’)$30 billion isn’t a bailout. $30 billion is a whole new car company.
General Motors Corp said on Tuesday it could need a total of up to $30 billion in U.S. government aid — more than doubling its original aid — and would run out of cash as soon as March without new federal funding.
GM wants the equivalent of almost 4% of the entire stimulus package that just passed. Not only are they unlikely to repay it, they’re unlikely to make the fundamental changes necessary to adapt to the future and get their house in order. I can’t see any way right now we should be entertaining the idea of propping up GM at this cost.
I don’t want to think about the ripple effects of GM going under. Their suppliers would collapse, and it would bring down the other automakers as well.
Having said that, since we’re all talking about nationalization, how about nationalizing the car companies too?
I can’t see any way right now we should be entertaining the idea of propping up GM at this cost.
Here’s the question: Can GM return to viability at any time, ever? If that’s not imaginable, then a carefully managed bankruptcy or forced sale to a foreign automaker is the only solution.
If GM can become viable again, I think it’s in the country’s interest to have a prominent U.S. automaker survive. It’ll be painful.
I have no idea why GM’s shareholders aren’t carrying management out of town on a rail.
Let them die? Too harsh.
But let them file for bankruptcy and try to reorganize? Absolutely.
I’ve said it in a variety of contexts, but it applies here just as well: “if you’re too big to act responsibly, you’re too big.” It was first said about big companies spamming, it fits asshats like Kos (“you can’t blame him for all the nuts who have diaries on his site!”), and it fits GM too.
I didn’t like the first bailout, and I sure as hell won’t like another. Sorry, GM.
J.
“Having said that, since we’re all talking about nationalization, how about nationalizing the car companies too?”
Add +1 Vote for this suggestion.
Hell, how many cars are needed for various government officials? All those food inspectors have to get places, right? Make cars with very high fuel efficiency, excellent safety, but don’t bother with style (outside of aerodynamics).
Oh good, I was wondering what Jay Tea thought of this.
I get just a little bit tired of everybody blaming the car companies for the position they are in. The car companies have been manufacturing what sells. Period. It you want to blame someone blame the leadership for not increasing MPG standards, blame leadership for not mandating and encouaging higher mpg cars.
Americans for far too long have lived like there is no tomorrow and have treated oil as if it were as plentiful as water. Americans got into this mess by being spoiled and selfish, the car companies just gave them what they wanted.
As a former resident of Detroit I can tell you that cities like Detroit are already failing, I left 15 years ago because I saw the writing on the walls economically. The real shame is that millions still live in the Detroit area and they are barely hanging on as it is.
To encourage everyone to take a deep breath and think long and hard about allowing these companies to tank. How would you feel if it were your company that needed help?
Shorter Oliver: $800 billion for TARP is ok, but $30 billion to save GM is a ripoff!
I’m a little horrified that seemingly intelligent people are so gung-ho for the death of GM. We’re spending $800 billion with the hope of creating 3-4 million jobs, and we have idiots who are unwilling to spend $30 billion to save 2-3 million current jobs (approx, including suppliers, dealers, etc). If the whole stimulus package were as cost efficient as just saving GM, it would only have to cost $200 billion… Can GM recover? I’m not sure, but throwing $30 billion at them is a bargain (and yes, I’d very much like to see their senior management and a good chunk of their junior management tossed) relative to the other huge wads of cash we’ve already wasted (hell, didn’t we lose half that much in cash in Iraq?). Plus, it’s conceivable they will pay us back, which is more than anyone can say for the banks/mortgage companies, etc.
It’s sad to say that when a downturn hits, people spend less. It is conceivable that cars will be made, and nobody will buy them.
The car companies have been manufacturing what sells.
Funny. So have Honda, Toyota, and Mazda, but their cars don’t look like what GM has been selling.
Any bail-out to GM needs to stipulate that they start designing and building cars for the realities of the 21st century. No more gas-guzzling SUV’s, not piece-of-shit whales that only an 80 year-old could love, no more super-trucks. Stipulate that a percentage of the money goes straight into RnD for next-generation fuel cells and cleaner emissions.
In fact, GM’s only profit over the last few yeas came from selling smaller, fuel-efficient cars to Asia, and especially China. But now that China’s economy has tanked as well, no more of that.
Any Federal money spent that creates or _keeps_ jobs is worth spending right now, but in the long term GM’s previous business model was an obvious failure.
And in a worst case scenario, simply sell the GM plants to Japanese and Korean auto-makers at sweetheart prices. There _is_ a relatively succesful car-making industry in America, and it’s called Honda/Toyota/Hyundai.
I find it amazing that banks can be “too big to let fail” so we need to bail them out without oversight, but the automakers have provisions put on that would make the bankers absolutely swoon.
The main reason I hear for allowing automakers to go chapter 11 is to allow them to bust the unions. To what end, lower wages? Shifting the burden of retirees from the corporations to the government?
So we’re going from a point in history where real wages have been decreasing and exchanging that for even lower wages.
This should end well.
“Hello, Exxon? Hi, this is GM. Do you think we could get a loan from you guys?”
Feh. The only decent car GM makes is the Corvette.
Detroit is going under because no one in the world buys their shitty cars. No one, except for a few deluded patriotic Americans.
GM had all the time and resources in the world to turn things around when the early warning signs arrived, now it goes crying to big daddy government when things get out of control and it can’t stand on its own legs.
Stop pouring taxpayers’ money into the abyss. Declare bankruptcy, and I am sure other companies like Toyota will be happy to buy the company for cheap.
Auto workers out of job? Time to find a new job. Maybe your new master Toyota will offer you a job, but you won’t get the perks you lazy, entitlement mentality unionized American auto workers are so used to.
“Auto workers out of job? Time to find a new job. Maybe your new master Toyota will offer you a job, but you won’t get the perks you lazy, entitlement mentality unionized American auto workers are so used to.”
So you think the line workers are lazy? Wow thats just rich. When was the last time you worked on an assembly line? You know who has the entitlement mentality? All of those rich mofo bankers who robbed taxpayers of billions giving out bonuses to idiots who deserved to be fired for running their banks into the ground.
Domestic cars are ugly hunks of garbage.
They were too proud of themselves as number-one to admit that this could happen.
And this was already going to happen… it was just a matter of time. They’re using this opportunity to blame an event.
http://nettwerkdesign.com/general-shares/photos/gm-should-according-to-google.bmp
Love that…