Posted on 11/20/2008 2:03:40 PM PST by fightinJAG
Let's look at General Motors as a classic tale of large numbers. What would it mean if GM were to go bankrupt? How significant would it be to the economy?
Emotionally, we may feel General Motors (nyse: GM - news - people ) represents a pillar of our economy and should be saved. But when we look at the facts and rely on industry experts to put them in context, we see an alternative conclusion.
The Center for Automotive Research just released a report indicating that, as of December 2007, the motor vehicle industries employ 732,800 workers and the Detroit Three (GM, Ford and Chrysler) employ 239,241 workers in the U.S. Assuming the worst-case scenario--that all three companies will cease operations in 2009--the report estimates a loss of nearly three million American jobs.
This estimate assumes each direct job creates four jobs for suppliers and 7.1 "spin-off" expenditure-induced jobs.
(Excerpt) Read more at forbes.com ...
I have a 4-Runner and an S-2000
IWM, a simple Exchanged Traded Index Fund, is worth $9.61 billion.
Bet you never heard of it ~ has about 5 employees, manufacturers NOTHING, has no debts, owns no assets, and still, it's value on the stock market is 5.5 times that of GM.
Over the past 5 years I've bought and sold IWM numerous times and earned about 3 times my investment. (NOTE: I sold in September just before it crashed to its present pitiful state).
If the UAW thinks GM is all that important I'm sure they can buy it outright!
With a name like Ron Jeremy I wouldn’t think you’d be freaked out by any chick.
BTW, Who is that?
My 76 Chevy C20 Van with a 350 cu in Corvette engine (and this gigantic carburetor) was pretty good. Got rid of it in 2001.
Uhh. GM did not make substandard cars in the ‘50’s. That era was the pinnacle of the American Automobile industry.
My all time favorite car is the ‘57 Chevy Bel Air 2 dr. hardtop with a 283 cubic in. V8 with 2 4’s and a stick shift.
Second favorite is the ‘59 Pontiac 4 dr. Flattop Bonneville or Starchief Widetrack fullly loaded.
And there it is, right there. Well put.
Things have changed. The vehicles have been pretty much of comparable quality to foreign models since the mid nineties. New hires are getting a much more reasonable $15/hr. Ridiculous pensions are gone, 401ks now. Current retirees have been told to find their own medical insurance after 65. Management levels have been eliminated. They are being responsible. Now.
But its like someone that makes $40K buying a $500,000 house, furnishing it to the hilt, and then crying for someone to pay their mortgage because they can't afford to even though they're now clipping coupons, shopping at Walmart and have gone back to rabbit ears on their 50" plasma tv.
This is the responsibility of the unions and the Big 3.
I'd suggest they adopt the same system the "transplants" use to fill dealer orders ~ maybe even use Hyundai's system. Plus, reduce options and variability so the dealers don't have to carry enormous inventories just in case they get a sale.
Henry Ford was onto something important when he said "they can have any color they want just as long as it's black".
If GM and Ford go out of business, what’s to stop the foreign automakers from closing up their US plants and shifting everything back to their homelands? Nothing. They will have 100% of the US market anyway. We NEED the domestic automakers to survive, and that means gutting the current labor contracts or fast-tracking the agreements made last year that take effect in 2010. Bankruptcy is not a solution, they will never come out of it. Management and the UAW need to sit down and get this done now, forget begging to Washington for a loan/bailout. I’m guessing the UAW membership will go for massive pay cuts right now to save their own hides. UAW leadership, on the other hand, continue to be obstructionist.
I love Corvettes and I love my 2006 dearly.
An American icon.
Hopefully somehow they will keep making them.
But of course with the impending AL Gore-ification of the economy, perhaps it is better it dies at the top of performance then be dumbed down into gutless enviro-mobiles.
Union members know they don’t work for a living. They sit around laughing about doing nothing much on the lines. Or sitting idle doing nothing. And getting the annual layoffs, big vacation time. Now perhaps they’ll have to learn how to work again. I don’t feel sorry for them. With 100 percent paid education allowances, they have no excuses for being in jobs about to end.
“Buy American, Buy Toyota and Honda”
If it makes you feel better to buy a foreign car assembled in America, that’s fine. When the bell tolls and the profits are made, where do you think the money goes? TOKYO. We have outsourced our jobs, imported crap from China, allowed the foreign manufacturers to come to America, build their cars and refuse to allow our car manufacturers to do the same in their countries and we wonder why we are the largest debtor nation on earth. When the Big 3 fail, so will the foreign companies because they use the SAME SUPPLIERS the Big 3 use. The reporter who did this story is an elitist who probably never spent a day making a real living.
Forbes, Steve Forbes to be precise, was one of the folks crying the loudest for the scam of a “bank buyout” 700 billion, how cavalier of his publication to now pronounce that “we don’t need no stinkin’ GM”
H-i-p-p-o-c-r-i-t-e thy name is Forbes.
Hmmmm...it might be close, but I am hesitant to challenge you on who had the most fun.
Increasing AIG largesse from $85 billion to $150 billion and allowing car companies and states to join the queue provides evidence the bailout produces deception without solution. Terms enabling lending or investing, allows management, labor, and government leaders to fabricate temporary shelters from market forces and voters revealing their ineptitude. Elections for 535 patricians returned most to Washington, when nearly all were decayed and wretched. One patrician even became president, though severely infected by gifts and influence from those precipitating the mortgage crisis.
Government institutions nationalizing private sector firms feed addictions to power equivalent to individual addictions to chemicals or pornography. Individuals exchange personal freedom for perception of material security, but only postpone the looming reckoning.
Proper government involvement means the Federal Reserve, in concert with Treasury and Justice, applies persuasion to private sector firms. Brutal persuasion, just short of torture as condemned by Geneva Conventions, enables private companies to discover programs for market clearing asset prices. They also form new companies absent flagging management and labor attributes.
Whatever financial cost the country must pay now to adhere to principle pales before the later cost incurred, if markets are forced to merely postpone consequences. True solutions reaffirm the inevitability of market forces countermanding human laws, and incorporating risk within all economic activities.
Our Constitution says this country will promote the general welfare. It did not say the Treasury Secretary would ensure protection of home values, college funds, retirement accounts, life savings, homeownership, corporate wealth, political careers, and union benefits.
I was pretty fond of my ‘70 Formula 400 RamAir III, with the Muncie M22 “Rock Crusher”.
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