Obama Motors

Delta didn't have to worry about losing a majority of it's market share to foreign competition. In that case, a bailout would have been overkill.

If they hadn't bailed out GM, the loss of labor in the auto industries and the industries that were dependent on the auto industry in the form of unemployment taxes. Taxpayers would have been screwed anyway. Right now, there isn't sufficient economic growth in other industries to offset the exponential loss of jobs. Maybe in another place, another time, it would have been beneficial to force the auto industries to head into a more traditional bankruptcy process, but considering that demand for automobiles isn't going anywhere in the immediate future, we'd just be directly killing our GDP by not doing so. So, yeah, maybe the actual path we are going to take isn't much better, but it's certainly not worse, at least in the short term.

Where this has the potential to be worse is if the temporary economic stimulus solutions become permanent (think New Deal). But that's a different issue entirely. And even though Obama's plans seem to take that into effect, it's probably going to be up to his successor to actually see that part through. The long term effects of this bail-out are likely not in his control.

Your arguement would make sense if American jobs were being saved when in fact GM is shipping jobs over-seas. The plant in Fredericksburg is being closed or so I've heard. So they're jobs are not beign saved? I say a picture of Detroit in a magazine. It doesn't look to me like the government did a really good job of saving people's jobs there, neither did GM. So why throw bad money after good?

um, anybody else think that the reason *most* europeans drive those "piece of shit" cars is out of necessity. High price of fuel, over congestion and limits on space make these cars necessary. Where exactly do you think we're headed, back to 1965 and cheap gas? And for those really wanting to bitch about the perceived lack of performance in electrical cars, check out the numbers and 0-60 times (http://www.autoblog.com/2009/01/11/detroit-2009-dodge-circuit-ev-now-with-cross-hairs/) compared to internal combustion.

Here Here :food-smil

Why? Your stock is worth shit, your company is worth shit and the other guys (government) has more shares and can therefore exercise their rights and f'ck you over legally. As a normal shareholder you should be glad they're getting bailed out, as a predatory shareholder you can go f'ck off and die.

To borrow and revise S10's sentiments, this is a case that shows an impressive lack of understanding of basic investing.

Ford didn't take a bail out.

Ford didn't take a bail out.

Shows how much you know, again...they got themselves a ~10 billion line of credit from the US government in January when no one else was willing to give them a dime (junk companies get that kind of treatment). It got an additional 1.5 billion line of credit from the Canadian government. Guess what happens if they can't pay back that money? The government becomes the other guys.

You don't have to call it a bailout if you don't want to but please believe Ford from an investment prospective is near death company and would have certainly been dead without a government line of credit.

As a consumer, you're right, no problem. However, as a stockholder of Ford (I'm not, but hypothectically) I would have a HUGE problem with it.


Fair point. However the jobs being saved at GM (and the number of people affected by it) outweighs the negative effect on stockholders of competing firms.

In most economies I'd be all for letting GM go completely under and out of business, with no bail-out, no nothing. Normally, all those GM employees would be out of work, but would find new employment relatively quickly. However in this economy, it takes people an average of 8 months to a year to find a new job. So if GM went under in this economy, that's a huge number of people out of work, for a very long time, who need to be supported by the unemployment insurance program. So either way, the taxpayer is going to pay the piper for those employees.

Obama's logic actually makes sense (although makes one very critical assumption). The taxpayer's going to pay to support GM employees one way or another, either via taxpayer funding or via unemployment insurance.

The question is: Is GM worth saving? That's his critical assumption, he's assuming it is worth saving. It may be cheaper to simply fund GM and keep it afloat, rather than supporting their employees. But if GM's piss-poor management navigates that big ass ship right back into another iceberg, then Obama will have made a critical mistake.

So I get the approach: in this economy keep the people working. If people don't have other employment options, then the government will be footing the bill no matter what. So you might as well keep them working, trying to turn GM around.

Just better hope GM can be saved. After the way they've operated the last 8-10 years, you could put them in the Harvard Business Review for how not to run a car company.

Your arguement would make sense if American jobs were being saved when in fact GM is shipping jobs over-seas. The plant in Fredericksburg is being closed or so I've heard. So they're jobs are not beign saved? I say a picture of Detroit in a magazine. It doesn't look to me like the government did a really good job of saving people's jobs there, neither did GM. So why throw bad money after good?

They're shipping those jobs overseas, and then still going bankrupt even after doing that.

Those jobs were a sunk cost, a cost encurred by absurd management over the past 10 years. The question is how many jobs NOT YET lost can be saved. That's what the government funding is designed to accomplish.

No sense crying over spilled milk.

if your numbers are correct and if what you say is even true then thats still only 11.5 billion to ford were as gm is gonna be at least 50 billion and bankrupt

Shows how much you know, again...they got themselves a ~10 billion line of credit from the US government in January when no one else was willing to give them a dime (junk companies get that kind of treatment). It got an additional 1.5 billion line of credit from the Canadian government. Guess what happens if they can't pay back that money? The government becomes the other guys.

You don't have to call it a bailout if you don't want to but please believe Ford from an investment prospective is near death company and would have certainly been dead without a government line of credit.
If I'm correct they secured those lines of credit for if something happened but as of now they have not had to use any of those funds. So at this point I have to say ford has not taken any bailout money.

Fair point. However the jobs being saved at GM (and the number of people affected by it) outweighs the negative effect on stockholders of competing firms.

In most economies I'd be all for letting GM go completely under and out of business, with no bail-out, no nothing. Normally, all those GM employees would be out of work, but would find new employment relatively quickly. However in this economy, it takes people an average of 8 months to a year to find a new job. So if GM went under in this economy, that's a huge number of people out of work, for a very long time, who need to be supported by the unemployment insurance program. So either way, the taxpayer is going to pay the piper for those employees.

Obama's logic actually makes sense (although makes one very critical assumption). The taxpayer's going to pay to support GM employees one way or another, either via taxpayer funding or via unemployment insurance.

The question is: Is GM worth saving? That's his critical assumption, he's assuming it is worth saving. It may be cheaper to simply fund GM and keep it afloat, rather than supporting their employees. But if GM's piss-poor management navigates that big ass ship right back into another iceberg, then Obama will have made a critical mistake.

So I get the approach: in this economy keep the people working. If people don't have other employment options, then the government will be footing the bill no matter what. So you might as well keep them working, trying to turn GM around.

Just better hope GM can be saved. After the way they've operated the last 8-10 years, you could put them in the Harvard Business Review for how not to run a car company.
I wonder how many people GM employees and supports with there operations in the US.

Why? Your stock is worth shit, your company is worth shit and the other guys (government) has more shares and can therefore exercise their rights and f'ck you over legally. As a normal shareholder you should be glad they're getting bailed out, as a predatory shareholder you can go f'ck off and die.

To borrow and revise S10's sentiments, this is a case that shows an impressive lack of understanding of basic investing.WTF are you talking about? I think you misread something. If I'm a shareholder of Ford stock and the U.S. government is giving a tax break for consumers to buy GM products and not Ford products, that's a problem. Are you advocating that it's OK for the U.S. government to favor one company over another. This isn't Venezula....yet.

And I have no clue how my statement shows an impressive lack of understanding of basic investing.