Satty

Suppose GM gets a bailout

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Lets say GM gets $25,000,000,000 in taxpayer dollars as a bailout. What do they do with it thats any different than what they've been doing the last decade or so? It seems to me they're saying "Give us money or we die now" instead of presenting an "If you give us money, we'll do x,y and z in order to survive" argument.

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Interesting question. They won't get the whole 25 billion, and probably the government would own part of the automakers.

Private enterprise may no longer be quite so "private" But even then, it won't make that much of a difference as there aren't that many people with good jobs left in this country to afford new cars. Honda, toyota, Mazda, BMW, and Suzuki will suffer here as well. I look for the auto market to shrink year by year for a long time to come.

Things will move to the left politically and the government will run GM, Ford and Chrysler from the sidelines for a very long time...

That would be my guess.

Just keep your Buick wagon. GM cars from the 1950's are running around Havannah, Cuba...your grandson and granddaughter may well be driving it, if things don't change.

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Live long enough to let the UAW agreement kick in reducing costs.

Get the Volt to market.

Expand E-flex

Finance the R&D required for more alt fuel/electric/fuel efficient technologies

Keep about 3 million people employed

Pay interest to the govt.

for starters.

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Renegotiating with the UAW is the only thing you've listed that can GM from going under. Even that may happen more quickly if they file Chapter 11. I'm just worried that GM is going to make the same mistakes they've been making the last decade and we'll be having this same conversation in six months when GM burns through government money.

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Renegotiating with the UAW is the only thing you've listed that can GM from going under. Even that may happen more quickly if they file Chapter 11. I'm just worried that GM is going to make the same mistakes they've been making the last decade and we'll be having this same conversation in six months when GM burns through government money.

No.

They have already secured a workable agreement with the UAW that will begin to go into effect soon and show full effect in 2010. IIRC the annual savings is about 5 billion.

The continued employment of those 3 million workers means that we all have a shot at staying alive economically - otherwise, do not pass go - go straight to Depression.

The Volt embodies the technical capabilities of GM and is the ambassador to all who refuse to consider GM today.

When funded, GM's R&D is world class.

ALL of those things are major reasons to go forward with the loans.

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The Volt is going to be a money loser for a year or two, at least.

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The Volt is going to be a money loser for a year or two, at least.

Based on its own sales, Yes.

But in PR, and positive perception it will be invaluable.

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GM spent the current decade correcting the mistakes of the last two:

- Downsizing workforce

- Shedding excess capacity and making the plants they kept more efficient.

- Getting the UAW to make concessions in the first place

- Redirected money back into cars

- Re-established the importance of design

I believe it's a loan GM's asking for, not a bailout, and I don't think it'll be used for executive bonuses - I don't think the Fed will allow it. Let me ask this: what would you want GM to do with the $25B if they got it?

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GM's argument is that they're on the cusp of fixing the problem, and when the new healthcare agreement comes into effect next year they'll start raking in the cash. They just want a loan to last that long.

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I believe it's a loan GM's asking for, not a bailout, and I don't think it'll be used for executive bonuses - I don't think the Fed will allow it. Let me ask this: what would you want GM to do with the $25B if they got it?

I'd want GM to allocate a majority of it to product development, particularly interior refreshes pretty much across-the-line-up, and particularly to Pontiac, Buick, and small Chevrolets. The rest should go toward reducing dealership glut in metro areas, and in upgrading key factories to be more cost-effective.

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Some portion of whatever monies may be recieved HAS to go to a series of 'straight talk' advertisments - too many erroneously believe GM is an evil fat-cat conglomerate and the money would just go to executive pocket-lining. There would need to be at least an element of nationalism and an accounting of both the Corp's contributions to the tapestry of America, and a foreshadowing of what would likely come were no assistance granted.

Nicer interior plastics will have to wait; the #1 critical issue here is on-the-fence public opinion.

Just in passing (so I missed the context, but...) the Clueless News Network had a blurb that used these terms: "GM", "bailout" and "clunkers". :rolleyes: Even if that was a 'quote' of detractors, repeating it will still plant the seed in some feeble minds.

Frankly, I feel this nation is far too self-absorbed for even the most effective ads to make much of an impression.

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They have already secured a workable agreement with the UAW that will begin to go into effect soon and show full effect in 2010. IIRC the annual savings is about 5 billion.

The Volt embodies the technical capabilities of GM and is the ambassador to all who refuse to consider GM today.

When funded, GM's R&D is world class.

Toyota will have a plug-in hybrid as well, plus the 3rd generation Prius. The Volt has to be first to market and excellent, because Toyota can attract the "green" crowd as well.

Problem is GM R&D is not funded properly, and lags $2-3 billion a year behind Toyota. GM has more models, they should be spending $2 billion more than Toyota, not less.

In 2007, GM's hourly wage with benefits was $71, Toyota's was $47. The 2010 deal won't be enough to make up for that.

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I wish bailout would go to new product development at Cadillac and Chevy, and closing/selling Hummer and Saab (possibly Saturn as well) and focusing on making the core brands competitive.

But, I believe the money will just go to funding the cash burn, and have no impact on product or innovation.

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Lets say GM gets $25,000,000,000 in taxpayer dollars as a bailout. What do they do with it thats any different than what they've been doing the last decade or so? It seems to me they're saying "Give us money or we die now" instead of presenting an "If you give us money, we'll do x,y and z in order to survive" argument.

Tread water until 2010 when they can start making a profit again.

They don't HAVE to say they'll do anything. They're (Detroit and it's suppliers) already employing 3.5 million americans. That's plenty.

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Renegotiating with the UAW is the only thing you've listed that can GM from going under. Even that may happen more quickly if they file Chapter 11. I'm just worried that GM is going to make the same mistakes they've been making the last decade and we'll be having this same conversation in six months when GM burns through government money.

I'm a little worried about that too... Unless GM can show that it is committed to truly changing, I'm not sure that the business can be saved (especially since the media is working overtime to 'inform' the public that GM will not change)

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Toyota will have a plug-in hybrid as well, plus the 3rd generation Prius. The Volt has to be first to market and excellent, because Toyota can attract the "green" crowd as well.

Even if it is first to market, the Toyota solution will most likely be better as it is just an incremental improvement to the Prius. The battery will also be much smaller than the Volt's. When compared to the Volt this should result in a more reliable Plug-In Prius and perhaps a less-expensive one as well (but there are lots of variables here).

Yes, the electric range will be shorter. But as the longer electric range costs extra money and will tend not to be used this is actually a very real advantage of the Prius.

I also suspect that much of the benefit of the Volt has already been realized thanks to GMs frequent and early PR campaign.

In 2007, GM's hourly wage with benefits was $71, Toyota's was $47. The 2010 deal won't be enough to make up for that.

IIRC under the new agreement GM was going to be able to start hiring people at $15/hour and without as many benefits. Does anyone have the details?

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Lets say GM gets $25,000,000,000 in taxpayer dollars as a bailout. What do they do with it thats any different than what they've been doing the last decade or so? It seems to me they're saying "Give us money or we die now" instead of presenting an "If you give us money, we'll do x,y and z in order to survive" argument.

But they are presenting the latter argument, devoting resources to fuel-efficient vehicles, limiting executive compensation etc.. Besides, the plants are already winning awards for productivity and quality, the vehicles are winning car of the year awards, UAW wages will be halved, healthcare will be shifted to the VEBA trusts, inventory has been kept low, daily rental sales cut—everything they should be doing. Now, unless you're of the opinion that no-one should be building cars in the US at all, it's hard to see what else they should be reasonably expected to do.

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Live long enough to let the UAW agreement kick in reducing costs.

Get the Volt to market.

Expand E-flex

Finance the R&D required for more alt fuel/electric/fuel efficient technologies

Keep about 3 million people employed

Pay interest to the govt.

for starters.

The R and D thing is huge. Our local Miata club has been given some tours of the Honda "skunkworks" in Marysville, Ohio. We have friends that have friends that...well nevermind.

I can tell you that Honda is spending about eleventy billion dollars on R and D right now. GM needs to spend a similar amount to keep up. This would put a lot of people to work an keep the idea of competing automotive design alive...

Chris

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Some portion of whatever monies may be recieved HAS to go to a series of 'straight talk' advertisments - too many erroneously believe GM is an evil fat-cat conglomerate and the money would just go to executive pocket-lining. There would need to be at least an element of nationalism and an accounting of both the Corp's contributions to the tapestry of America, and a foreshadowing of what would likely come were no assistance granted.

Nicer interior plastics will have to wait; the #1 critical issue here is on-the-fence public opinion.

Just in passing (so I missed the context, but...) the Clueless News Network had a blurb that used these terms: "GM", "bailout" and "clunkers". :rolleyes: Even if that was a 'quote' of detractors, repeating it will still plant the seed in some feeble minds.

Frankly, I feel this nation is far too self-absorbed for even the most effective ads to make much of an impression.

In two years here at C and G, this is one of the smartest, most reality based posts EVER.

Chris

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But they are presenting the latter argument, devoting resources to fuel-efficient vehicles, limiting executive compensation etc.. Besides, the plants are already winning awards for productivity and quality, the vehicles are winning car of the year awards, UAW wages will be halved, healthcare will be shifted to the VEBA trusts, inventory has been kept low, daily rental sales cut—everything they should be doing. Now, unless you're of the opinion that no-one should be building cars in the US at all, it's hard to see what else they should be reasonably expected to do.

from my somewhat informed perspective, the biggest problems i have are allocation of resources and planning that in hindsight looks very limited and unfocused. all the big trucks came and went again, when in the early 2000s the problem we were all discussing were cars and how uncompetitive they were. lambda came and the plan to reduce overlap was blown out of the water--what if the money for traverse had been used to give cobalt a meaningful update with stylish trappings meanwhile its true update won't be here until TWO years after it debuts in other smaller markets. insignia won't be available here--perhaps at all, when Pontiac is selling a massively outdated car with massive discounts and in relatively large volumes. small cars are a bust at GM. medium cars at GM outside Malibu are a bust. Buick cars are a joke [lacrosse] or irrelevant [lucerne]. large cars, cars in general, suck at GM.

there's no getting around that the product picture has been seriously seriously laughable compared to competitors. competition is coming in and making stories with innovation in design, features, engineering.....GM is nowhere in that picture.

it's always coming just around the corner with GM. meanwhile, I could have gone there and turned the company around several times just introducing astra and insignia on time here and watched the money pile up on those fantastic cars. greenlighting good designs doesn't require a lot of work

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WTH happened here that you're all making the case against GM now? "Change" is what GM has been doing for the past decade or more. Those with a working knowledge of the industry (not just dealers or line workers) seem to think the hard yards have been made. Anyone would think the Cruze woill be arriving with a 2.4 L 4 and a V6 and get just 26 mpg instead of a 1.4 Turbo and 40+ mpg, that they are working on a big V8 Cadillac to replace the DTS and priced less than high-end CTS instead of Alpha, that there is no new Aveo coming, that the GPix concept presages nothing, that the uopcoming LaCrosse will feature a 3.8 V6 and V8, and that all their cars will still have 4-speed autos instead of 6-speeds. What is up with all this "nothing has changed" talk? Almost everything has changed except public perceptions.

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Get rid of the outdated dealers, with fat slobby salesman in pastel leisure suits, smelling of Brute aftershave, cigars, and bad salami breath. Or the ex HS jock with tons of hair gell, spray on tan, and gold earrings. Or the ones who don't know how an engine works, etc.....

Cancel any that try to sell new cars with aftermarket 'carriage' roofs with other add on garbage. Ones that say that "Ad fees are mandatory". Or, ones in dead neighborhoods with beat up signs and inventory is 90% junky used cars, and the few new ones are 'bait and switch' base cars to get sub prime buyers to "come on down", then they're are pushed into 25% loan on a '95 Cavalier.

Edited by Chicagoland
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GM has a mountain of debt, and the only way they will be able to compete in the long term is CH 11 bankruptcy(except not called a bankruptcy) with govt loans to keep the cash flowing while they restructure. UAW contracts voided, bond holders share in the losses, GM closes plants and lays off workers so they have the right # of workers and plants for their production.

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WTH happened here that you're all making the case against GM now? "Change" is what GM has been doing for the past decade or more. Those with a working knowledge of the industry (not just dealers or line workers) seem to think the hard yards have been made. Anyone would think the Cruze woill be arriving with a 2.4 L 4 and a V6 and get just 26 mpg instead of a 1.4 Turbo and 40+ mpg, that they are working on a big V8 Cadillac to replace the DTS and priced less than high-end CTS instead of Alpha, that there is no new Aveo coming, that the GPix concept presages nothing, that the uopcoming LaCrosse will feature a 3.8 V6 and V8, and that all their cars will still have 4-speed autos instead of 6-speeds. What is up with all this "nothing has changed" talk? Almost everything has changed except public perceptions.

Cognitive Conditioning by the media...

It's gotten so bad and we've been dealt so much FALSE negativity for so long that even GM fans are turning against the company.

I'm a diehard GM fan, but even still I can make a case as to why Toyota is better. The fact that the media has that kind of influence over me, a bleeding GM fan is disheartening and scary. Imagine the influence they've had on the average consumer.

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