GM Bailout

[hlmencken]

If the Bush Admin or the incoming admin. is even considering bailout GM and Detroit, they've turn the treasury into an ATM for big business. GM got themselves in this mess because they put all their money into those big SUV's, thinking that gas is going stay at $1 a gallon forever. They didn't begin to diversify their product line until, of course, it was too late. And now they want the taxpayers to cover their bad bets. They should'nt receive guaranteed loans, much less grants! They should perish just like the Pinto with the exploding gas tank. This is on top fighting the War on Iraqi, which has cost almost a trillion dollars, while cutting taxes for top tax brackets and the possible bailout of Fannie and Freddie Mac.
Sweet Dreams.

 

[dawgball]

I don't believe in bailouts, either... or at least very rarely. I don't know of a situation off-hand where I think a full-blown bailout is appropriate.

But there was a lot more to do with GM's woes than the SUV decisions.

 

[selkirk]

the big three were rumoured to be looing for 25 billion however now there is talk of 50 billion in loan guarantees.

not sure the big three have costs issues though that is only one problem.

GM for instance has to many brands, I mean Toyota and Honda have 3-4 major models, GM has more brands than that...more brands, more money to relaunch them every 3-5 years and even market them.... however killing a dealership network would not be easy and very expensive.

not all govt. bailouts are failures, but a large majority do not end well, you just need so many things to turn at the same time.

managment and labour have to be one side, and share the costs and have invesment in the company, also they have to be efficient, and the market for their products have to improve.

one that worked in Canda was Algoma Steel, however many do not, have a paper company that went bust after just 3 months, provinical govt. might be out 30-40 million..... maybe more.


thanks
selkirk

 

[DOGS THAT BARK]

A very successful bailout out in U.S. was Chrysler Corp of which I was an employee at the time.

of course leadership -Lee Iacocca- had a lot to do with it.

The union had us ready to fight any wage reduction--but by the time Lee finished his -we are all in this together speech--attitudes changed.

He said saalried people would be taking bigger cut than production and he was cutting his pay to $1 a year until company was in the black.

Chrysler not only paid off loans in full but paid them off early.

Of course this was exception to most bailouts.

 

[dawgball]

The Chrysler situation had another advantage: they were the only one looking to be bailed out at that time. With it more than likely that all three will now want their hand-outs, I feel it makes it much less likely to be successful.

managment and labour have to be one side, and share the costs and have invesment in the company

This is the MAIN reason why this won't work. Neither side is really ready to work together from what I have seen.

 

[DOGS THAT BARK]

I'm with you brother Dawg
I no fan of bailouts--unless no other option--and results of company going under would be catastrophic.
There has to be consequences for bad decisions.