GM loses $9.6 billion

Were it not for the large number of employees and retirees, I'd say bury them now. The failure of GM, unfortunately, would be more than the national economy could bear. Michigan would turn into one big Hooverville.

 

Oh no, it's not just their employees and Michigan.

If GM goes down, so will other companies in the supply chain. If those companies go down, then global auto manufacturing will, if not shut down completely, slow down considerably. I don't think that's something we need right now.

 

That would be one HUGE restructuring, and it would take years. In the meantime, the entire supply chain goes cold and retirees are left with no pension.

 

Wow, doesn't it suck that it is now the Federal government's job to support losing companies?

What about Circuit City? Linens and Things? Who else? When is a company too big to be allowed to restructure into a newer, better, more competetive company?

Can the government just take over all private enterprises and be done with it?

 

My concern is that a bailout is only going to delay the inevitable.

 

GM should have never gotten that money in the first place. They changed nothing and any more money we throw at them they will burn through in a matter of months.
They HAVE to go through bankruptcy. Restructure, reorganize, and I'm sure they will come out of it a lot stronger and it will be a lot cheaper too.

 

The sad fact of the matter is that we can either spend the money now and help them restructure (with MUCH tighter controls on the money than last time around), or watch them throw hundreds of thousands of people on the welfare rolls. There's no cheap way out of this.

 

That might be the point right now. They should, nay, need to declare bankruptcy and restructure and negotiate with the unions, but now isn't such a hot time.

 

Remind of that when you're whining about having your tax dollars go for increased costs in welfare, health care and job training.

 

Let it die.

 

C'mon Matt...



Two-syllable, five letter word that uniquely differentiates Big Three automakers from foreign-owned automakers; singly explains why Big Three automakers are failing.
Hint 1: They heavily donated to The One's campaign!
Hint 2: They are responsible for this, which makes the Big Three manufacturers unable to turn a profit.

 

We need to figure out if we're trying to save the company, or its employees. If this is your concern, wouldn't it make more sense to kill GM (or halve its size, or whatever) and then have the feds hire the workers to build train tracks? If we agree that the company isn't viable, whatever the workers build is just waste. Pay them to do something that's not wasteful.

As I understand it, there's a serious disconnect between the world's demand for cars and its ability to produce cars. To me, the smart thing for Obama to do would be to call a summit of the big auto producing nations and agree that they'll all let 10% (or whatever is the appropriate percentage) of their car companies die. Subsidize the rest if you want, but some of this excess capacity needs to be burned off. And if Japan wants to have those workers build roads, and Germany wants to retrain them to be soccer coaches, and South Korea says "screw 'em," and the US hires them to build wind farms, that's up to each nation.

I get the concern of "now isn't the time." But that's an argument about the WORKERS, not the COMPANY. If that's the right approach, then we're not doing the right thing. We're just feeding virgin dollars to the zombie to keep it alive.

 

This is from last fall, but a case for the bailouts:
http://www.tnr.com/politics/story.html?id=a4893b49-36df-4784-9859-2dfa3a3211bf

 

This is BS. They're "taking steps?" GM is a dinosaur. This is a company that cannot even accurately report basic financials. Kill it.

 

So that's roughly 150k a year a full time, union auto maker makes. Considering the cost of housing, health care, education, etc, in our country, that does not seem at all excessive to me. A fair wage for hard work.

 

I'm not buying that supply line business, just sounds like scare-mongering from people crying for bailouts. Let's assume that GM is worth 25% of a supplier's business. Worst case scenario the supplier has to cut 25% of its operations, assuming GM's rivals don't pick up the business.

 

If you look at the US market, then it's obvious that many jobs will be lost, at auto makers as well as suppliers.

GM couldn't make a profit in a 17 million car market, so far, 2009 is on it's way to become a sub 9 million car market.
And without cheap credit, don't expect the glory days to come back.

Let's be positive and suppose that in the mid term, the market will go back up to around 13 million cars. Then there would still be suppliers who couldn't survive.

So the supplier argument doesn't hold up.

GM is a bottomless pit. They're losing $3.5 million an hour! And the first quarter of 2009 won't be any better.

If another bailout is passed, expect GM to be back before the end of the year (probably as early as August), by then the money will be burnt in the Detroit incinerators and the situation will be exactly the same.

How much has GM already gotten? GMAC got a bail out of $6 billion, then there are $25 billion for "retooling" (a bailout by any other name), also the $13.4 billion that were already paid. That money has already been sucked up by the black hole that is GM.

Now they want $16.6 billion more. How far will that get them? And then what?
If GM gets its bailout, we're already at $61 billion of federal money that got burnt. Seriously, when you look at that amount of cash, it would have been much cheaper to let them die in the first place.

And as long as GM is kept alive, it won't stop, it's an ongoing situation. Letting them die is the only option. Then take that money and built a new company out of GM's remains. Seriously, for $61 billion, the government could have started a new company from scratch. BTW, GM's market cap is at $1.45 billion right now.