into a socialist porcelain punch bowl. I have a tool for coping with such issues.

Serenity now.

http://www.youtube.com/watch?v=5513mXmQbw4

(Quote)
ThombDbhomb Says:
May 22nd, 2009 at 5:42 pm

#139 and #140 carcus1

“In this year’s index, Hong Kong retains the highest rating for economic freedom, 8.94 out of 10. The other top-
10 nations are
Singapore (8.57),
New Zealand (8.28),
Switzerland (8.20),
United Kingdom (8.07),
Chile (8.06),
Canada (8.05),
United States (8.04),
Australia (8.04), and
Ireland (7.92).”

How can being in the the top ten for economic freedom be considered “swirling into a socialist porcelain punch bowl?”

SERENITY NOW!

(Quote)
CaptJackSparrow Says:
May 22nd, 2009 at 5:48 pm

@carcus1 140

Don’t lie, you go to those topless carwashes…
http://www.youtube.com/watch?v=sXFPbITbrKY

(Quote)
Mark Sist Says:
May 22nd, 2009 at 5:54 pm

So much for capitalism. I never thought I would live to see the beginning of the end of our capitlistic economy. Move over France, here we come !!!

(Quote)
carcus1 Says:
May 22nd, 2009 at 6:11 pm

#142 CaptJack
#141 ThombD

“Don’t lie, you go to those topless carwashes…”
_________________

I’d like to think I could move to one of the countries further up the list, and all my cares would be washed away.

But it looks like misleading advertisements can be found even in Singapore. It just makes me sick.

http://www.youtube.com/watch?v=D_5lHeQfLMo

/There are some hot ladies to “date” in Singapore though, (just bring about $200 cash)

(Quote)
solo Says:
May 22nd, 2009 at 6:15 pm

30 Nuclearboy.

I think you are right. The government won’t steal your private 401k, the supreme court would put a halt to it pronto. Even Teresa Ghilarducci didn’t propose that. She DID propose eliminating all tax credits associated with 401k’s to fund a new federal taxing authority called “guaranteed retirement accounts” which would be a suplement to Social Security. The plan would likely take a lot of capitol out of the free market and put it in the hands of the federal government. The feds really REALLY need a new revenue source to keep running their Ponzi scheme. Ms. Ghilarducci may be giving them ideas on how to accomplish it without a direct tax increase on income.

The university where Ms. Ghilarducci works is called The New School for Social Research. This university is so far left it makes Berkley look like a Baptist college in South Carolina. I pulled the following 2 paragraphs out of Wikipedia’s bio on the university. As you can see they are tied in to ….. 1: The UAW, 2:The democratic party.
————————————————————
From Wikipeida:
In 2003, adjunct faculty in several divisions of the New School began to form a labor union chapter under the auspices of the United Auto Workers. Though the university at first tried to contest the unionization, after several rulings against it by regional and national panels of the National Labor Relations Board the university recognized the local chapter, ACT-UAW, as the bargaining agent for the faculty. As a result of a near strike in November 2005 on the part of the adjunct faculty, the ACT-UAW union negotiated its first contract which included the acknowledgment of previously unrecognized part-time faculty at Mannes College The New School for Music.

John McCain’s speech at the graduation ceremony of 2006 generated a large amount of media attention, due to vocal student opposition in print,[18] radio, [19] and television[20] media, and the speech of Jean Rohe, a graduating senior who spoke before McCain and directly confronted the controversy, saying that the senator “does not reflect the values upon which the university was founded.”[21]

In 2007, New School trustee and long-time Clinton fundraiser Norman Hsu was arrested after being found to have skipped out on a felony theft conviction.[22] In 2008, he was convicted and sentenced to three years prison for defrauding millions of dollars of investors’ money in an intricate Ponzi scheme. In response, the Hillary Clinton campaign returned $850,000 of his campaign contributions.[23]
———————————————-

(Quote)
CaptJackSparrow Says:
May 22nd, 2009 at 6:16 pm

@carcus1

AHAHAHAHAHAHA!!!!

Man, at just before the end of the video, I just stuffed my face with some Doritos and saw what came next…..

NICE……..
I need to wash it down with more beer now.

(Quote)
carcus1 Says:
May 22nd, 2009 at 6:21 pm

Yeah, I gotta cleanse my palate after those two videos.

Going back to the original car wash scene. . . .

Taken em’ off here boss!
http://www.youtube.com/watch?v=Kliy32YWFcU

(Quote)
Ford Worker Says:
May 22nd, 2009 at 6:33 pm

I was terminated by GM due to buyout in 2002 and now work at Ford in Ypsilanti. Let me tell you, I hate GM and most Ford workers here also have little sympathy for both GM and Chrysler on corporate level (you know who benefit when they fail), but always sympathize with our fellow UAW members there!

Ford is going to win from this wreck! I hope my ex-boss Jeff G**** (cell phone: 313-3*7-**04) at GM at GM Powertrain (Romulus) get fired and retirement wiped out, I will call to congratulate him for his pain!

T Wh

(Quote)
Vincent Says:
May 22nd, 2009 at 6:38 pm

Interesting…
http://en.wikipedia.org/wiki/GM_Daewoo

(Quote)
Edwin Mang Says:
May 22nd, 2009 at 6:58 pm

The Government stake in GM is going to the dealers .
Some what like Ford .

(Quote)
George K Says:
May 22nd, 2009 at 7:26 pm

#63 CaptJackSparrow
“First things first for this weekend. I want to thank everyone who has serverd in our US Military in every branch for all their hard work and dedication to keep our grand country FREE!!!”
– - – - – - -
You’re welcome from my son and myself.

(Quote)
jeffhre Says:
May 22nd, 2009 at 8:23 pm

#119
N Riley, “I would put my money in investments where it would be a lot less likely the U.S. government could get control of the industry”
_______________
I agree with that 100%. As an investor I try exceedingly hard to do that. A lot of business owners make the mistake of thinking that govt wants to own or control businesses, same kind of thing some folks sometimes think about banks. Yet the only time they step in, is in the case of failures, except in countries like Russia and Venezuela.

In more sophisticated countries pols realize that owning and running a successful business is usually very hard work. Why do it when you can just collect the vig, umm, I mean tax the income. So I try very hard to stay away from where govt. will interfere, change the rules. Or take over, in the case of a colossal failure.

GM stopped being a rational investment long ago. In the current economic environment the remaining GM bondholders have been reduced to speculating on the future. Anyone who wanted to be reasonably compensated for their speculation to date, could have sold while there was still a market for their bonds

As for the UAW they will apparently exchange equity for pension benefits that the govt. would be on the hook for anyway. Equity price fluctuations could help them realize that being aligned with GM’s future requires more that demanding the highest possible dollar for the least level of acceptable work.

Anyway, I figure if you bring 53 plus billion to a rescue, you get to write your own terms, until some one is willing to take your place or management decides to just say no.

(Quote)
carcus1 Says:
May 22nd, 2009 at 8:23 pm

Speaking of the military, Noel Park brought this up the other day. Here’s a link.

Military Officers Tie Energy To National Security
http://www.npr.org/templates/story/story.php?storyId=104267992

(kind of a “duh” but it adds some weight when the 4 stars start talking about it)

/how many times did my man Ron Paul have to explain “blowback” during the presidential compaign?

(Quote)
Jason L Says:
May 22nd, 2009 at 8:26 pm

Its very simple, if GM pays back my tax money that I gave them in the form of a loan, I will buy a Volt or other GM car. If it turns out that money is wiped out in bankruptcy and was a free money gift, I will never buy a GM car as long as I live. We’ll see what happens.

(Quote)
jeffhre Says:
May 22nd, 2009 at 8:40 pm

126 nuclearboy
5. Go back to step 1 and repeat

The people running the circus should be blamed.
The voters should be pissed.
___________________________
…And

Sorry, good point. One of the things I think is really nuts is Govt. accounting. It’s so opaque it makes Hollywood accounting look like a charitable activity. But no one has the time or inclination to look at the boring nuts and bolts while politicians compete on their rhetoric on the items on your list.

(Quote)
Roger Ramjet Says:
May 22nd, 2009 at 10:37 pm

Nice move GM. Go under and immediately collect 30 BILLION LARGE. Ha ha. Only in America..

(Quote)
MarkH Says:
May 23rd, 2009 at 1:18 am

Carcus1 and ThombDBhomb

Most of the countries on your lists are former parts of the British Empire that went their separate ways without needing a Revolutionary War. Nearly all of those still have the British monarch on at least some of their currency.
Would Patrick Henry have appreciated the irony or would he have put a gun to his head?

(Quote)
nuclearboy Says:
May 23rd, 2009 at 5:37 am

Have a great weekend everyone. I will try not to drink multiple cups of coffee and read http://www.gm-volt in the future.
Thanks for all the great discussions.

God Bless America and our Troops.

(Quote)
carcus1 Says:
May 23rd, 2009 at 7:35 am

MarkH @ 157,

“Would Patrick Henry have appreciated the irony or would he have put a gun to his head?”
_________________________________

2 lesser known quotes from Patrick Henry may help answer your query:

“For my part, whatever anguish of spirit it may cost, I am willing to know the whole truth; to know the worst and provide for it.”

“Give me liberty or give me . . . SERENITY NOW!”

(Quote)
JEC Says:
May 23rd, 2009 at 7:56 am

carcus1

Thomas Jefferson was one of our greatest presidents. His insight and understanding were ahead of his time.

One of my favorite T. Jefferson quotes:
“The tree of liberty must be refreshed from time to time, with the blood of patriots and tyrants.”

(Quote)
CDAVIS Says:
May 23rd, 2009 at 8:26 am

______________________________________________________
#131 StevePA
—–

Excellent Post!
______________________________________________________

(Quote)
noel park Says:
May 23rd, 2009 at 11:18 am

#153 carcus1:

Thanks.

(Quote)
The Government might send GM into Bankruptcy - FinalGear.com Forums Says:
May 23rd, 2009 at 2:24 pm
Larry McFall Says:
May 23rd, 2009 at 2:45 pm

The sooner the better. I know that the environment seems bleak for GM but it appears that “Bankruptcy” may have spruced the bad situation for Chrysler. Now that Chrysler is in Chapter 11, I understand that the Government is going to reach down deep and pull them up “Out of Bankruptcy”. If the US Auto Manufacters and yes, the US Labor Unions would have thought in the Long Term, the US Government may not have to be today, the Super Savior as they are.

Unfornutely, someone as to do it and of course, the Bush administration wasn’t making any effort and here came along Obama. Let’s just hope he can make something work and with a little of that OLD American iniative and energy, just maybe GM can shine again.

If it works ??? The GM employees need to strive to get everything they want in this world providing, they don’t want so much. The Union is a good aid and has the ability to keep the corporate greed in check however, don’t use the union to feed yours.

Being part of the GM family since before World War II, I pray that they recover some of their dignity.

(Quote)
Preseli Says:
May 23rd, 2009 at 9:52 pm

Rather than “reinventing” the ownership experience, I suspect that stock and bond holders alike are *repenting* of the ownership experience. I will not purchase a car (or anything else) from an agency that is 50% owned by the State.

BTW, what does “lift Chrysler out of bankruptcy” mean?

As for #108 Victor, did the government give $170 billion to its friends in AIG? How about Fannie Mae? Freddie Mac? And how many cars has the government made and sold successfully anyway?

Schills to the State!

(Quote)
KenEE Says:
May 23rd, 2009 at 10:31 pm

Laws? Obama don’t need no stinking laws!

(Quote)
BobbyG Says:
May 23rd, 2009 at 10:39 pm

If the bondholders are willing to put up an additional $45 billion then GM would be willing to give them an additional 50% ownership as well. The last money in, when the company is worst off gets the largest share of the pie.

(Quote)
Jmac Says:
May 25th, 2009 at 8:36 pm

Let them go Bankrupt! I’m tired of our Billions of tax dollars being wasted to save a company that arrogantly would not transform their thinking, use creativity & innovation & retool to build vehicles that people actually want to buy! Last time I checked we live in a Capitalistic society, where survival & thriving of the fittest is what makes our economy go round. Not socialism at its finest! Let’s face it more americans buy Toyota, Honda, & Hyundai then they do GM’s. Just walk around a parking lot at the mall & count how many jap & foreign cars there are, and then how many GM, Chrysler, and Ford’s there are. It’s Obvious! Let Ford be the last american car company standing, Oh & by the way keep an eye on them. They have been stated as being as competitive & comparative with Honda & Toyota.

(Quote)
Bob G Says:
May 26th, 2009 at 4:11 pm

#168 Jmac Says, “…I’m tired of our Billions of tax dollars being wasted to save a company that arrogantly would not transform their thinking, use creativity & innovation & retool to build vehicles that people actually want to buy! Last time I checked we live in a Capitalistic society, where survival & thriving of the fittest is what makes our economy go round. Not socialism at its finest! Let’s face it more americans buy Toyota, Honda, & Hyundai then they do GM’s.”

I think you have socialism and capitalism confused. GM *has* been making the cars that the market has demanded. Maybe SUVs don’t fit your tastes, but they have been very popular.

Meanwhile, Toyota and Honda have used their protected domestic market and direct government subsidies to give them a huge advantage, especially in the small car market.

(Quote)

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Report: White House to Send GM into Bankruptcy Next Week

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