Obama Motors

[Trample the Elderly]

Originally Posted by GTripp0012

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?

[saden1]

Originally Posted by BleedBurgundy

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 compared to internal combustion.

Here Here

[Trample the Elderly]

Originally Posted by saden1

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.

[saden1]

Originally Posted by Trample the Elderly

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.

[Schneed10]

Originally Posted by Slingin Sammy 33

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.

[Schneed10]

Originally Posted by Trample the Elderly

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.

[wolfeskins]

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

[firstdown]

Originally Posted by saden1

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.

[firstdown]

Originally Posted by Schneed10

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.

[Slingin Sammy 33]

Originally Posted by saden1

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.

[Schneed10]

Originally Posted by Slingin Sammy 33

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.

It should be noted that we're arguing hypotheticals, and grilling Obama here for something he hasn't even done yet: institute tax breaks especially for GM cars while under government ownership. It's kind of putting the cart before the horse to get on his case about this.

But, swooping in and buying up a controlling interest in GM after its management has positioned it to become one of the biggest failures in American business history? That shows highly suspect knowledge of business and investing.

I'd feel better if it were just a bailout, but buying up shares? Borders on reckless.

[firstdown]

Originally Posted by Schneed10

It should be noted that we're arguing hypotheticals, and grilling Obama here for something he hasn't even done yet: institute tax breaks especially for GM cars while under government ownership. It's kind of putting the cart before the horse to get on his case about this.

But, swooping in and buying up a controlling interest in GM after its management has positioned it to become one of the biggest failures in American business history? That shows highly suspect knowledge of business and investing.

I'd feel better if it were just a bailout, but buying up shares? Borders on reckless.

Obama said earlier today that tax breaks will come for all hybird type cars.

[GTripp0012]

Originally Posted by firstdown

The problem is even with all this bail out money there is no guarantee any of this will work. We have dumped 20 billion into GM and are going to now dump another 30 billion and if that does not work they will dump even more money into GM. I'm guessing within a year we are going to dump another 20 to 30 billion more into GM over the 50 billion.

Well, when GM spends that money, it's not going to be burned in a fire. The money that they are spending is revenue to somebody, and most likely, that somebody will be a private entity. So, the contributions of the taxpayers aren't going to be in vain in the way you are suggesting. All that's happening is that the current state of the economy is forcing you to reinvest some of what you would otherwise consider discretionary income into our economic system in the name of stability. Wheter via a bailout increasing taxes, or an increase in the unemployment tax seems like semantics to me.

We're a society that is interdependent on each other to an extent. A scenario where a major part of society could just fall out and everyone else is unaffected just isn't feasible. From an economic standpoint, the bailout doesn't guarentee the success of GM per se, but unless the capital ends up being sucked up into the pockets of shareholders, it's guarenteed to benefit the overall economy in some way.

[Slingin Sammy 33]

Originally Posted by Schneed10

It should be noted that we're arguing hypotheticals, and grilling Obama here for something he hasn't even done yet: institute tax breaks especially for GM cars while under government ownership. It's kind of putting the cart before the horse to get on his case about this.

But, swooping in and buying up a controlling interest in GM after its management has positioned it to become one of the biggest failures in American business history? That shows highly suspect knowledge of business and investing.

I'd feel better if it were just a bailout, but buying up shares? Borders on reckless.

Agree on the hypothetical argument, we definitely need to wait and see. And agree 100% about buying up GM, not a good idea. I would've rather seen a bankruptcy without the U.S. government holding an ownership stake. On the unemployment vs. owning GM, I'll take the unemployment insurance route, at least the unemployment eventually ends. This GM could be an albatros on the gov't neck for many years (Amtrak).

[saden1]

Originally Posted by Slingin Sammy 33

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.

I have misread something because I assumed you were merely referring to being upset if gov to told Ford how to run their business. Apologies. As for giving a tax-breaks to one company but not another in the same industry, well, that's unconstitutional and I would have a hard time envisioning anyone being that stupid.

p.s. The Obama administration has done a terrible job with the auto companies. I would have taken them over outright and resold them to the highest bidder after a few years. Shareholders should have been bought out and those who wanted to stick around would get first dib during the resale of the company.