The Big 3

[Edie]

I know its gonna suck for Detriot and whoever is directly effected but it is the right move.

 

They can get bank status if they want, but the government has to realize all these businesses cant just start changing into banks just to get money.

 

I assume you know that Ditech is part of GMAC -- and that GMAC is pretty heavily involved in mortgages.

[ZenLunatic]

I assume you know that Ditech is part of GMAC -- and that GMAC is pretty heavily involved in mortgages.

 

I know GMAC is into mortgages, started out as car loans and went into mortgages.

[Good Old Neon]

How do you feel about large insurance companies acquiring failing banks in order to get some bail out money?

 

I view them with about as much warmth, compassion and respect as the assholes who take advantage of natural disasters by selling bottled water at $20 a pop.

[Edie]

I know GMAC is into mortgages, started out as car loans and went into mortgages.

 

Well then shouldn't they get some of the money if they feel they need it? Pretty big strings attached.

 

I am saying that because most banks would avoid the money like the plague if they didn't need it.

[ZenLunatic]

Well then shouldn't they get some of the money if they feel they need it? Pretty big strings attached.

 

I am saying that because most banks would avoid the money like the plague if they didn't need it.

 

 

Then why shouldnt any other non-bank finanical company have access to the money also? Get in line, I think the credit card companies were first. This brings up the future of credit cards. Dont be suprised when you start seeing your credit cards drastically lowering your limit.

 

Why doesnt GM sell off GMAC?

[Edie]

Not dead yet.

 

From Automotive News

 

Key members of the U.S. Senate have reached a bipartisan deal to fund a rescue package for the Detroit 3, according to a spokesman for U.S. Sen. Carl Levin.

It remains unclear whether the senators have enough votes or when the matter will be taken up. It's also unclear if Senate Majority Leader Harry Reid, D-Nev., has signed on to the compromise.

A draft of the compromise was being worked on by Levin, D-Mich., and Sen. Christopher Bond, R-Mo., among others.

Bond and Sen. George Voinovich, R-Ohio, with White House support, on Wednesday introduced legislation that would redirect $25 billion in loans to the auto industry as bridge loans to the Detroit 3 automakers. The original intent of the loans was to enable automakers and suppliers to retool to build more fuel-efficient vehicles.

Democratic leaders in Congress have resisted using those funds, instead seeking money from the recently approved $700 billion banking bailout legislation.

Levin and other auto state senators are expected to reveal terms of the compromise at a 2:30 p.m. press conference today on Capitol Hill.

There was no word about any similar activity in the House of Representatives.

The CEOs of the Detroit 3 are asking for $25 billion in federal funds to see the automakers through a cash crisis.

[IATTBYB]

Not dead yet.

 

From Automotive News

The real problem will be getting any kind of support from non-UAW-auto manufacturing state's senators. Some of the comments that I've heard from that guy from Alabama make me think that some GOP senators would love to see one or more of the Big 3 go down as it would take the UAW with them.

[ZenLunatic]

So Democrats reject the $25 billion for the energy car thing being used as help for the car companies. Auto industry has no bailout. Senate will meet again in December for another meeting to see if GM and others have a better plan. I really think the Democrats are taking a big risk with that if they really wanna help the car companies.

[cryptique]

from Andrew Leonard on Salon.com:

 

Worst of all possible bailouts?

 

The Associated Press is reporting that a bipartisan group of senators has come up with a compromise deal to keep beleaguered U.S. automakers afloat, although it is unclear whether the full Senate will pass it.

 

Worst of all possible bailouts?

 

It temporarily would divert to troubled automakers money from a program that currently finances the development of fuel-efficient vehicles. The aim would be to cover their immediate expenses.

So the plan is to take money aimed at giving the Big Three a fighting chance to compete in a world where climate change and declining fossil fuel resources are immense challenges, and use it just to keep G.M., Ford and Chrysler from declaring imminent bankruptcy. If ever the phrase "bail out" was appropriate, in the sense of futilely bailing water out of a doomed sinking ship, this would be the case.

 

When the news first filtered out on the wires, the Wall Street Journal reported an immediate stock rally, but by early afternoon sentiment had already turned sour again on a day marked by immense volatility.

 

And no wonder. New jobless claims spiked to their highest point in 16 years, the Labor Department announced on Wednesday. Signs of serious stress are now emerging in the market for commercial real estate mortgage-backed securities. There is absolutely no doubt, as economist Brad Setser conceded this morning, that "this is the biggest financial crisis since the depression."

 

So, in this climate, the possibility of a General Motors declaring bankruptcy is obviously terrifying to financial markets, but the news that Congress may only go so far as to subsidize ongoing expenses for another month or two does very little to build confidence.

 

The short and sweet argument for an immediate rescue plan for the Big Three goes like this: Economists agree that we need a big, fat, honking economic stimulus plan to juice the economy right now. Not two months from now, not six months from now. Right now. Classic Keynesian economics are the order of the day. Goldman Sachs is suggesting something on the order of $300 billion to $500 billion -- anything less would have little effect.

 

Letting a G.M. collapse would, effectively, be the polar opposite of a stimulus -- it would accelerate job losses and pummel the economies of Michigan and Ohio, two states that are already in big trouble. So if you support a stimulus plan, as do most economists, Democrats, and President-elect Barack Obama, one would think that you would also probably support trying to avert, in the short term, a U.S. automaker implosion.

 

However, I don't think it makes any sense to support a solution that doesn't include a comprehensive restructuring of how the Big Three do business. Sell the corporate jets. Ax the current management. Force corporate mergers. There are numerous smart proposals for some kind of government-administered bankruptcy that keeps Ford, Chrysler and G.M. going in some form but as markedly different entities than as currently exist. Perhaps some form of consolidation, along with liquidation of various assets, and sacrifices made by all the stakeholders -- labor, shareholders, management, bondholders, etc. And of course, there's my hope, as bashed today by Sen. James Inhofe, that any new regime would be structured to make sense in terms of limiting greenhouse gas emissions and conserving on fuel consumption.

 

But so far as I can tell, there's nothing like that included in the current compromise besides a desperate attempt to pay automaker bills in a desperate economy. No wonder stock traders appear, at this writing, unimpressed (although who can guess what the final tally on a crazy day like today will be?).

 

My prediction: Chances are good that we will find out exactly what will happen when a major U.S. industry collapses in the middle of a fierce recession. And then we can argue about something else.

[Edie]

I am certainly all for creative solutions here. All I know is that the loss of GM scares the crap out of me.

[ZenLunatic]

When it comes to down to it the collapse of the auto companies will hurt America in the short term. More companies go out of business, more job loss, and everything else to worsen the recession. In the long run, it is better for America. We can start to build a new model for the US automakers that work now. Lets stop wasting money now. There will be a better Detriot only if we let bad Detriot go.

 

We have to stop thinking short term here in America. Lets bear through the pain now for the sake of a good future of America.

[austrya]

When it comes to down to it the collapse of the auto companies will hurt America in the short term. More companies go out of business, more job loss, and everything else to worsen the recession. In the long run, it is better for America. We can start to build a new model for the US automakers that work now. Lets stop wasting money now. There will be a better Detriot only if we let bad Detriot go.

 

We have to stop thinking short term here in America. Lets bear through the pain now for the sake of a good future of America.

 

If the auto industry collapses, it will hurt me. My mom would no longer get a pension or benefits, my ex would be out of a job and would be unable to pay child support, two of my kids would not have health benefits, I would no longer be able to be a stay at home mom and would have to send my kids to daycare, my friends and family would be out of jobs and would perhaps have to move out of state to find work, the value of my house will fall even more than it already has, the schools will suffer, etc.

 

I'm all for a bailout, but it has to be done right. I don't think they can just throw the money at them and let them do their thing, but I do think they need to do something.

 

Have you been to Michigan lately?

 

Here's a pretty realistic view of detroit. Detroit Blog

[Guest Jules]

When it comes to down to it the collapse of the auto companies will hurt America in the short term. More companies go out of business, more job loss, and everything else to worsen the recession. In the long run, it is better for America.

This is not true.

[ZenLunatic]

If the auto industry collapses, it will hurt me. My mom would no longer get a pension or benefits, my ex would be out of a job and would be unable to pay child support, two of my kids would not have health benefits, I would no longer be able to be a stay at home mom and would have to send my kids to daycare, my friends and family would be out of jobs and would perhaps have to move out of state to find work, the value of my house will fall even more than it already has, the schools will suffer, etc.

 

I'm all for a bailout, but it has to be done right. I don't think they can just throw the money at them and let them do their thing, but I do think they need to do something.

 

Have you been to Michigan lately?

 

Here's a pretty realistic view of detroit. Detroit Blog

 

Thats a sad story and there will be many stories like that in this recession. It's already happening right now to alot of people. There really isnt anything you can do about it except start to look for new work and get by. GM is already planned to close plants regardless of bailout. There is only so much the government can do. They should do what they can to help this situation, but like you said dont throw good money away.

 

The problem is even clearer after the auto hearings in Washington, where the CEO's flew in their private jets and just flat out asked for billions without a real plan. Where's there a plan that can work? Where's a plan that people can get behind? When it comes down to it, dont blame the government for not supporting this bad company. Blame the auto companies themselves for creating the situation and not fixing it. Demand new leaders of your companies that can avoid this type of fall. You have to understand that if we give money to the auto industry, that money has to come from somewhere, some other industry will suffer. We have to deal with the companies we work for. Its not the governments fault that the US car companies failed.

 

Good luck with everything. I forsee a new energy plan creating massive jobs in America and should follow that idea. You know there will be the workers in the waiting.

[bjorn_skurj]

I continue to think a dude from the London School of Economics whom I heard on NPR one late night had it right - "It is better to have high taxes and a job than to have low taxes and no job."

[ZenLunatic]

I continue to think a dude from the London School of Economics whom I heard on NPR one late night had it right - "It is better to have high taxes and a job than to have low taxes and no job."

 

Thats true in and of itself. What if your job means you are making other people suffer? Is it still worth it? A job isnt good unless you are working for the good of your society.

[MrRain422]

I think morally neutral jobs are okay.

[bjorn_skurj]

Thats true in and of itself. What if your job means you are making other people suffer? Is it still worth it? A job isnt good unless you are working for the good of your society.

Cars aren't good for society?

[mfwahl]

Lets bear through the pain now for the sake of a good future of America.

"Let's" includes who? If I am reading your statements correctly, you are expecting to lose your job through this and are fine with that?

[MattZ]

Also, after you've defined "let's" for mfwahl, please define "short term" for me. You suggest that the pain will be for the short term. How long is that?

[ZenLunatic]

News - GM returns leased private jets for travel after receiving harsh scrutiny.

 

America is us. We as americans are suffering and will suffer. If I lose my job, than I am fine with that.

 

Short-term is in the next 4-5 years, but who knows maybe longer.

[MrRain422]

You're fine with it, but what are the prospects of it actually happening? There are tens of thousands of people who would be guaranteed to lose their jobs, healthcare, pensions, etc if these companies go under.

[ZenLunatic]

You're fine with it, but what are the prospects of it actually happening? There are tens of thousands of people who would be guaranteed to lose their jobs, healthcare, pensions, etc if these companies go under.

 

Likelihood of me losing my job is pretty high, maybe not as high as GM workers, but still up there. We will see unemployment rise alot more from here. Alot of people will be in this situation. If we try to save GM, it can take jobs away from other industries. It's not like GM will lose every employee if they dont get bailout. They will file Chapter11 which will make them drastically reduce in size which is what is needed. There will still be functioning plants and dealers with employees. America is being forced to downsize by market forces. Most companies will go through this.

 

I would like to say no job is secure. No one is guranteed a position for life. You have to make yourself valuable and create job security. You have to be able to change with shifting demands. If you lose your job, go out and look for a new one. Time is the only solution to this mess we are in.

[bjorn_skurj]

America is us. We as americans are suffering and will suffer. If I lose my job, than I am fine with that.

I call bullshit.

[ZenLunatic]

I call bullshit.

 

I guess thats why you cant understand my stance.