GM and Chrysler Will Get $17.4 Billion in U.S. Loans to Survive

Yahoo News ^ | 12-19-08 | Roger Runningen

[WackySam]

Dec. 19 (Bloomberg) -- General Motors Corp. and Chrysler LLC will get $13.4 billion in government loans to keep operating in exchange for a restructuring under a rescue plan that President George W. Bush will announce this morning.

The money will be drawn from the Troubled Asset Relief Program and the automakers will get an additional $4 billion from the fund in February, according to a statement from the Bush administration. The money would allow GM and Chrysler to keep operating until March.

[shoutingandpointing]

Maybe. I think the LEASE is what really through a wrench into the works.

The industry was built and flourished on a model that sold cars—both new and used. Those who were flush bought a new one; those who were not bought the used ones. People also used to take care of cars differently than today. Who wrenches on their own car anymore? Who CAN?

I sorely miss my first car—a ‘67 Mustang I bought used. There was little that could break that I could not fix, and nothing that needed maintaining that I could not maintain. Somebody build me a car like that, PLEASE?

[wmfights]

Ford borrowed the money it needed back in 2006, when they used pretty much the entire company as leverage. They already bit the bullet and used the money to re-engineer their cars.

They have also expanded their operations overseas as they cut their workforce from apprx 89K to 49K in the USA. It really is not farfetched to see the day they only offer their trucks in the USA.

[shoutingandpointing]

You are welcome, and a Merry Christmas to you and yours.

Keep the Faith. ;)

[wiley]

Actually it’s a parting shot to Obama. Let him take the hits on the Democrats’ dime next year.

OTOH, I doubt that Bush is that Machiavellian.

[truth_seeker]

“Well where the proof they are building inferior products?”

Sales statistics? Market capitalization?

[logician2u]

Whether you agree or disagree with the idea that the Medium 3 need to be bailed out, there's another wrinkle in this that probably needs further discussion.

I cannot find a print source for it, but I heard George Bush on the radio news (Fox I believe) saying that since Congress failed to act, it was now his responsibility to save the automobile industry by executive action. He will use the TARP funds to keep GM and Chrysler out of bankruptcy.

In other words, we don't really need a Congress that represents the people of this great republic since we have a President who is all-powerful and all-caring.

It's been said time and time again on this forum that you have to consider what will happen when a Democrat (e.g., Hillary) gets elected and starts using laws such as the PATRIOT Act for purposes different than what they were intended.

Why wait? This Republican president demonstrates by his actions that laws, like the Constitution, are only scraps of paper.

[teletech]

Actually it’s a parting shot to Obama. Let him take the hits on the Democrats’ dime next year.

OTOH, I doubt that Bush is that Machiavellian.

The RATS will simply blame Bush and they won't take any 'hits'.

[Drill Thrawl]

That that is the COST of employment is it not.

The bigger problem here is that Detroit pissed on their customers so hard and so long that regardless of the current build quality many people will not even consider a Big 3 car. You lost a lot of your older customers due to declining quality and many young people were so disgusted with the low end cars that they looked elsewhere when it was time to trade up.

So what killed Detroit...

Vega,
Chevette,
Mustang II,
Fiesta,
Pinto,
Maverick,
Citation\Phoenix,
Cadilac Cavalier,
Neon,
Cobalt,
Escort,
Horizon\Omni,
Aerostar\Winstar\Death Star,
Astro,
Any GM Minivan,

I could go on, but you get the point. Once you've owned one of those and a lot of people did. You look elsewhere for a new car.

[shoutingandpointing]

A couple of things to look into: (1) has the overseas market for their vehicles expanded to the point that it makes sense to build the vehicles in the countries where they will be sold, and (2) were those US workers building models that became obsolete or were phased out?

I do not know.

Trucks were once a niche vehicle. Basic transportation with one bench seat for three and nothing behind that seat, and usually priced significantly lower than a car. It was rare to see anyone other than a man driving one. Gone are those days.

Truck plants are interesting. Toyota recently built a huge truck plant in San Antonio, where they’ll manufacture Tundras and nothing else. Tundras: “the Japanese F-150?” This “supplements” their IN Tundra plant.

http://www.industryweek.com/ReadArticle.aspx?ArticleID=13087

MAYBE what both Ford and Toyota are doing signals a return to a more basic vehicle and leaner vehicle lines? While I would not welcome a return to the days of Henry Ford’s “You can get it in any color you want, so long as it’s black,” I’d like to see the industry get a grip on common sense. If that means both building and marketing only those vehicles that sell in a given market then so be it—IF that’s what it takes to get this derailed train back on the tracks.

CAVEAT: The industry will not come to its senses unless and until the consuming public does. Unless we demand otherwise of the industry, the industry will continue to give us no more than it feels we deserve.

[Spktyr]

Would you buy a car with a transmission “made” by these guys?

http://www.clickondetroit.com/video/10235271/index.html

[JamesP81]

I don't mean to be a nitpicker (well, on second thought, yeah I do), but the Big 3's problems are not product. Just count the number of cars built by the big three the next time you're driving down the highway. They make cars that people do, in fact, want to buy. But they don't want to buy them at the confiscatory prices the idiot UAW contracts necessitate.

Break the UAW, and we'll end up with American made cars that are quite a bit less costly than the competition. But whatever happens, public money shouldn't be used to bailout UAW malfeasance. If that means bankruptcy, then it means bankruptcy. So be it.

[WackySam]

Here’s a few more-

AMC Pacer
Pontiac Fiero
Ford Bronco II
Ford Tempo
AMC Gremlin

[edge10]

“NO MORE UAW CARS! Nope, for the first time in my life, the next car I buy will be made in America, but not by an American company.”

Same here.

W. - worst Republican president of my 43 year life. 2nd worst overall.

[henkster]

The biggest insult to me is calling this an “investment.” An investment is something I expect a return on. I’m not getting a return on this “investment.” Might as well have “invested” with Madoff.

[blastbaby]

I am confused.

If things are that bad in management....why not join the rank and file?

I forgot, did you post your salary?

And with the word out about GM opening factories in China and upping manufacturing in Mexico - I am Canadian and we have GM here....it’s not an American problem.

[wmfights]

A couple of things to look into: (1) has the overseas market for their vehicles expanded to the point that it makes sense to build the vehicles in the countries where they will be sold, and (2) were those US workers building models that became obsolete or were phased out?

The overseas mkt is profitable. The local mkt is not.

The local mkt is going to die. The work rules, the bureaucracy and cost has them in a death spiral. A good example is the UAW has now said that the bailout expects too much from them and they will wait for 0 to fix it. IOW, throw more good money after bad.

The duplication of models is as much a result of work rules where they can't lay anybody off, so you might as well build a GMC truck that is a copy of a Chevy truck, as incompetence. The dealerships will buy them.

In the end mgmt recognizes that they have to minimize their exposure to the USA mkt and expand their overseas mkt. The foreign auto makers see a similar situation, in that it is cheaper for them to manufacture here and as they gain mkt share they expand operations.

The dynamic leadership to actually make the US auto maker competitive doesn't exist. They are going to be a nationalized group and will continue to lose mkt share just as they have for the last 30 yrs.

[dinodino]

Okay, UAW, you got what you wanted, but this taxpayer won’t forget how you sh*t on us. It will be a long, long time before I buy another Big Three car. Sayonara.

[wmfights]

...for the first time in my life, the next car I buy will be made in America, but not by an American company.”

I can't believe it, me to!

W. - worst Republican president of my 43 year life. 2nd worst overall.

I think you're wrong. His foreign policy and defense of this country has been great. He has put good judges on the bench.

It was his domestic policy that was bad. He s right about SS, school choice, medicare, immigration reform but he never fought for the changes. He was too much of a patrician when dealing with the political wrangling and the Pubs in congress followed his leadership and failed terribly.

[Eric Blair 2084]

You forgot:

1982 Cadillac Cimarron
1976 Ford Mustang

Last time social engineers tried to ram crap down the sheeple’s throats that they don’t want.

We wanted cars that go real fast and get real shitty gas mileage.

[WackySam]

His medicare policy has added more than 11 trillion to the unfunded entitlement debt.

That alone makes him a failure of a president.