Automobile buyout solution??? alternative?

[iphish]

If you haven't read the papers or seen the news- this buyout decision has to happen within 90 days (yes 90 days) otherwise ford and GM could be belly up & gone- and the american tax payer not only will have to support up 3 million additional unemployed people (todays UE'd figure is 750K). But also the resiual businesss effected by it- tire manufacturers, repair facilies, dealerships, finance, onstar, delphi....etc etc

 

The republicans are against buy out, the democrats are for it. I am a republican but I do not agree with either party.

 

My feeling is if you give them $50 Mill, this money will effectively go to health insurance, pension, retirement, payroll, disability etc etc. None of this sells cars. Seems to me the whole problem is GM/Fords ability to sell cars.

 

Remember Joe taxpayer is going to pay for it anyway one way or the other.

 

1) Offer a tax write off of every american car bought i.e. $32k car over 4 years, you get a $8K write off each year. Provided it purchased thru GM/ford financing.

 

2) Force, demand, immediately implement at 25% surcharge (tariff) for any imported car. Why- because some experts feel that 20% of the selling price of any american car goes directly to cover medical, insurances, pension, disability, retirerment etc to the american automobile worker. These costs ARE not paid for by imported cars. I think the end result will look like this Toyota Camery $25K, Honda accord $25K, comparable car from GM/FORD $19K or less.

 

3) let chrysler go to the grave- there is not enough room for the big 3, since chrysler is already for sale- have a yard sale for some of it's parts- like JEEP. the rest, let it go. I know this maybe harsh for some, but it needs to be put to bed. Parties over for them. Heck even mercedes could get them to be profitable.

 

4) Suggest to the ford/gm that they need to curtail model offering by 25% immediatly and 40% by 2012. Produce what sells.....Replacing these models will be ensure attractive tax credits for them in retooling of facilities for next generation ultra efficiant autos/trucks. By reducing models they can get more turns of inventory and reduced manfacturing costs.

 

5) hope for the best

[RegDunlop]

problem with number 1 - nobody ( or almost nobody ) can qualify for a loan from GMAC or Ford financing

 

i think number 2 would be a disaster for the ENTIRE econonmy - you would set off a trade war

 

i like 3 ( and imo opinion you can change chrysler for ford or Gm any one of the 2 should be allowed to fail to send a message )

 

and i like 4 a lot

 

and #5 why not OBAMA = hope right?

[BassNuts]

COLUMBUS, Ohio, Even as Detroit's Big Three teeter on collapse, United Auto Workers President Ron Gettelfinger said Saturday that workers will not make any more concessions and that getting the automakers back on their feet means figuring out a way to turn around the slumping economy.

"The focus has to be on the economy as a whole as opposed to a UAW contract," Gettelfinger told reporters on a conference call, noting the labor costs now make up 8 percent to 10 percent of the cost of a vehicle.

"We have made dramatic, dramatic changes and the UAW was applauded for that," he said.

Instead, Gettelfinger blamed the problems the auto industry is suffering from on things beyond its control - the housing slump, the credit crunch that has made financing a vehicle tough and the 1.2 million jobs that have been lost in the past year.

"We're here not because of what the auto industry has done," he said. "We're here because of what has happened to the economy."

Gettelfinger also called on Congress to act quickly on a bailout plan for the auto industry, saying action is necessary before President-elect Barack Obama takes office in January.

He said if one automaker were to file for bankruptcy, the others may follow. He said the automakers would find it difficult to restructure under bankruptcy laws and instead could end up out of business. "Would you buy a car from a bankrupt automaker?" he asked.

[Trunky]

the automaker deserve what they got. Mismanaged for many years, in bed with big oil, crushed innovative technology in favor of gas guzzlers...now we're supposed to pickup the tab ? f that, I'll buy a japanese mobile, those auto workers can pound sand as far as I'm concerned, and the union leaders can rot also,

 

survival of the fittest.

 

Loan some money to companies with NEW ideas, scrap the dinosaurs

[iphish]

COLUMBUS, Ohio, Even as Detroit's Big Three teeter on collapse, United Auto Workers President Ron Gettelfinger said Saturday that workers will not make any more concessions and that getting the automakers back on their feet means figuring out a way to turn around the slumping economy.

"The focus has to be on the economy as a whole as opposed to a UAW contract," Gettelfinger told reporters on a conference call, noting the labor costs now make up 8 percent to 10 percent of the cost of a vehicle.

"We have made dramatic, dramatic changes and the UAW was applauded for that," he said.

Instead, Gettelfinger blamed the problems the auto industry is suffering from on things beyond its control - the housing slump, the credit crunch that has made financing a vehicle tough and the 1.2 million jobs that have been lost in the past year.

"We're here not because of what the auto industry has done," he said. "We're here because of what has happened to the economy."

Gettelfinger also called on Congress to act quickly on a bailout plan for the auto industry, saying action is necessary before President-elect Barack Obama takes office in January.

He said if one automaker were to file for bankruptcy, the others may follow. He said the automakers would find it difficult to restructure under bankruptcy laws and instead could end up out of business. "Would you buy a car from a bankrupt automaker?" he asked.

 

 

I am not sure I follow you on your reply.

1) there won't be a contract without a JOB, both GM and Ford are at risk of going under within 100 days

2) if 1.2 million job losses are a problem, how about an additional 3 million immediately unemployed effect other industries.

3) joe Taxpayer will also be responsible for all the retiries, all the healthcare too.

4) let chrysler go bankrupt.

5) I disagree with the notion that the autmobile companies were only in trouble recently as result of the finacial, subprime etc etc. On a quartely basis they have been in trouble for years now- losing millions, billions.

 

personally I don't care what this gettlefinger says- perhaps one small element of why we are at this point is the UAW.

[Mick2360]

COLUMBUS, Ohio, Even as Detroit's Big Three teeter on collapse, United Auto Workers President Ron Gettelfinger said Saturday that workers will not make any more concessions and that getting the automakers back on their feet means figuring out a way to turn around the slumping economy.

"The focus has to be on the economy as a whole as opposed to a UAW contract," Gettelfinger told reporters on a conference call, noting the labor costs now make up 8 percent to 10 percent of the cost of a vehicle.

"We have made dramatic, dramatic changes and the UAW was applauded for that," he said.

Instead, Gettelfinger blamed the problems the auto industry is suffering from on things beyond its control - the housing slump, the credit crunch that has made financing a vehicle tough and the 1.2 million jobs that have been lost in the past year.

"We're here not because of what the auto industry has done," he said. "We're here because of what has happened to the economy."

Gettelfinger also called on Congress to act quickly on a bailout plan for the auto industry, saying action is necessary before President-elect Barack Obama takes office in January.

He said if one automaker were to file for bankruptcy, the others may follow. He said the automakers would find it difficult to restructure under bankruptcy laws and instead could end up out of business. "Would you buy a car from a bankrupt automaker?" he asked.

 

Someone should remind Gettelfinger what happened to the Air Traffic Controlller's union. He is leading his guys off a cliff.

[canyondiver]

I am not sure I follow you on your reply.

1) there won't be a contract without a JOB, both GM and Ford are at risk of going under within 100 days They will go under once Obama is in office?

I thought Obama was into making us pay the auto industry to build us cars, and then we can buy the cars we already paid for.

2) if 1.2 million job losses are a problem, how about an additional 3 million immediately unemployed effect other industries. Money is tight all around and people are not swarming in droves to pay me for photography. I do not expect taxpayers to make up my losses, nor would I want them to (as nice as that might be).

3) joe Taxpayer will also be responsible for all the retiries, all the healthcare too.Is this really true?

Would good ole unemployment per person be as expensive as the $140,000 or so per year?

I didn't know unemployment included healthcare, I thought you paid for that out of whatever pittance you get, and isn't there a limit in how many years you get unemployment?

4) let chrysler go bankrupt.

5) I disagree with the notion that the autmobile companies were only in trouble recently as result of the finacial, subprime etc etc. On a quartely basis they have been in trouble for years now- losing millions, billions.Totally agree... Seems most of the trouble we are in is because of greed and unsound business practices.

 

personally I don't care what this gettlefinger says- perhaps one small element of why we are at this point is the UAW.

 

Perhaps the gov employees should buy the surplus, with their own pocket money, not ours!!

[dkovac]

1) Offer a tax write off of every american car bought i.e. $32k car over 4 years, you get a $8K write off each year. Provided it purchased thru GM/ford financing.

 

 

2) Force, demand, immediately implement at 25% surcharge (tariff) for any imported car. Why- because some experts feel that 20% of the selling price of any american car goes directly to cover medical, insurances, pension, disability, retirerment etc to the american automobile worker. These costs ARE not paid for by imported cars.

Why should I have to pay more for a car because the US automakers have made bad decisions

I think the end result will look like this Toyota Camery $25K, Honda accord $25K, comparable car from GM/FORD $19K or less.

Camry's and Accords are built in the US pumping Billions of dollars into our economy and those workers in turn spend their paychecks here.

 

 

3) let chrysler go to the grave- there is not enough room for the big 3, since chrysler is already for sale- have a yard sale for some of it's parts- like JEEP. the rest, let it go. I know this maybe harsh for some, but it needs to be put to bed. Parties over for them. Heck even mercedes could get them to be profitable.

 

They are no different than the other 2 Actually you don't here them begging for money

4) Suggest to the ford/gm that they need to curtail model offering by 25% immediatly and 40% by 2012. Produce what sells.....Replacing these models will be ensure attractive tax credits for them in retooling of facilities for next generation ultra efficiant autos/trucks. By reducing models they can get more turns of inventory and reduced manfacturing costs.

 

Get rid of Buick Mercury really no need for GMC as Chevy has the same product No need for Chrysler and Dodge put them under one name and save a ton of money in marketing.

 

 

5) hope for the best

 

There really is no good outcome Unless they get alot of cash over a long period of time it is a bad scenario. They have been bleeding for years and now are hemorraging. There are so mony people that could lose thier jobs over this from the people in dealerships the suppliers even the guy that has a lunch truck at a plant.

 

The easy answer is let them sink they brought it on themselves. The worst part is that the idiots running then just now figure out that they are done for in 3 months. Or is it that they see money being thrown around and want a piece of the action.

 

If they do get the loans, what are the consequences if they default? None If they cannot get anyone else to invest in them Why would the Government think it is a good Idea.

 

Having said all this I think that this is a worse crisis that the banking situation. Much more trickle down effect So many Jobs could be lost and lives ruined. To me if we do not do anything about this we will only be punishing the wrong people. The workers will lose their jobs and who knows what else. Where as the decision makers(execs) will retire and live on their big fat nest egg that they have made in the years leading to this.

 

My opinion is that they made thier own bed now let them sleep in it for better or worse.

 

Sorry about the rant but this week 10 of my coworkers were laid off from the dealership I work at........and we sell Imports

[iphish]

Chrysler is the weakest of the 3, and no longer owned by an american company. IMHO I always thought they were a junk. reliability and resale being the tell tale.

[iphish]

Some valid points here, but right now, within 90 days we have 3 options.

1) pay 25 billion right now- ballooning to $50 billion

2) Let them sink, they deserve it.

3) Make an incentive for americans to buy american through costs, write off, tariffs for all imports and domestically built foriegn owned manufactureres, by doing so effectively allowing ford and gm to continue to produce and sell cars.

 

If you think #2- Ask yourself this.......how are you going to handle 3.5 million unemployed almost instantly? keep in mind in addition to the unemplyed, Entire cities bankrupt, millions of loans (credit cards, homes and retirement) defaulting. The ultimate cost of this will cost alot more than #1.

 

#1 is the easy way out- short term that is, with no guarentee. Besides the money being allocated to them- does not come with conditions of how the money will be spent.

[jmjftw]

What will GM do with the money other than pump it into a failed business model? "Keeping it alive will only prolong the agony."

[iphish]

whats the alternative?

 

The failed business model is that we are unable to compete due to manufacturing, overhead costs and marketing?

[jmjftw]

Bill Ackman on "Charlie Rose" had an interesting take on reorganization and putting the skilled labor of the unemployed GM masses to good use improving national infrastructure:

 

It's long, just about a half hour, but if you have the time, it's worth the watch. Great information about the bailout, state of the economy, fraud of the economy, etc... I hadn't heard about Bill Ackman prior to last night's show, but I was completely engaged for the entire half hour, fascinating stuff in an understandable delivery.

 

http://video.google.com/videoplay?do...89126459&hl=en

[ActionBastage]

Someone on the Sunday ciruit made a good point.

There are systems in place for companies to go CHapter 11. I'm no economist or accountant, but it would allow the company to cut its losses and reorganize, remove the drain, and hopefully retool and re-enter the market.

Point is if I'm thinking correctly, they will not go away, they will receed, reorganize and hopefully come back with a profitable model.

 

It will be a hit, but I think they can adjust and come back without our money. Otherwise, where do you draw the line?

[AdrianF]

whats the alternative?

 

The failed business model is that we are unable to compete due to manufacturing, overhead costs and marketing?

 

 

 

gm and ford have a failed business model

 

Toyota opperates here very succesful. Proving that it can be done, with the right management.