GM Asking for $50 Billion Bailout, Do they deserve it?

[rcracer_tx]

ChrisK, I should have started a separate thread to Discuss this Instead of Cluttering the previous thread with a different topic. Sorry to have to get you involved.

JOLIET, Ill. — A top General Motors executive said Thursday that automakers were “deserving” of as much as $50 billion in government-backed loans so that they can build more fuel-efficient cars.
G.M.’s vice chairman, Robert A. Lutz, said the car companies need money to retool their plants but probably cannot raise enough capital on their own because of the tight credit markets. He said the automakers have already made considerable progress in transforming themselves and that the government should help them proceed faster.
“The American auto industry is deserving of government loan guarantees,” Mr. Lutz told reporters at an event near Chicago where G.M. showed off its 2009 lineup. “We have done a whole bunch of things that people said, ‘Why aren’t you doing this?’ ”

http://www.nytimes.com/2008/08/29/bu...8aGRrYpf/FN2WA

They are asking for up to 50 BILLION DOLLARS in the form of a government loans. (a bailout) What do you think? Would a bailout turn a failing company around or would it be a waste of US tax dollars?

[Spook]

I could see government research dollars going into the R&D of fuel efficient vehicles in general but why should we give it to GM? So they can piss it all away again?

[BForbes]

Holy Hell that is a lot of money. I'm suprised they're not trying to top AIG.

[Sephiroth]

They need to declare Chapter 11 and get their affairs in order. Shed the useless divisions, cut the labor force, cut the plants, and show up with a good business plan. Then they can talk about govt. bailouts, till then they get nada.

Nobody gets a get-out-of-jail-free card because they 'deserve' it.

[penny]

The rich gets richer, poorer gets poorer. For me, no.

[Call]

The kind of salaries & benefits for autoworkers is way out of hand. Now is a great time to go Chapter 11, restructure and rid themselves of the unions...then lets talk some serious loans.

I rather guarantee loans for the automakers than piss the billions away giving it to other countries.

Call

[rcracer_tx]

Originally Posted by Call

The kind of salaries & benefits for autoworkers is way out of hand. Now is a great time to go Chapter 11, restructure and rid themselves of the unions...then lets talk some serious loans.

I rather guarantee loans for the automakers than piss the billions away giving it to other countries.

Call

Yeah, domestic autoworkers are severely over payed and over compensated. I'd almost rather give the foreign auto manufacturers the money because something productive might actually come from the money.

[3toM]

Yah, all these bailouts are pissing me off. My first question is, for the companies getting bailed out here (AIG, etc), how much is the upper managment taking home in pay (salary, bonuses, perks) this year. If I'm the government, they would need to give up a ton of those millions before I give you a penny.

[Steve135i]

Think about the question, if GM goes under so does the US economy even more. What about spendind A TRILLION dollars on a stupid WAR??? YES THEY DESERVE IT. Many of GM's new cars are of excellent quality, fit and finish. Go look at the CTS, G8, Malibu. I was VERY impressed with the quality. The new Camaro should be at least as good!!!

[ptack]

Not a penny. These are the same idiots who were rolling in cash when SUVs were hot and stupidly invested very little in their future. They fought tooth and nail against having to create the very vehicles that they need right now. Why should they be rewarded? It would just be a form of welfare.

[ARES45]

I saw an interview with the Ceo where he stated what they were asking for was the incentives for R & Ding alternate fuel/0 emission cars that the gov't had already said they would give. If that is the case, maybe the volt would qualify and they should get what the gov't has promised. Otherwise I am not really about giving money to corporations because they are bad at what they do.

[ChrisK]

Originally Posted by rcracer_tx

Yeah, domestic autoworkers are severely over payed and over compensated. I'd almost rather give the foreign auto manufacturers the money because something productive might actually come from the money.

Are you referring to domestic brand autoworkers? I don't think that is the big problem. Those same domestic autoworkers also build BMW, Honda, MB, Toyota, etc in the US. I'm sure those workers are just as well compensated. It is company management that needs fixing.

[1er junkie]

Originally Posted by Call

The kind of salaries & benefits for autoworkers is way out of hand. Now is a great time to go Chapter 11, restructure and rid themselves of the unions...then lets talk some serious loans.

I rather guarantee loans for the automakers than piss the billions away giving it to other countries.

Call

+1 billion. They need it honestly (not DESERVE it) , because, well, 1 in 4 jobs in the US are some way related to the automotive industry. BUT, I really think they should have to pay it back, ie., once they get rolling and turning any decent profit they should have to put a certain percentage of that profit into research for alternative fuels, or pay back the govt.........but like the later of the two would ever happen....

[1er junkie]

Originally Posted by 3to1

Yah, all these bailouts are pissing me off. My first question is, for the companies getting bailed out here (AIG, etc), how much is the upper managment taking home in pay (salary, bonuses, perks) this year. If I'm the government, they would need to give up a ton of those millions before I give you a penny.

also a +1 , they need to say enough with the gigantic payrolls until you pay us back and get back on your feet. But seriously, they need to cut loose the extreme benefits they are giving away.

[xbook]

Originally Posted by 3to1

Yah, all these bailouts are pissing me off. My first question is, for the companies getting bailed out here (AIG, etc), how much is the upper managment taking home in pay (salary, bonuses, perks) this year. If I'm the government, they would need to give up a ton of those millions before I give you a penny.

Dear US Gov't,

I made a mistake and spent all of my money on beer, steaks, hookers, and drugs all weekend. My child support is due, as is my mortgage, car payment, college fund, medical bills, have to pay for my uncle's foot surgery, my dog just had puppies, and the fridge is busted. Ya mind throwing me a few million dollars so I can get this all taken care of. Ummm, the quicker you get it to me, the better. As my mom, sister, aunt, dog, brother, stepmother, 3rd cousin, and my 17 cats all depend on me for their well-being.

Yeah yeah, I know that back when I was making $500,000 a month when the real estate market was hot, I should have been putting money away. But, come on, how often do you get a chance to live like I was living. Woohoo, FREE MARKETS!!!! Saving is for pussies and pig-wrestlers.

Oh yeah, about that couple mill I was askin' for. Can you make the check payable to cash??

-Me

/rant off

[rcracer_tx]

Originally Posted by ChrisK

Are you referring to domestic brand autoworkers? I don't think that is the big problem. Those same domestic autoworkers also build BMW, Honda, MB, Toyota, etc in the US. I'm sure those workers are just as well compensated. It is company management that needs fixing.

yes, I was referring to the brands, Such as GM and Ford. The employee unions make turning a wrench cost an arm and a leg. It would be a perfect time for a restructure with the help of chapter 11. While there is no doubt that the company needs restructuring, it shouldn't be done on the taxpayers dollar.

[rcracer_tx]

Originally Posted by xbook

Dear US Gov't,

I made a mistake and spent all of my money on beer, steaks, hookers, and drugs all weekend. My child support is due, as is my mortgage, car payment, college fund, medical bills, have to pay for my uncle's foot surgery, my dog just had puppies, and the fridge is busted. Ya mind throwing me a few million dollars so I can get this all taken care of. Ummm, the quicker you get it to me, the better. As my mom, sister, aunt, dog, brother, stepmother, 3rd cousin, and my 17 cats all depend on me for their well-being.

Yeah yeah, I know that back when I was making $500,000 a month when the real estate market was hot, I should have been putting money away. But, come on, how often do you get a chance to live like I was living. Woohoo, FREE MARKETS!!!! Saving is for pussies and pig-wrestlers.

Oh yeah, about that couple mill I was askin' for. Can you make the check payable to cash??

-Me

/rant off

That is hilarious, and actually a good overview of this situation...

[jeremyc74]

Originally Posted by rcracer_tx

That is hilarious, and actually a good overview of this situation...

Actually it's not even close. There are so many non-factual statements and misunderstandings in this thread I can't leave it alone any longer.


First and foremost, this isn't a bailout from the government. It isn't even a LOAN from the government. It is a loan guarantee from the government, on money that will be paid back WITH INTEREST. The US Government will have to set aside $7.5 billion to cover the loans. This is the equivalent of your parents co-signing for a car loan to allow you to get a better rate. The corporate credit markets are locked up right now, and that’s not the automakers fault. It’s largely due to poor government policy and oversight over the past 5 years.

Someone explain to me why it’s OK for the government to step in and save the financial industry (which has created more of a mess than an automaker ever could), but not a major portion of the manufacturing segment.

Second, this IS NOT for GM only. It’s not even for domestics only. The loans would be available to ALL automakers, foreign and domestic, and are intended to allow re-tooling to meet the new federal standards that are going into effect.

Third, there’s no doubt the UAW is a huge issue, but putting the company into bankruptcy is like killing the patient to cure the disease.


Fourth, even if it was a bailout (which it’s not) it would be a good idea. There isn’t a person in this country that wouldn’t be affected by the failure of US auto manufacturing. There are very good reasons why there’s so much support for this in Washington. They had a hand in creating the problem, and have also mandated fuel economy and emissions improvements that won’t come cheap. They also have enough foresight to realize the consequences of a failure.

Feel free to fact check what I've posted.
http://www.msnbc.msn.com/id/26592095/

[Sephiroth]

Loans, loan guarantees, its all the same. Its a bailout.

I don't mind that auto manufacturers are looking for help with new energy and emissions, i have a problem with them creating their own troubles then claiming they deserve a loan. GM, Ford, and Chrysler had crappy business plans for decades and it shows. How do we know thats going to change even with govt. loans?

Building electric cars ain't enough.

[JB135i]

Are the taxpayers going to get a break on the price of the cars?

We already know how to build fuel efficient GAS powered cars and hybrids. The tech is there and has BEEN THERE for years, GM chose NOT to use it and now they are crying.

Look at Toyota, Honda, Subie, Nissan, VW and even some Euro only versions of American makes, again we already know how to do it.

I agree let them Chap 11, and clean house.

What about Flex-Fuel crap they already put out, and the hybrids they already make. Yep that's right even though they are supposedly greener and more efficient, NOBODY (not many) people want GM cars.

And anything that burns ethanol raises our food cost too...ooooops, we didn't think of that.

[ptack]

People used to say that about railroads and steelmakers. It's just subsidizing failure and does almost nothing to address the root of the problem. GM is not going to vanish, even if it seeks protection under chapter 11. It will be reconstituted into a smaller, more manageable business. The losers will be the shareholders and employees all of whom share more of the blame for the failure than the average tax payer who is being asked to risk our tax dollars.

[jeremyc74]

Originally Posted by JB135i

Are the taxpayers going to get a break on the price of the cars?

We already know how to build fuel efficient GAS powered cars and hybrids. The tech is there and has BEEN THERE for years, GM chose NOT to use it and now they are crying.

Look at Toyota, Honda, Subie, Nissan, VW and even some Euro only versions of American makes, again we already know how to do it.

I agree let them Chap 11, and clean house.

What about Flex-Fuel crap they already put out, and the hybrids they already make. Yep that's right even though they are supposedly greener and more efficient, NOBODY (not many) people want GM cars.

And anything that burns ethanol raises our food cost too...ooooops, we didn't think of that.

Nobody want's GM cars? Are you serious? They're the second largest automaker in the world! That sure is a lot of "nobodys"!

The money isn't just for developement, it's for re-tooling. Knowing how to build smaller cars doesn't make it happen. It costs tens of millions of dollars to re-tool an autoplant to produce a different sized vehicle, and NO ONE was predicting the rise in oil prices that we've seen over the last 6 months.

You can thank Government policy for ethanol, not GM or Ford.