GM Almost Out Of Cash, Looks To Washington For Bailout

GM is running out of money and may not have enough cash to continue running its business. They’ve burned through $6.8 billion in the last quarter and will exhaust their reserves by the end of 2008 without government intervention or a significant increase in auto sales. Which sounds more likely to you?

CNN says:

Dave Cole, chairman of Michigan think-tank the Center for Automotive Research, said the chances that GM would be forced to file for bankruptcy were high unless Congress takes almost immediate action to bail out the industry.

“This is not something that can go on and be dealt with in the next year, it needs to be dealt with in the next few weeks,” said Cole. “When your cash is gone, you’re gone.”

GM: Almost out of cash [CNN]
(AP Photo/Paul Sancya, File)

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  1. Canino says:

    Hurray for union contracts!

    • catcherintheeye says:

      @Canino: Totally agree – in a time when unions are pretty much obsolete (from an economic perspective, anyway) I’m taking great pleasure in seeing the unions negotiate themselves out of jobs. It’s unfortunate that unsuspecting auto workers who thought the unions were only looking out for them (yeah, right) will have to suffer as a result of poor management, negotiations and foresight.

      • Orv says:

        @catcherintheeye: It’s unfortunate because at the same time the unions are disappearing, we’re also losing a lot of the progress they once made. Wages are stagnant, pensions are gone, and the 8-hour workday is a fond memory for a lot of people.

      • ecwis says:

        @catcherintheeye: This is why I believe the Detroit auto companies are going to disintegrate. Obama is very pro-union so I doubt he will do anything to help the companies de-unionize. So the only way that the “Big” 3 can survive is if the government socializes them…

      • snowburnt says:

        @catcherintheeye: I’m sure this is echoed below, but this is not the fault of the unions. It didn’t help that the unions forced the companies to comply to standards, but the real culprit is the stagnant designs, lack of initiative and lack of foresight by the management at GM.

        I can’t believe that they’ve been pushing their trucks and SUVs even harder than before during the gas crisis and even before then. It’s like they were saying: “Hey consumer: FU!”

    • Anonymous says:

      @Canino: Yes, it is clearly the fault of the unions, and not the gross incompetence and refusal to realize that gas was not a limitless commodity that is causing the American Motor companies to fail. I would accept unions as a part of a larger problem, but to pass off unions as the sole source of their financial woes is disingenuous.

    • rellog says:

      @Canino: Or “hurray for excessive executive pay and excessive pay for engineers that have failed miseribly to address the needs/wants of our countries automotive buying population.

      Unions gave us a middle class. Their erosion will remove it. Blame greedy execs for companies’ downfalls, since they’re the ones causing them. Any industry that is seriously hurting will see its unions take cuts for the benefit of the company, how often do the uppers do that same thing?

      • Rhayader says:

        @rellog: I sort of agree. While I think Unions have historically been corrupt and, in many ways, counterproductive, they did maintain a middle class and keep blue-collar workers in the US. The death of American manufacturing has coincided with the death of labor unions very closely.

        If you find this stuff interesting, check out season 2 of HBO’s The Wire. Actually, check out all season. Awesome stuff.

      • Canino says:

        @rellog: “Excessive” executive pay is a red herring. The dollar amount is miniscule compared to ongoing union contracts for health care and other benefits for workers who have long retired, many more than 20 years ago.

        • oneandone says:

          @Canino: Yes, and those union contracts for healthcare & pensions are what GM (& other U.S. carmakers) signed to ward off government pensions and national health care. It’s their own fault. In 1950, UAW wanted GM management to join with them to lobby Washington for federal benefits. GM would have none of that and was *extremely* short-sighted. To fend off the specter of socialism, GM and Ford and Crysler decided to guarantee pensions for their very young workforce.

          Short-sighted in the extreme, but I don’t blame the unions for accepting the offer. They wanted pensions & healthcare, and it’s the carmaker’s fault that they went with hubris and fear instead of rational thought about the future.

          NYT article from July has details: [www.nytimes.com]

          Harper’s had a great piece about exactly this a few years ago, with the emphasis that countries like Ireland have been prospering because they divorced employers from providing services & social insurance, and instead made it a govt responsibility.

          • buckfutt says:

            @oneandone:

            Laughable, but to be expected from a Leftist rag like Harper’s. Ireland is prospering because their taxes are an order of magnitude lower than most of Europe, and they’ve removed the old socialist barriers to new businesses. Look at Germany and France if you want to see what comes of putting the government in charge of everybody’s health care and pensions: zero growth, permanent, double-digit unemployment, and an unsustainable welfare state.

          • slopirate says:

            @oneandone: embracing Socialism is hardly “rational thought about the future”

        • varro says:

          @Canino: National health care would eliminate the necessity of the auto companies paying both current employees’ and retirees’ health insurance.

          Why do you think the auto companies have so many operations in Canada now?

      • ilovemom says:

        @rellog: Don’t blame the engineers. We have no say. We can only take orders from marketing and execs. We just make it do what they say.

      • ecwis says:

        @rellog: I know two engineers that work for Detroit auto companies (and two that work for suppliers) and they are far from rich. I don’t know where you’re getting your facts…

    • coan_net says:

      @Canino: My father worked for GM, and raised me & my sister thanks to the job & union getting his pay to increase for so many years.

      ….. but more recently, I worked for a union company – in which the union walked all over the company. (Example – company caught 2 people clocking each other in – fired them both. 6 months later, union got their jobs back with back pay for the 6 months. Another example, for years, one of the maintenance workers was the highest paid employee…. and found out it was because he had his own time clock that he manipulated to get more overtime hours….. again fired, and union got him back.)

      Oh, don’t worry – the company screwed the union. They closed and opened a plant in Mexico.

    • bravo369 says:

      @Canino: I bet the union would rather let people get laid off than rework the contract. With the dire straits GM is in, and the economy for that matter, i bet if you asked the GM workers whether they prefer to have a cut in salary/benefits/whatever and keep their job or lose it altogether, they would choose to keep their job. Isn’t a union supposed to work FOR the people they represent. I wonder what would happen if GM workers start demanding their union to start help saving some jobs.

    • tmed says:

      @Canino: yes, blame the people on one side of the negotiation. So sensible. if it was going to kill the company, perhaps management shouldn’t agree to the terms. It is not wrong for A-Rod to accept $25 million a year, if someone can be found to pay it.

      the same is true for unions.

  2. tedyc03 says:

    GM is running out of cash because its products suck.

    Let’s let the free market decide.

    • Orv says:

      @tedyc03: The thing is, GM’s products have improved markedly in the last few years, and they haven’t exactly been resting on their laurels. The Cadillac CTS-V is a world-class car that can stand up to anything BMW makes. The Volt is a revolutionary design that they look to be on the verge of actually producing. The fuel-cell version of the Equinox is, by all accounts, a reliable vehicle that anyone could drive if the infrastructure to fuel it existed.

      It’s just too little, too late. The bottom fell out of the SUV market before the other stuff was ready to go.

      I think it would be a disaster long-term for the U.S. to lose its automotive industry. Cars are the most complicated things anyone mass-produces on a large scale; having people around with the knowhow to build something like that is important strategically. The financial meltdown has shown us the folly of having an economy that depends on moving money around instead of actually building things.

      • rellog says:

        @Orv: Blame YEARS of piss poor quality and and bad decision making for their downfall. I swore of GM when my Pontiac’s head gasket went, I I found out that they ALL fail due to their design. GM knew it and not only failed to fix the defect in produced cars, but continued using the desing for years after…. All it would have taken was a change in material for the gasket, but they refused to address the issue…

        • baquwards says:

          @rellog: was it the 2.4 liter engine used in the grand am, and a few other cars, I know of that one failing around 40k in most cases.

          • TechnoDestructo says:

            @baquwards:

            A B F G W Y, those are the good GM cars of the 80s through early 2000s. The rest are a crap shoot and got all the shittiest engines, too.

        • TechnoDestructo says:

          @rellog:

          Note: Other countries’ cars have or have had reliability issues in the past, too (or even in the present). VW ignition systems, Honda CV axles and auto transmissions (yes, Honda), Toyota and sludging (though in many cases you can just keep on driving regardless), Subaru and head gaskets.

          It’s just that GM went about 20 years with nothing good to offer in exchange for putting up with it. (A Mazda Rotary owner considers replacing apex seals a bonding experience with their car, because they love them so much when they work. I’d use a flat tire as an excuse to ditch a Cavalier.)

    • Quatre707 says:

      @tedyc03: GM is running out of money because most of it’s assembly line workers make $25 to $30 an hour, plus full benefits, and often have ridiculously simply, and often irrelevant tasks to perform on a shift.

    • INsano says:

      @tedyc03:

      God, if only someone could have seen the future of the automotive 5, 10 or 15 years ago and encouraged american car makers to use alternate fuel technology. Oh wait…

      They had their chance. For the happiness of my soul and some major karma I’d like to watch them burn–however…

      The sad part is I understand how imperative it is to the economy(their employees and everything their employees help support) that they be saved.

      If only they would have understood earlier that their close alliance with Oil was more to Oil’s benefit than theirs, and that in rough times oil would be ok for the short run, but they wouldn’t.

      Of course, being that aware while making cars like the Hummer, the Excursion and the Viper is oxymornoic.

    • StanislausJagar says:

      @tedyc03: @tedyc03:
      Tedy is right. It’s the products

      I live in near Flint where numerous fabrication plants are located and are included in the shutdowns. A spokesman said that changes in the industry and in consumer behavior “took [them] by surprise”. Huh? The first Toyota Prius came in 1997. Gas prices generally trend upward. Consumer Reports and J.D. Powers have been rating the Japs and now the Koreans very well in the areas of initial quality and vehicle durability. Surprised, were they? I’m surprised that they missed these glaring signs. Welcome to the game, now in the 4th quarter. I just hope that the Asians car makers (with some factories in the U.S.!) don’t get complacent, lacking competition, and let their quality slip.

      By the way, GM ought to be ashamed at the way the Flint-area population are showing their preference for Jap and Korean cars – about 1/3rd of vehicles on the road by eyeball – in GM’s home court. GM, may you rest in peace.

  3. buckfutt says:

    Ridiculous. There’s no reasonable argument that can be made for propping up bad management, a crappy union, terrible products and a dishonest dealer base.

    Let them fail. They deserve it. There’s a huge automotive industry in this country that’s doing just fine without Detroit or the UAW. There’s no reason to bail out a failed company, especially when there’s no anticipation that they’re going to change anything for the better.

    Not that that’ll happen, since The Messiah is due to pay off the UAW for all those confiscated dues that were turned into donations.

    • IamNotToddDavis says:

      @buckfutt: I second that. Sorry GM, you saw the writing on the wall years ago and ignored it. No one left to blame but your own failed business plans. I don’t want my tax money being used to bail out consistently bad decisions.

      • zonk7ate9 says:

        @IamNotToddDavis: I don’t know about you guys, but I don’t feel like having to suffer for other people’s mistakes. If a company this big is allowed to collapse think of the consequences. There will be a massive amount of jobs lost and GM probably has a lot of debt as well. It may cause a chain reaction and cause some of their creditors to fail as well. I don’t mind my tax dollars going to help striggling companies to keep the economy from collapsing, but their should be oversight like the AIG bailout. And to all you people stuck in the “red scare” screaiming sociliasim, would you rather live in a socialist country or a third-world country? It may not be the ideal solution, but allowing these giants companies to collapse will only make things worse.

    • docrice says:

      @buckfutt:

      Thirded. We bailed out banks because people (supposedly)cannot live without banks/credit/etc. We can live without crappy overpriced cars. I’d pee on the ashes – GM vehicles have been notoriously unreliable, underdesigned, etc. and they refuse to admit a problem and continue to sell the same bad design. They had their chance, they sucked.

      Our economy is based on a simple precept: if you make good products at a reasonable price, you stay in business. If your stuff sucks and no one buys it, you lose and close up. GM lost. I don’t want my taxes to prop up all the loser companies, no matter how big.

      • dhmosquito says:

        @docrice: You guys are all correct. Just look at this:[static.howstuffworks.com]

        Notwithstanding all the reliability/serviceability problems of Detroit products, aesthetics mean a lot to me, and it’s obvious no one at GM has a clue in that regard either. Aside from the infamous Caprice Classic, think Aztec or Chevette. Detroit is so bankrupt in terms of design that they are now producing copies of “classics”: Mustang, Challenger, etc.

        Based on what I’ve seen in rentals and in others’ vehicles, nothing Detroit makes even comes close to my Acura TSX. Period. And it’s not really a top-of-line luxury car.

        BTW, buckfutt, that’s a great username! LOL cheers

    • karmaghost says:

      @buckfutt: I feel sorry for anybody that would lose their jobs because of this, but GM needs to be allowed to fail. Just because you’re a large company, doesn’t mean we should bail you out. You fucked up, and continued to fuck up for years, so now you’re done. Hopefully future companies will learn from your mistakes. Goodbye GM.

    • ELC says:

      @buckfutt: Awesome – and right on the money. The ONLY reason we bail out these companies is to keep people from losing their job. But that’s the risk of having a job, it may not always be there. NO govt can continue to bail out failed businesses.

      • medusasbedhead says:

        @ELC: Well said. The only GM product I ever had was a Cavalier… which broke down so often I traded it in for a Ford Mustang, which ran reliably well until I had to trade *that* in due to skyrocketing gas prices. Fuck GM.

  4. Chairman-Meow says:

    To quote the immortal JR “Bob” Dobbs:

    Buh-bye.

  5. blackmage439 says:

    “GM Almost Out Of Cash, Looks To Washington For [Another] Bailout”

    There, I fixed it for you.

    I say let the company die. It’s nobody’s fault but their own for building their business on a sure to fail business model for the past decade. Did they honestly think soccer moms would continue buying SUV’s and other underperforming gas wasters forever? Yes, the job losses in the mean time would be catastrophic, but we just need to wait for the market to turn around, and have another auto company to step in to fill the gap. Or, *gasp* maybe the workers just need to adjust and find a different job, possibly in an entirely different sector of the economy.

    These companies don’t need handouts. Certainly not ones given by the government funded entirely on borrowed taxpayer money. They need lessons in smart business management, how to adjust to changing consumer trends, and how to better manage and invest their finances.

  6. GavinEstecado says:

    Haven’t they been bailed out before, sometime in the 80’s? I know that the workers would suffer if they were to dissolve, but seriously… treat this company like a horse with broken legs…find the shotgun and lets move on.

    • tande04 says:

      @GavinEstecado: The auto industry is like the airline industry. They’re pretty much constantly getting “bailed out”.

    • MickeyMoo says:

      @GavinEstecado: that was Chrysler 1979.

      We’ve seen this movie before – it was called the 70’s. Domestic automakers sold large gas guzzling cars that weren’t quality/price/mileage competitive with imports – flash forward 30 years and it’s still the same thing. Let them sell themselves to Cherry or some other Chinese automaker that’s dying to get a foothold in the American market.

      • robb9 says:

        @MickeyMoo:

        Cherry?! Do you know anything about the industry or are you just pulling names out of a hat. Cherry has not made a vehicle that will hold up to american safety standards. They can’t even make one that will pass european safety standards and those are the most lax of all the nations in the world.

        • MickeyMoo says:

          @robb9: Oh I’m very familiar with the horrendous crash tests of their export vehicles as shown on youtube, 20/20, etc – they are flush with cash and with such a purchase would get all the IP with which, one would presume, they might be able to carry on with current GM designs during a transtion time. I was being semi facetious with the Cherry example, but speaking of safety – ever see an Explorer roll over? the A and B pillars can’t support the vehicles weight when resting on it’s roof and the whole thing pancakes like a Marina district apartment building during Loma Prieta. This was known to Ford and they continued to sell the vehicle for many years without strengthening the supports. Lack of safety isn’t an exclusively Chinese design philosophy.

        • m4ximusprim3 says:

          @robb9: As Mickey pointed out below, cherry has a shitload of cash, and would happily dig though the GM scrap pile.

  7. TecmoTech says:

    If Congress bails GM out, I might consider you-know-what-icide.

  8. FrugalFreak says:

    They are running out of cash NOW because Bush is still in office, and GM knows Bush supports the Corporate handouts.

    • ecwis says:

      @FrugalFreak: Obama supported the $700 billion bailout as well… I’m pretty confident that Obama will support the bailout of the auto companies as well. He has chosen Governor Granholm (D-MI) as one of his economic advisors for his transition team; she obviously supports bailouts of the auto companies since it’s the only major industry in Michigan. I don’t think he would have picked her if he disagreed about that. He will support the bailout saying that it’s to help the factory workers, not the executives…

      • Tmoney02 says:

        @ecwis: Doesn’t matter what Obama thinks because it wont be his call. The automakers need the money by the beginning of December, and Obama doesn’t take control until the end of January.

        • ecwis says:

          @Tmoney02: I was just trying to let FrugalFreak know that Obama would likely support the corporate handouts so there’s no point in them running out of cash now rather than later…

      • edosan says:

        @ecwis: Despite what you may have heard, Obama isn’t president until Jan 20th. That dopey Texan guy is still in for a while yet.

        • ogsoleysol says:

          @edosan: Despite what you may have heard, Obama is still a member of the Senate. Thus, his support for or opposition to legislation on which he can vote IS still quite relevant.

      • este says:

        @ecwis:

        NO NO NO! didn’t you know Obama will fix everything!?

  9. Bertmanintx says:

    well, would it not make sense for there to be some “payroll” cuts to slow down the burning threw of cash reserves? Let the managers take a 5-10% reduction, that will make up the 6.8 billion real quick :)

    • blackmage439 says:

      @Bertmanintx: That is one of the most logical and smartest business decisions I have ever heard.

      Unfortunately, the world’s business just don’t operate that way. CEO’s may not be immune from criminal prosecution, but they’ll be damned if they take even a 0.01% reduction in pay.

    • DeltaTee says:

      @Bertmanintx: Yes, and then we can cut 20% of the blue collar union workers (no big loss) and cut their wages by 20%. They have been hacking at the white collars and R&D for a while now.

    • Tmoney02 says:

      @Bertmanintx: The funny thing is, when companies get this way the Ceo’s and board members say they need a pay raise – to ensure that they can keep people from leaving – as if it would be a bad thing to lose the team that got the company in its current bad situation.

  10. Bahnburner says:

    Chrysler was given loans in the 80s, which they repaid early, actually. However this time, I give UAW and GM management equal marks for this cluster fail, thinking they can sustain multiple brands of the same car…if they’d have cut loose Buick, Pontiac and GMC when they axed Olds, they might have had a fighting chance, but with $1,500 out of every car sold going just to retiree healthcare…its unsustainable, no matter how red, white and blue your blood runs.

  11. jamesmusik says:

    This has been a long time coming. Seems like they threw caution to the wind and hoped for a bailout instead of dealing with their problems.

    • TechnoDestructo says:

      @jamesmusik:

      They were dealing with their problems. They thought they had cash to ride out the time until they had everything under control. Then people stopped buying cars, just in general. They didn’t have any control over that.

  12. Farquar says:

    I’m not pro-union, and I’m typically a “let the chips fall where they may” kind of person when considering these things, but keep in mind:

    Directly or indirectly GM supports 900,000 US jobs. If GM goes under do not expect Ford, or the US plants for other manufacturers to up production in a significant way. 900,000 additional unemployed.

    When GM shut down for 2 months in 1998 the US economic growth rate fell by 1%.

    GM’s pension, as I understand it, is not a free-standing investment plan, like state plans, etc. That is, GM funds their employee pensions in part from operating expenses, not from an invested pension fund. I couldn’t begin to guess the number of people who rely on GM pension and retirement benefits. 2 Million? These people lose, if not all then a good portion of their retirement funds and benefits.

    So, while you are gleefully dancing on GM’s grave understand how bad this would be for the US. 900,000 newly unemployed with millions of people losing their only source of income in retirement, and millions more without health insurance.

    This is not to say that we should bail out GM. This is only to say that we should not be happy to see GM go under.

    • Hawkins says:

      @Farquar: Retirees? Don’t worry, the Federal government has set up the Pension Benefit Guaranty Corporation, which bails out private-sector pension plans. No worries!

      Oh, wait: seems like PBGC is running out of cash almost as fast as GM: [www.washingtonpost.com]

    • mac-phisto says:

      @Farquar: no, i think we’d rather build a bonfire, throw a crash test dummy on top, hang a “UAW KILLS BABIES” sign around his neck & dance around it while it burns.

      gotta love how everyone blames the workers for the poor strategic decisions of the executives.

      • Orv says:

        @mac-phisto: I know. It’s so easy to blame the unions. People seem to think that these massive, multinational companies are somehow powerless in the face of people holding signs on sticks.

        Unions are the only hope workers have of getting any say at all, as companies become more and more powerful and more and more cozy with the government.

      • Farquar says:

        @mac-phisto:

        I’m not sure where in my post I blamed the workers. Actually, I think my post was the exact opposite.

        Unless of course your response to me wasn’t directed at me.. In that case you are very confusing.

        • mac-phisto says:

          @Farquar: i agree with your statement. i was referring to the other posts on the board that would gladly sacrifice a few million jobs just to stick it to the UAW.

    • jamesmusik says:

      @Farquar: I’m not happy that see GM go under. I just acknowledge that its GM’s executives’ willful decisions that are causing it to go under. They have deliberately built cars that won’t sell at prices well below cost for years. They have been losing money on each consumer sale, yet hoping somehow that things would change.

    • astroworf says:

      @Farquar: I am one of those workers who will lose his job if GM fails. We supply material to companies that make parts for GM and have already seen about 10% of our workforce laid off this year while the rest of us are getting used to so-called “work curtailments” where we get a 3 or 4 day work week or sometimes even an entire week off without pay.
      The unexpected time off and the ever-rising cost of health insurance has more than offset any paltry gains we made in compensation in our last union contract.

    • Justifan says:

      @Farquar:
      bingo, if obama lets gm die under his watch…
      its a 1 term presidency for him

      other countries also protect their auto industries for this reason

    • cf27 says:

      @Farquar: If GM goes bankrupt, they will do so under Chapter 11, just like the airlines, and not under Chapter 7. Sure, Delta and Northwest lost a few jobs when they went bankrupt, but they’re still flying. In all likelihood, GM will continue to build cars. Their current shareholders will be wiped out, but that’s the price you pay for investing in a loser.

      Even if they do liquidate, large parts of the company will be sold off wholesale to other manufacturers. GM as a corporate entity would cease to exist, but a lot of what it built would be repurposed.

      The best thing an unemployed auto worker could do is move to the south, where Honda, Toyota, Nissan, &c have set up huge manufacturing plants. When GM folds, sales of those cars will go up, and those plants will need experienced employees.

      • starrion says:

        @cf27: If GM goes bankrupt, they will do so under Chapter 11, just like the airlines, and not under Chapter 7. Sure, Delta and Northwest lost a few jobs when they went bankrupt, but they’re still flying. In all likelihood, GM will continue to build cars.

        Unlikely. Would you buy a car from a bankrupt manufacturer? Most people would consider possible loss of warranty a deal breaker. Bankruptcy almost certainly means liquidation.

        The auto industry in the US is 2 million jobs. If the big three go under, it means 10% unemployment, and no US companies to take advantage of the much-longer delayed recovery.

  13. RandomHookup says:

    History repeats itself…

    “I’m changing my name to Chrysler
    I am headed for that great receiving line
    So when they hand a million grand out
    I’ll be standing with my hand out
    Yes sir I’ll get mine..”

    Thanks Tom Paxton.

  14. Murph1908 says:

    Solution:

    Throw out the union contract. Restructure the jobs without the insane rules enforced by the union*. Offer the jobs to the best current workers. Tell the UAW to go truck itself.

    People will want their jobs.

    *Did you know that on Broadway, there are minimums to orchestra jobs? So even if your production doesn’t need the minimum number of musicians, you are still required to pay a cellist here or a percussionist there to meet the minimum?

    *Friend of mine works in a factory. Over the years, a process has been improved and automated to the point where someone needs to just press a button to kick it off, and come back 4 hours later to refill the hopper. Because of union rules, they can’t let someone else on the floor add this to their daily duties. There is a guy who gets paid for pushing the button, hanging out in the break room for 4 hours, refilling the hopper, pressing the button again, and going back to the break room to finish his shift. Union rules won’t allow for elimination of that position.

    Unions are important to look out for the safety and well-being of the workers. But their over-reach is going to kill them, their companies, and our economy.

    • bigrig says:

      @Murph1908: Truer words have never been spoken. Wagoner’s total comp is a drop in the bucket compared to the ridiculous wages they pay the union jerkoffs to do menial labor.

      • mac-phisto says:

        @bigrig: so, are you trying to say that the $15.7 million wagner took home last year pales in comparison to the $63,000 an “average highly skilled worker” earns in wages & overtime at gm? [source] hmm…that math doesn’t quite work out, b/c wagner is still $15.637 million ahead of that menial worker.

        wait. maybe what you’re trying to say is that the $15.7 million wagner took home last year pales in comparison to the cost of employing a million people. well, i guess that would be true so long as you paid them each more than $15.70/year. assuming an average 40 hr work week, you’d have to pay them about 8 mils/hr (that’s $0.008/hr).

        you know, no matter how i look at it, your statement just doesn’t make much sense. was it meant to be facetious?

        • buckfutt says:

          @mac-phisto:

          You’re forgetting (or more likely, ignoring) the gold-plated union contract lifetime health plan, pension, work rules that let very little work get done, “U Ain’t Working” requirements to pay people who’d have been laid off in any other business, etc., etc.

          GM’s execs deserve to get fired, they’re incompetent boobs. That doesn’t excuse the UAW’s decades-long drive to run the American car companies out of business.

          • mac-phisto says:

            @buckfutt: listen. i get it. you hate unions. maybe if you educated yourself about some of the benefits you have today b/c of them, you wouldn’t be so critical. do i think it’s a perfect system? hell no. but i also realize why i’m lucky to have health insurance, a retirement program, overtime, sick time, vacation time, educational reimbursement, work safety requirements, child labor laws, unemployment benefits…the list goes on & on.

            we’ve come a long way in our workplace rights BECAUSE of unions, not in spite of them. if you’ve forgotten that, maybe it’s time you read up on your late 19th/early 20th century labor history.

            or you can choose to ignore those facts. doesn’t make them any less true though.

            • buckfutt says:

              @mac-phisto:

              If this were still the 19th or 20th centuries, you might have a point. Since it isn’t, you’re living in the past, and you don’t. Try getting a job with a buggy whip company; you might even be able to unionize it–if you can find one.

              • mac-phisto says:

                @buckfutt: which is a great way to think if you think that labor relations constantly improve – which they don’t. when unions were at their height, workers (as a whole) had more rights than they do today. consider the fact that now the burden of retirement is on the employee (401(k)/ira/etc.) instead of the employer (pension). consider that working wages have remained stagnant, or declined in some industries since the 80’s. consider that most of our production has been lost oversees.

                it’s not a coincidence that these trends parallel a decline in the power of unions.

                • buckfutt says:

                  @mac-phisto:

                  It’s not a coincidence at all that Detroit is a basket case, while the non-UAW auto plants in the South are booming, and nobody there wants U Ain’t Workin’ anywhere near their jobs.

                  • mac-phisto says:

                    @buckfutt: you’re right – it’s not a coincidence. it’s deliberate. southern factories offer a comparative advantage b/c they can pay their employees less & downsize at will. & companies specifically chose those locations to take advantage of domestic trade advantages. workers don’t want UAW in the door b/c they’ve been told the plants will shut down (& they probably will). if bmw, toyota, honda, etc. had to pay union wages, they would lose any advantage earned by manufacturing in this country.

                    but this is where it gets tricky. imagine there’s no UAW at all. the next thing to evaporate are tariffs. at that point, there’s zero advantage for foreign automakers to produce here. they can instead take their production off-shore & import for an absolute advantage. so you see, even those southern non-union jobs are protected by union labor.

                    yes, detroit is…not doing very well right now. but what makes you think it would be doing any better without UAW? mark my words: when UAW leaves detroit, auto production leaves detroit. there’s already evidence of this happening with auto part suppliers all across the rust belt.

                    • Techguy1138 says:

                      @mac-phisto: At this point some unions only represnt the workers in theory only. Unions are out for themselves and the works best interest be damned.

                      For a union to be effective it should be a secret society where anyone in it gets a free ride if they do wrong.

                      In Philidelphia a plan to save water by installing waterless urinals was halted by the plumbers union. Waterless urinals mean less pipes meaning less maintance needed so they opposed them.

                      The UAW has in recent years opposed buyout plans for their members even though for many the offer is far better than anything they could get elsewhere. The offers were opposed by the union because it reduced the union ranks.

                      Recently the retired profootbal union took a kick back from EA sports(a video game company) when it help negotiate a LOWER price for the likeness rights of the players it represents by blocking a competitor for getting the rights at a higher price.

                      Unions can work but they have to be willing to actually progress and advance their field and help their clients be sucessful. Some seem stuck in the past and unwilling to move to the future working like a parasite to suck out money from the members in terms of dues and from the employers.

                • Miguel Valdespino says:

                  @mac-phisto: The burden of retirement? This change largely came because nobody can create a sustainable pension plan when you don’t know what is going to happen to life expectancy, cost of living and health care costs in the future. If any of those rise faster than anticipated, then the pension plan flounders and puts added costs onto the system. If one cost rises 1% higher than expected, the others would have to be cut more than 1% in order to break even. Pretty soon a well-funded pension plan becomes one that requires more and more cash to make it work.

        • bigrig says:

          @mac-phisto: I was trying to say that blaming Wagoner’s comp for the financial trouble GM is in, which some are apt to do, is ridiculous. I’m in no way defending him, he IS responsible for the strategic decisions that have led to some absurd designs and the badge engineering that have occurred.

          I’m saying that if you want to make comp the issue, look at the total amount you are overpaying UAW workers (versus what a non-union company would pay for the same labor) and it will obviously dwarf Wagoner’s comp. Unions had their place once a long time ago, but that time has come and gone and now they are nothing but a way for guys with an entitlement complex to bully corporations for job security (which as Murph noted is sometimes undeserved) and above market wages which put their employers at a huge disadvantage in the market. That disadvantage combined with Wagoner’s (and other C-levels) ineptitude are the two main reasons GM is on bankruptcy’s front porch.

          • mac-phisto says:

            @bigrig: i don’t think comp is the issue. i think the issue is poor management, a reluctance to innovate & an outright refusal to listen to input from line workers/design engineers & the general public to adapt to a changing marketplace.

            their badge engineering strategy simply isn’t working in its current form. it’s a nice idea, but when you have 3 or 4 products competing with each other in the same marketplace, all you’re doing is stealing sales from yourself. furthermore, you’re sacrificing design quality for versatility, which results in less reliable & less appealing vehicles overall. & notice how, despite their attempt to appeal to every driver, they ignore entire market segments, until competing in them becomes virtually impossible. gm needs to shift its strategy from selling us the cars it wants to make to making cars we want to buy. if they can succeed in that, they can turn things around.

            • bigrig says:

              @mac-phisto: I pretty much agree with you on all your points, especially with regards to them having way too many models out in the marketplace. There’s really no need for it and they’d be better served building fewer cars overall, and more high quality cars that consumers want. I’m pretty impressed by the new Malibu, though I admittedly haven’t driven one. I just don’t see how they can continue to function under their current operating structure when the competition doesn’t have anywhere near the same expenses. DB did a number on them today though….ouch.

  15. lalaland13 says:

    Does this mean it’s harder to buy a car from them? My dad and I have been trying (yes, I know, against all logic, but they are cheaper) and they don’t want to deal. Part of that could be my dad, though.

  16. concordia says:

    On NPR yesterday a representative for the auto makers pointed out that the closure of one or more automakers would not only put the staff of that company out of business, but also signal a reduction in force for dealerships.

    We’re talking DEALERSHIPS here, people! Those stalwart mainstays of honesty and transparency that we all look upon fondly, thinking warm thoughts regarding the great treatment they always provide their customers.

  17. WBrink says:

    While GM is a crappy company, you can’t just let GM die as other people have pointed out. The last thing Obama can do in the beginning of a presidency is let 1 million people go on the unemployment line.

    • este says:

      @WBrink:

      I can’t wait until the rampant Obama fanboyism wears off, as we enter a great depression and he is remembered as a terrible president – I will be first in line to say I told you so.

      • blackmage439 says:

        @este: And Bush had absolutely nothing to do with getting us into this mess at all? No sir, his anti regulation policies and paying for a war with loans is not at fault.

        Back up your statements before you preach to all the other racist masses out there.

        • buckfutt says:

          @blackmage439:

          Lovely. Yeah, that’s “hope and change,” just accuse anybody you don’t agree with with being a “racist.”

        • cf27 says:

          @blackmage439: Which regulation did Bush repeal that caused this, or which regulation pushed by the Democrats did he block that would have prevented it? And, how did that work?

          I’ve seen people (liberals especially) point to the Graham-Leech-Bliley Act, but I haven’t seen where they’ve shown that to negatively impact any company and, thus, remain unconvinced.

      • myasir says:

        @este: Yes, let’s hope that 25% of us are unemployed. I bet you’d really love being the first person in a food line laughing at others and yelling “I told you so.” Great depressions are a great time to gloat. Now is the time to hope that he becomes a great president and gets us out of this mess we’re in.

    • cf27 says:

      @WBrink: It would not be anywhere close to 1M people. GM would go through a chapter 11 bankruptcy, sell off some business units to other companies (where the employees would still be employed). Sure, some parts of the company would close. But, by and large, most of those workers would stay employed.

      The big losers would be the stockholders, who would be wiped out, GM’s creditors and some of its unprofitable dealerships. But, none of them are victims — you have had to been under a rock for the last 10 years not to know about GM’s financial state.

  18. Mooshie says:

    If GM goes under and the government doesn’t grant them a bailout, we can expect many Americans to lose their jobs. But wouldn’t that mean other auto makers increase production to fill in the gap in the market? Companies like Toyota have plants that put together cars in the states in order to bypass certain tariffs and quotas. While the demand for cars are declining, people still need to get their cars from someone.

    • chrisjames says:

      @Mooshie: It’s not a fear that there will be a gap in the industry, because everything you said was right. It’s a fear that losing those jobs will put another strain on the economy and could increase the time it takes to fill that gap.

      I’m guessing some short-sighted people in Washington right now are asking each other this: if we throw money at GM and slow this collapse, could we recover faster? Or, we could play it fairly and let them fail, but would that risk a longer return to normalcy?

  19. P_Smith says:

    Obama should do to GM what the IMF does to foreign countries and give them a “do it our way or go broke” deal.

    Lend them the money, not give it, and tell them it has to be used to build small, fuel efficient cars that the public wants. If they don’t like it, they can go cap in hand to Ford or a foreign automaker or just go belly up.

    • rellog says:

      @P_Smith: I agree.

    • Parting says:

      @P_Smith: I love your common sense…

    • Irashtar says:

      @P_Smith: More than 10 weeks before he actually gets any real power, I’m sure this’ll work out one way or the other before then.

    • buckfutt says:

      @P_Smith:

      Great idea. After all, bureaucrats and politicians always do a great job of picking which products will succeed in the free market.

      As Wayne said to Garth, “NOT!”

      • P_Smith says:

        @buckfutt:

        So when the US dictates to other countries about how to run their businesses and economies, you have no problem with that. But tell Americans how to do it? Pffffft….

        Especially when, as we all know so well, the US is so much better at it than anyone else (e.g. banking, mortgages, etc.).

        • buckfutt says:

          @P_Smith:

          The reason the US is in financial trouble right now is because the government (a) leaned on banks to give mortgages to people who couldn’t afford them, and (b) backed up those garbage loans through Fannie and Freddie, which only encouraged lowlifes like Countrywide (and all those Democratic Friends of Angelo) to make things even worse.

          You aren’t exactly making a great case for government intervention here.

          • P_Smith says:

            @buckfutt: The reason the US is in financial trouble right now is because the government (a) leaned on banks to give mortgages to people who couldn’t afford them

            What delusion are you living under?

            It was companies like UBS and politicians like McCain and Gramm on the take from bank lobbyists who made it possible by relaxing laws on predatory loans.

            Laws written to make home ownership for the poor were misused by greedy bastards looking to make a fast buck. If you deludedly disagree, then ask yourself why the mortgage collapse only happened after John McKeating5 and others changed the laws in 1999, not in the first 20 years of the policy.

    • TheSpatulaOfLove says:

      @P_Smith:

      This is what they’re asking for – a LOAN to retool their product line to provide more fuel efficient vehicles. They’ve been asking for the Feds’ attention for EIGHT YEARS, but bull-headed Bush flipped the bird to MI and Big 3 when the early warning signs were beginning to show. Bush did this REPEATEDLY.

      To those looking to p^ss on GM’s grave – be careful what you wish for – you just might get it. If GM goes away, that’s the last major bastion of manufacturing left in this country. You guys p^ss and moan about bailing banks out – wait to see what happens if GM shuts down. You ain’t seen nothin’ yet!

  20. Anonymous says:

    The job losses would probably be even higher than 900k, don’t forget all the vendors they use for car parts as well.

    Also don’t forget you will have people losing their minds thinking they will not be able to get warranty work on their car so they will be dropping their GM cars to where anything with a GM label on it will be worthless. That effects used car dealers, or repair shops. I know most people don’t have a positive image when they think of a car dealer, but you need to consider how much tax revenue is given to your state with each car they sell, how many people the car dealer supports, etc. GM is so far reaching that the financial crisis might be that much worse if GM were to go under.

  21. Anonymous says:

    Just to inform some of you. 900,000 people out of jobs is a low number. The number would be closer to 1.5 million. You have to think about all the suppliers, the companies that sequence parts, and trucking companies. GM closing would have a huge domino effect all over the country and even outside the US.

    • Ihaveasmartpuppy says:

      @MitchellMarburger: This is so true. Also, consider the similar trouble that Ford and Chrysler are in right now. I don’t know what the answer is, but if they do go under everyone will feel the effects in some way.

    • Parting says:

      @MitchellMarburger: It’s called competition. Too much offer = lower prices = smaller profit margin. GM does not build reliable cars. (I’m comparing to Toyota/Honda). No wonder people don’t want buy them.

      • Orv says:

        @Meltdown: GM didn’t *used* to build reliable cars. That has changed. Check out the JD Power Dependability ratings. Cadillac beats Toyota and Honda. The most reliable 3-year-old midsize car according to JD Powers is the Buick Century.

        • buckfutt says:

          @Orv:

          Sorry, but the Detroit car companies have long since lost any trust they might have had as far as quality goes. I’ve been screwed too many times by “designed to fail” crap in their cars and dealerships out to screw me over any way they can (be it in sales or in the crooked service departments). To hell with ‘em. They ripped me off, and they can kiss my hiney when they beg for a bailout.

        • SolidSquid says:

          @Orv: Check out the JD Power Dependability ratings. Cadillac beats Toyota and Honda.

          Actually I just did check, and Toyota beats Cadillac. They get the same scores on all but power train dependability, where Toyota has a higher grade to Cadillac. Overall quality, Cadillac matches Toyota once, but loses out on the other 4 categories. Green efficiency Cadillac is on the low end of the scale with Toyota on the high end (two point difference). The only category where Cadillac beats Toyota is their APEAL rating

          You’re right though about the Buik Century, it did win 2007 dependability award

        • TechnoDestructo says:

          @Orv:

          They did so used to, they just didn’t make as many of them. But if you told someone they should get a Pontiac Grand Prix, most wouldn’t know not to consider a Grand Am.

      • Psychosocial says:

        @Meltdown: Have you driven a new GM car lately? I’m thinking no…

    • Farquar says:

      @MitchellMarburger: Reread the quote. GM is responsible directly or indirectly for 900,000 US jobs. The 900,000 figure includes suppliers, sequencers, sales, etc.

    • cf27 says:

      @MitchellMarburger: GM is not going to liquidate! They would go through chapter 11, sell off a few product lines and wipe out their stockholders and restructure their debt, but the end result is that the company still runs and people still have jobs. Look at Delta and Northwest airlines — sure, some people lost their jobs, but most didn’t.

  22. rellog says:

    So for those of you out there whining about unions, I have a simply way of fixing the issue. A law that requires executive to receive compensation based on the earnings of their employees. For example, a CEO may receive 50 times what the average non-management worker would earn. And that figure would extend to employees in other countries as well. So I doubt we’d see much overseas jobloss from it.

    Seems fair to me…

    • wgrune says:

      @rellog:

      While good in theory, it falls apart when you look at how high the average UAW assembly wage is. In 2006 (latest data i could find), the average UAW assembler made $26 per hour. With no overtime that works out to $54,000 a year. 50 times that is about $2.7 million. Should someone who bolts car parts together make more then most people 5 years out of college? I personally dont think so.

      • mac-phisto says:

        @wgrune: depends on how you look at it. i would much rather be traveling at highway speeds in a car bolted together by someone making a living wage than one bolted together by a temp worker in southeast asia. how about you?

  23. postnocomments says:

    Hurry corporate welfare seekers! Bush time is almost up!

  24. Swizzler121 says:

    if there is another bailout then we must be communist, because i swear these companies are just looking for handouts from the government.

  25. Skankingmike says:

    And stop saying bush this and obama that. They’re the same person when it comes to bailing out corporate swine.

    He’s gonna turn this damn country into a bigger mess than Bush and Clinton did. Except this time we won’t have that great economic boom that we had with Clinton.

    he’s gonna raise taxes for everybody just like under Clinton. Hes gonna destroy our intelligence with military cuts and he’s gonna socialize half our damn nation worse than FDR.

    Screw Obama Screw bush and screw FDR.

  26. Parting says:

    Crappy cars, paid by your taxes…

  27. edosan says:

    Dear Bush Administration:

    I’m a little short right now, and I could really use one of those multi-billion dollar bailouts like you’re giving to the airlines, the financial industry, and the auto industry.

    While I realize I am not a giant corporation that has incurred massive debts due to sloppy mismanagement and huge executive salaries, I could really use some extra cash.

    I look forward to your help.

    Thank you,
    edosan

    P.S. If you don’t get this letter in time to do anything about it, could you forward it to the Obama administration? Thanks.

  28. CRSpartan01 says:

    We should just let GM fail, have our government buy Toyota, and we can all just drive reliable and gas efficient vehicles that don’t suck. All in favor?

    • Dawnrazor says:

      @CRSpartan01:
      Ugh…
      NO!!!

      You should reword your sentence to: “…we can all just drive reliable and gas efficient AND THOROUGHLY SOULLESS AND BORING vehicles…” (There is not a single Toyota or Lexus vehicle in the US market that provides anything resembling an engaging driving experience; comfortable and reliable-YES, exciting or fun to drive-NO!)

      Besides that, does an “American Leyland” really sound like a good idea? Didn’t work out so well for the Brits.

      • Dawnrazor says:

        @Dawnrazor:

        I hastily lambasted Toyota Co. for not having a single model in the American market which provides an “engaging” driving experience. I stand corrected: I forgot that the Lexus IS-F came to market this year. By all accounts, this car IS a world-class sports sedan and worthy competition for the M3, S4, and C63.

        It’s still a far cry from the days when Toyota made several relatively affordable full-on sports cars though: MA71 Supra and AW11 and SW20 MR2s FTW!

  29. philipbarrett says:

    Sell both Ford & GM to Tata, their market cap is just under 10x (around $65B) the combined value of the Not-So-Big 2!

    The deal would give Tata established inroads into both the Americas and China.

  30. dwhuntley says:

    This bankruptcy is brought to you by UNIONS! Thanks for screwing everything up! Hey I’m running low on cash how about a bail out for me. The domino effect would be catastrophic image the lost sales in beer and food alone! I say let the go.

  31. RamV10: The Axeman Returneth says:

    2 words.

    Fuck em.

  32. nicemarmot617 says:

    I’m from Michigan. My relatives all have GM pensions. They are mostly lazy, good-for-nothing scum I am ashamed to be related to. Not one of them worked hard a day in their life and every one of them retired young and have been living off their pensions for years. I’m sure there are hard-working GM employees out there, but I never met one in my 22 years there.

    The unions have completely destroyed the entire state of Michigan. Their original purpose was so good – the hard-working people versus the evil greedy corporations. But now the unions are evil and greedy and the corporations are struggling to stay afloat. It’s not the unions’ fault that GM can’t run their company well, but it IS their fault that GM can no longer afford to pay absurd union salaries and pensions. Notice that the car plants in the South don’t have these problems – there’s no unions there.

    I have an easy/hard two-point solution for them:
    Cut the extra lines (as someone else pointed out it is idiocy to sell the same car under multiple lines)
    Cut the pensions. Seriously. It’s not like everyone else isn’t screwed out of their 401k, I want to see those union assholes take their cut too.

    • Orv says:

      @nicemarmot617: I think it’s naive to think wages in non-union car plants would be as high as they are if they didn’t have to compete for workers with union plants. Bust up the unions and watch wages fall through the floor for everyone.

  33. oneliketadow says:

    The main argument I’m reading here for the bailout is that GM is too big to fail, they are too integrated into our economy. Maybe they should have been broken up then or heck, now!

    • TecmoTech says:

      @oneliketadow:

      Don’t we have antitrust laws that are supposed to prevent companies from becoming “too big to fail”? I don’t get how we can keep supporting the behemoths and putting them in the position to cripple us when they fail.

  34. Verucalise (Est.February2008) says:

    I’d love for one of the big automakers make a deal with Washington… take a truck that’s worth $25K. It cost them $19K to build (just for instances, no real numbers here) Have them drop the price of the truck to $15K, and $4K is a tax deduction. Then we as consumers can afford the vehicles… hahaha. I’d love a new truck for $15K, and SOME OF US are responsible with credit LOL. Or else, have the government give US the tax deduction if we buy a new vehicle before the end of the year. I don’t particularly agree with the bailout packages myself, but if there’s some way to boost the economy without a hand out per say… more like an incentive would work.

    • Pylon83 says:

      @verucalise:
      I think the tax break idea is actually a pretty decent one. Rather than straight up hand cash to GM, incentivize the purchase of new cars with tax breaks. Might be a good way to get GM back into the black and help the economy overall. I think the bailout needs to be the last resort, and only after extensive other options, even ones that are out there, are given serious consideration.

  35. Pylon83 says:

    I am generally unsupportive of government meddling in private business, thus I tend to oppose bailouts generally. That said, with the economy the way it is now (down and weak), if GM were to be allowed to fail, putting probably a million people out of work, it would be absolutely devastating to the nation. While I’m not convinced that a bailout is the way to go, something is going to have to be done. Whether the government assists with a merger, allows GM to break the union contracts, gives tax breaks, etc., something has to be done. A failure of GM at any point would be terrible, but at present it could crush our economy beyond repair.
    I recognize that GM’s downfall is completely their own doing, be it by giving in to unreasonable union demands, failing to keep up with designs people want, or just bad management, it would be irresponsible to let them fail completely.

  36. draketrumpet says:

    If they’ve run their business into the ground, let it burn. Someone else will pick up the slack.

  37. robb9 says:

    All I read in these comments are from people who want to see theirselves type. Save for a few here and there that actually write something with meaning. such as the Cherry Auto comment above.

    If GM fails, so does America. Well over 100,000 people in the U.S. alone rely on GM everyday whether it be for pension, insurance or a plain old fashion paycheck.

    I also see a lot of “they only built gas guzzlers and paid no attention to fuel economy” comments. I will point to you and tell you are wrong and wrong in the worst way. You have no one to blame but yourself. yes you the consumer are to blame. YOU wanted the SUV. If that was not the case then explain why so many were sold in the 90’s. YOU said no to the electric car. YOU wanted a V8. YOU wanted a car that held a lot more than your kids. YOU. no one else but YOU & ME.

    I’m in sales and you would be surprised by how many people still want to buy a Saturn Outlook (7-8 passengers) for their 3 member family. We sell the Saturn Aura which has best in class fuel economy (mid size class) that gets 33mpg on the HWY, better than camry or accord, and yet everyone still wants a V6 with 100 extra horsepower.

    Turn that finger you’re pointing around or at least point in the mirror.

    • buckfutt says:

      @robb9:

      You’d have a point if GM didn’t make garbage cars that nobody except Hertz wants to buy.

      As it is, not so much.

      • robb9 says:

        @buckfutt:

        validate your statement.

        Malibu, Aura, CTS, (all three have gotten at least one car of the year award) G6, Cobalt XFE, Lucerne, G5 XFE, More Hybrids than any other manufacturer, Astra etc etc…

    • CharityCaecus says:

      @robb9:

      They buy a Camry or an Accord because Saturns are horrible cars.

      I’m driving a 93 Camry with ZERO problems, it still runs like new. I’d challenge you to find a 93 saturn that still runs well. GM wouldn’t be going bankrupt if they made cars that lasted.

  38. Orv says:

    I think part of the problem here is that we’re in danger of entirely losing our domestic auto industry if GM goes under. Chrysler’s pretty much already gone, and Ford isn’t in very good shape either. This creates a national security issue. If GM goes under, what will we do if we have another big war? Are we going to get Toyota and Honda to build our tanks for us?

  39. Bahnburner says:

    vercalise has a great idea for a bailout: Take part of the price of the car out of your federal income tax bill!…say up to $5000 if you buy a Ford, GM or Chrysler. That way, we KNOW that all the money was used properly. Just attach the Monroney label to your tax return and take your tax credit!

  40. RandomHookup says:

    I propose a merger of the Big 3 into “the Big One”. Redd Foxx, in a revival of his Fred Sanford role, will be the Chairman of the Board.

  41. Gatcha_Journalism says:

    I’m against most of these bailouts, especially since they aren’t coming directly to families, however the impact of GM going under might have a devastating effect on the economy even more. GM and Ford were competing to see who could manufacture the monster Truck/SUV, and unfortunately that monster turned on them.

    Unless one truly has 10 kids, who needs an effing Excursion XL in the city? We really don’t have the infastrature to support such monstrosities and it probably added to more fatal car accidents as well.

    If they want a bailout, it should be on the condition that they only manufacture efficient cars moving forward.

    • robb9 says:

      @Gatcha_Journalism:

      The consumer put Ford and GM in there.

      Why does everyone blame GM and Ford for the “monster SUV”? Another question, does anyone know who put out the last “monstrosity” SUV? Toyota. Thats right, the 2008 Seqouia was the last big SUV introduction. Thats 2 years after Ford and GM released theirs. or one model year later, but hey, no one here seems to care about facts.

      • vdragonmpc says:

        @robb9:

        I have seen a 2008 Sequoia and its nowhere near my idiot uncle’s Excursion Beast or the CEO of my old companies escalade with 22 inch rimmies…

        Im still pissed that a pickup truck gets 14-18 HIGHWAY! When they should be in the 20-30 range with all that torque and power…

        • Orv says:

          @vdragonmpc: You’re never going to see 30 mpg from a pickup truck, unless it’s tiny. The shape of a pickup gives them poor aerodynamics — a drag coefficient of around 0.50, vs. 0.15-0.30 for most cars. To get 30 mpg you’d have to build a pickup that was about the size of a VW Rabbit.

      • Dawnrazor says:

        @robb9:

        I’m glad someone made this point. It’s curious that only the American car companies get chided for building fuel-inefficient vehicles when Toyota and Nissan not only build behemoths of their own, but then go on to give them names like “Titan” and “Sequoia” which overtly flaunt the “bigger is better” ethos.

        I also wonder why people don’t seem to criticize the sheer stupidity of 250+ hp FWD family sedans (I’m as big a pistonhead as anyone, but why would anyone ever need a FAMILY CAR to be able to do 14-15 second 1/4-Mile times!?) or the “wretched excess” of 500+ hp V8 and V12 lux sports sedans.

        • factotum says:

          @Dawnrazor: They get chided because they (GM and Ford) let their family sedans wither on the vine. Ever been in a 2004 Taurus? Craptacular comes to mind. Compare one to an Accord, Camry or Altima of the same year. At the height of the SUV craze, GM and Ford were raking in billions in profits. Very little of that money was saved or invested in practical cars. And now, they’re paying for it in decreased market share and growing losses.

          Look at GM: they created a two-seat roadster that weighs more and carries less than a Miata; Ford created the Edge CUV that is close in size to the Explorer and gets about the same mileage. These are just two examples off the top of my head.

          Nissan, Honda, and Toyota developed alternative propulsion vehicles that sell, unlike the hybrid Tahoes that GM thought would be their great savior!

          So, yes, the Japanese build “behemoths” but they did not ignore the less-desirable (at the time) economy cars. And when the market shifted, GM and Ford were caught flat-footed, while the J3 had a variety of fuel efficient vehicles from which to choose.

  42. crazydavythe1st says:

    If GM were to declare bankruptcy could GM use the bankruptcy to deunionize completely and restructure?

  43. cubejockey says:

    How convienient. Right after a sweep of the neo-cons and a stand against corprocratic dictatorship does GM swoop right in and threaten economic destruction if we the people don’t give ‘em a handout for decades of poor management. Pricks.

  44. frodo_35 says:

    Bushes last gift to the middle class will be to break the auto unions.

  45. Dawnrazor says:

    Any “bailout” is just going to be good money after bad, won’t “save” any of them in the end, and will lead to the loss of tens of thousands of jobs (which politicians will struggle with).

    The only thing that will save GM is Chapter 11. Their biggest problem is they are way, way too bloated. The only way to lose the fat is going to be filing C11; it’s the only way they will be able to shed brands, dealers, plants, and yes, unfortunately, employees. I cannot believe they have not pursued this yet as it appears they will be completely out of operating cash by year’s end. GM needs to dump everything except Chevrolet and Cadillac. Chevy needs to be their bread and butter lineup of cars and trucks to compete with the Asian imports and other domestics (leave the ‘Vette as the “halo” car), and Cadillac needs to be CAR ONLY, and focused solely on competiting with the best European sports sedans/sports cars. Buick, GMC, Saturn, Pontiac, Hummer, and Saab are nothing but dead weight at this point.

    Chrysler is toast. They don’t have a single competitive product (the new age muscle cars are cool but not enough to save them) and their owners (Cerberus) will dismember the company and part it out as soon as they can find willing buyers (if they are not forced into C7 in the meantime). The only remnants of Chrysler in existence 5 years from now will probably be the Jeep brand (probably owned by the Koreans or Chinese). MAYBE someone will buy the minivan line and keep it in production.

    Ford is probably in the best shape of any of them, but still has its problems. It too, needs to shed brands (Mercury) and dealers and make Lincoln what it should be (TRUE lux/performance cars rather than tarted-up versions of FWD Ford sedans and Ford trucks). I don’t think they can do any of these things without filing C11.

    Any “bailout” is just going to be money down the rabbit hole, with the end result being something resembling an American version of British Leyland.

  46. robb9 says:

    hurray for Obama!

    As said today on live television….
    “The news coming out of the auto industry this week reminds us of the hardship it faces – hardship that goes far beyond individual auto companies to the countless suppliers, small businesses and communities throughout our nation who depend on a vibrant American auto industry. The auto industry is the backbone of American manufacturing and a critical part of our attempt to reduce our dependence on foreign oil. I would like to see the Administration do everything they can to accelerate the retooling assistance that Congress has already enacted. In addition, I have made it a high priority for my transition team to work on additional policy options to help the auto industry adjust, weather the financial crisis, and succeed in producing fuel-efficient cars here in the United States. I have asked my team to explore what we can do under current law and whether additional legislation will be needed for this purpose.”

  47. The Walking Eye says:

    @Canino: The UAW is certainly part of the equation, however it’s been GM’s lack of making good cars that has put them in this position. I was raised in a GM family (non-union side) and fully agree that the UAW is horrible.

    They have had a complete and utter contempt for making a good small car and operated by the assumption that our gas would always be dirt cheap. Toyota, Honda, Nissan, Mazda, Kia, and Hyundai all make excellent small cars that the public has purchased for decades, yet the Detroit automakers refused to invest in the small car market and it bit them very hard this year.

    During the SUV boom, GM was making obscene profits on the SUVs and not reinvesting into quality cars. They didn’t adopt lean manufacturing (partly the UAW’s fault due to refusal to move jobs and close plants).

    In my opinion, the management of GM is the main culprit and especially the BOD. Rick Wagoner has been running the company into the ground for over near a decade and it’s now too late to avoid Ch. 11. Since Roger Smith was in charge at GM, there has been a corporate culture that spread throughout and led to what is now going on. A refusal to take the foreign companies seriously, to try to compete with them, complete lack of foresight, and so on.

    See [www.ttac.com] for information on the downfall of the Detroit automakers.

  48. vdragonmpc says:

    Maybe if as everyone said the ‘big three’ put out cars that people felt lasted longer than the financing that they would sell more.

    I know a Honda is just getting broken in at 100,000 miles… My Supra is at 210,000 and gets good milage. Our Nissan is not a great car but has better value than a malibu of the same year…

    Besides the greatest excitement I ever got from a GM product was the thing actually running from point A to point B without showing me something new needed fixing. I will never forget the s-10 series of vehicles or Fords escorts… True vacation killers.

    • Orv says:

      @vdragonmpc: The Big Three have greatly improved their build quality. The problem is, like you, most people still associate those brands with the awful cars they built in the 1980s. GM can’t seem to shake that legacy in spite of currently building some of the most reliable cars out there. Conversely, Honda and Toyota have had some real duds in the last several years but their reputation for good quality survives.

      • philipbarrett says:

        @Orv: 1980’s? I had a ’99 Suburban which required 2 intake manifolds before 70K. My mechanic correctly diagnosed the problem over the phone since he’d apparently seen so many of them.

        By 75K ever piece of plastic was loose, trim was coming off, seat adjusters were failing – horrible vehicle. By contrast I had Volvo with 175K that EVERYTHING down to the cassette deck still worked.

  49. quagmire0 says:

    I wholeheartedly oppose a bailout for the auto industry. I really don’t see the urgency of keeping them in business. Is it to keep those people’s pensions afloat? Fine, give them some tax breaks or something, but KEEP THE GOVERNMENT OUT OF THIS! Let the free market take its course. If they get bought out by a foreign firm, so be it.

    • quagmire0 says:

      @quagmire0: Bailing out these companies just to keep people employed is like putting a band-aid on a torn artery. It’s just not going to work in the long run.

  50. hankrearden says:

    Damnit! What about my infinite Sky Redline warranty?!

    Having owned many cars…I switched from BMW back to GM. Long story. But GM is actually pretty good.

    The unions…eh. That’s another story…

  51. fleebailey33 says:

    Circuit city isn’t getting bailed out.

    and neither did compusa which i worked for. I this it is all retarded. Bail out all companies. or none. well bailing them all out would be stupid……….

  52. Spider Jerusalem says:

    Let it die already. It had years and years to correct problems EVERYONE knew about, and they didn’t.

  53. Gizmosmonster says:

    I believe this is called poetic justice…Did anyone else see “Roger and Me”?

    What goes around comes around.

  54. chese79 says:

    While I am I admittedly taking a controversial stance, GM needs some form of a bailout, even if it is letting them fail gradually. Letting it crash and burn would create a prolonged recession versus at limited one.

    There is no material difference between state socialism (which is not a bad thing) and a bailout.

    Obama’s election marked a new era. If he can turn this Sh*t sandwich, into anything less, I applaud the results.

    • Parting says:

      @chese79: If the government gives an industry some money, then it should set conditions, too.

      Just giving out free money = executives 80K hunting trips.

  55. johnfrombrooklyn says:

    I believe that if GM goes under all those pensions start getting paid by the US Taxpayer. So the taxpayer is going to pay the pensions one way or another. Also, now is a good time for the federal government to force US automakers to build safe but energy efficient cars. If GM wants taxpayer money, then it needs to help ween us off the foreign oil tit. Frankly, I don’t want a Japanese or worse, Chinese, company indirectly setting US energy policy by deciding what cars we can and can’t drive in this country. We’ve already seen that outsourcing certain military parts to China results in “unexpected” scarcity or massive price increases once the US makers are gone.

    • Parting says:

      @johnfrombrooklyn: Funny, Toyota has been making fuel-efficient cars, for ages!

      So this is = lower demand for gas = lower prices on gas

      • CumaeanSibyl says:

        @Meltdown: Even funnier: my ’98 Escort got 30 city/40 highway. My ’02 Focus gets about 25/35. The US automakers are obviously capable of building a fuel-efficient sedan, so I don’t even know why they’ve been whining so much about increased standards. Just, you know, shut up and do it.

  56. artki says:

    GM SHOULD file for bankruptcy protection. Just because you’re bankrupt, doesn’t mean you’re out of business. Bankruptcy allows you to start over, to renogotiate some of those contracts which were killing you.

    Yes, the common shareholders are pretty much guaranteed to be wiped out. That’s the risk you assume when you buy common stock.

    But I didn’t buy any GM stock. Why should I be responsible for bailing them out?

    On the other hand, you could bail out GM and the rest of the US Auto industry. And you’ll have a perpetual money suck from then on.

  57. parad0x360 says:

    To hell with GM and all American car companies for that matter. Perhaps if they made quality cars that not only ran well and were reliable but were also safe and got good gas mileage without sacrificing performance then people would buy them. Japanese companies have been doing these things for like 15 years so whats the deal?

  58. anthonyhasp says:

    @Canino: @Canino: Amen. GM and Ford cannot compete with Toyota and Honda because of the unions. GM and Ford could build identical cars to Toyota and Honda but would still go bankrupt because they would have to charge an additional $1,600 per car because of union legacy costs.

    • johnnya2 says:

      @anthonyhasp: @Canino: The union has nothing to do with a rapidly falling market share for ALL the three US based auto companies. Which one of those three made an effort to produce mid to small size cars that people were going to want. Honda, Toyota and Nissan all see beyond the current quarter, and think long-term. To show the incompetence of Ford Motor, the past CEO was the same guy who runs the Detroit Lions who have failed miserably for 50 years since their family has owned it.
      The auto companies could have developed an all electric car, but they couldn’t produce them crappy enough to take away all the ancillary business like oil changes, brake pads etc to make it worthwhile. Why shouldn;t we let them fail and those companies that produce what consumers want will survive.

  59. lincolnparadox says:

    Detroit has been laying people off en masse since the 1980s. If GM closes its doors, SOMEONE will buy the plants or the equipment.

    But, it’s not going to happen. Bush is looking for something positive to do before he leaves, and saving GM is a decent feather in any President’s cap.

  60. Anonymous says:

    This is madness! I think I’ll run up debt and horribly mis-manage my life, then when times comes to pay up, I’ll ask to be bailed out! Will that work?

    Jeeze, let all these places go out of business, give them money now and later they will be asking again, this time for twice as much.

    Be irresponsible, pay the price, it’s that simple.

  61. NotChoinski says:

    Hey! Why doesn’t Exxon Mobil fund the bailout? They seem to have record profits.

  62. Psychosocial says:

    Let it all crash and burn. Stupid business decisions should not be rewarded.

  63. synergy says:

    They’ve burned through $6.8 billion…

    They’ve burned through a lot of money while knowing that their products were crap and people weren’t going to want what they were making. How exactly is getting money from me going to change that? It’s like the banks. I don’t see them doing much other than going on spa retreats they shouldn’t be going on and buying each other up.

  64. JosephineinDetroit says:

    There is no easy solution, but the government cannot let GM go under. Period. You think the economy’s bad now? Let GM go under. One in ten jobs are connected to the auto industry in the US. One in three in Michigan.

    Here is a comment left on a Detroit based radio show that sums of the problems of GM nicely and pretty much addresses every single comment to this post.

    You can find the full thread here: [www.wdetfm.org]

    “In Defense of the Auto Industry:

    Recently I have been hearing from the national media, including NPR, that the auto industry is having its current problems because it refused to “go green.,” or does not produce quality cars. This view is totally myopic.

    It is not the auto industry’s fault the speculators falsely drove the price of oil to $144 per barrel using leveraged deals…

    It is not the auto industry’s fault that the banking and insurance industry destroyed the credit market with criminal loans and credit default swaps….

    It is not the Auto industries fault because it wants its employees to have health care …

    It is not the auto industry’s fault the price of health care shot through the roof…

    The media may not realize it, but QUALITY cost money…and the $1800 in per vehicle health care costs put the US auto industry at a disadvantage.

    I have worked for a long time with the UAW. While in years past, the attitude of the UAW workers has been terrible- these problems have quickly evaporated. Everyone seems to be working together now …

    Hopefully, people will realize that America can not survive selling by each other insurance on lawsuits and large cups of coffee… We need manufacturing.

    Without inexpensive energy we will have no manufacturing in Michigan…It takes energy to make steel from dirt – it takes energy to make plastic from oil – it takes energy to make cars from steel -

    If we tax carbon too high – the production jobs will go to where the carbon is cheap …. China

    As much as it might not be politically correct to say … the laws of physics do not allow the use of alternative energy for car production. It is simply impossible to run an auto plant on solar or wind – can’t be done- the energy density simply is not there.”

  65. jimmydeweasel says:

    Back in 1970 I sold slide rules. HP put me out of business with a calculator. Did Washington bail me out? Huh Did they? Noooooo. So I invented the AIDS virus to get even.

  66. ZukeZuke says:

    Hey now would be a great time to release a car styled after something we produced 40 years ago, and let’s throw a giant 400 horsepower v-8 in it since gas is so cheap, and… hey wait a minute…

  67. boxjockey68 says:

    Bye Bye GM, it’s been a good ride huh? Oh…not so much.

  68. Marshfield says:

    So let’s just say people quit buying new cars. they still have to get around, so they keep their old cars longer. This makes more jobs for car repair. Remember when every gas station had mechanics? Those days will come back. The people who built cars can start repairing them.

    Now, people not burdenend by monthly car payments will have that money to spend elsewhere. The loss of car manufacturing in the economy won’t mean people won’t be spending that money elsewhere.

    I’ve seen towns go down when the businesses that supported them go away, and it isn’t pretty, but like the Wall Street bailout I hope to heck that the govt puts in adequate (unlike wall street) oversight on the funds.

  69. Robert Isbell says:

    GM needs to fail, no more bailing out private companies with taxpayer money.

  70. GoVegan says:

    History does repeat itself. Didn’t the American auto companies go through this scenario when we had the oil embargo in the 70’s? Most of their product line consists of vehicles the size of tanks and the manufacturers always act shocked when the price of oil skyrockets and people no longer want to spend half their paycheck to fill their tank. These are the same companies that became upset when the government tried to raise CAFE standards to ensure that the vehicles produced here get 30 miles to the gallon or better. Enough is Enough! I hope that if we do decide to bailout the auto industry that we also make them accept higher fuel mileage standards. I can say without a doubt that although gas is reasonable now IT WILL go way up in the not to distant future.

  71. sonneillon says:

    So just let them go bankrupt the airline industry does it every few years and they survive. Let them go bankrupt wipe their debts layoff some workers. Rebrand and start with a new product line that people actually want.

  72. rjflyn says:

    My biggest complaint was people that make cars make more money than people that saved lives. I knew one day this was going to bite then in the ass. Its now more than bit them in the ass it bit the whole ass off. Their bleeding to death and they want me to save their live. I say die or your lose a limb if you want to live. In other words you the american auto worker should not be making more than an american nurse.

    R

  73. Quilt says:

    Why bailout a failing company that refuses to change? If they were failing because something beyond their means had changed, then sure, a bailout could be on the table. That isn’t the case though. They knew about gas prices rising for decades and continued to pump out gas-guzzling vehicles. They dug their own grave. Let ‘em die.

  74. kwsventures says:

    No bailout. Our financial system, that has created a fantastic country out of nothing in the last 200 years, is based on the idea of success and failure. Bailing out losers was never written into the constitution. Giving taxpayer money to losing companies delays the inevitable. We have had 12 recessions since 1945. Recessions clean out the system, getting rid of the weak and allowing new businesses to flourish.

  75. jonworld says:

    So if I own a small business which goes bankrupt due to the economy, the government sits there and watches me fail. But if GM, or for that matter, AIG and several other large corporations fail, government assistance is not really a question of if, but when.

  76. ralfhutter says:

    Goodbye GM. Goodbye unions. Goodbye middle-class. Welcome world economy. Welcome capitalism. Welcome ingenuity.

  77. Anonymous says:

    Thiis is not the platform for bias GM product positions. I do think however it is the platform for commentary related to the status qou of the company.
    Having said that , GM’s troubles could probably be repaired by implementing a very simple business model.

    A previous poster touched on their basic problem . Multiple models. Example. The Suburban and Denali are the same truck. The Suburban is a flagship , nix the Denali and offer the features as options in the Suburban line. Betcha nobody complains.
    Yeah, the Silverado is brand and has made a long run. But is it making you money now? If not , let GMC produce the trucks, Chevorlet, stick to what you know , cars.

    Pontiac maybe a historical icon, but let’s be real, we are selling Chevies here, nix Pontiac. Keep in mind, I’m not privy to the models profit and los info, but I think everyone get’s the message.

    Downsize and green equip new models.
    Let GMC solely produce trucks and Chervorlet produce cars. At some point , when you are producing similar products they compete with each other and you wind up robbing Peter to pay Paul.

    You’re making multiple efforts to make the same vehicle in most instances.

    Henry Ford was on the right track when he offered the model T only in black. Not suggesting GM resort to that extreme, but the multiple models accross the platforms, that’s the problem.

    Renegotiate Union agreements. Look at it this way, if there are no jobs , then you don’t have much use for a union now do you?

    And last, rehire, management that know from handson experience how the auto production industry works. Trim the fat from production , design and development teams.

    These are basics, maybe GM should consider them.

    Geo

  78. tc4b says:

    Whatever type of car I’m shopping for, minivan, econobox, whatever, I can buy American or Japanese and pay comparable prices. I opt for the latter because I need it to last me as long as possible. I’m just a schoolteacher, the single wage earner for a family of four, I can’t blow 15-25K on something that’s not even going to last until I’m done paying for it. For me, it’s Honda or Toyota, and then only models that have a proven track record of reliability. If I believed GM had a model that got 30+ MPG and would last 200K+ miles, I’d buy one.

    When are American manufacturing companies going to stop being so short-sighted?

  79. Sorentso says:

    Sometimes it’s darkest right before dawn. I am sorry to hear a lot of people will be out of the job if they close, but that’s what needs to happen.

    Bad business parctices brings consequences. Lets hope someone buys them out and builds better cars.

  80. darkryd says:

    Tough love.

    Sink or swim on your own, GM. Maybe start making cars that don’t suck.

  81. james says:

    I really hate this crap.
    The idea of government “bailing out” companies is beyond my comprehension. Funny, I thought the Republicans were against government involvement in business. I guess the problem is that most of the CEO’s and such are Republicans and they have found a great new way to make money off the “common people”.
    Funny that for as much as the Republicans talk about how they are pro-business, the economy has traditionally been much stronger under Democratic leadership.
    If we are going to bail out anymore companies, they should be treated as extremely high risk borrowers. I would say their credit ratings should be around 300 or so and they want to borrow billions of dollars. Sounds like they’ll default to me. Aren’t high risk loans what started this mess?

  82. Anonymous says:

    GM is the Single largest advertiser in the U.S. spending about $4.5 billion in advertisig in 2005. GMs failure would hurt nascar and possiblly other sporting events and TV in general. I have mixed feelings about a GM or Big Three bailout. Honda and Toyota have 6 factories in the united states and BMW, Hyundia, Subaru, Mercedes have at least factoryin the US. Most of these are in red states and not unionized. The big three are unique in the number of jobs and the concentration in MI, IN, OH which are already hard hit. But If there is a bailout it should be industry wide evenly or relative per job in the US or not at all.