Big 3 Bail Out

[Kenneth B.]

From the looks of things Congress is not going to give the auto. industry any more money. I don't think the CEO'S did a good job of conveying the fact that not only will the UAW & they will suffer but that what really will happen is that the tier 1&2 will also go chapter 11. It didn't help for them to fly in on there own company jets. If GM goes chapter 11 they do not pay for the machined parts shipped to them Then the machine/Assembly company dose the same & the foundry's do not get paid they do the same & the there suppliers don't get paid for tooling then my company go's under. What that means is that they will not have to pay there suppliers like my company & the lower suppliers will either go out of business or eat the loss & a lot of non union workers will lost there jobs. In essence the little business & its workers will finance the auto bail out but at what experience. I guess paper pushers In the banking,insurance & wall street need there 560,000 bonus more than the guy with a family in the Midwest need his 35,000 a year.
KEN

[Duke W.]

Re: Big 3 Bail Out

At least they could have "jet pooled" and shared one company's jet to DC.

Mulally still lives in Seattle. (He came from Boeing.), and takes the Ford jet back there on weekends.

Life if tough for failed executives.

My understanding is that Congress has told them to come back next month with a business plan, which is a correct move. This is exactly what anyone would have to do if you approached a bank for a business loan or a venture capitalist for an equity investment.

Even though none of the execs nor Congress nor the UAW will publically mention "labor cost", it will have to be addressed in any viable business plan. How do you compete when your labor cost is $78 per hour and the competition's is only $48 per hour?

Maybe Mulally will stay in Detroit this weekend and get together with the other CEOs and the UAW guy and start working on a business plan that can make Detoit competitive in US-based vehicle manufacturing.

BTW, I looked at the latest new vehicle inventory data in Automotive News. There was a huge increase during October, and no doubt there will be another huge increase this month. Current average new vehicle inventory is over 100 days - well over 3 million and growing. Expect a lot more dealers to fold as banks refuse further floor plan financing.

Of note is Corvette. Sales have really dried up and current inventory is over 200 days, so now should be a great time to buy a new Corvette.

Duke

[Kenneth B.]

Re: Big 3 Bail Out

At least they could have "jet pooled" and shared one company's jet to DC.

Mulally still lives in Seattle. (He came from Boeing.), and takes to company jet back there on weekends.

Life if tough for failed executives.

My understanding is that Congress has told them to come back next month with a business plan, which is a correct move. This is exactly what anyone would have to do if you approached a bank for a business loan or a venture capitalist for an equity investment.

Even though none of the execs nor Congress nor the UAW will publically mention "labor cost", it will have to be addressed in any viable business plan.

Maybe Mulally will stay in Detroit this weekend and start working on his business plan.

Duke

DUKE
I understand that none of the big wigs will get hurt including the union exes. My point is that little companies like mine that employ way more people than the UAW will be the ones that lose. PS the congressmen all get a travel & car allowance & some buy non American cars.
KEN

[Jamie F.]

Re: Big 3 Bail Out

The repercussions cannot even be fully comprehended. Everyone who reads this will be affected in some way. It hasn't even happened yet and already I'm hearing "We can't make any moves, too much uncertainty, either way a new world order is coming" or something similar. That translates to an overall slowing, into a graveyard spiral if I've ever heard one.

[Michael L.]

Re: Big 3 Bail Out

I guess you start by doing the math. If as CNN Money says that 3 million people will lose their jobs if the big three closed, and you hear that we will add 13 extra weeks to unemployment benefits, figure out what that will cost us. Then factor in all the lost health insurance that will go back to Medicare for retirees, the lost taxes on an estimated 157 billion a year, the additional foreclosure of homes which will again adversely effect banks... It goes on and on.

Hey, my mortgage is paid off, my retirement money is mostly in CD;s ( I did get creamed on my 401K) my cars are paid off. I'm sitting pretty and should be one of those who does not care... BUT, I see what the long term effect could be and think a long term loan with STRICT compliance to terms might be the best for all concerned.

What happens to NASCAR? All the ad money spent by the auto industry? We have put way too many eggs in one shoddy basket.

My sister had a Daewoo years ago, once they filed bankruptcy, parts and service disappeared, she traded in a year old car with less than 10K miles for $500... Imagine that happening to parts for all those F150 Fords and other vehicles still on the road.

[Timothy B.]

Re: Big 3 Bail Out

Maybe we can cut some of that foreign aid and help America for a change. Only good thing about this crash is that the whole world gets to participate this time. We will get blamed for it's cause though!

[David D.]

Re: Big 3 Bail Out

I watched some of the big 3 inquisition, and one interesting point I believe was when one of the Senators asked, why on earth are the 3 being grouped as 1? All three get a 1st round bailout/loan (more will be required, gauranteed) or all three fail. That just doesn't seem correct.

In other words, Ford is probably doing better than the other 2 combined. At least, if even by accident, they have cash to help them burn through most of 2009 if needed in some fashion. Chrysler is 2nd on the list but they are now a Private company. Finally there is GM whom in my opinion needs to have their entire executive entourage removed via Wagoner's private jet, and get some young/smart blood in there place. Personally I have absolutely NO respect for this extremely prideful bunch of crooks. If not, then my vote is let GM die on the vine that they created single handedly. There must be a change with their managment team, some Serious concessions with the UAW, and future plans for what the people/customers want/need vs. them dictating what the people will buy.

Each Auto maker, in my opinion, should have a detailed proposed forward looking plan, reviewed by and then decided upon by Congress as to which monies to be made available to them, based on each individual companies plan and merrit.

With regards to letting them file Chapter 11 and the claim that no one will be buying a car if they are not sure the company will be around is quite true. However, I would also contend that with the economy heading much further south before getting better, no real fix to the credit crisis (so no loans available for most folks) AND with unemployment reaching double digits by this summer no one will be buying anyways. How many would be wanting more debt vs. now a need to be saving, or tapping that 401K etc...at a time most have realized 40% or more pain. Especially with the Fear of a pending Recession/Depression and potential Job lose. Besides what does their inventory mostly look like vs. their competition? SUV's and Trucks, vs. eco and fuel friendly vehicles....bottomline jobs in the auto industry are going away anyways.

Finally, I keep hearing that GM just needs to get to 2010 to have their new VOLT become the savior in metal clothing. Well their original price point was supposed to be low $20K.....It now sits just south of $40K. As much as I'd love to help out GM, and do something great for the eco and get much better gas mileage It'd be a long time in the future before I'd be able to justify that much for a domestic car, from a company that has not done that much, in my opinion, to win me back over with quality etc.....Not to say that they haven't made improvements....but I worked for GM, was a UAW member, had GM auto's for many years, until they started crappin the garage...... When I finally broke down and bought a Honda, the quality, which btw is something WE taught them how to manufacture, is/was so far superior, in wasn't even a close comparison. We just decided not to follow our own teachings because of being so fricken cocky, and having a monopoly on the industry. Or so we thought. Plus...why pay that much, when you'll be able to buy an equivalent Foreign car made in the USA, for near half that price.....How or why is this possibly?

Finally, knowing what GM did in the shutting down or the resourcing of so many jobs to Mexico, and other places, thus cutting thousands upon thousands of jobs with little to no regards for the blue collar workers that literally made these companies is inexcusable in my humble opinion. In the name of cost cutting? So Wagoner and the others can fly around on their personal cororate jets...

Maybe I'd have a better feeling IF any these guys even came close to admiting they screwed up (self responsibility) instead of pointing fingers.

Oh, I believe they will get at least one or two cash infusions, but that's only because the other crooks (Congress) are in their pockets. They certainly aren't for the people, and doing by the people.

So how about them Mets?

David

[Stuart F.]

Re: Big 3 Bail Out

Based on what I heard today, I can now bet that the big three will tell Congressman Barney "call me sweetie" Frank and Senator Cris "build me a house" Dodd (authors of the Fanny Mae Freddie Mac fiasco) go pound salt! and take your Madam "Chair Person" Pelosi and Harry "The Weasel" Reid with you. We'd rather keep our dignity, file bankruptcy, and take our chances with the courts - or something like that.

At any rate, that's what I'm planning for and betting on - good, bad or otherwise. Tell um you heard it here first.

Stu Fox

[David D.]

Re: Big 3 Bail Out

Maybe we can cut some of that foreign aid and help America for a change. Only good thing about this crash is that the whole world gets to participate this time. We will get blamed for it's cause though!

Tim, I agree that we should be cutting Foreign Aid, but not stopping there. We need to make major cuts in everything. Both Foreign and Domestic. But with that being said, I certainly would hope we'd get the blame....That is because We (America) are the cause. We both as a Nation and as a people went from being Savers and a Productions/Manufacturing/Exporting Nation, to some how we were convinced to become the Globes biggest Debtors and Importers.....we have virtually no where near the required Production/Manufacturing to be competitive in anything but anymore. Just look, watch and learn at what's going on with our beloved domestic auto industry. They are basically the last of our large ability to Manufaction, and export.... Thanks all to our illustrious Congress, and programs such as NAFTA etc....

The World is measured on the US Dollar, yet we are printing the stuff quicker than you can stick 0000's on the end of our Debt. And this printing is growing at an exponetial rate, when it must be slowed. It is somewhat combined with the crooked Federal Reserve (which we can never pay off our debt to it) the Central Banking system and especially when we went off the Gold Standard back in '71 and put all our eggs in the FIAT basket.

I hope y'all aren't getting comfortable believing some on the Business news saying we are near the bottom of this collapse. In my opinion it's going/got to get much worse before it get's better. This is far more than a mere stock market correction this time.

My suggestion.....PRAY, and PRAY hard,
David

P.S. In case you want a prediction. DOW - 4500 within 2 months. I certainly hope I am wrong.