regfootball

BAILOUT or BANKRUPTCY

33 posts in this topic

you know, if GM goes bankrupt, or is using it as a threat to leverage cash from the US Govt.....

could you make a case to say

the CANADIAN GOVERNMENT should chip in also?

or can you use bankruptcy in the US as a threat to coerce some cash out of Canada too?

of if the ship sinks, does that mean all of the Canadian operations goes down too?

I am curious to hear how this affects the folks north of Pembina.

0

Share this post


Link to post
Share on other sites
you know, if GM goes bankrupt, or is using it as a threat to leverage cash from the US Govt.....

could you make a case to say

the CANADIAN GOVERNMENT should chip in also?

or can you use bankruptcy in the US as a threat to coerce some cash out of Canada too?

of if the ship sinks, does that mean all of the Canadian operations goes down too?

I am curious to hear how this affects the folks north of Pembina.

Pembina? All of the Canadian auto industry is south of Pembina, as is Ottawa. There are a couple of bus manufacturers in Winnipeg....

0

Share this post


Link to post
Share on other sites
Pembina? All of the Canadian auto industry is south of Pembina, as is Ottawa. There are a couple of bus manufacturers in Winnipeg....

ok, how bout north of ohio?

0

Share this post


Link to post
Share on other sites

Here's a little background for you Reg...

Because Canada is a collection of some very different provinces which are in different financial situations, there is a transfer program in place in which the 'have' provinces transfer some money to the 'have not' provinces. This has helped the maritime provinces to survive problems with the fishing industry.

Ontario has 38.8% of Canada's population and is therefore obviously a very important province. California by contrast has only 11.95% of the US population.

Ontario has long been a 'have' province, doling money out to others. Now that massive amounts of oil are flowing out of Alberta and the auto industry in Ontario has already taken a massive hit, Ontario has become a 'have not' province and will soon receive equalization payments.

This is not a question of when it will affect Canada. It already has. Oshawa in particular is having a bit of a real estate crash right now due to GM.

0

Share this post


Link to post
Share on other sites

The auto sector is more important to the Ontario economy than probably any state in the Union. The last figures I saw (2007?) Ontario 'built' more vehicles than Michigan did. Magna is one of the largest auto parts suppliers and one of the biggest Canadian companies - built on the success of the Big 3. Our proximity to Michigan and the 'rust belt' also means that our manufacturing base is very important. Unfortunately, so much of that has depended on our lower dollar (which was at par with the $US for the past year or so, until very recently) and on our 'free' health care.

The one issue often overlooked by Americans is that ALL auto manufacturers are foreign to us. Although a strong argument can be made for the historical/investment ties that the Big 3 have made in Canada over the past 100 years, there are legions of liberal economists who would argue that Toyota and Honda's recent expansion into Ontario should be encouraged over any 'pandering' to the Big 3. There was yet another diatribe in the Toronto Sun yesterday that basically called GM a 'dinsosaur' and said let it die. I file that under one of the new, more self-centered categories of "What Have You Done For Me Lately?" They cited the upcoming Camaro as yet another example that Detroit 'doesn't get it.' Whatever. Nobody in Queen's Park (Ontario's capital buildings) complained when the Silverado crewcabs and Impalas were flying out the door with tons of overtime being paid to CAW workers in Oshawa, only 2 years ago.

When I think of GM and bankruptcy, I think of what happened with Texaco. When Texaco filed for bankruptcy, they were forced to 'sell off' their Canadian holdings to appease stakeholders. Since Canada represents a puny portion (although still profitable) of GM's holdings (China is now GM's #2 market), I would think that would be a real possibility. Although we are told that GM is doing very well outside of the greater Toronto area, in this city it is a bloodbath. No less than about 9 dealers have closed in and around this city in the past few years. K-Mart also did the same thing. We no longer have K-Mart

Due to our higher gas prices, what happens in Canada, generally happens south of the border in a few years. For example, the Civic has been the #1 selling vehicle here for a while; whereas, the F-150 stole the limelight south of the border. Hell, the Silverardo is the #4 selling pickup in this country! I think GM often treats us like the poor cousin (even though a Canadian-born is running GM's finances south of the border!), but Detroit should have paid more heed to what was or wasn't selling here 5 or 10 years ago as to a clue what might have happened in the Excited States.

Opel product brought over and sold here 5 years ago would have postioned Detroit to be ready for any turn of the marketplace, rather than being caught flat-footed without competitive small cars just as the market for those turned up.

0

Share this post


Link to post
Share on other sites

^ Even though all auto manufacturers are foreign to us GM, Ford and Chrysler offer much more to Canada than Honda.

Edited by Cremazie
0

Share this post


Link to post
Share on other sites
you know, if GM goes bankrupt, or is using it as a threat to leverage cash from the US Govt.....

could you make a case to say

the CANADIAN GOVERNMENT should chip in also?

or can you use bankruptcy in the US as a threat to coerce some cash out of Canada too?

of if the ship sinks, does that mean all of the Canadian operations goes down too?

I am curious to hear how this affects the folks north of Pembina.

With the Canadian Government in Surplus territory and the relatively low debt I would love to see a large scale Canadian Bailout with an Equity share in GM with a guarantee that there would be no Canadian job losses.

0

Share this post


Link to post
Share on other sites
The auto sector is more important to the Ontario economy than probably any state in the Union. The last figures I saw (2007?) Ontario 'built' more vehicles than Michigan did. Magna is one of the largest auto parts suppliers and one of the biggest Canadian companies - built on the success of the Big 3. Our proximity to Michigan and the 'rust belt' also means that our manufacturing base is very important. Unfortunately, so much of that has depended on our lower dollar (which was at par with the $US for the past year or so, until very recently) and on our 'free' health care.

The one issue often overlooked by Americans is that ALL auto manufacturers are foreign to us. Although a strong argument can be made for the historical/investment ties that the Big 3 have made in Canada over the past 100 years, there are legions of liberal economists who would argue that Toyota and Honda's recent expansion into Ontario should be encouraged over any 'pandering' to the Big 3. There was yet another diatribe in the Toronto Sun yesterday that basically called GM a 'dinsosaur' and said let it die. I file that under one of the new, more self-centered categories of "What Have You Done For Me Lately?" They cited the upcoming Camaro as yet another example that Detroit 'doesn't get it.' Whatever. Nobody in Queen's Park (Ontario's capital buildings) complained when the Silverado crewcabs and Impalas were flying out the door with tons of overtime being paid to CAW workers in Oshawa, only 2 years ago.

When I think of GM and bankruptcy, I think of what happened with Texaco. When Texaco filed for bankruptcy, they were forced to 'sell off' their Canadian holdings to appease stakeholders. Since Canada represents a puny portion (although still profitable) of GM's holdings (China is now GM's #2 market), I would think that would be a real possibility. Although we are told that GM is doing very well outside of the greater Toronto area, in this city it is a bloodbath. No less than about 9 dealers have closed in and around this city in the past few years. K-Mart also did the same thing. We no longer have K-Mart

Due to our higher gas prices, what happens in Canada, generally happens south of the border in a few years. For example, the Civic has been the #1 selling vehicle here for a while; whereas, the F-150 stole the limelight south of the border. Hell, the Silverardo is the #4 selling pickup in this country! I think GM often treats us like the poor cousin (even though a Canadian-born is running GM's finances south of the border!), but Detroit should have paid more heed to what was or wasn't selling here 5 or 10 years ago as to a clue what might have happened in the Excited States.

Opel product brought over and sold here 5 years ago would have postioned Detroit to be ready for any turn of the marketplace, rather than being caught flat-footed without competitive small cars just as the market for those turned up.

bingo. that was why i asked the question and started the thread, actually.

0

Share this post


Link to post
Share on other sites
Here's a little background for you Reg...

Because Canada is a collection of some very different provinces which are in different financial situations, there is a transfer program in place in which the 'have' provinces transfer some money to the 'have not' provinces. This has helped the maritime provinces to survive problems with the fishing industry.

Ontario has 38.8% of Canada's population and is therefore obviously a very important province. California by contrast has only 11.95% of the US population.

Ontario has long been a 'have' province, doling money out to others. Now that massive amounts of oil are flowing out of Alberta and the auto industry in Ontario has already taken a massive hit, Ontario has become a 'have not' province and will soon receive equalization payments.

This is not a question of when it will affect Canada. It already has. Oshawa in particular is having a bit of a real estate crash right now due to GM.

like revenue sharing in major league baseball......

0

Share this post


Link to post
Share on other sites
With the Canadian Government in Surplus territory and the relatively low debt I would love to see a large scale Canadian Bailout with an Equity share in GM with a guarantee that there would be no Canadian job losses.

GM is sinking under the weight of their debt and shrinking market share. Giving ANY money to GM is a COMPLETE waste of money at this time because it will go straight to any number of non-Canadian debtors and there is pretty much no chance of getting paid back.

We may as well just give the money directly to the ex-GM employees for retraining. Alternatively, we could use it to bring auto-makers that have a chance of surviving.

I'm already annoyed that we didn't take the recent opportunity to get our $300 Million back from GM due to breaking their word.

0

Share this post


Link to post
Share on other sites
GM is sinking under the weight of their debt and shrinking market share. Giving ANY money to GM is a COMPLETE waste of money at this time because it will go straight to any number of non-Canadian debtors and there is pretty much no chance of getting paid back.

We may as well just give the money directly to the ex-GM employees for retraining. Alternatively, we could use it to bring auto-makers that have a chance of surviving.

I'm already annoyed that we didn't take the recent opportunity to get our $300 Million back from GM due to breaking their word.

... and how much money did Toyota get to open in Woodstock; a plant that is barely running with one shift these days? That's the trouble with big players playing States/Provinces against each other: the taxpayer is always the loser in the end. As long as Ontario whored itself out to Japan Inc. to get those precious jobs in Alliston and Cambridge, they were merely adding more nails in the coffins to jobs in Windsor, Oshawa and Oakville.

Or what about the Korean transplants - which don't employ a single f'ing job in a factory in this country? Ditto for VW, BMW and the rest. GM and Ford have literally paid out BILLIONS in taxes over the past 90+ years. So what if they are going through tough times and need a hand.

Besides, there is a big difference between 'loan guarantees' and subsidies. A loan guarantee merely allows free market cash to come to the rescue. Half the trouble with GM and Chrysler right now is that the banks aren't loaning money to anybody right now, let alone those who are in trouble.

Edited by CARBIZ
0

Share this post


Link to post
Share on other sites
Or what about the Korean transplants - which don't employ a single f'ing job in a factory in this country? Ditto for VW, BMW and the rest. GM and Ford have literally paid out BILLIONS in taxes over the past 90+ years. So what if they are going through tough times and need a hand.

GM is a business, not a charity case. It might be different if they had a reasonable chance of coming through this. But they don't. There is NO reason that Canadian tax payer money should be given to GM to pay off Chinese debtors.

Besides, there is a big difference between 'loan guarantees' and subsidies. A loan guarantee merely allows free market cash to come to the rescue.

Really? What happens to the loan guarantee when GM is bankrupt or in restructuring? Perhaps I don't understand the concept, but I believe the "guarantee" part means that Canada is out the money. So in this case there is no difference.

Half the trouble with GM and Chrysler right now is that the banks aren't loaning money to anybody right now, let alone those who are in trouble.

Actually, the real problem is shrinking market share, shrinking profits and rising debt. We'll see the real effects tomorrow, but even in the relatively health Q2 GM's sales were off some 20% YOY. In Q2 2007 GM's equity was NEGATIVE $3.7Billion. Q2 2008 it was NEGATIVE $57 Billion.

They will almost certainly never recover from this. Assisting them now would leave us less able to clean up the mess when they are gone.

No thanks.

Edited by GXT
0

Share this post


Link to post
Share on other sites

The banks created this mess and it's okay to bail them out?

If GM can no longer finance its customers because it cannot borrow money, is that necessarily GM (or GMAC's) fault? The money markets have dried up, my friend. If they don't free up soon, it won't be just Detroit that is going down.

Right now, Warren Buffet probably wouldn't get approved for a loan.

0

Share this post


Link to post
Share on other sites
With the Canadian Government in Surplus territory and the relatively low debt I would love to see a large scale Canadian Bailout with an Equity share in GM with a guarantee that there would be no Canadian job losses.

Policy-wise, I doubt the Conservative government would be receptive to such an action. It'd surely compromise support from the West.

0

Share this post


Link to post
Share on other sites
The banks created this mess and it's okay to bail them out?

If GM can no longer finance its customers because it cannot borrow money, is that necessarily GM (or GMAC's) fault? The money markets have dried up, my friend. If they don't free up soon, it won't be just Detroit that is going down.

That isn't the issue. GM is a zombie. Just because there is a heart for transplant doens't mean that GM should get it. They'd still be dead and the heart will be wasted.

Right now, Warren Buffet probably wouldn't get approved for a loan.

I don't think you are being realistic about GM's situation. I am sure that Toyota, Honda, Nissan, etc. are still getting financing.

GM lost $54 billion in equity in one year. I can only imagine how much worse it will be tomorrow. At the same time their revenue is shrinking rapidly. It is a horrible investment. The banks know it, and I suspect you probably know it as well. I'd appreciate if you would stop suggesting that the government waste my money.

0

Share this post


Link to post
Share on other sites
Policy-wise, I doubt the Conservative government would be receptive to such an action. It'd surely compromise support from the West.

NEP

0

Share this post


Link to post
Share on other sites
NEP

Well yeah, and a major chunk of the current Conservative government are people that were part of the Reform Party which opposed the NEP.

I'd see a similar argument being made if GM were to be bailed out heavily by the government; many westerners viewed the NEP as a crutch to prop up inefficient manufacturers in the East.

0

Share this post


Link to post
Share on other sites
That isn't the issue. GM is a zombie. Just because there is a heart for transplant doens't mean that GM should get it. They'd still be dead and the heart will be wasted.

I don't think you are being realistic about GM's situation. I am sure that Toyota, Honda, Nissan, etc. are still getting financing.

GM lost $54 billion in equity in one year. I can only imagine how much worse it will be tomorrow. At the same time their revenue is shrinking rapidly. It is a horrible investment. The banks know it, and I suspect you probably know it as well. I'd appreciate if you would stop suggesting that the government waste my money.

I'd appreciate it if you would stop trolling here as well. I re-read some of your posts last night and ever since you've joined C&G, all you have done is harp on GM. It's clear to me that you must work for a Honda or Toyota dealer. In all your posts, there has not been a single positive thing said about GM. Not one. In fact, the Volt terrifies you. You've been trashing the Volt more than Toyota has in Washington. :scratchchin:

If you can read, read yesterday's Post. If Ford or GM went down, the job losses (both direct and indirect) would be on the order of 3 million. Those are American figures, of course, but Canada's would probably be proportionately the same. Magna is a Canadian Company and it is also in trouble, having lost huge backing by a Russian investor. If Chrysler goes, there is a real possibility Magna would, too. The study cited suggests as much as 130 BILLION in tax revenue would be lost to the U.S. side of things within 3 years (the time period the study looked at.)

We have to decide whether or not as a nation(s) we want to be in the auto business. The jobs Toyota and Honda create in Canada are strictly for window dressing. Any pretence at building vehicles here would be out the window with no direct competition from Detroit. GM has been retrenching since 2001, but it isn't easy untangling 100 years of job contracts and other legal entanglements. Vehicles like the Traverse, Malibu and CTS prove that GM is worth saving, even if that hurts your sensibilities, GXT.

I say, bring back the Auto Pact.

0

Share this post


Link to post
Share on other sites

Take the money. I believe we need to level the playing field and practice protectionism in the American Auto industry. The reason is because Japan has given Toyota so much help it just should be fair. This is the one area I agree with protectionism and giving a bail-out, this industry is too important not to save.

0

Share this post


Link to post
Share on other sites

Bankruptcy time. They just burned another $6.9 billion in the 3rd quarter. The cash burn is no longer $1 billion a month, it is now $2.3. By early-middle of next year they will be out of money, if they declare bankruptcy, and can get rid of the union, and can get government help, they could come back as Chevy-Buick-Cadillac and hold 15% market share probably and at least make a profit. Not the ideal situation and a lot of jobs will be lost, but they didn't take measures years ago to prevent this, this is their best option now.

Edited by smk4565
0

Share this post


Link to post
Share on other sites
I'd appreciate it if you would stop trolling here as well. I re-read some of your posts last night and ever since you've joined C&G, all you have done is harp on GM. It's clear to me that you must work for a Honda or Toyota dealer. In all your posts, there has not been a single positive thing said about GM. Not one. In fact, the Volt terrifies you. You've been trashing the Volt more than Toyota has in Washington. :scratchchin:

I don't work for any automaker. I'm just a consumer with a grudge. My wife that bought a new GM product and we suffered horribly with the reliability and finally the depreciation of it. Perhaps I should let it go, but rest assured my anger at GM is because of their own crappy product.

As for nothing positive... I'll give credit when it is due. I've made some positive posts on the CTS and the Lucerne.

I "trash" the Volt because when GM first displayed the concept... which we now know had a detergent box and two standard automotive batteries under the hood... so many on this board claimed that GM had just jumped ahead of Toyota. Reality was plain... the Volt was nothing but flash and Toyota et al recognized the problems with the Volt and had left it quietly in the lab where it belonged. GM had nothing on anyone except for commercials and desperation based on incompetent product and decisions in the hybrid market.

What do you think should terrify me about it? The high cost? The loss per vehicle? The watered-down design? The flawed concept? The way GM is rushing it to market without the usual checks? The potential for disaster? GM's complete lack of knowledge of the longevity of the battery? The shrinking of the range? The lowering of the ICE fuel economy? The trivial and nonchalant way in which Toyota (and apparently Chrysler and Ford) could match it at will? The only thing terrifying about the Volt is how the faithful are blind to the reality of it. GM never would have done it if they didn't have a giant case of Prius-envy.

Vehicles like the Traverse, Malibu and CTS prove that GM is worth saving, even if that hurts your sensibilities, GXT.

The Malibu is a great step forward. My criticism regarding it has been limited to GM's misleading comparisons with the Accord.

But they don't "prove that GM is worth saving". There is lots of product just as good or better backed by financially capable automakers.

Edited by GXT
0

Share this post


Link to post
Share on other sites
Bankruptcy time. They just burned another $6.9 billion in the 3rd quarter. The cash burn is no longer $1 billion a month, it is now $2.3. By early-middle of next year they will be out of money, if they declare bankruptcy, and can get rid of the union, and can get government help, they could come back as Chevy-Buick-Cadillac and hold 15% market share probably and at least make a profit. Not the ideal situation and a lot of jobs will be lost, but they didn't take measures years ago to prevent this, this is their best option now.

It is worse than that. Apparently they need ~12Billion to operate. It sounds like they only have a couple of months left unless they can get someone to give them some money.

0

Share this post


Link to post
Share on other sites

They have $16.2 billion in cash right now, and need 11-14 to operate, so about $4 billion left. Wagoner said the cash burn will slow down, but even if it does, come February 1, 2009 they are probably bankrupt. Maybe Toyota can buy them, and spare Chevy, Cadillac, and a few jobs.

0

Share this post


Link to post
Share on other sites
I don't work for any automaker. I'm just a consumer with a grudge. My wife that bought a new GM product and we suffered horribly with the reliability and finally the depreciation of it. Perhaps I should let it go, but rest assured my anger at GM is because of their own crappy product.

As for nothing positive... I'll give credit when it is due. I've made some positive posts on the CTS and the Lucerne.

I "trash" the Volt because when GM first displayed the concept... which we now know had a detergent box and two standard automotive batteries under the hood... so many on this board claimed that GM had just jumped ahead of Toyota. Reality was plain... the Volt was nothing but flash and Toyota et al recognized the problems with the Volt and had left it quietly in the lab where it belonged. GM had nothing on anyone except for commercials and desperation based on incompetent product and decisions in the hybrid market.

What do you think should terrify me about it? The high cost? The loss per vehicle? The watered-down design? The flawed concept? The way GM is rushing it to market without the usual checks? The potential for disaster? GM's complete lack of knowledge of the longevity of the battery? The shrinking of the range? The lowering of the ICE fuel economy? The trivial and nonchalant way in which Toyota (and apparently Chrysler and Ford) could match it at will? The only thing terrifying about the Volt is how the faithful are blind to the reality of it. GM never would have done it if they didn't have a giant case of Prius-envy.

The Malibu is a great step forward. My criticism regarding it has been limited to GM's misleading comparisons with the Accord.

But they don't "prove that GM is worth saving". There is lots of product just as good or better backed by financially capable automakers.

people need to get over their mancrush for the accord. i don't get it. my 08 accord test drove showed me that the accord was an average driving experience. slightly insubstantial feel to it. creepy dash. having driven the g6, aura, and newest malibu, i can say that there is not any real substantive difference in these cars to 95% of the drivers out there (save the G6's cheap interior).

if you hang your hat on 'depreciation' you're a fool. you paid more for that rice burner to begin with, or its residual was artificially high on a subsidized lease.

rest assured, with the market crash, any used car is worth nothing when you trade it in now, espcially a car like the accord or camry which are now commodity cars flooding the used market like everything else. the days of the golden resale of import makes is fast ending as they become as common as white bread and flood the market.

0

Share this post


Link to post
Share on other sites

Your content will need to be approved by a moderator

Guest
You are commenting as a guest. If you have an account, please sign in.
Reply to this topic...

×   You have pasted content with formatting.   Remove formatting

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor