Big Auto Wants $50B

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http://www.bloomberg.com/apps/news?pid=206...refer=worldwide

[Boomer860]

http://www.bloomberg.com/apps/news?pid=206...refer=worldwide

They will have to wait , my bank is closed till Monday. Let people with IRA's withdraw money with out penality or tax ramifications , if the money goes for the purchase of a new car. Keeps people working ,boosts the industry .

[SDS]

The auto industry is probably a good topic to discuss. It seems apparent to me that there are WAY too many car companies with WAY too models to support with WAY too many dealerships to really be sustainable these days. Cars just don't go to the junk yard after 60k miles like they did in the 70's.

[Boomer860]

The auto industry is probably a good topic to discuss. It seems apparent to me that there are WAY too many car companies with WAY too models to support with WAY too many dealerships to really be sustainable these days. Cars just don't go to the junk yard after 60k miles like they did in the 70's.

The auto industry will never be what it used to be . And that includes foreing made cars . Plus re tooling for alternate energy.

[Steely Dan]

http://www.bloomberg.com/apps/news?pid=206...refer=worldwide

 

There are so many jobs tied into this industry I'm all for it as long as CEO's cut their total income and benefits from the company to a million dollars a year or less. They look at making cuts in what could be an over abundance of jobs in the middle and upper management positions.

 

A friend of mine works for Xerox and he said that an independent company was hired to come in and suggest ways to cut the fat from the company. The company came in and told them that they were too fat in middle management. The middle managers didn't like that report so they hired another company to come in and they told them the same thing. Eventually the whole project was just dropped.

 

 

The auto industry is probably a good topic to discuss. It seems apparent to me that there are WAY too many car companies with WAY too models to support with WAY too many dealerships to really be sustainable these days. Cars just don't go to the junk yard after 60k miles like they did in the 70's.

 

I agree to a certain extent but they were surviving before this depression. Barely surviving but surviving. They have been very slow in recognizing trends in the markets and that has really hurt them. As you stated cars last a lot longer today than they did in the past and so they need to figure out ways to branch out into different types of associated business'.

[blzrul]

Terrible dilemma - there are about 5 million jobs that would go kaput if GM got what it deserved (nothing). Personally I would not be sad to see this dumbass dinosauer of a company bite the dust but I would have a problem with all the workers going with it. They work hard and it's not their fault that management is slow, stupid, greedy and out of touch.

 

I would hope there would be some sort of solution that would let GM hang in there while making a transition to new technology. That would keep many of the existing jobs and create new ones as the migration takes place. But it's going to be slow, and painful.

[Dwight Drane]

The problem isn't GM itself....once again it is all the financial instruments tied into a GM failure. That is the sad fact of financial life now that there is no answer for. Those that say "don't force a mark to market" and that will solidify the banks....when GM goes under, there are so many defaults that will trigger that it will take many down with it. You can only pretend by not forcing mark downs on real estate....but the real economy has plenty of other bets going right now that are in deep doodoo. You can't pretend anymore when it requires either a $20 billion per month cash infusion from the government to prop up the industry, or a mass default and payout on credit default swaps.

 

We are still only 15-20% into this "crisis". The world is calling for a global banking system, and the sad fact is that will be the easiest way out for the US. We could restructure ourselves out of a bankruptcy and end up with government oversight of everything. That would be a real redistribution of wealth. If the US plays hardball....which they obviously aren't, we get the dollar sold out from us anyhow by our creditors.

 

Obama is in for a reason. People are in love and there is a much better chance they will comply with a new banking system and a government work program to make up for the 20% unemployment. Of course there will be an escalation in war as well....if we play along as a people, it will just be a depression and the battlefront will be elsewhere. If the American people still have any balls left, there will be military deployed on the homefront and a real shot of a revolution of some sort. We've also had Biden, Powell, Albright, etc., say there will be an international crisis in the first days of an Obama administration. Why in the hell would they say that? Are they drinking the Drane Juice?

 

GM cause a civil war? That's crazy! That's the point.....if you haven't figured out by now that there are no more rules and that we aren't in Kansas anymore, you will soon. Things have happened pretty much as I have said so far. If anything they have gone slower than expected...which to me signals that the US has waived the white flag and is standing down. If the powers that be really had any fight in them, this would have come to a head by now. At best we will be just another European country. At worst, Mad Max. The days of the good ol' USA are toast.

[John Adams]

GM cause a civil war? That's crazy! That's the point.....if you haven't figured out by now that there are no more rules and that we aren't in Kansas anymore, you will soon. Things have happened pretty much as I have said so far. If anything they have gone slower than expected...which to me signals that the US has waived the white flag and is standing down. If the powers that be really had any fight in them, this would have come to a head by now. At best we will be just another European country. At worst, Mad Max. The days of the good ol' USA are toast.

 

Where have you been buddy? Things got good and you got quiet. Funny how that happens.

 

But glad you're back man.

[molson_golden2002]

I just don't see how this will not be something that keeps happening over and over. The trucks won't sell for value and American cars can't compete right now with Toytoa, Honda and the rest. Toyota is living resonably well with the idea that you don't sell a person one car, you sell them a life time of cars. How GM, Ford and Chrysler change that I have no idea. So unless gas drops to $1.50 a gallon I don't think the car companies will be off the public tit for years.

 

And one of the battles going on inside the Democratic party is who gets the leadership position to change Detriot, John "Detroit" Dingle or Waxman. Which one of them will hold the car comapnies feet to fire more?

[Steely Dan]

I just don't see how this will not be something that keeps happening over and over. The trucks won't sell for value and American cars can't compete right now with Toytoa, Honda and the rest. Toyota is living resonably well with the idea that you don't sell a person one car, you sell them a life time of cars. How GM, Ford and Chrysler change that I have no idea. So unless gas drops to $1.50 a gallon I don't think the car companies will be off the public tit for years.

 

And one of the battles going on inside the Democratic party is who gets the leadership position to change Detriot, John "Detroit" Dingle or Waxman. Which one of them will hold the car comapnies feet to fire more?

 

For the economy and for jobs it's better to let them die a slow death so job losses can be absorbed more easily.

[KD in CA]

The package would be $25 billion for health-care spending

 

So let's see....a private organization promises lavish benefits that it has no money to pay for to thousands of people, and now the taxpayers are supposed to step in and pick up the tab?

 

And what is stopping every other private organization from doing the same thing? Oh yeah...NOTHING. Because Congress won't fix the problem and won't tell anyone to f*%k off. Where are the cries of "regulation" when it comes to bailing out auto manufactures and airlines time after time?

[molson_golden2002]

For the economy and for jobs it's better to let them die a slow death so job losses can be absorbed more easily.

Maybe, maybe not, but it sure as hell isn't politically viable.

 

It would be kind of funny is Dubai stepped in and bought the big three though.

[finknottle]

There are so many jobs tied into this industry I'm all for it as long as CEO's cut their total income and benefits from the company to a million dollars a year or less. They look at making cuts in what could be an over abundance of jobs in the middle and upper management positions.

 

Agreed on your later comment about letting them die a slow death. Unfortunately that only works if the workforce and the dependent workforces steadily decline to (politically) negligable numbes first.

 

But I differ on the whole pay compensation issue, which has also been discussed with the banks. I think it is a compete red herring - it has no real impact on the bottom line. I don't like them getting the pay that they do, but that's an issue for me as a shareholder. It is *not* an issue the government. There are those who say a company is better run if you pay outrageous salaries, just as there are those who say you need to throw sponsorship money at every sport in sight. It's not the governments place to decide on these tactics, it is the market-places.

[StupidNation]

The auto industry is probably a good topic to discuss. It seems apparent to me that there are WAY too many car companies with WAY too models to support with WAY too many dealerships to really be sustainable these days. Cars just don't go to the junk yard after 60k miles like they did in the 70's.

 

Those are all excellent thoughts. Same as what I believe.

[Steely Dan]

Agreed on your later comment about letting them die a slow death. Unfortunately that only works if the workforce and the dependent workforces steadily decline to (politically) negligable numbes first.

 

But I differ on the whole pay compensation issue, which has also been discussed with the banks. I think it is a compete red herring - it has no real impact on the bottom line. I don't like them getting the pay that they do, but that's an issue for me as a shareholder. It is *not* an issue the government. There are those who say a company is better run if you pay outrageous salaries, just as there are those who say you need to throw sponsorship money at every sport in sight. It's not the governments place to decide on these tactics, it is the market-places.

 

I agree with the executive pay thing but not if the government is giving them money. In that case the government has every right to make some demands on the spending of the monies. The Federal bailout shouldn't be pocketed by top executives.

[finknottle]

I agree with the executive pay thing but not if the government is giving them money. In that case the government has every right to make some demands on the spending of the monies. The Federal bailout shouldn't be pocketed by top executives.

 

Sure. But that demand is cosmetic. You might as well demand that the CEO give up golf and abstain from sex, or - like Lee Iococca - reduce the CEO's salary to $1. It doesn't mean that the business is getting its house in order

[DC Tom]

I agree with the executive pay thing but not if the government is giving them money. In that case the government has every right to make some demands on the spending of the monies. The Federal bailout shouldn't be pocketed by top executives.

 

It's tough for the federal government to have a say. Executives at that level usually have compensation set in their employment contract negotiated with the board. The government can't just say "Executive pay can't come out of this money". But it could, I imagine, say "You're only getting the money if you renegotiate the compensation of your executives." That'd be fine with me.

 

 

Fink's right, though...executive compensation is a drop in the bucket. What did GM burn through last quarter? Seven billion? GM's CEO got maybe a quarter of a hundredth of a percent of that. They're asking for a years' worth of operating capital from the government, no one's pocketing any measurable amount of that without folding up the company. Hell, the automakers will probably misplace more of the bailout than they'll spend on executive compensation.

[Steely Dan]

It's tough for the federal government to have a say. Executives at that level usually have compensation set in their employment contract negotiated with the board. The government can't just say "Executive pay can't come out of this money". But it could, I imagine, say "You're only getting the money if you renegotiate the compensation of your executives." That'd be fine with me.

 

 

Fink's right, though...executive compensation is a drop in the bucket. What did GM burn through last quarter? Seven billion? GM's CEO got maybe a quarter of a hundredth of a percent of that. They're asking for a years' worth of operating capital from the government, no one's pocketing any measurable amount of that without folding up the company. Hell, the automakers will probably misplace more of the bailout than they'll spend on executive compensation.

 

It's not a fiscal idea as much as a point to be driven home that if the CEO's can't manage their own companies to avoid these things then they shouldn't be given Federal monies to reward that.

[SD Jarhead]

Where have you been buddy? Things got good and you got quiet. Funny how that happens.

 

But glad you're back man.

 

When did this happen? I missed it.

 

Actually I, for one, have missed his postings and am glad he's back, at least part time.

[DC Tom]

It's not a fiscal idea as much as a point to be driven home that if the CEO's can't manage their own companies to avoid these things then they shouldn't be given Federal monies to reward that.

 

Minor point. Kind of a misleading one, too...if the executives can't manage their companies, they should be FIRED.

 

Keep in mind, too, that the auto makers are very susceptible to the instability in the credit markets, both directly (reduced credit available means reduced sales and revenue) and indirectly (inability to get working capital in the commercial paper markets). Personally, I think the US auto industry's been badly mismanged for about 20 years now...but it's possible that this immediate crisis isn't entirely of their making.