An idea for the auto bailout - DPChallenge Forums

Nikon AF-S Nikkor 70-200mm f/2.8G ED VR II

12/03/2008 12:15:09 PM · #52

Originally posted by DrAchoo:

Originally posted by goinskiing:

Originally posted by Spazmo99:

Originally posted by goinskiing:
The reason the auto industry is hurting, IMO, is the lack of innovation. It really needs to move forward, I realize that yes, jobs are at stake, but something has to change.

Despite the domestic focus on Trucks and SUVs, which have greatly improved through innovation at the D3, the D3 have been innovative, especially Ford. Everyone knows about the Focus as being an economical vehicle, but did you know that Ford also sells, in Europe, a 68mpg Fiesta. That's better mileage than the Prius, or any other hybrid save the 2 seat Honda Insight.

I guess I just don't understand why we don't see them here in the states? Are we just not good consumers? Still, I don't claim to be an expert, it just seems like there's something amiss. I do know several families and friends that would be affected if the D3 aren't bailed out and that is never a peasant thought. Even though I don't like jobs being lost, sometimes these kind of things can have unseen positive effects.

From Wiki...
The model will not be available in the United States because, as Business Week noted, the company "doesn't believe it could charge enough to make money on an imported ECOnetic" and doesn't think it would sell enough of the model (350,000/year) to justify the $350 million in upgrades required at their Mexico plant in order to justify its manufacture in North America.[11]

Another problem the Ford Fiesta ECOnetic shares with other Diesel cars in the US is Diesel cost - 50% higher than gasoline as of Nov 2008.

I'd say that Wiki's outdated.

As to the diesel issue, it's at least partially an issue of production. Some gasoline production could be sacrificed to produce more diesel and the price would drop. I doubt the price premium placed on diesel is permanent. Of course, perhaps the government could work with the oil companies to reduce the cost of diesel, maybe convince them to give something back as a thank you for those record profits.

The government could help in other ways too, by loosening restrictions that have saddled the D3 unnecessary burdens. They've done such things before, back in the 1970's, during the oil crisis. That's what allowed most of the efficient imports at that time to be imported in the first place.

MattO

Nikon D4

12/03/2008 12:31:21 PM · #53

Originally posted by glad2badad:

Next-gen Ford Fiesta will arrive in U.S. by late 2009

That article is almost 2 years old and has a date to arrive in the article of late 2008. I'm pretty sure thats not going to happen since FMC hasnt retooled any plants to accomodate that.

Matt

pamelasue

Tamron SP AF 28-75mm f/2.8 XR Di for Canon

12/03/2008 12:41:53 PM · #54

Originally posted by MattO:

I think the exec. make way too much money and receive way too many bonuses for running a business as poorly as they do. I say if the govt. helps them out in any way its with the stipulation that wholesale changes are made to upper management and the way they do business.

Agreed ... all of the execs are nothing more than criminals in my mind ... they should all be fired, made to pay back all salaries and bonus money and after that, locked up for a LONG time!

Nikon AF-S Nikkor 70-200mm f/2.8G ED VR II

12/03/2008 12:42:36 PM · #55

Originally posted by MattO:

Originally posted by glad2badad:
Next-gen Ford Fiesta will arrive in U.S. by late 2009

That article is almost 2 years old and has a date to arrive in the article of late 2008. I'm pretty sure thats not going to happen since FMC hasnt retooled any plants to accomodate that.

Matt

Ford plans it for 2011.

2011 Ford Fiesta

MattO

Nikon D4

12/03/2008 12:44:55 PM · #56

Originally posted by Spazmo99:

Originally posted by MattO:

Originally posted by glad2badad:
Next-gen Ford Fiesta will arrive in U.S. by late 2009

That article is almost 2 years old and has a date to arrive in the article of late 2008. I'm pretty sure thats not going to happen since FMC hasnt retooled any plants to accomodate that.

Matt

Ford plans it for 2011.

2011 Ford Fiesta

That is a far cry from 2009, and IMHO they have to still be around in 2011 for that to even be plausible. On the ford discussion boards we have had a long drawn out thread on Fords sitting on their hands getting these things to market. As a company we need them here now, not 2011.

Matt

glad2badad

Apple iPhone 16 Pro

Lensbaby Sweet 35 Optic

12/03/2008 12:48:18 PM · #57

Ok...How about 2010 then? :-)
FORD FIESTA PRODUCTION TO BEGIN IN EARLY 2010; EUROPEAN HATCHBACK ADDED FOR NORTH AMERICA

12/03/2008 01:18:24 PM · #58

Originally posted by MattO:

Originally posted by Spazmo99:

Originally posted by MattO:

Originally posted by glad2badad:
Next-gen Ford Fiesta will arrive in U.S. by late 2009

That article is almost 2 years old and has a date to arrive in the article of late 2008. I'm pretty sure thats not going to happen since FMC hasnt retooled any plants to accomodate that.

Matt

Ford plans it for 2011.

2011 Ford Fiesta

That is a far cry from 2009, and IMHO they have to still be around in 2011 for that to even be plausible. On the ford discussion boards we have had a long drawn out thread on Fords sitting on their hands getting these things to market. As a company we need them here now, not 2011.

The site calls for them to be here early 2010 as a 2011 model.

Matt

Sure, they're needed here now, so? They can't just take a mfg plant that's tooled up for Explorers and turn the knob to "Fiesta" and have that plant magically start making Fiestas.

Message edited by author 2008-12-03 13:18:45.

Matthew

Peleng 8mm f/3.5 Fisheye MC In M42 Mount

12/03/2008 02:12:11 PM · #59

Originally posted by glad2badad:

Originally posted by pamelasue:

Originally posted by glad2badad:
Employees
Ford 246,000
GM 252,000
Chrysler 129,000

so let's talk about the auto suppliers also and the jobs that would potentially be lost there .... and since were talking about jobs lost, let's also consider all of people in a 'supporting cast' type of role ... like the restaurants and other small businesses that operate near the factories and headquarters ... those small businesses rely heavily, if not almost completely on the Big 3 ... if the auto industry dries up, the trickle down effect that will happen to the rest of the country will be devastating ...

I agree absolutely! You too Spaz...

I figured this argument/point would be made. Nothing against you personally Doc, but I think the "doomsaying" and "talking heads" are close on this one. 1 million jobs is a certain reality and up to 3 million isn't out of the question either. The automotive industry reaches into many places with all of the support, etc...

Hardly. If the big auto manufacturers go bust, that does not mean that their businesses suddenly stop. It means that they are restructured and sold to someone else.

The restructuring will involve job losses, and the subcontractors of the auto companies will suffer some bad debt and may have to renegotiate their key contracts, but (outside of a catastrophe) the businesses will still run and workers will still largely have jobs in the short to medium term.

Ironically, it is the collapse of a number of key subcontractors that has weighed down the auto industry in recent years - the big carmakers have had to bail them out at the cost of billions in order to ensure continuity of manufacturing.

DrAchoo

Panasonic Lumix DMC-LX5

Canon EF 24-105mm f/4.0L IS

12/03/2008 02:29:22 PM · #60

Originally posted by Spazmo99:

Sure, they're needed here now, so? They can't just take a mfg plant that's tooled up for Explorers and turn the knob to "Fiesta" and have that plant magically start making Fiestas.

How come I get the funny feeling this is tied into the $25 billion in loans the big 3 got for more fuel efficient cars? My guess is congress had the idea you needed to plan a car from scratch, do all the R&D, and then manufacture it. Ford rather spends less than a billion to retool the Mexico plant and suddenly we are making 65mph Fiestas. Thanks for the money...suckerrrrrsssss!!!

Message edited by author 2008-12-03 14:29:31.

pamelasue

Tamron SP AF 28-75mm f/2.8 XR Di for Canon

12/03/2008 02:32:41 PM · #61

Originally posted by DrAchoo:

Originally posted by Spazmo99:

Sure, they're needed here now, so? They can't just take a mfg plant that's tooled up for Explorers and turn the knob to "Fiesta" and have that plant magically start making Fiestas.

How come I get the funny feeling this is tied into the $25 billion in loans the big 3 got for more fuel efficient cars? My guess is congress had the idea you needed to plan a car from scratch, do all the R&D, and then manufacture it. Ford rather spends less than a billion to retool the Mexico plant and suddenly we are making 65mph Fiestas. Thanks for the money...suckerrrrrsssss!!!

Ford is actually only asking for the guarantee of a loan IF they need it ... right now they're in the best financial position and are considered to be the healthiest of the Big 3 ... GM, on the other hand, won't survive unless they get 4 billion by years end ...

12/03/2008 03:05:16 PM · #62

Originally posted by Matthew:

Originally posted by glad2badad:

Originally posted by pamelasue:

Originally posted by glad2badad:
Employees
Ford 246,000
GM 252,000
Chrysler 129,000

so let's talk about the auto suppliers also and the jobs that would potentially be lost there .... and since were talking about jobs lost, let's also consider all of people in a 'supporting cast' type of role ... like the restaurants and other small businesses that operate near the factories and headquarters ... those small businesses rely heavily, if not almost completely on the Big 3 ... if the auto industry dries up, the trickle down effect that will happen to the rest of the country will be devastating ...

I agree absolutely! You too Spaz...

I figured this argument/point would be made. Nothing against you personally Doc, but I think the "doomsaying" and "talking heads" are close on this one. 1 million jobs is a certain reality and up to 3 million isn't out of the question either. The automotive industry reaches into many places with all of the support, etc...

Hardly. If the big auto manufacturers go bust, that does not mean that their businesses suddenly stop. It means that they are restructured and sold to someone else.

The restructuring will involve job losses, and the subcontractors of the auto companies will suffer some bad debt and may have to renegotiate their key contracts, but (outside of a catastrophe) the businesses will still run and workers will still largely have jobs in the short to medium term.

Ironically, it is the collapse of a number of key subcontractors that has weighed down the auto industry in recent years - the big carmakers have had to bail them out at the cost of billions in order to ensure continuity of manufacturing.

That's a big assumption. There's a big difference between restructuring under Ch 11 and being chopped up and sold off bit by bit under Ch 7.

The problem with the D3 restructuring under Ch 11 is twofold. One: Consumers are highly unlikely to purchase a car from a manufacturer that may not be around when they need service. In one survey I read, 70% of consumers would not buy a car from a manufacturer in bankruptcy. The common comparison is made to airlines going bankrupt, but a car is not like an airline ticket. If the airline goes bust,you're only out a few hundred bucks. Aside from a home, a car is the most expensive asset people buy, they're simply not willing to make the purchase from a company that may not be there when they need warranty service.

Second is the suppliers and the shortage of available credit. If the D3 are financially at risk, their suppliers will be unwilling to ship them parts on the 90 or 120 day terms that they need. If they can't pay their suppliers, they can't build cars and they will soon be out of Ch 11 and on the chopping block under Ch 7 being sold off bit by bit. Who would buy the pieces in this economy?

Canon 12x IS USM (S3 IS built-in Lens) -- 36-432mm (35mm EQ)

12/03/2008 03:10:27 PM · #63

Originally posted by DrAchoo:

Actually, I'd bet that the Fiestas we get here in the U.S. will have a very different engine, most likely a much less efficient gasoline engine due mostly to the onerous restrictions and regulations we have here.

In any event, Ford is the one D3 company that is the least likely to take out a loan from the government.

It's also not a handout, they're asking for loans, both in the increased fuel economy development case AND the so-called "bailout".

Message edited by author 2008-12-03 15:14:15.

GeneralE

Canon PowerShot S3 IS

12/03/2008 03:12:47 PM · #64

Hawaii Endorses Plan For Electric Cars

LoudDog

Canon EOS-350D Rebel XT

Canon EF 17-40mm f/4.0L USM

12/03/2008 03:26:33 PM · #65

Some points:

If one or all of the big three fail, people still need to buy cars! More of the other cars would be sold. Production at other plants will rise. As some die, others will be born.

How does Honda Toyota and Nissan survive when the D3 canâ��t?

If I were paid $20,000,000/year to run a company and had to beg the government for loans to survive Iâ��d be very embarrassed. Why are you paid that much if you can not turn a profit? What do you do to deserve that pay? Superior begging skills?

What happens if we give the D3 34 billion, the market does not turn around for a year or two, and they need more money? Do we give them more money? Or do we watch them fold and see our 34 billion go to complete waste.

With the real estate crash lots of agents have had to fold, many are operating at a loss. Add in loan agents, title companies, inspectorsâ�¦ New housing industry is down to nothing too because of this. Plumbers, framers, drywallers, roofers, painters, flooring peopleâ�¦ all out of work. Without New homes, appliance sales are downâ�¦ Cabinet makers, countertopsâ�¦ What about a bailout for the housing market? County wide I bet much more people are affected by the housing slump then a D3 crash!

Having bought 2 new cars in the last few years and doing extensive research on all of our options comparing price, performance, features and feel none of the D3 came close to consideration.

I have a better idea for the 34 billion. Lets have a lottery of tax payers that are current on their taxes and have been good honest tax payers the last 5 or 10 years. We could draw 340,000 names randomly and give each $100,000 (tax free of course). The US would be far better off! Those people would buy cars, houses, pay off debt, send kids to collegeâ�¦ Or we can fund the D3 to continue to build and market cars people donâ��t buy.

And finally, has all this begging for bailout money increased or decreased your confidence in American automakers and likelihood of you ever buying one?

Sorry, just a few things I wanted to get off my chest!

goinskiing

Canon EOS-6D

Canon EF 24-70mm f/2.8L USM

12/03/2008 03:29:36 PM · #66

Originally posted by LoudDog:

I think that's what I have been thinking in the back of my mind but couldn't formulate it.

DrAchoo

Panasonic Lumix DMC-LX5

Canon EF 24-105mm f/4.0L IS

12/03/2008 03:38:39 PM · #67

Originally posted by Spazmo99:

Originally posted by DrAchoo:

Originally posted by Spazmo99:

Sure, they're needed here now, so? They can't just take a mfg plant that's tooled up for Explorers and turn the knob to "Fiesta" and have that plant magically start making Fiestas.

How come I get the funny feeling this is tied into the $25 billion in loans the big 3 got for more fuel efficient cars? My guess is congress had the idea you needed to plan a car from scratch, do all the R&D, and then manufacture it. Ford rather spends less than a billion to retool the Mexico plant and suddenly we are making 65mph Fiestas. Thanks for the money...suckerrrrrsssss!!!

Actually, I'd bet that the Fiestas we get here in the U.S. will have a very different engine, most likely a much less efficient gasoline engine due mostly to the onerous restrictions and regulations we have here.

In any event, Ford is the one D3 company that is the least likely to take out a loan from the government.

It's also not a handout, they're asking for loans, both in the increased fuel economy development case AND the so-called "bailout".

Note I DID say "loans". The $25 billion for more fuel efficiency has already been done (although I don't think the check has been written). That was separate from them asking for money this week.

Canon EF 17-40mm f/4.0L USM

12/03/2008 04:31:07 PM · #68

Originally posted by LoudDog:

Some points:

If one or all of the big three fail, people still need to buy cars! More of the other cars would be sold. Production at other plants will rise. As some die, others will be born.

Yes, they will still need to buy cars, but you should know better than to expect increasing production to be as simple as turning a knob. Those cars will, in all likelihood be produced overseas, since a failure in the D3 will devastate the Tier 1 and 2 suppliers that also supply the domestically produced foreign car plants and, in any event, Honda, Toyota and Nissan will be unable to fill in the gaps, so as supply drops, expect prices to rise significantly.

Originally posted by LoudDog:

How does Honda Toyota and Nissan survive when the D3 canâ��t?

They're hardly thriving.

Originally posted by LoudDog:

If I were paid $20,000,000/year to run a company and had to beg the government for loans to survive Iâ��d be very embarrassed. Why are you paid that much if you can not turn a profit? What do you do to deserve that pay? Superior begging skills?

Good question, it's one that should be asked of many CEO's especially those who ran banks. BTW, the numbers you see for the pay that the automotive CEO's get is misleading. The SEC reports their options as being valued at the face value, however, since the stock prices have fallen, those options are worthless and that will reduce that $20,000,000 by about 90%. The CEOs at the failed banks don't take that hit.

Originally posted by LoudDog:

What happens if we give the D3 34 billion, the market does not turn around for a year or two, and they need more money? Do we give them more money? Or do we watch them fold and see our 34 billion go to complete waste.

Do you stand by and twiddle your thumbs while 3 million people join the unemployment line? You sound as though you think this money is a check that the D3 are going to go to the bank and cash. It's not, it's for loans. You know as in the borrowing of money. It gets repaid. Even if the D3 were to go totally bust and get auctioned off under Ch 7, the government will be first in the line of creditors being repaid out of the proceeds.

Originally posted by LoudDog:

With the real estate crash lots of agents have had to fold, many are operating at a loss. Add in loan agents, title companies, inspectorsâ�¦ New housing industry is down to nothing too because of this. Plumbers, framers, drywallers, roofers, painters, flooring peopleâ�¦ all out of work. Without New homes, appliance sales are downâ�¦ Cabinet makers, countertopsâ�¦ What about a bailout for the housing market? County wide I bet much more people are affected by the housing slump then a D3 crash!

A good part of that $700 Billion dollar bailout is for just that or did you sleep through that?

There's also another, proposed $800 Billion package in the works.

Originally posted by LoudDog:

Having bought 2 new cars in the last few years and doing extensive research on all of our options comparing price, performance, features and feel none of the D3 came close to consideration.

That's your choice. Maybe you'll see it in your heart to take in a family or two that gets displaced when the D3 crumbles and they can admire your choices.

Originally posted by LoudDog:

I have a better idea for the 34 billion. Lets have a lottery of tax payers that are current on their taxes and have been good honest tax payers the last 5 or 10 years. We could draw 340,000 names randomly and give each $100,000 (tax free of course). The US would be far better off! Those people would buy cars, houses, pay off debt, send kids to collegeâ�¦

I've heard more stupid ideas, but not many.

Originally posted by LoudDog:

And finally, has all this begging for bailout money increased or decreased your confidence in American automakers and likelihood of you ever buying one?

Neither.

Originally posted by LoudDog:

Sorry, just a few things I wanted to get off my chest!

Apology accepted.

Message edited by author 2008-12-03 16:37:08.

LoudDog

Canon EOS-350D Rebel XT

12/03/2008 05:27:43 PM · #69

Originally posted by Spazmo99:

Originally posted by LoudDog:
Some points:

If one or all of the big three fail, people still need to buy cars! More of the other cars would be sold. Production at other plants will rise. As some die, others will be born.

Yes, they will still need to buy cars, but you should know better than to expect increasing production to be as simple as turning a knob. Those cars will, in all likelihood be produced overseas, since a failure in the D3 will devastate the Tier 1 and 2 suppliers that also supply the domestically produced foreign car plants and, in any event, Honda, Toyota and Nissan will be unable to fill in the gaps, so as supply drops, expect prices to rise significantly.

Maybe, maybe not.

Originally posted by Spazmo99:

Originally posted by LoudDog:
How does Honda Toyota and Nissan survive when the D3 canâ��t?

They're hardly thriving.

They are not begging for money and they have far less experience building and selling cars.

Originally posted by Spazmo99:

Originally posted by LoudDog:
If I were paid $20,000,000/year to run a company and had to beg the government for loans to survive Iâ��d be very embarrassed. Why are you paid that much if you can not turn a profit? What do you do to deserve that pay? Superior begging skills?

Good question, it's one that should be asked of many CEO's especially those who ran banks. BTW, the numbers you see for the pay that the automotive CEO's get is misleading. The SEC reports their options as being valued at the face value, however, since the stock prices have fallen, those options are worthless and that will reduce that $20,000,000 by about 90%. The CEOs at the failed banks don't take that hit.

If I were paid $2,000,000 or even $200,000 per year and had to beg for taxpayer money to keep my business running Iâ��d be embarrassed. Shame on those other overpaid empty suits too.

Originally posted by Spazmo99:

Originally posted by LoudDog:
What happens if we give the D3 34 billion, the market does not turn around for a year or two, and they need more money? Do we give them more money? Or do we watch them fold and see our 34 billion go to complete waste.

Do you stand by and twiddle your thumbs while 3 million people join the unemployment line? You sound as though you think this money is a check that the D3 are going to go to the bank and cash. It's not, it's for loans. You know as in the borrowing of money. It gets repaid. Even if the D3 were to go totally bust and get auctioned off under Ch 7, the government will be first in the line of creditors being repaid out of the proceeds.

Do you bail out everyone that needs it? And loans to a company with a failed business plan is more of a grant then a loan.

Originally posted by Spazmo99:

Originally posted by LoudDog:
With the real estate crash lots of agents have had to fold, many are operating at a loss. Add in loan agents, title companies, inspectorsâ�¦ New housing industry is down to nothing too because of this. Plumbers, framers, drywallers, roofers, painters, flooring peopleâ�¦ all out of work. Without New homes, appliance sales are downâ�¦ Cabinet makers, countertopsâ�¦ What about a bailout for the housing market? County wide I bet much more people are affected by the housing slump then a D3 crash!

A good part of that $700 Billion dollar bailout is for just that or did you sleep through that?

There's also another, proposed $800 Billion package in the works.

Actually that money went to banks, and if youâ��ve tried to get a home loan recently youâ��d know that it hasnâ��t helped make it any easier to get one. And I wasnâ��t happy about bailing out the banks either. And, I may have been misunderstood, I donâ��t think the housing industry should get a bailout either. Iâ��m just saying they could use one as much as the auto industry could.

No one should be bailed out. If you canâ��t survive on your own business plan and no banks will give you a loan, you deserve to fail.

Originally posted by Spazmo99:

Originally posted by LoudDog:
Having bought 2 new cars in the last few years and doing extensive research on all of our options comparing price, performance, features and feel none of the D3 came close to consideration.

That's your choice. Maybe you'll see it in your heart to take in a family or two that gets displaced when the D3 crumbles and they can admire your choices.

Actually, the cars I ended up buying were made nearly as much in America as the D3 ones I passed up. And they were cheaper, and more economical, and more powerâ�¦

Originally posted by Spazmo99:

Originally posted by LoudDog:
I have a better idea for the 34 billion. Lets have a lottery of tax payers that are current on their taxes and have been good honest tax payers the last 5 or 10 years. We could draw 340,000 names randomly and give each $100,000 (tax free of course). The US would be far better off! Those people would buy cars, houses, pay off debt, send kids to collegeâ�¦

I've heard more stupid ideas, but not many.

Yes, a very stupid idea. But still not nearly as stupid as giving a loan to a company that is ready to go under, in a bad economy, when the same company struggled even when the economy was good! Ya think there may be a reason no bank is stupid enough to give them a loan? If anyone had confidence they could pay it back people would be lining up to lend them the money!

Prof_Fate

12/03/2008 06:01:11 PM · #70

who's to say it's a failed business plan?
They have made mistakes (ford bought jaguar, range rover and some other stuff and sold most of it off). GM bought Saab and sold off (i think) daewoo (now part of kia I believe).

It was mentioned about salaries, er, employee payroll - that's the biggie. In the flush days the unions got their workers high pay and benefits. Now things are not so flush but they won't give it back - to the point of being paid like Toyota, Honda and the like pay the US workers at their factories. Also when Nissan or whomever wants to build a new plant they get tax breaks out the wazoo.

So let GM/Ford/Chrysler eliminate the unions and all the pension stuff and pay no taxes for 5 years on all their factories. Then you'll see some competition perhaps.

It's pitiful the attitude that is out there about cars. Toyota and GM have a plant in california (NUMMI) where they built THE SAME car, only the name was different. Today it's the Matrix/Vibe. Read the reviews, consumer reports, etc. ALWAYS the toyota gets higher ratings, even for dipstick placement - THEY ARE THE SAME CAR. Was the ford probe a good car? It was really a mazda. Is the Escape any good? It's a mazda. Is the mazda pickup any good? It's a ford ranger. The only difference is the name on the fender and how brainwashed is the buyer/magazine writer.

robs

Canon EOS R6 Mk II

Canon EF 24-105mm f/4.0L IS

12/03/2008 06:19:34 PM · #71

Originally posted by Prof_Fate:

So let GM/Ford/Chrysler eliminate the unions and all the pension stuff and pay no taxes for 5 years on all their factories. Then you'll see some competition perhaps.

The auto unions took over the responsibility for pensions/health some time ago..... What about the billions given/lent to GM & co a decade ago for less polluting technology in cars..... Why must the big 3 run so many brands here?? As for the tax breaks, the big 3 get those with new plants as well - just they cannot afford to open more then the others.

I do agree that more then it should be is based on name rather then objective measures like you say but I drive a LOT of rental cars each year and I have to tell ya, drive the big 3 vs. other brands (assembled in the US in a lot of cases) and it's not even close in a lot of cases....

Nikon AF Zoom-Nikkor 70-300mm f/4.0-5.6G

12/03/2008 06:39:53 PM · #72

Originally posted by LoudDog:

Originally posted by Spazmo99:

Originally posted by LoudDog:
Some points:

If one or all of the big three fail, people still need to buy cars! More of the other cars would be sold. Production at other plants will rise. As some die, others will be born.

Yes, they will still need to buy cars, but you should know better than to expect increasing production to be as simple as turning a knob. Those cars will, in all likelihood be produced overseas, since a failure in the D3 will devastate the Tier 1 and 2 suppliers that also supply the domestically produced foreign car plants and, in any event, Honda, Toyota and Nissan will be unable to fill in the gaps, so as supply drops, expect prices to rise significantly.

Maybe, maybe not.

Google the law of supply and demand. Read and learn.

Originally posted by LoudDog:

Originally posted by Spazmo99:

Originally posted by LoudDog:
How does Honda Toyota and Nissan survive when the D3 canâ��t?

They're hardly thriving.

They are not begging for money and they have far less experience building and selling cars.

You mean they aren't getting money from the US government.

Originally posted by LoudDog:

Originally posted by Spazmo99:

Originally posted by LoudDog:
If I were paid $20,000,000/year to run a company and had to beg the government for loans to survive Iâ��d be very embarrassed. Why are you paid that much if you can not turn a profit? What do you do to deserve that pay? Superior begging skills?

Good question, it's one that should be asked of many CEO's especially those who ran banks. BTW, the numbers you see for the pay that the automotive CEO's get is misleading. The SEC reports their options as being valued at the face value, however, since the stock prices have fallen, those options are worthless and that will reduce that $20,000,000 by about 90%. The CEOs at the failed banks don't take that hit.

If I were paid $2,000,000 or even $200,000 per year and had to beg for taxpayer money to keep my business running Iâ��d be embarrassed. Shame on those other overpaid empty suits too.

No disagreement there, but you're willing to screw 3 million people and destroy a whole industry to satisfy your desire to take down those few. Nice.

Originally posted by LoudDog:

Originally posted by Spazmo99:

Originally posted by LoudDog:
What happens if we give the D3 34 billion, the market does not turn around for a year or two, and they need more money? Do we give them more money? Or do we watch them fold and see our 34 billion go to complete waste.

Do you stand by and twiddle your thumbs while 3 million people join the unemployment line? You sound as though you think this money is a check that the D3 are going to go to the bank and cash. It's not, it's for loans. You know as in the borrowing of money. It gets repaid. Even if the D3 were to go totally bust and get auctioned off under Ch 7, the government will be first in the line of creditors being repaid out of the proceeds.

Do you bail out everyone that needs it? And loans to a company with a failed business plan is more of a grant then a loan.

Who says they have a failed business plan? Because they built vehicles that catered to customer wants and are damn good at it.

Originally posted by LoudDog:

Originally posted by Spazmo99:

Originally posted by LoudDog:
With the real estate crash lots of agents have had to fold, many are operating at a loss. Add in loan agents, title companies, inspectorsâ�¦ New housing industry is down to nothing too because of this. Plumbers, framers, drywallers, roofers, painters, flooring peopleâ�¦ all out of work. Without New homes, appliance sales are downâ�¦ Cabinet makers, countertopsâ�¦ What about a bailout for the housing market? County wide I bet much more people are affected by the housing slump then a D3 crash!

A good part of that $700 Billion dollar bailout is for just that or did you sleep through that?

There's also another, proposed $800 Billion package in the works.

Actually that money went to banks, and if youâ��ve tried to get a home loan recently youâ��d know that it hasnâ��t helped make it any easier to get one. And I wasnâ��t happy about bailing out the banks either. And, I may have been misunderstood, I donâ��t think the housing industry should get a bailout either. Iâ��m just saying they could use one as much as the auto industry could.

No one should be bailed out. If you canâ��t survive on your own business plan and no banks will give you a loan, you deserve to fail.

No, some of the money went to banks to keep them from going under after investing in crappy real estate loans. A significant portion of the remaining money is going to buy up those ill-conceived loans and keep people from going under. All of that is Real Estate.

Yeah, because someone else in another industry screws the pooch on an epic scale, 3 million people should take one in the kiester?

Originally posted by LoudDog:

Originally posted by Spazmo99:

Originally posted by LoudDog:
Having bought 2 new cars in the last few years and doing extensive research on all of our options comparing price, performance, features and feel none of the D3 came close to consideration.

That's your choice. Maybe you'll see it in your heart to take in a family or two that gets displaced when the D3 crumbles and they can admire your choices.

Actually, the cars I ended up buying were made nearly as much in America as the D3 ones I passed up. And they were cheaper, and more economical, and more powerâ�¦

Really? What did you buy? Of course the next one will be almost all foreign made.

Originally posted by LoudDog:

Originally posted by Spazmo99:

Originally posted by LoudDog:
I have a better idea for the 34 billion. Lets have a lottery of tax payers that are current on their taxes and have been good honest tax payers the last 5 or 10 years. We could draw 340,000 names randomly and give each $100,000 (tax free of course). The US would be far better off! Those people would buy cars, houses, pay off debt, send kids to collegeâ�¦

I've heard more stupid ideas, but not many.

Yes, a very stupid idea. But still not nearly as stupid as giving a loan to a company that is ready to go under, in a bad economy, when the same company struggled even when the economy was good! Ya think there may be a reason no bank is stupid enough to give them a loan? If anyone had confidence they could pay it back people would be lining up to lend them the money!

Banks aren't giving anybody a loan.

Stupid is putting 3 million people out of work when the economy is shaky. Do you think that increasing the ranks of the jobless will somehow make the economy better? Did you fail economics?

tlalonde

Nikon D850

12/03/2008 06:40:15 PM · #73

I'd be more likely to support the bailout if taxpayers received shares of stock in exchange for the 'loan money'. Every taxpayer receives one share at current face value. When the market rebounds we all win: The auto industry gets it's money, the public gets reciprocation, the government gets credit for putting a band-aid on the failing economy. The current proposal only promises sour grapes.

LoudDog

Canon EOS-350D Rebel XT

Canon EF 17-40mm f/4.0L USM

12/03/2008 07:38:25 PM · #74

Quit drinking the D3 kool aid. 3,000,000 people will not lose their job if the big three fail. Plus, I highly doubt all three will fail. Probably just GM.

Failed business plan: //finance.yahoo.com/q/bs?s=GM&annual
Net tangible assets for GM (total of what they have minus what they owe):
Dec 2005 $10,258,000,000
Dec 2006 NEGATIVE $6,559,000,000
Dec 2007 NEGATIVE $38,160,000,000
June 2008 NEGATIVE $58,040,000,000 (you have to click over to quarterly to get this number)
Any guesses for December 2008???

When a company loses $68 billion dollars over the course of three years (actually three really bad months shy of three years) I call it a failed business plan. And on the streak they are on, I can't see how 10, 20 or 30 billion will keep GM afloat very long. Thus, taxpayer money to them in the form of a loan will simply disappear when they go belly up.

I'm well schooled on supply and demand. When GM is gone people will still need cars and people will still have to build cars. Loss of supply does not reduce demand. GM's market share will simply move to the surviving companies. Yeah, some will go to the J3, but it could be a good little boost for Ford and Chrysler.

But, if you think GM is such a great company and is just going through rough times, thus deserving of a government loan (because no one else will loan them any more money), buy their stock. At $4.75 a share you can make a killing if they bounce back.

pamelasue