Posted on 11/07/2008 8:37:58 PM PST by reaganaut1
DETROIT — The rapidly deteriorating finances of General Motors are forcing the federal government to decide whether to bail out the largest American automaker or face the prospect that it might go bankrupt.
G.M. said Friday that its cash cushion had been dwindling by more than $2 billion a month recently and that it could run short of money by mid-2009 unless it got emergency federal assistance.
It also said it had suspended merger talks with Chrysler to focus on its own increasingly urgent problems, brought on by higher gas prices, a weakening economy and tight credit — a combination afflicting the entire auto industry, but hurting G.M. the most.
The government faces a difficult choice. If it provides G.M. with a bailout, there is no guarantee the company will not need more money later to stay out of bankruptcy, particularly with the economy weakening.
But a bankruptcy by G.M. or any other automaker would have far-reaching consequences, given the millions of people employed by supplier companies, dealers and other small businesses that are dependent on the industry.
A bankruptcy filing by G.M. would also probably scare off many consumers, hurting any chances for a revival. “You can’t sell cars to people under those circumstances,” said Rick Wagoner, G.M.’s chief executive, in an interview on CNBC Friday.
President-elect Barack Obama signaled his intentions Friday to help the auto industry, calling it “the backbone of American manufacturing” during his news conference.
(Excerpt) Read more at nytimes.com ...
Republicans need to condition a bailout on a radical restructuring of GM's labor costs, tearing up the current contract (as would happen in a bankruptcy).
Gas prices are damn low right now.
The big problem isn't mentioned in the above. The big problem was how much their retirees get paid in pensions and healthcare. It's almost like Social Security and Medicare in a few years, except not as bad.
Well....DUH....who else will give them money....George Soros?
Bankruptcy would be their best solution, and sooner rather than later. Get out from under the retiree benefits (they wouldn’t have to put much of a squeeze on current employees), get rid of a couple of lines (Buick and either Saturn or Pontiac)and GMC models, and ditch about 20 or 25 per cent of their dealers. That should put them back into viable shape.
True, indeed. Now if G.M. built cars that people wanted to buy in the first place, they would have cash to spare.
On this issue, and this one alone, I am a Democrat. Call me selfish, but this failure of GM would make the next four years total h3ll. (more h3ll than our future president will make it)
No more bailouts; I’m sorry for the loss of jobs, but do we bankrupt the entire country in the process?
The BO administration will probably go along with it to thank the Unions for their support of his campaign.
Here we go with nationalizing private companies!
GM Opens new plant in St Peterburg, Russia.
[snip]
The first line of the plant located in the Shushary-2 industrial zone will produce 70,000 vehicles per annum. Investments neared $300 million, and about 1,700 jobs were created. (http://www.itar-tass.com/eng/level2.html?NewsID=13251393&PageNum=0) and http://www.freerepublic.com/focus/f-news/2128434/posts)
[snip]
Investments earned $300 million and needs $25Billion in loans (bailout money) for GM/Chrysler/Fords or face bankruptcy. Maybe some of the foreign money should be invested here.
Sorry, what was I think. Common sense loses again. I forgot its free money and wht give-away windows open.
Thanks for nothing.
If they made cars that Americans wanted to buy, they would be flush with U.S. cash, the Japanese auto makers are.
This is as unrealistic as his energy views. He thinks he can make the auto makers profitable by requiring them to make more efficient autos. All they can do is build more eco shoeboxes that people don't want and quit making useful vehicles that many people need.
Maybe Gittlefinger, Union Head, (sp?) should look into the mirror and decide if furloughed GM union workers are really entitled to 90% of wages to sit on the sidelines, whilst watching their bread and butter job go down the bottom chute!
Free Market, entice Japanese engineers to come to work for them, and make cars Americans would brag about owning.
American automakers need fresh ideas and a core principle of fine customer service. Buy American only because it’s patriotic doesn’t cut it anymore. We need to be competitive!
“A bankruptcy filing by G.M. would also probably scare off many consumers, hurting any chances for a revival.”
And like it isn’t doing that now?
thte japanese (german and korean) carmakers were smart enough to put plants in right to work states, and did not let the uaw run their business.
These automakers were buried by unions. We shouldn’t bail out businesses just so they can meet their labor obligations.
The state of California also wants a bailout, because their liberalism got them into trouble.
I believe we are seeing a pattern here, and Hussein is going to let them off the hook, resulting in us ALL walking the plank. I hope they all bankrupt before the man-child gets inaugurated.
My best hope is a new, and of course, FREE, Cadillac CTS. I like the Pearl color. What say you GM?
My dad would shoot me for saying this, but I am considering buying foreign cars now. Never have in my life. That’s plain unpatriotic, right?
Well, I think union thugs voting for Chicago thugs is unpatriotic too. Unions can kiss my arse.
Anyone have a reason I shouldn’t vote with my money? I’m not totally sold on the idea yet, but every election I get closer and closer...
The big three agreed to all of these Union demands. they could have said no, or moved to another state, but they didn’t. It was stupid, and stupid is expensive. Why is that “our” problem?
Hurry and get a seat G.M.!
The trough is populating quickly via government dictate. Don't wait in line until it's too late to get a piece of the pie via front row feeding.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.