# Let them fail!



## a_majoor (16 Nov 2008)

We have all heard about the proposed plans to bail out the US "Big Three", but people still need transportation. Why not do the right thing and let the Big Three fail; here are *10 US automakers waiting in the in the wings* with real products that people might really want (I'd take the Carbon Motors sedan without the police package myself). Saving the Big Three presupposes they are indispensable, this shows even domestically they are not (and you also have all the Japanese and European companies to choose from as well)

http://www.popularmechanics.com/automotive/new_cars/4291426.html



> *Top 10 New Eco and Exotic Car Companies*
> 
> Can fresh startups weather today's economic perfect storm? The car industry is certainly in trouble, but these ambitious little companies intend to buck the trend. Some have arisen to take advantage of low labor costs in China or Eastern Europe. Some are determined to be the company that revolutionizes transportation by reinventing the automobile with some new technology or alternative fuel. History makes it plain that most of these companies are bound to fail without leaving behind much evidence that they ever existed—Bricklin and DeLorean come to mind. But radical change often comes from people who dream audaciously and act boldly. Here are ten new car companies that may (or may not) change the world.
> 
> ...


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## Colin Parkinson (16 Nov 2008)

But then who would pay the pension and health plans?


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## a_majoor (16 Nov 2008)

Colin P said:
			
		

> But then who would pay the pension and health plans?



I think you forgot the [sarcasm][/sarcasm] headers  

For those of you who think this is a serious question (and it actually is, in a way), *you* are responsible for making alternate arrangements. What would you do if *your* company failed? (There are plenty of RRSP and private insurance options out there). 

Asking me to bail out GM through my tax dollars (or an inflation tax imposed by deficits) means I would have far less ability to go out and buy a car from any manufacturer, much less GM. Adding an additional tax burden or inflation burden for more bailouts in the future (since I can't buy a car) *means I won't be buying* new appliances, clothes, entertainment or even shoes and clothes. Think about *that* next time someone asks for a bailout.....


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## Snafu-Bar (16 Nov 2008)

Let em go belly up. 

 Someone will buy out the assets for 10 cents on the dollar, turf the union, change the name and re-open a week later with people making a third of the wage 

Life goes on.


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## chanman (16 Nov 2008)

Seems like a case of watching them fail now, or watching them fail later while they owe you oodles more money than before.  It's not like this hasn't been years in the making.  There's a time to cut your losses...


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## xo31@711ret (16 Nov 2008)

I'm most likely wrong, but I heard (and I must be wrong) that some average? pay for an employee at one of the big 3 is on the average $67 an hour?? This can't be true of course.


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## retiredgrunt45 (16 Nov 2008)

It's true, if you factor in the cost of their benefit packages, 100% drug, 100% dental, pensions, it's not far off.

http://money.cnn.com/2007/03/09/news/companies/ford_bonuses/?postversion=2007030914.


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## retiredgrunt45 (16 Nov 2008)

> We have all heard about the proposed plans to bail out the US "Big Three", but people still need transportation. Why not do the right thing and let the Big Three fail; here are 10 US automakers waiting in the in the wings with real products that people might really want (I'd take the Carbon Motors sedan without the police package myself). Saving the Big Three presupposes they are indispensable, this shows even domestically they are not (and you also have all the Japanese and European companies to choose from as well)



Even though I agree with one side of your argument about alternatives, I don't see how advocating for the Japaneses auto makers is going to help us here in North America. People say they make a better product, but that is still a matter for debate. I owned Japanese and i say they have as many faults as American cars. Don't believe me, ask me to show you the cost of a new transmission in my Honda Odyssey sometime. Now getting to the other issue of bailouts, while you argue that it will leave you a bit poorer, well you have to look at the bigger picture, what if they are left to fail? overnight 500,000 jobs would dissapear, whole communities, towns and some cities would also go under. Then what happens to the economy? The massive amounts of money injected by these industries and there subsidiaries into the economies of both the US and Canada would no longer be there and it would affect everyone on a colossal scale and I think you would be much worse of in the end if they were left to fail than if we were to bail them out. 

Just something to think about when you buy your next car and the price is jacked up by 30%, because its no longer a competitive market place because the Japanese have moved right in to fill the void. 

Sorry but I already have enough products coming from these foreign markets without having to drive a Japanese car because theres' no longer any other alternative. Been there and done that and the old analogy, it always looks greener on the other side of the fence still holds true.


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## Spanky (16 Nov 2008)

For those of you who think this is a serious question (and it actually is, in a way), *you* are responsible for making alternate arrangements. What would you do if *your* company failed? (There are plenty of RRSP and private insurance options out there). 

Easy to say if it doesn't affect you.  RRSPs and private insurance cost money.  Now where would the older workers get those kinds of funds without a job?  Don't get me wrong.  I think they are paid way too much, and the CAW has become a self-serving corporation in it's own right, but the reality is that the economies of entire cities, and their inhabitants, would be devastated overnight. 

Chrysler was given government *loans* in the past that saved them.  They managed to get their head back above water and paid it off.  A similar plan perhaps?  Any of our money that goes to these companies should come with conditions.  Conditions would have to be placed on the unions as well.  Alternate North American car companies were mentioned.  Maybe give them some assistance in becoming more well known and move to a position of legitimate competition to the Big 3.

I personally feel that our society and economy has become too dependant on the car.  This is a mistake that should be fixed or changed over a period of time, but that is a subject for a different thread.


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## GAP (16 Nov 2008)

For all the talk of bailouts and such, not once have you heard anything from CAW and the US wing about adjusting the wages downward to make any of the big 3 competive again....until that happens they should get $0.00.................


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## brave little soldier (16 Nov 2008)

:rage:

Someone will buy out the assets for 10 cents on the dollar, turf the union, change the name and re-open a week later with people making a third of the wage.

And if the old employees don't like that, they can always become partners at Walmart and Home Depot.  :crybaby:

We, North American people, have lived on a FALSE economy long enough... The American Dream has just crashed, and Canada will go through the same pains if we don't smarten up soon !

Let's face it : only half of the population is actively working and too much of our pay goes back to the government to help support the other half that doesn't... 

If someone you love came to you and said that they give 40% of their pay to a Cult Leader for eternal peace, you would have them committed ! Yet, we have been giving it to our government !  :


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## Snafu-Bar (16 Nov 2008)

There are cars being built in Toronto right now that are FULLY electric, interestingly enough NOT for sale in Canada due to our idiot government and the big 3.

 It's time to stop babying these companies and let them either stand up and walk on thier own, or fall over.

Cheers.


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## Spanky (16 Nov 2008)

GAP said:
			
		

> For all the talk of bailouts and such, not once have you heard anything from CAW and the US wing about adjusting the wages downward to make any of the big 3 competive again....until that happens they should get $0.00.................



I read a couple of days ago that the UAW has stated that they will not make any further concessions.  They feel that concessions made earlier have been enough.  A very stupid attitude to take.  I wish I remember which news source I got it from.


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## Fishbone Jones (16 Nov 2008)

Spanky said:
			
		

> I read a couple of days ago that the UAW has stated that they will not make any further concessions.  They feel that concessions made earlier have been enough.  A very stupid attitude to take.  I wish I remember which news source I got it from.



Blood sucking dinosaurs. They are headed for extinction. The hierarchy is starting to cement their positions and man the ramparts. They don't care about their members, so long as they have enough to maintain their office and position (and paycheck). The plight of the working man is no longer their concern, hence the anointment of the illiterate, desk thumping Ken Lewenza to the head position. As has been said, the CAW is no longer a union of like minded workers, intent on creating better and fair working conditions. It is now a socialist, self serving corporation, intent on driving political agenda in conjunction with the NDP. Case in point, Windsor. Where Ken Lewenza Jr (a puppet and mouthpiece for his National President father) was elected to city council by brainwashed unionists and works in conjunction with the Labour Council, run by Gary Parent, past president of the Chrysler union. This bunch has appeared before council demanding what the city should do with it's land, businesses and city agenda. They are nothing more than an extention of the NDP offices owned by Joe Comartin and Brian Masse. The only reason they have concern for the worker is because that is the source of their income.

The days of the CAW are quickly drawing to a close here. The dinosaurs will evolve into birds or go extinct to become the fossils for future generations of sociologists to pick at in history books.


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## Kat Stevens (16 Nov 2008)

We left Britain when I was a kid, largely because the trade unions had crippled the economy by pricing British labour out of the competitive market.  We moved to BC, and saw the forestry and paper unions do pretty much the same thing to BCs lumber industry in the 70s.  It was in fact a contributing factor in my career choice.  Now the auto workers are doing it to Ontario.  How does it go?  "Those who do not learn from history...something...something..."


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## a_majoor (17 Nov 2008)

A "buyout" would be much cheaper than a "bailout":

http://www.powerlineblog.com/archives/2008/11/022087.php



> No UAW Bailout
> Share Post   PrintNovember 17, 2008 Posted by John at 7:12 AM
> 
> Jim Manzi has done some of the best analysis of the proposed bailout of GM, Ford and Chrysler--or, one should more properly say, bailout of the United Auto Workers, otherwise slated for extinction. Here, he addresses the theory that the Big Three are in the midst of a turnaround, and if we only keep them afloat a while longer, they'll be profitable again.
> ...


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## a_majoor (20 Nov 2008)

More opinion:

http://volokh.com/archives/archive_2008_11_16-2008_11_22.shtml#1227141469



> [Jim Lindgren, November 19, 2008 at 7:37pm] Trackbacks
> A Simple Argument Against the Auto Bailout: A Bailout Would Destroy Jobs. I have hesitated writing about the GM bailout for two reasons. First, I like GM cars; I bought two of them in March, and every car I’ve ever bought was a GM car. Second, a professor with tenure should be somewhat circumspect in writing about the jobs of people who do not have the protections that we have.
> 
> But in watching CNBC debates on the Auto Bailout, I have been frustrated by the arguments of those who favor bailouts that government largesse will on balance lead to more employment, rather than less.
> ...


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## Michael OLeary (20 Nov 2008)

Anyne remember DEVCO?

Ottawa, Monday, May 6, 1996 



> During the course of the period since 1968, while each next year would be a "better year," I calculate that since 1968 the taxpayers of Canada have paid approximately $1.5 billion in order to look forward to that next better year. I then look at your numbers tonight. I appreciate how candid you have been with us and the difficulties that you have had as you have come into this scenario for the second time. However, in trying to understand your numbers, I think there are assumptions in your numbers that are not supported, just as there were many assumptions in the numbers before that were never supported.



Bailouts don't make companies create functional business models or profitable and sustainable practices.  Companies that get bailouts accept them as an opportunity to repeat the same bad practices year after year


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## Snafu-Bar (20 Nov 2008)

The greed and ineptitude at the top of this food chain deserves to go belly up and lose thier golden rainbows along with it. Chapter 11, no bailout, no handouts and no saviours. Chain the doors closed, wait for the auctions to end and then restart the industry with all new ownership and new personel. Put in legislation to block ANY and ALL unionized practices within the industry and start making vehicles for tommorow, not 100 years ago.

 Cheers


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## FastEddy (20 Nov 2008)

Michael O`Leary said:
			
		

> Anyne remember DEVCO?
> 
> Ottawa, Monday, May 6, 1996
> 
> Bailouts don't make companies create functional business models or profitable and sustainable practices.  Companies that get bailouts accept them as an opportunity to repeat the same bad practices year after year




Absolutely and so True.

Yes and we mustn't forget, CEO's at 9 Milion a year Salaries and  Factory Floor Sweepers at $71.00 a hour and lets not forget the Corporate Jets and Perks.

No wonder nobody wants to be a Doctor or Nurse anymore when you can work for the Big Three.

Cheers.


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## FastEddy (20 Nov 2008)

Snafu-Bar said:
			
		

> The greed and ineptitude at the top of this food chain deserves to go belly up and lose thier golden rainbows along with it. Chapter 11, no bailout, no handouts and no saviours. Chain the doors closed, wait for the auctions to end and then restart the industry with all new ownership and new personel. Put in legislation to block ANY and ALL unionized practices within the industry and start making vehicles for tommorow, not 100 years ago.
> 
> Cheers




Sure sounds good to me .

Cheers.


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## Redeye (20 Nov 2008)

I remember hearing countless times that if the 1960s they gave every Cape Bretoner a million bucks and told them never to come back it would have been cheaper than all of the money poured into DEVCO et al to try to keep the Cape Breton industrial economy going - and it's been a dismal, continuing failure - even ACOA still is doing the same thing I would guess.



			
				Michael O`Leary said:
			
		

> Anyne remember DEVCO?
> 
> Ottawa, Monday, May 6, 1996
> 
> Bailouts don't make companies create functional business models or profitable and sustainable practices.  Companies that get bailouts accept them as an opportunity to repeat the same bad practices year after year


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## retiredgrunt45 (20 Nov 2008)

> Heavily unionized businesses usually have trouble competing with non-unionized businesses. Unions are successful in getting above-market wages and benefits, which makes it difficult for the businesses to compete. In the auto industry, there are many more dealerships than necessary. And, according to Larry Kudlow, the average compensation and benefit rate for auto workers in Detroit is $72 an hour, compared to $44 an hour for foreign car workers at US plants.



And this is were it has to begin. The unions must have their wings clipped and told to curb their Mafia style tactics. Wages have to be rolled back a bit, CEO salaries and perks must to be significantly reduced. Worker benefit packages have to be toned down and workers have to start contributing something towards their own pensions, just like the rest of us do.

Both the CAW and UAW have become huge liabilities to the auto sector and it has to stop.

That's not to say there can't be some relief given to the auto sector with highly regulated terms.

I read all these articles on how every one is against giving them some relief, there's many to choose from in all the papers and on the web. I call it free lip service. Its one thing to sit behind a computer and write these erroneous artifices about how bad the auto sector is, when actually these people know little or nothing about the industry. Its actually quite funny to listen to these people place all the blame of the industries demise on only a few factors, when in actuality that couldn't be farther from the truth. But I guess it sells papers and writing a half ass story seems to be the media's way on most everything these days. If it sells papers, what the heck an little spin doctoring always helps.

I heard something this morning that rang very true and it came from a politician. If the big three were to be let fail, they would have to spend almost twice as much on EI claims than what the big three were asking for in relief. $50,000,000,000.00 on EI claims, that's a lot of zero's. It would probably bankrupt the EI system it would be so large and as more people lost there jobs and applied for EI, it would caue yet another crisis and there seems to be no shortage of those,these days.

They gave half a trillion dollars to the very people who caused this mess and what are the banks doing with that money, sitting on it, so to add fuel to the fire, we let two and a half million people walk away with pink slips, who now apply for EI and bankrupt that system, now not only do we have a banking and a manufacturing crisis, we now have put billions upon billions more into the EI system to keep it from being crushed under the weight of a now massive unemployment crisis. Can you say "Depression" I hope so,because if that happens the big "R" word won't seem so bad anymore.

I'm no fan of the auto sector either, but I wish people would stop thinking about this problem with their emotions and start looking at it in a more logical manner. The end doesn't justify the means, it will only make an already extremely fragile system that must worse and push us that much closer to a 1929 scenario and I don't think anybody wishes for that to happen, ever again.

Economics 101.


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## Michael OLeary (20 Nov 2008)

retiredgrunt45 said:
			
		

> I'm no fan of the auto sector either, but I wish people would stop thinking about this problem with their emotions and start looking at it in a more logical manner. The end doesn't justify the means, it will only make an already extremely fragile system that must worse and push us that much closer to a 1929 scenario and I don't think anybody wishes for that to happen, ever again.
> 
> Economics 101.



Hmmm, logical thought, what a concept.

Like asking how much of the automotive industry has been relying on the idea that cars/trucks are lifestyle accessories rather than means of transportation?

Or asking what portion of a vehicle's cost is merely underwriting an unnecessary annual cosmetic redesign loop?

Or asking what portion of a basic car's price only serves to underwrite losses on unprofitable but highly advertised models that are unobtainable to the purchaser of that basic car?

Or asking how they expect to be sustained by the taxpayer who has already decided to economize by not buying that new car yet?

How about asking why the Big 3 haven't created affordable alternative energy vehicles for mass production by now? Or even more economical and energy-efficient internal combustion models?  Why the continued embrace of the V-8, et. al., that has really only been milking egos and disposable income for decades.  Just because the public is watching that disposable income more closely is no reason to force them to give it up in a bailout funded by taxation.  You can't blame the Big 3's troubles on a more prudent public.  They created a poisoned business model kept afloat by aggressive advertising and it is unfortunate that many people will likely suffer for their continued arrogance.

Logical thought is indeed required, and is long overdue in the automotive industry.


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## Snafu-Bar (20 Nov 2008)

retiredgrunt45 said:
			
		

> And this is were it has to begin. The unions must have their wings clipped and told to curb their Mafia style tactics. Wages have to be rolled back a bit, CEO salaries and perks must to be significantly reduced. Worker benefit packages have to be toned down and workers have to start contributing something towards their own pensions, just like the rest of us do.
> 
> Both the CAW and UAW have become huge liabilities to the auto sector and it has to stop.
> 
> ...




 A chapter 11 scenario would not be at all an impending doom on the economy or the industry itself. The public demand for transportation will not diminish in the slightest. However due to forclosure at the big 3 allows for opportunity from the likes of Toyota Honda and other offshore companies to swoop in and grab the tender cuts off the carcasses while the getting is good. This means the parts and pieces they find "usefull" will be salvaged and put to good use. That means parts plants and companies supplying the big 3 won't be left in the cold very long. It will however mean the big 3 will no longer be and the very greed and corruption will cease. The vehicles themselves will be either re-tooled and remarketed or be dropped in favour of something economically viable for the current downspiral of the econonomy as it stands. Hence you go back to the basics and start over once again. People will inevitable lose thier jobs and they will be forced out to the UE lines and that's part and parcel of the system. When the system is being drawn under strain to due having an industry IMPLODE such as the auto sector it's far better to INVEST those dollars in the "system" than invest them back into the failing industry for the greedy bastards to use at thier own discretion.

 Hurry up and fail and be done with the dinosaurs of greed...

 Cheers


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## a_majoor (20 Nov 2008)

Let's look at how well the Big Three have done with two previous handouts, shall we?

The money the McGuinty government threw to the Auto sector ($200 million +), but jobs had to be cut anyway.

The $800 million the Big Three got from the Clinton Administration on the Partnership for Next Generation Vehicles, which resulted in *not one* new hybrid reaching the road before Toyota and Honda started selling their (non taxpayer subsidized) hybrids. (Indeed, the Big Three still have very few hybrids, and some are a simple waste of time and money like the Cadillac Escalade hybrid, which gets the same milage as a Buick Enclave luxury SUV which weighs 1000 lbs less and has a V6 and six speed transmission).

They will be back in a year or two (they loose cash at a rate of $2 billion a month, how long will $25 or $50 billion last at that rate?) for another bailout, then another, since they are not being forced to change their dysfunctional behaviours. End it now.


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## retiredgrunt45 (20 Nov 2008)

> Let's look at how well the Big Three have done with two previous handouts, shall we?
> 
> The money the McGuinty government threw to the Auto sector ($200 million +), but jobs had to be cut anyway.
> 
> ...



Yes we all heard the stories about the what ever and what ever, but that doesn' diminish from the facts that putting two and half million people out of work because of bad decisions made by a few top executives is not a recipe for disaster. 

My question is why aren't you having the same mindset towards the banks who caused this fiasco in the first place and ended up receiving ten times the amount of money and are now, just sitting on it? Why? 

People love criticizing the auto industry but love buying and driving your cars. A bit hi procritical don't you think?

If you placed conditions on the relief, then no they couldn't come back. In the past governments just threw money at them and that didn't help and we all seen what happended, but if you place strict rules on that money, they have no choice but to pull up or pull out. 
But to just say oh what the hell, let them go, it would be a big difference if that was any of you who was told that maybe next week you wouldn't have a job, now wouldn't it?
Before you go of and be judge jury and executioner, put yourselves in their shoes and then see if your still willing to let them go. Its always easier to criticize from a distance than it is to be the one in the hotseat.

As I said in one of my earlier posts, the next time you buy a car and its more expensive because the Japanese have filled the void from the big three and theres no more competition, are you going to say then, oh well to bad so sad. No your going to holler like the rest of us ask, why are prices now so high? 

Well I'm very happy that the decision isn't up to any of you.


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## Brad Sallows (20 Nov 2008)

Essentially all the TV manufacturing ceased in NA long ago; I suppose we must be buying more expensive TVs now because the Japanese etc filled the void and there's no more competition.

Here is the problem: the only way to bail the auto manufacturers out of their pension commitments and benefits, among other costs that they are about to be unable to carry, is to raid my pension and benefits.  This is unavoidably true because dollars in government hands are fungible.  Is my pension protected?  I think a small part of it lies where is theoretically protected by deposit insurance, but that is all.

If we are to have bailouts in general, and if we are in particular to have governments backstop pension funds, then I would like to see some equal protection and benefit of the law.  If his pension is to be guaranteed against loss, then so is mine.  If his salary - not his EI - is to be guaranteed in some fraction against loss, then so is mine.

While I admit to some antipathy toward unions which exhibit the worst characteristics of the archetype, the objective truth is that workers have a right to negotiate with the business for a share of the business proceeds.  This applies equally to workers who nominate a union as a bargaining agent, and workers who act as their own bargaining agents.  It is up to the prospective employee to cooperate with the prospective employer to ensure there will be business proceeds to share.  If between them they break the business model, there should be no recourse to third-party compensation that is not equally available to every other person.

If you are foolish enough to ask a weak-minded employer for something as absurd as a "job bank" (or powerful enough to extort it), you are entitled to a full share of the benefit and obligated to endure a full share of the consequences.


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## brave little soldier (20 Nov 2008)

People love criticizing the auto industry but love buying and driving your cars. A bit hi procritical don't you think?

There is absolutely nothing as fabulous as being behind the wheel on my yellow Crossfire, top down, hair all over the place, sun on my face... A little pink macho going on...

But I think my hard earned tax dollars would serve me better if they were invested into the construction of a subway across Ottawa : auto workers will be building wagons for Bombardier (another $$$ eater) and people will commute in and out of the city with a smile on their faces.


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## Snafu-Bar (20 Nov 2008)

retiredgrunt45 said:
			
		

> Yes we all heard the stories about the what ever and what ever, but that doesn' diminish from the facts that putting two and half million people out of work because of bad decisions made by a few top executives is not a recipe for disaster.
> 
> My question is why aren't you having the same mindset towards the banks who caused this fiasco in the first place and ended up receiving ten times the amount of money and are now, just sitting on it? Why?
> 
> ...



 You state that two and a half million people will be out of work? How long do you think it would take for someone or some corporation to come into the auction and buy out the assets and restructure the business for resuming business? It's not rocket science going on here, it's called letting go and watching the pheonix rise from the ashes. Without failure success cannot be achieved. It time the big 3 go the way of the dodo(pun befitting and intended) and someone else to rise up in thier places to provide the populous with a viable product worth the money to spend on it.

 Toyota and Kia already have plants here in canada and are expanding due to market share gains, the public will not be completely screwwed if the big 3 absolve. They will be divvied up to the highest bidder. The unions will lose thier place and be left out in cold where they belong, and we move forward.

 Prices are HIGH becuase of the UNIONIZED lollygaggers wanting 90 an hour with 150% coverage across the board with 6 months paid holidays a free car every year and a gas voucher = to 25,000 a year. But hey it's a tough job working for the big 3... i mean they do have to go on strike at the hint of the place actually having to produce vehicles and making money  :

 Cheers.


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## Brad Sallows (20 Nov 2008)

Two and a half million people are not going to be out of work.  The problem is that Ford, GM, and Chrysler aren't selling enough product to meet their negotiated obligations to their workers; it isn't that Ford, GM, and Chrysler aren't selling any product at all.


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## SeaKingTacco (20 Nov 2008)

I seem to remember a certain airline named Air Canada going bankrupt less than 5 years ago...

You will perhaps note that Air Canada is still with us today.  Sometimes, bankruptcy is the best thing that can happen to a company.  It focuses the board and shareholders wonderfully on solving problems.

Let. Them. Fail.

The world will not end.


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## Michael OLeary (21 Nov 2008)

retiredgrunt45 said:
			
		

> People love criticizing the auto industry but love buying and driving your cars. A bit hi procritical don't you think?



I have to say that made me laugh.  I didn't get a license until I was 30 because I didn't need one.  I drive a 13 year old Ford Aerostar.  The automotive industry's successes and failures have not been a result of any hypocrisy on my part.  I will not shed a tear over the demise of a bloated dinosaur that thinks convincing people they need a monster pick-up truck or SUV to go buy milk is a sustainable business model.


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## Marshall (21 Nov 2008)

I hate the idea of bailing out companies like this. Lets get that new German car company over here in the next few years.. They are supposedly making a vehicle that is 2x the savings of a Smartcar.. (but full sized, some lightweight bottom heavy frame) too bad I can not remember the name of it since it was about 2 months ago I read on it.


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## medaid (21 Nov 2008)

Want to hear something... funny?

Well I was watching the US Senate committee on this whole economic hand me down thing, and the person who did this cracked me up.

Speaker: Just so I understand... and can put things into perspective. How many of you, CEOs of major corporations came down here today asking for a grant in your own private charter flight?

CEOs all put their hands up.

Speaker: Let the record show that all of them did.

CEOs all put their hands down.

Speaker: So, once you've received this grant, how many of you are going to take a charter back? 

CEOs all put their hands up.

Speaker: Let the record show that all of them did.

CEOs put their hands down.

Speaker: Now what if... you don't get this grant. How many of you are willing to abandon your charter, and fly commercial, so that that money may be put towards your employees' severance pay?

*cricket* *cricket*

Speaker: That's what I thought. Let the record show that NONE of them put their hands up. 


...classic....


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## Brad Sallows (21 Nov 2008)

The irony being, what steps will the guy in the questioner's chair and his peers take to minimize their own expenses so as to ease the burden on the taxpayers who are ultimately liable for the decisions to be made.


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## RangerRay (22 Nov 2008)

I have a Mazda truck, which is just a Ford Ranger built at a Ford plant with a Mazda sticker slapped on.  Is it a "Japanese" truck?  Am I in trouble if Ford sinks?


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## chanman (22 Nov 2008)

RangerRay said:
			
		

> I have a Mazda truck, which is just a Ford Ranger built at a Ford plant with a Mazda sticker slapped on.  Is it a "Japanese" truck?  Am I in trouble if Ford sinks?



Ford owned a minority stake in Mazda (bit over 30%), of which they have sold a good portion recently.  Your warrantee will not go down if Ford does.


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## HunterADA (22 Nov 2008)

I'm an average young American. I make a little more than average, but not terribly so. My work absolutely requires that I have transportation 24/7/365, and because I'm locked into a 4 year contract, that's not going to change anytime soon. So I need a car. Matter of fact, I'm looking for a new car during this next year. The used car I'm driving right now will last me at least another year, but I'm not too sure beyond that.

I don't need a Corvette. I sure as heck don't need a price tag that's comparable to my yearly salary in these economic times.

I don't need a big pickup truck. With gas the way it's been lately, I couldn't be sure of filling it up for less than $100 anyway, and that's with the ridiculously cheap American fuel.

I need something with 4 wheels that runs. Air conditioning is optional. Try to charge me an extra grand for a transmission that does what I can do better with my right hand and I'm going to laugh.

So what's available for this first time new car buyer?

What's more American than a Jeep? Not much. But for $20,000, I can buy a lot of flags.

Ford? $15k gets me a Focus with A/C and even an MP3-capable CD player. Their Mercury badge line is out, nothing there for under $20k.

Or Chrysler? Their Dodge Caliber at 15.7 isn't too bad. Of their own brand, the PT Cruiser will redefine fugly for me at a hair under 18.

Maybe a GM model. The Pontiac Vibe is an entry-level vehicle, for $16,000. Looking further, we may have a winner! Their Aveo sedans and hatchbacks start at $12,000.

Looking around the imports, the MAZDA3 and Honda Fit sit at $14.5k, Nissan Versa is at $13k, the Yaris is even lower at $12k, and both Hydunai's Accent and the smart fortwo drop the price bar to 11 and 11.5, respectively.

So, among the lowest-priced, entry-level cars out there for a new buyer on a budget, there is precisely one American car out of seven under $15k, and a second sitting right on that line. The margins and gross profits in the first-car market are tiny compared to an SUV or V8-driven oversized sedan. But market research shows time and again that the 20 or 25 year old who buys a budget car and drives it for a few years turns into the 40 year old who buys your luxury sedan. Fail to compete in that segment of the market and you fail to capture the brand loyalty that helps you throughout your product line.

Sometimes you need to get smacked across the face with a cold, wet fish before you wake up. It doesn't look like the Big Three are there yet.


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## chanman (22 Nov 2008)

The Vibe is a rebadged Matrix.  The Aveo, Optra, Wave, are Daewoos.  I think the only GM small cars designed in-house right now are the HHR and the Cobalt/G5 twins.  The HHR is assembled in Mexico making the only GM small (compact or subcompact) cars assembled inside the US... the Cobalt/G5 and the rebadged Toyota.

It's a funny world, but at least we can expect that GM won't be lobbying for tarriffs this time around - not if they want to actually have small cars available to sell.


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## Lil_T (22 Nov 2008)

I don't think a bailout is the answer, and it's certainly not going to heal any of the serious, serious problems plaguing the Big Three.  Not this late in the game.  I think the only sensible solution to this problem is massive restructuring, and getting rid of (or remodeling) the union.  Being that they don't want to budge a single inch on wages and benefits, I think they're going to be in for an awful shock when the Big Three have to say, okay, well, we're just going to have to shut it all down.  Then no one will have a job.  The entire situation is ridiculous.  

I'm just concerned for my in-laws.  If GM goes belly up and they lose their pensions, what will become of them?


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## Michael OLeary (23 Nov 2008)

Lil_T said:
			
		

> I don't think a bailout is the answer, and it's certainly not going to heal any of the serious, serious problems plaguing the Big Three.  Not this late in the game.  I think the only sensible solution to this problem is massive restructuring, and getting rid of (or remodeling) the union.  Being that they don't want to budge a single inch on wages and benefits, I think they're going to be in for an awful shock when the Big Three have to say, okay, well, we're just going to have to shut it all down.  Then no one will have a job.  The entire situation is ridiculous.
> 
> I'm just concerned for my in-laws.  If GM goes belly up and they lose their pensions, what will become of them?



Firstly, if governments decide there "has" to be a bail-out, it would be cheaper to just underwrite the pension plan than to fund the rolling catastrophe of the Big 3.

Secondly, as previously mentioned, any vacuum caused by the "threatened" disappearance of the Big 3 would quickly be filled by others taking over the useful assets and working to take over that market share of automotive sales. The failure of the Big 3 doesn't mean that demand for vehicles disappears, or that the infrastructure and workforce evaporates. It does mean that a new business model can evolve, leaner and more effective for today (instead of demanding tax dollars to sustain yesterday's illusions).


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## Lil_T (23 Nov 2008)

That's a good point you make as far as underwriting the pension fund.  



> Secondly, as previously mentioned, any vacuum caused by the "threatened" disappearance of the Big 3 would quickly be filled by others taking over the useful assets and working to take over that market share of automotive sales. The failure of the Big 3 doesn't mean that demand for vehicles disappears, or that the infrastructure and workforce evaporates. It does mean that a new business model can evolve, leaner and more effective for today (instead of demanding tax dollars to sustain yesterday's illusions).



Another good point.  I'm sure there are plenty of fledgling (or established) automotive companies just waiting for space in the market to open up.  But in the interim between failure of the big 3 and new/ other companies commencing operation our unemployment rate is going to increase exponentially.  Hopefully there will be a sensible solution to this whole debacle and soon, though I'm not counting on it.


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## a_majoor (3 Dec 2008)

It looks like the supposed saviour of GM is really an overweight "Rube Goldberg" contraption. Series hybrids can be useful (most locomotives, the giant trucks at mine sites are series hybrids, and military applications can be easily envisioned: imagine a series hybrid LAV doing a silent runup). Without the 1000lbs of batteries, electric motor, control electronics etc. you would have a car that is much lighter, cost 1/2 as much and probably have similar performance (and would not have been under development since 2003(?) but on the market already).

Sorry guys, but the Chevy Volt was one of those "cool" ideas that didn't survive contact with the real world.

http://www.technologyreview.com/energy/21387/?a=f



> *Is GM's Volt Ready to Roll?*
> The production design is ready, but the electric vehicle's battery needs work.
> By Kevin Bullis
> 
> ...


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## tomahawk6 (4 Dec 2008)

The Senate lacks the votes to approve this loan to the car companies. Instead the Senate will allow $25b previously allocated for green cars to be used by the big 3.


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## a_majoor (4 Dec 2008)

Slogan for a T-shirt or bumper sticker:

"*You gave them a bail out, now I can't afford a car. Good thinking.....*"


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## KingKikapu (6 Dec 2008)

While it is a "bailout", it is also a *loan *that will make the government a small amount of net present value money.  That is of course assuming the big 3 survive.  It's a risky investment to be sure, but there are 3 million auto worker jobs and 5 million support jobs on the line.  Of course they were going to do it.


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## Edward Campbell (6 Dec 2008)

Please don’t forget that Tata (India) and Chery (China) are both reported to be only a year or so away from being ready to make cars that will meet North American technical standards. The trick will be to produce them in quantity and, more importantly, to *competitive* price/quality standards. That can be accomplished by buying and retooling existing plants and hiring skilled, experienced assembly line workers – albeit for lower wages than the big three paid to CAW/UAW workers.

A $(CA)10,000 four passenger compact will sell – remember the Hyundai _Pony_? And, despite (inevitable) problems with reliability and quality (which now _respectable_ Hyundai and Kia suffered - even the Honda Civic was junk in the '70s and early '80s) it is likely that Chery and Tata will grow and prosper in North America by building and selling the cars we need in the plants the big three will be forced to close – bail outs or not.

Many plants will close, with or without taxpayers’ money. Many, many workers will be out pounding the pavement, with or without a bail out. *But* a turn around will come, probably in/around 2010, and people will want new cars again – just not the expensive behemoths GM and Ford make now. It is likely that companies like Tata and Chery will have the cars we want in production, made by Canadian and American workers in Canadian and US plants, when we want them.

By the way, be prepared to have you car deader collocated with large Canadian Tire retailers in your area – one or two dealers in a city like Halifax or Saskatoon, maybe three in Calgary or Ottawa and four in Vancouver, Montreal and even Toronto. You will probably shop on line and take delivery at the Canadian Tire retailer which may, also, have the warranty servicing contracts for two or three Asian world auto brands.

One or, more likely two of the big three will not die, completely, if they are not bailed out, but they will be much smaller and will  likely specialize in larger cars, vans and trucks as they work hard to find their _niche_ in the still rich North American market.


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## armyvern (6 Dec 2008)

brave little soldier said:
			
		

> Let's face it : only half of the population is actively working and too much of our pay goes back to the government to help support the other half that doesn't...
> 
> If someone you love came to you and said that they give 40% of their pay to a Cult Leader for eternal peace, you would have them committed ! Yet, we have been giving it to our government !  :



OK ... keep your 40%.

No healthcare for you or your spouse. Nor for your kids. No free schooling for your kids. You can fork out the 10K a year each it costs to send them off to Private Schools from your pocket. No fire service should your house catch fire. No police to help you if you're in an accident. ... and on an on and on. No military or other services coming in to help you out should forest fires threaten your lives and homes or floods. Gawd forbid no military resources to fight off an enemy invader ... Oh - and most of all - no government money forthcoming to pay for food for your kids should you be left without a job all of a sudden ...

 :

I'll continue paying my 40% thanks very much ... I actually prefer it. The benefits far outweigh the alternative. The vast majority aren't abusing the system. Why should the rest suffer for those few sycopants and cretans?


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## missing1 (6 Dec 2008)

Army Vern

Very very well said, so many fail to stop and think where the taxes go.


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## a_majoor (7 Dec 2008)

missing1 said:
			
		

> Army Vern
> 
> Very very well said, so many fail to stop and think where the taxes go.



Sadly, far too much in the way of taxes does NOT go to the Military, Police, protective services and Courts of Law (the essential minimums of Government). Much too much goes to the bureaucracies that surround the various government services, and often these services are available at very competitive prices from the private sector. Compare government provided garbage collection with multiple fleets of trucks picking up garbage, blue boxes, green boxes etc., carrying them to different facilities and processing three small streams of waste (using union labour and a big "front office" of unionized city workers to "supervise" them) with private garbage collection that uses one fleet of trucks and workers, delivers the waste to a "single stream" processing plant and sorts and recycles the usable stuff on the spot.

WRT the bailout; like Edward said, you can still buy cars from non "Big Three" manufacturers, and more are on the way. (Read back in this thread and you will find *ten* US companies that have cars ready for market). As well, Jeep will probably survive on its own, Chevy might only make the Corvette, Dodge might only make the iconic minivan and Ram pickup truck etc. Instead of the Big Three stifling competition and innovation, we might see the "Little 20", and many of these companies will need the services of the manufacturing industries that exist to service the Big Three, so millions of jobs will be secure. 

Finally, since the American Auto Industry management and Unions have no plan to seriously restructure, the money being given in the bailout is just going to be burnt up in about two years, and they will be back for more of *your* money. The market cap for the Big Three combined is @ $7 billion USD; Stephen Harper could conceivably buy them all for less than the bailout would cost and then auction off the viable products (Jeep, Minivans), the factories, the land and the tools, make a bit of money and start a rebirth of the North American Auto industry for a fraction of the price of a bailout.


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## KingKikapu (8 Dec 2008)

Thucydides said:
			
		

> Sadly, far too much in the way of taxes does NOT go to the Military, Police, protective services and Courts of Law (the essential minimums of Government).


Let's not forget medical and education while we're at it.  Those are also essential.  I'm sure people could argue for a few more.


			
				Thucydides said:
			
		

> Instead of the Big Three stifling competition and innovation, we might see the "Little 20", and many of these companies will need the services of the manufacturing industries that exist to service the Big Three, so millions of jobs will be secure.


Maybe.  You can't just substitute twenty players for three and expect the manufacturers to be secure.  These companies have different sizes, production requirements, infrastructures, yadda yadda.  It's like jamming a square peg into something set up for a circle socket.

The problem with 20 market players means their products will ultimately need to be more carefully segmented.  Such specialisation makes it a real nightmare for the parts manufacturers; it would require them to hold huge amounts of inventory to support so many automakers, and a lot of it probably wouldn't be compatible with the other auto makers. The parts manufacturers would then have a pretty crappy choice on their hands; produce parts only for a few companies (thereby tying their wellbeing to a few untested automakers), or produce parts for a great many of them, but suffer from bloated inventories, credit issues, and low liquidity ratios.  



			
				Thucydides said:
			
		

> The market cap for the Big Three combined is @ $7 billion USD; Stephen Harper could conceivably buy them all for less than the bailout would cost and then auction off the viable products (Jeep, Minivans), the factories, the land and the tools, make a bit of money and start a rebirth of the North American Auto industry for a fraction of the price of a bailout.


No.  You buy the company, you incur the fiduciary responsibilities of the company.  The last thing Canada wants is to take on those pension plans, among other things like the amassing debt.


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## TCBF (8 Dec 2008)

KingKikapu said:
			
		

> ... No.  You buy the company, you incur the fiduciary responsibilities of the company.  The last thing Canada wants is to take on those pension plans, among other things like the amassing debt.



- GM is a health care and pension provider that also builds cars on the side.  Bail-out the pension plans - let the companies fail.


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## Flip (8 Dec 2008)

When news of this "problem" first broke the very next thing I heard on the radio was "the union has given enough concessions".

I see this as an opportunity.  The companies don't evaporate if they need Chapter 11 protection. They restructure.
There is no good reason for the big three to struggle much less fail.  They need to address the reasons that exist.

The bailout will serve as a way for the government to buy into a restructuring plan.  Government is not in a position to legislate restructuring.
Restructuring in this manner will lead to the wrong result anyway.

Another issue is the obscene executive "compensation" in the US and to a lesser extent Canada.  I am a fully commited capitalist, but when a single executive is deemed to be worth hundreds of other employees we have a distortion. Unions exist to at least in part remedy this distortion.
If management robs the cookie jar - the unions' rank and file will rob the cookie jar the shareholders get what's left and there's nothing left to run the company on.  North American engineering culture could use a little shot in the arm as well, not much hope of that. ( as Dilbert wept )


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## Michael OLeary (8 Dec 2008)

KingKikapu said:
			
		

> You can't just substitute twenty players for three and expect the manufacturers to be secure.  These companies have different sizes, production requirements, infrastructures, yadda yadda.  It's like jamming a square peg into something set up for a circle socket.



But those "little 20" won't all be trying to compete in every vehicle market sector, like the "big 3" do.  The little 20 would be market niche corporations picking the profitable elements out of the morass of the big 3's collapse.   The big 3 have created a market bloat as they fight for share in a world that was build on a dependence of you or me being a "Ford guy" or a Chevy guy" our entire lives.  That's not true anymore (at least not like it once was) and the big 3 have never created a realistic marketing model that accepts that they no longer exclusively own the North American market.

This is a "disaster" of their own making, bailing them out now only postpones their collapse, because they have no long term plan except to keep asking for more money to maintain the state of tragedy they want to convince us exists.  Evolution in industry is not necessarily a bad thing.


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## a_majoor (8 Dec 2008)

KingKikapu said:
			
		

> Let's not forget medical and education while we're at it.  Those are also essential.  I'm sure people could argue for a few more.



That is exactly the problem; people are arguing and conniving for a few more at your and my expense. Military, Police and the Courts of Law cannot be dealt out to the private market in a society like ours (although in the past they actually were; see the Middle Ages), but virtually any other service that you can name can be provided by the free market, and usually at a better price and service than the bureaucratic "public service" provides.

Education? Do you want public schools where most of the money is vacuumed into pay and benefits while students share textbooks?
Health care? The current system treats patients as a drain on resources due to the perverse incentives built into the system. The idea outcome in our system is for you to die before you access expensive treatments.
Garbage pickup? Roads? Broadcasting? Art? There are no services that cannot be provided by the private sector, and once this fact is accepted and the parasites who can only survive by feeding off the public are sent packing, the better off we all will be.


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## KingKikapu (8 Dec 2008)

Michael O`Leary said:
			
		

> But those "little 20" won't all be trying to compete in every vehicle market sector, like the "big 3" do.  The little 20 would be market niche corporations picking the profitable elements out of the morass of the big 3's collapse.   The big 3 have created a market bloat as they fight for share in a world that was build on a dependence of you or me being a "Ford guy" or a Chevy guy" our entire lives.  That's not true anymore (at least not like it once was) and the big 3 have never created a realistic marketing model that accepts that they no longer exclusively own the North American market.
> 
> This is a "disaster" of their own making, bailing them out now only postpones their collapse, because they have no long term plan except to keep asking for more money to maintain the state of tragedy they want to convince us exists.  Evolution in industry is not necessarily a bad thing.


I think you misunderstood what I was trying to convey.  I already stated that the 20 companies would have to specialize their products in order to survive (which you have also aptly noticed).  Here's the problem:  even if the new auto manufacturers pick out profitable elements (as you put it) that in no certain circumstances mean the auto *parts* manufacturers can support this new collection of auto makers.  The parts manufacturers can either produce parts for a few specific makers and consequently tie their wellbeing to them, or they produce parts for all of them.  The latter option is a terrible idea.  Given the previously mentioned specialisation of these new companies, there is very little hope of mass scale part interoperability like there currently is for the big 3.  This small scale interoperability means the part manufacturers have to carry more company specific stock even when there is relatively low demand (compared to now) for one specific company's products.  The part manufacturers will suffer serious cash deficiencies because a large portion of their money will be tied up in slow moving inventories, which means they will have to finance more to stay afloat in the product cycle lulls that are endemic of the auto industry.  As most people have noticed, it is a lot harder to acquire loans these days.  Any banker worth their salt would look at these industry changes as tough times a comin' and be somewhat cautious in lending money to such in such a volatile market/situation.  Serious restructuring of the parts system would have to happen first, and who necessarily wants to put their money on the line at this moment to see that through when the auto makers (asia and europe included) themselves are in rough waters?  

I would also like to point out that the current situation is not entirely the big 3's fault.  They certainly have their share of the blame, but you can also add investment bankers, the US government de-regulating their banks (thank your lucky stars Canada didn't follow suit), the fluctuating price of oil for the last 40 years, the waning US collective buying power of oil in the last 25 years, the Nixxon administration changing the gold standard, as well as both the Vietnam and Iraq wars.  I'm dead serious about all of those factors.  There has been a LOT leading to this day.  It would be terribly shortsighted to think this was all their own doing.  That said, they certainly have hurt their cause a few times along the way.


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## a78jumper (9 Dec 2008)

Read today on the GM site that they sold 154,000 vehicles last month down 41% year to year. On top of that they are holding an inventory of 855,000 vehicles, more than five months worth. Stop bulding cars that are not selling !


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## a_majoor (9 Dec 2008)

I find your reasoning unsound. If it is going to be difficult to be a parts manufacturer supplying parts to 20 different car companies who make products for niche markets, then how is it easier to make parts for the 20 different product lines that one "Big Three" company makes in an attempt to fill all the market niches?

Even the argument that the survival of the parts manufacturers being dependent on filling niches is true regardless of supplying a "Big Three" or "Little Twenty" company. Many product lines fail and are replaced swiftly by the "Big Three", and ACME tool and die must be able to retool at the same speed or die.

Lets face it. The market cap of these companies is a small fraction of the monies they demand, and their losses ($2 billion/month for GM alone), cannot be tidied up with a "loan" that would be consumed in two or so years. The companies need to go Chapter 11 and do a top to bottom restructuring, which means shedding liabilities like an unproductive work force ["job bank" workers in particular], uncompetitive wage and benefit packages, bloated product lines, bloated dealership networks, etc.; and working on new business plans. Rube Goldberg contraptions like the Chevy Volt should be ditched in favor of simple and robust engineering (a Chevy "Gas' without the battery pack, electric motor and control electronics would weigh about half as much, cost much less than half of the Volt's price and have similar performance and much greater reliability.)

The Market demands a robust and reasonably priced product; the Big Three have failed to supply that demand so the Japanese moved in and filled it. Soon the Indians and Chinese will be adding to the supply, and many American companies are working to enter the market. Let *them* succeed. 

Government malinvestment and regulatory failure (such as the proposed "Card Check" legislation favored by the Democratic Congress) will stifle the free market and keep good cars out of the hands of the American buyer, while transferring their hard earned dollars to the Democratic Party supporters in the UAW.

And BTW:

http://www.stephenbainbridge.com/punditry/comments/why_the_emerging_auto_bailout_sucks/



> *Why the emerging auto bailout sucks*
> 
> AP report:
> 
> ...


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## Edward Campbell (9 Dec 2008)

Here, reproduced under the Fair Dealing provisions (§29) of the Copyright Act from today’s _Globe and Mail_, is an example of the sort of _roughhouse_ politics we can expect over the next few days:

--------------------​ http://business.theglobeandmail.com/servlet/story/RTGAM.20081209.wrautoscanada09/BNStory/Business/home
 Chrysler turns up the heat on Canada
*Car maker warns production from two Ontario plants could be transferred to U.S. as it presses governments for emergency funding*

SHAWN MCCARTHY , BARRIE MCKENNA and KAREN HOWLETT AND GREG KEENAN

From Tuesday's Globe and Mail
December 9, 2008 at 1:07 AM EST

OTTAWA, TORONTO AND WASHINGTON — Chrysler Canada Inc. has warned Ottawa and Queen's Park that it could close its two assembly plants in Canada, eliminating more than 8,000 direct jobs, and shift the work to the United States if the two governments fail to provide $1.6-billion in emergency financial help.

In a 14-page restructuring plan filed with officials last week, Chrysler compares the two assembly plants in Canada with facilities in the United States that could make the models now being produced here, according to people who have been briefed on the document. “In the context, it could be seen as a veiled threat,” said one of the people. The document talks about the challenges of maintaining a “Canadian footprint” and notes the company has the “same type of plant, set up exactly the same” on both sides of the border, the source said.

Government and industry sources have been worried that the U.S. government would attach strings to its final aid package that, in the absence of Canadian assistance, would favour the companies' operations south of the border.

As officials in the two governments digested the requests by Chrysler, Ford Motor Co. of Canada Ltd. and General Motors of Canada Ltd. for $6-billion in loans, loan guarantees and lines of credit, U.S. lawmakers reached a deal yesterday that would give their parent companies a $15-billion (U.S.) lifeline.

It is hoped these funds would keep the car makers alive until after the new administration of Barack Obama takes office in late January. The amount is about half of what the car companies are asking for, and the deal gives Washington the right to buy up to 20 per cent of the companies and would put the government ahead of other shareholders in getting its money back. Congress is expected to consider the legislation this week.

The U.S. deal increases the pressure on the Canadian governments to come through with a rescue package for the companies' Canadian arms, which submitted proposals for assistance that could amount to as much as $7.2-billion (Canadian) if the auto slump deepens and GM Canada needs to draw down an additional backstop of $1.2-billion, which would be on top of a $2.4-billion initial request.

Chrysler spells out the grim prospects for its Canadian operations in its restructuring proposal. The company said it could switch minivan production out of Windsor, Ont., to a plant in St. Louis that is now idled, the sources said. Production of large sedans made in Brampton, Ont., could be transferred to a plant in Detroit.

Closing the two Canadian plants would be a devastating blow to Ontario and especially to Windsor, which has already been battered by thousands of job losses at Ford and GM operations in the city.

It would also lead to the loss of tens of thousands of jobs at auto parts makers in the two cities and elsewhere in the province. Chrysler Canada president Reid Bigland said last week that 420 suppliers in Canada account for 50,000 jobs.

“Everything depends on whether there are strings attached to the U.S money,” according the person who had been briefed on Chrysler's proposal. In the initial round of assistance so far in Washington, the Canadian side is not seeing the U.S. government insist on conditions that would disadvantage assembly plants in Canada.

Democratic lawmakers in Washington said yesterday they have a draft $15-billion (U.S.) bailout bill they believe both the White House and Congress will support. The compromise would require the Detroit Three to produce detailed restructuring plans by March 31. The government would also designate a “car czar” to oversee the rescue, according to a draft of the bill.

Ontario Finance Minister Dwight Duncan said last night that he has not seen the restructuring plans proposed by the Canadian subsidiaries of the Detroit Three. “We have to ensure that whatever the outcome of the arrangement in the United States, that it doesn't prejudice the footprint of the auto sector here in Ontario,” he said. “But we will be there to do our fair share.”

Mr. Duncan said the Canadian governments will be asking the auto makers to make a commitment to produce certain vehicles in this country in return for financial aid.

“I think one of the challenges is that any package may not guarantee everything we want guaranteed on either side of the border,” he said.

It would be relatively easy for Chrysler to switch minivan production to the St. Louis plant, which closed this fall amid the slump and a decline in the minivan market. One problem in gearing it back up, however, would be in restoring the supplier base, because some companies, such as Magna International Inc., closed nearby plants that shipped components to the Chrysler factory.

The Windsor plant outperformed St. Louis in productivity last year according to the Harbour Report, an annual study of North American auto assembly plants.

Chrysler's Brampton plant ranked fifth of six in its category – large, non-premium conventional cars. The auto maker's Jefferson North Assembly Plant's performance on the Grand Cherokee topped the mid-size non-premium utility vehicle category.

Switching production of full-sized sedans to Detroit from Brampton “is not something you could do overnight,” said one industry source.

But the source noted that both plants are operating at less than full capacity.

The third shift at the Brampton plant was eliminated earlier this year amid poor demand for the Chrysler 300 and Dodge Charger models made there. The reborn Dodge Challenger muscle car has been a hit for Chrysler, but not enough to sustain a full shift of production.

Windsor is producing minivans on three shifts a day, but some of that is production of the Volkswagen Routan, a vehicle Chrysler is building for Volkswagen AG.

The Windsor plant will cease production for all of January because of poor sales, union officials said.
--------------------​
I have said before that, bail-out or not, I expect to see only two of the big three making cars _circa_ 2015. I believe every single red cent given to Chrysler will be wasted, flushed down the toilet of expediency and into the sewer of senseless subsidies.

In any event, if the US is going to ante up with $16 Billion then, surely, Canada’s _fair share_ is $1.6 Billion divided between Chrysler, Ford and GM and a ‘stake’ in all three and a reaffirmation of the key principle of the 1965 auto pact: _for every (American) car sold in Canada, one had to be built in Canada. Each vehicle built in Canada also had to have at least 60 percent Canadian content in both parts and labour._

If we cannot get those two things then we are sending good money after bad. Bring on the Chinese and Indians!


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## Michael OLeary (9 Dec 2008)

> Chrysler Canada Inc. has warned Ottawa and Queen's Park that it could close its two assembly plants in Canada, eliminating more than 8,000 direct jobs, and shift the work to the United States if the two governments fail to provide $1.6-billion in emergency financial help.



1.6 Billion to save 8000 "direct" jobs.

1.6 Billion dollars is $200,000 per job - to continue building the same vehicles that the corporation isn't selling enough of to break even now.

And how many "indirect" jobs, maybe another 32000?  That's allowing for 4 secondary supplier jobs for each Chrysler employee.

1.6 Billion dollars, if divided between those 40,000 workers is $40,000 per worker - and still no promise of industry restructure!

Where does it end?


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## 54/102 CEF (9 Dec 2008)

We all seem to agree that they have to shrink capacity

Pulling a plant out of the Autopact would tend to do that.

Politics starts at home - and no Canadians voted for Obama. 

But he is a good friend ......

Invest today for tomorrow

Payoff the factories and you have no equity

Get a piece of them and you have their attention

Legislate inefficiency off the road

Carpools from 7-9 and 3-5

Its all within any party`s power.

To answer Michael`s question on where it ends - how about LEADERSHIP?


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## a_majoor (9 Dec 2008)

$1.6 billion to save 8000 autoworker jobs (and for how long? Chrysler's owner Cerberus Capital Management LP refuses to invest any more money, which says a lot), when the same *$1.6 billion is the resources required to create 32,000 full time jobs*. This is a vast net loss to the Canadian economy and should be turned down flat.

Anyway, the future seems clear as far a Chrysler is concerned:

http://online.wsj.com/article/SB122849949643583239.html?mod=googlenews_wsj



> *Chrysler Hires Law Firm Jones Day as Bankruptcy Counsel*
> 
> Chrysler LLC has hired a prominent law firm to provide counsel on a possible bankruptcy filing, people familiar with the matter said, adding to concerns the auto maker could go into default by the end of the month.
> 
> ...



Interested investors should stand ready to purchase the "Jeep" brand, the tooling for the minivans and perhaps the MOPAR performance franchise; three niche markets that Chrysler did have some success in.


----------



## Flip (9 Dec 2008)

Here's a cool little video link someone send me.

http://info.detnews.com/video/index.cfm?id=1189

As anyone can see, the company ( Ford ) is not the party that refuses to learn.
The video places the blame squarely with the UAW.


----------



## Greymatters (9 Dec 2008)

The whole point of capitalist based society is 'supply and demand' - how will this money force consumers to buy cars they cant afford?  

Whats the point of saving the job if no one buys the product?

Any other company would go out out of business...


----------



## Bruce Monkhouse (9 Dec 2008)

Greymatters said:
			
		

> Any other company would go out out of business...



..and don't think lots of company lawyers have the "feed us" papers already drawn up and ready to file the moment any money goes to the Big Three.


----------



## 54/102 CEF (9 Dec 2008)

Greymatters said:
			
		

> Whats the point of saving the job if no one buys the product?



Buy time

If they're toast it will become clear to all soon enough


----------



## Michael OLeary (9 Dec 2008)

54/102 CEF said:
			
		

> Buy time



At this point I think it's more "delay the inevitable."


----------



## Greymatters (9 Dec 2008)

Michael O`Leary said:
			
		

> At this point I think it's more "delay the inevitable."



More of a refusal to accept reality...


----------



## 54/102 CEF (10 Dec 2008)

Greymatters said:
			
		

> More of a refusal to accept reality...



Here's the reality http://www.nytimes.com/2008/12/10/opinion/10friedman.htm

And it applies to everyone


----------



## FastEddy (10 Dec 2008)

54/102 CEF said:
			
		

> Here's the reality http://www.nytimes.com/2008/12/10/opinion/10friedman.htm
> 
> And it applies to everyone




Excellent read, Boy ! does it hit the nail on the head. And I'm guessing that their line workers are not making $71.00 ph USD, or CEO's 24, mil a year.

Cheers.


----------



## imjustsomeguy (12 Dec 2008)

Let the big 3 fend for themselves. 
What about the 10 000 BC forestry jobs that have been lost in the last little while? Everybody in the industry here on the North Island (Vancouver Island) is out of work for an indefinite amount of time. 
There is NO talk about bailouts, handouts or any kind of "out". Just bleak outlooks for the future and a lot of worried families. 

In my opinion, the dice should be rolled and the strong will survive. However, public money should be spent to assist those who are displaced. People should be offered retraining with little or no hoops to jump through and the EI program should get an overhaul to make it more accessible to those in need. 

We cannot "force" people to buy our products. There is no miracle bailout that will save ANY industry. Throwing taxpayer money at any of these companies will not solve any problems...it will only make a "taxed to death" society worse when taxes increase to regain the billions of dollars that will be spent on bailouts. 

my $.02 ... I am not an economist...just a taxpayer and displaced worker offering an opinion.


----------



## Greymatters (12 Dec 2008)

imjustsomeguy said:
			
		

> However, public money should be spent to assist those who are displaced.



There are some programs that do this already in place, but they are not in every community and the scope of assistance is limited...


----------



## imjustsomeguy (12 Dec 2008)

Greymatters said:
			
		

> There are some programs that do this already in place, but they are not in every community and the scope of assistance is limited...



Very true...there are a few programs around. I should have made a point to say " MORE public money should be spent". 
There should be more of these programs and aimed at a wider scope of the public as well. There is government assistance available, but not enough, IMO.


----------



## FastEddy (12 Dec 2008)

imjustsomeguy said:
			
		

> Let the big 3 fend for themselves.
> What about the 10 000 BC forestry jobs that have been lost in the last little while? Everybody in the industry here on the North Island (Vancouver Island) is out of work for an indefinite amount of time.
> There is NO talk about bailouts, handouts or any kind of "out". Just bleak outlooks for the future and a lot of worried families.
> 
> ...




Its nice to hear someone else is angry out there. I don,t know what the average Logging industry wage is but I don't care !, theirs is a Hands on job, full of hazards, tough working conditions and probably few perks and has a far more useable and marketable product.

But the Corporate World can find 24 Milion Dollars a year for CEO's because they have a LL.B and belong to the Good Old Boys Club. Who probably can't even screw a light bulb in. It's is certainly not because they know how to run their Companies who are near in Bankruptcy. 

And Please don't go with, Well its the Market.

We hum and haw or can't find dollars to put into our Health Professionals Wages and system which have our Lives in their hands.

Just a point, who would you rather have:  A $200k per year Brain Surgeon operate on your child. or One of the Big three CEO's at $24 Milion per year. Please no Apples and Oranges Song. You get the point.

Rant Off.

Cheers.


----------



## imjustsomeguy (12 Dec 2008)

Good rant, FastEddy.

That $24 million salary should be at $250k ...TOPS. Public travel like the rest of us
 The people who are paid to protect us, fix us and even our heads of government make far less than this. There are no apples and oranges...only common sense.


----------



## Infanteer (13 Dec 2008)

imjustsomeguy said:
			
		

> That $24 million salary should be at $250k ...TOPS. Public travel like the rest of us
> The people who are paid to protect us, fix us and even our heads of government make far less than this. There are no apples and oranges...only common sense.



Funny how when times are good, we're all capitalists - "Let the Good Times Roll Baby!"

When times are bad, we're all socialists - "250K Tops!".

Should we be consistent and apply this across the board - 32K a year Tops for the average forestry worker?  Yay to a centralized economy!


----------



## zipperhead_cop (13 Dec 2008)

Things will certainly get interesting in Windsor.  I'm morbidly curious what the crime rate will look like when the hundreds of functional alcoholic/pot/pill/crack heads that work the lines suddenly have no income.  
(and don't get all pissy thinking I'm panning _all _ auto workers.  Hundreds is accurate)

And I offer a timely email.


----------



## Kirkhill (13 Dec 2008)

Infanteer said:
			
		

> Funny how when times are good, we're all capitalists - "Let the Good Times Roll Baby!"
> 
> When times are bad, we're all socialists - "250K Tops!".
> 
> Should we be consistent and apply this across the board - 32K a year Tops for the average forestry worker?  Yay to a centralized economy!



You want consistency?  Now?  Why?


----------



## FastEddy (13 Dec 2008)

Infanteer said:
			
		

> Funny how when times are good, we're all capitalists - "Let the Good Times Roll Baby!"
> 
> When times are bad, we're all socialists - "250K Tops!".
> 
> Should we be consistent and apply this across the board - 32K a year Tops for the average forestry  Wellworker?  Yay to a centralized economy!




Nobody here is against Capitalism, its what we are all about on both sides of the boarder.

But what's the matter with getting proportionally paid for what you do and not who you know. Nobody has mentioned putting a Cap on payment for performance..

And you do it all the time, How much do you tip your paperboy, how much to the guy who cuts your grass. Its a probability you don't even leave a decent tip if the restaurant food was iffy. Or regardless of the task  would you pay out , lets say $1,500.00, sounds stupid eh.

Maybe your worried if it was the case you'd be making minimum wage. 

Good luck to those Millionaires who have acquirered their wealth through hard work, creativity and actual contributions. I'd start the list with Bill Gates.



Grammar Edit.


----------



## The Bread Guy (13 Dec 2008)

Meanwhile, on our side of the border, from Canadian Press...


> *The federal and Ontario governments have agreed to provide up to $3.3 billion for the Canadian auto industry, but the bailout comes with the potential for thousands of job cuts.  Federal Industry Minister Tony Clement said late Friday the two Canadian governments have agreed to provide the equivalent of 20 per cent of the US$14 billion that the Bush administration is considering in emergency aid for General Motors, Ford and Chrysler.*  Clement said the main restructuring will be done in the United States, but Canada is also prepared to provide help to save the troubled industry, which employs hundreds of thousands of people in direct and spinoff jobs in Ontario.  "What we are signalling here tonight, both the governments of Ontario and Canada, is that we want to be part of the solution as well and it will be commensurate with the production that takes place here in Canada . . . about 20 per cent." Clement told reporters.  That works out to about US$2.8 billion or C$3.3 billion at current exchange rates, of the proposed US$14 billion American bailout package.  The Detroit Three currently employ more than 30,000 people at car assembly and parts plants in Ontario. If the U.S. carmakers cut that number of jobs in North America as they restructure their huge operations, a 20 per cent proportional cut in Canada could mean the loss of 6,000 direct jobs and more in spinoff employment at suppliers and other businesses....


A bit more from the _TorStar_, _National Post_ as well as Associated Press, the _New York Times_, Reuters and Agence France-Presse.


So far, Ford Canada seems pleased.....


> The Canadian and Ontario governments have demonstrated strong leadership in the decision to support the country's auto sector. At Ford of Canada, we are well on our way to transforming our company and do not need immediate access to government loans. Instead, we have asked the government for a "stand-by" line of credit to be used only if the current economic crisis worsens.


....however....


> we look forward to working with the government to create ways to stimulate the industry in Canada. For example, by providing support to the auto credit market, the government would help the more than 1 million Canadian vehicle buyers who rely on financing each year.  Other actions could include tax holidays for new vehicle purchases and incentives to encourage consumers to trade-in older vehicles and buy new, lower-emission vehicles. We are all working toward the same goal - a prosperous auto industry that can help fuel a strong Canadian economy."




And the CAW union?


> This evening's announcement by Federal Industry Minister Tony Clement to jointly with the provincial government put $3.3 billion into the domestic auto industry is a positive indication that both levels of government are willing to take measures to support Canadian industry.  "These funds will go a long way in helping the domestic auto industry through the next few difficult months," said CAW President Ken Lewenza. "As has been suggested in the U.S., we fully expect that these funds will be tied to Canadian jobs and keeping Canadian facilities viable well into the future."  Lewenza said that the aid must be part of a longer term program to develop a strategy to bolster the automotive industry, as well as other industries currently in crisis....


----------



## Kirkhill (13 Dec 2008)

> The Other American Auto Industry
> Plenty of car makers make a go of it in this country--they're just non-union and not headquartered in Detroit.
> by Fred Barnes
> 12/22/2008, Volume 014, Issue 14
> ...



Source

Without further comment.


----------



## Infanteer (13 Dec 2008)

FastEddy said:
			
		

> But what the matter with getting proportionally paid for what you do and not who you know. Nobody has mentioned putting a Cap on payment for performance..



So, something like "From each according to his abilities, to each according to his needs."?

Where have I heard that before?


----------



## Edward Campbell (13 Dec 2008)

Here, reproduced under the Fair Dealing provisions (§29) of the Copyright Act from today’s _Globe and Mail_, is a fairly comprehensive report on what’s thought to be planned, as at Friday evening anyway:
--------------------
http://business.theglobeandmail.com/servlet/story/RTGAM.20081212.wrautos1213/BNStory/Business/home

 Bailout to top $17-billion

GREG KEENAN , KAREN HOWLETT , SHAWN MCCARTHY and BARRIE MCKENNA

From Saturday's Globe and Mail
December 12, 2008 at 9:00 PM EST

TORONTO/OTTAWA/WASHINGTON — U.S. and Canadian governments say they will ride to the rescue of the beleaguered Detroit auto makers, hoping to head off a catastrophic collapse of Chrysler LLC or General Motors Corp. that would cascade throughout the North American economy.

Ottawa and Ontario will provide an estimated $3.4-billion to the Canadian units of the Detroit Three, while U.S. President George W. Bush will throw a $14-billion (U.S.) lifeline to their parent companies.

Federal Industry Minister Tony Clement called a hastily arranged news conference Friday night to announce the Canadian aid package.

“The seriousness of the situation dictates that we be here this evening,” Mr. Clement said.

The dire situation auto makers face was underlined Friday when GM announced massive cuts in production in January. Honda Motor Co. Ltd. also said it will trim output, but by a smaller amount than GM.

Mr. Clement would not provide a specific figure, but he said the amount of money in the Canadian bailout represents this country's one-fifth share of the Detroit Three's North American vehicle production and on Canada maintaining that percentage.

“Clearly, this amount of money is meant to be, as the U.S. is finding out, a way to keep the doors open for the domestic auto sector while they continue their long-term planning,” he said.

However, he stressed that the support package would reflect the interests of taxpayers and is contingent upon the auto makers working with their unions and parts suppliers on a long-term solution for the sector. It's also conditional on a U.S. deal coming together.

“This is an existential moment for the auto industry,” Mr. Clement added. “Is this industry going to exist in any capacity two years from now, five years from now?” Prime Minister Stephen Harper and Ontario Premier Dalton McGuinty ironed out the details of the Canadian plan during a one-hour meeting Friday afternoon in Mr. Harper's office in traffic-choked downtown Ottawa.

Ontario will contribute a portion of the funding, one source said.

A senior Ottawa source noted the U.S. government must change the $700-billion (U.S.) Troubled Assets Relief Program to make it apply to auto makers. Ottawa expects the Americans to take several days to finalize a deal.

Just hours after Senate Republicans killed a $14-billion (U.S.) bailout late Thursday, Mr. Bush made it clear he considers GM, Chrysler and Ford Motor Co. too big and too vital to the economy, to be allowed to fail.

“The current weakened state of the economy is such that it could not withstand a body blow like a disorderly bankruptcy in the auto industry,” White House spokeswoman Dana Perino said.

Chrysler and GM are in the most serious straits, warning that they could run out of sufficient cash to operate their businesses by the end of this month or early in January.

A bankruptcy by one or both of them would create an auto industry cataclysm, likely taking down the healthiest Detroit company – Ford – and sending hundreds of suppliers into bankruptcy as well.

One think tank estimated 3 million jobs in the United States alone would be vaporized. About 110,000 Canadians, mainly in Ontario, work for the Canadian units of the Detroit Three and for parts companies. Mr. McGuinty has expressed concerns that the sector is facing further job losses because, as he said, no amount of aid to the companies can make up for the fact that Americans are buying fewer cars.

The Detroit companies have warned that protection under Chapter 11 of the U.S. bankruptcy code can't be a solution for them because consumers won't buy vehicles from companies they think are bankrupt. The auto makers argue that they would be forced to liquidate their operations.

Canadian dealers said Friday that some consumers are already balking.

Parts suppliers are also getting skittish, with some starting to demand that Chrysler and GM pay them in cash immediately, instead of waiting for the usual 45- to 60-day payment period.

The move by the Bush administration came after the Senate rejected a compromise bridge loan package that would carry the industry through to the new administration of Barack Obama in January.

Mr. Bush is exploring several options, including tapping cash from the $700-billion TARP fund – which was originally designed to bail out banks – something he had previously insisted he would not do.

He is just 40 days from handing over the keys to the White House to Mr. Obama while the country grapples with its worst economic crisis since the Great Depression.

Mr. Obama, backed by a larger Democratic majority in the Senate, will likely have the votes to push through a more expansive rescue package when he takes office.

But time isn't on the side of the auto makers. The precarious state of the Detroit Three, particularly Chrysler and GM, means they will almost certainly need a substantial amount of cash well before Mr. Obama's inauguration.

Friday's GM and Honda production cuts offered fresh evidence of how the credit crisis has frozen auto sales and affected all companies.

All GM passenger car plants in North America will be shut in January, as will some plants that make sport utility vehicles.

A Chrysler plant in Windsor, Ont., that makes minivans will also close for the entire month and one of the company's passenger-car factories in Brampton, Ont., will shut for the first two weeks of the new year.

One government source said Canadian parts suppliers and dealers will get some help when the official agreement is announced.

Mr. Clement said the government will also insist that the auto makers use the aid to keep paying their parts suppliers.

Different parts of the sector have asked for different types of assistance and the needs of parts makers are distinct from those of the three vehicle manufacturers.

For parts makers, Ottawa is likely to expand the ability of Export Development Corp. to insure accounts receivable, which is a major headache for suppliers in an economy where credit and financing are tight.
--------------------

This is a mistake, but for Prime Minister Stephen Harper, it is almost certainly a mistake he cannot afford *not* to make. The mainstream media have convinced a huge number of Americans and, I’m sure a substantial majority of Canadians that government handouts are good things. They are not – generally; of course there are exceptions.

It is wrong, just plain wrong, to bail out Chrysler when its *private* parent company, Cerberus will not invest further. Whay should taxpayers bail out Cerberus?

Chrysler is probably doomed – although its _Jeep_ brand and its mini-van tooling/plants may survive under competent, likely Asian, management.. GM will likely survive, globally, – as a company on par with, say, Hyundai or Nissan. But Canadians demand that “someone do something” and spending wasting large amounts of public money to spice up the death march of great, lumbering industrial dinosaurs is probably what’s most likely to pacify the braying masses.

What Canada can and should use for stimulus is several tens of billions of federal, provincial and municipal dollars, borrowed if necessary, to build and, much more important, maintain infrastructure – but only where projects are already approved and where spending can start in 2009. New spending that starts after, say, mid 2010 and that extends too far beyond about end 2011 will, actually be harmful because it will fuel inflation during the recovery that will be well, maybe too well, underway by 2011.


----------



## tomahawk6 (13 Dec 2008)

Its possible that the wage/benefit issue isnt as much of a lodestone around the neck of the Big 3 as are the work rules/Job Bank ect. The work rules prevent efficiency and the Job Bank pays unemployed workers 95% of their wages/benefits. One work rule prevents a plant manager from taking workers off an idle line to help with a line that is slowed due to not enough workers to do assembly.Work rules also prevent the use of robots as are found in the Japanese plants for example.

I had an opportunity last year to visit a muffler plant which had robots doing the manufacturing.It just needed a worker to supply raw materials.It was a clean plant with no haze in the air.Floor was clean.It was quite an interesting operation.


----------



## Infanteer (13 Dec 2008)

Awesome - next time I'm wondering why a casualty in my unit isn't getting casevaced by a Canadian medical chopper (because we don't have any), I'll know it's because we threw billions at bailing out an inefficient auto sector that'll go tits up in a year anyways.

Score 1 point for reinforcing failure!


----------



## 54/102 CEF (13 Dec 2008)

Infanteer said:
			
		

> Awesome - next time I'm wondering why a casualty in my unit isn't getting casevaced by a Canadian medical chopper (because we don't have any), I'll know it's because we threw billions at bailing out an inefficient auto sector that'll go tits up in a year anyways.
> 
> Score 1 point for reinforcing failure!



Why do we think of the current or last concepts?

Score 1 point for the Politics that got you the C17s mon ami.

If we want, and I know we need, something like a big fleet of Blackhawks then the Centre of Gravity which I understand to be the Army, must get in bed with the Airforce and say we need 3 to 4 x worth of whatever we need to fly troops in Afghanistan. You'll need them in Darfur and points south.

Our mantra should be go big or go home.


----------



## Greymatters (13 Dec 2008)

tomahawk6 said:
			
		

> Its possible that the wage/benefit issue isnt as much of a lodestone around the neck of the Big 3 as are the work rules/Job Bank ect. The work rules prevent efficiency and the Job Bank pays unemployed workers 95% of their wages/benefits. One work rule prevents a plant manager from taking workers off an idle line to help with a line that is slowed due to not enough workers to do assembly.Work rules also prevent the use of robots as are found in the Japanese plants for example.  I had an opportunity last year to visit a muffler plant which had robots doing the manufacturing.It just needed a worker to supply raw materials.It was a clean plant with no haze in the air.Floor was clean.It was quite an interesting operation.



Do you mean 'work' rules or 'union' rules?  Because the problems you are mentioning are all union issues intended to preserve jobs and block change in the industry.  What next?  Burn the spinning jennies!


----------



## FastEddy (13 Dec 2008)

Infanteer said:
			
		

> So, something like "From each according to his abilities, to each according to his needs."?
> 
> Where have I heard that before?




So what's that supposed to mean, try it in plain good old English.


----------



## Michael OLeary (13 Dec 2008)

FastEddy said:
			
		

> So what's that supposed to mean, try it in plain good old English.



Google


----------



## tomahawk6 (13 Dec 2008)

Greymatters said:
			
		

> Do you mean 'work' rules or 'union' rules?  Because the problems you are mentioning are all union issues intended to preserve jobs and block change in the industry.  What next?  Burn the spinning jennies!



Business and the unions need to be flexible to remain competitive. If the union is an obstruction then the business could fail and the workers would be out of work.


----------



## a_majoor (13 Dec 2008)

So lets put this in perspective; the $3.3 billion dollar Canadian bailout means *a loss of 66,000 full time Canadian jobs*.

Yes, that's correct, and you can do the math yourself:

An investment of $50,000 is required to create *one* full time job. *Extracting $3.3 billion from Canadian taxpayers removes the resources to create 66,000 full time jobs.* (Lets do a head count of the number of jobs being "saved" by this bailout).

Be sure to write your MP and MPP and thank them for this massive job loss and destruction of taxpayer wealth.


----------



## Edward Campbell (14 Dec 2008)

The Big Three are on their last legs, one or two of them will spend their dying days leaning against a pile of unearned taxpayers’ money, but, as this article, reproduced under the Fair Dealing provisions (§29) of the Copyright Act from yesterday’s _Globe and Mail_, points out, one automaker is still profitable, even after its sales and profits and values fell:
--------------------
http://www.theglobeandmail.com/servlet/story/RTGAM.20081212.wrcoverberman1213/BNStory/Business

 As car makers suffer, one may thrive

DAVID BERMAN

From Saturday's Globe and Mail
December 12, 2008 at 10:09 PM EST

Whatever happens to the Big Three U.S. auto makers in the near term, it's not hard to envisage a day in the not-too-distant future when they will either be gone from the landscape or reduced to niche players in the global automotive industry. That's not good news – but it certainly opens an investing opportunity in foreign competitors, such as Japan's *Toyota Motor Corp*.

To be sure, there isn't a car maker on the planet that isn't suffering from the effects of the global recession, which has sent car sales back a decade or more. Toyota is no exception: Sales are plunging, production is being cut and the stock, which trades as an American depositary receipt on the New York Stock Exchange, has fallen about 40 per cent this year.

But if there is a company in the world that is likely to emerge from the current mess in better shape than it went in, it's Toyota – and it is something of a mystery why investors who have given up on General Motors Corp. and Ford Motor Co. haven't run into the arms of the Japanese company.

If you think of the auto manufacturing market as a zero sum game – where the sales losses of one company translate into sales gains for another – then the Big Three's missteps over the past couple of decades have benefited Toyota in a big way.

You can see this in terms of market share, where Toyota has been growing at a furious pace. In the U.S., Toyota's market share has risen to 16 per cent in 2007 from just 7.5 per cent in 1990. Over the same period, GM's share has fallen to 24 per cent from 35 per cent.

Globally, Toyota tied GM for vehicle sales in 2007 and is set to become the world's largest manufacturer this year. If market share doesn't sound like a big deal, consider how vehicle sales translated into profits. In 2007, both Toyota and GM sold 9.37 million vehicles. However, Toyota _earned_ $17.1-billion (U.S.) on those sales, while GM _lost_ $38.7-billion.

Next, keep in mind that, however troubled Toyota might be in the current economic climate, its survival is not being called into question. It has the equivalent of $28-billion in cash reserves, which can help it cushion a longer-than-expected recession. It also pays out the equivalent of $1.54 a share in yearly dividends – which it could cut if the bad times persisted.

Finally, although profits are down at Toyota, the company is still making money. It expects it will earn the equivalent of more than $6-billion this fiscal year. Analysts estimate that next year's earnings will fall 60 per cent. But here's the important point: The company is still profitable in the most vicious downturn in modern memory.

In other words, Toyota will still be standing when the recession ends – an assumption that does not apply to GM, Ford and Chrysler LLC. Surviving this downturn will make Toyota a bigger global player, and its stock price will reflect this status.
--------------------

Toyota’s management (tactics), its product line (strategy), its quality control (strategy) and its labour practices (tactics) account for the facts that:

•	_”In the U.S., Toyota's market share has risen to 16 per cent in 2007 from just 7.5 per cent in 1990. Over the same period, GM's share has fallen to 24 per cent from 35 per cent.”_ – Although T-6 tells us that Americans want Hummers and SUVs the sales of _Corollas_ and _Camrays_ tell a different story;

•	_”Globally, Toyota tied GM for vehicle sales in 2007 and is set to become the world's largest manufacturer this year;_

•	_”In 2007, both Toyota and GM sold 9.37 million vehicles. However, Toyota _earned_ $17.1-billion (U.S.) on those sales, while GM _lost_ $38.7-billion.”_ and

•	_”Although profits are down at Toyota, the company is still making money. It expects it will earn the equivalent of more than $6-billion this fiscal year. Analysts estimate that next year's earnings will fall 60 per cent. But here's the important point: The company is still profitable in the most vicious downturn in modern memory.”_

Maybe we should be sending money to the Canadian subsidiaries of Toyota, Honda and Nissan - even though they aren't asking for any - to encourage them to buy up the Big Three's dying plants and rehire their soon to be laid off workers.


----------



## Edward Campbell (14 Dec 2008)

And here, reproduced under the Fair Dealing provisions (§29) of the Copyright Act from yesterday’s _National Post_, is more (mixed) commentary on the bailout:
--------------------
http://www.nationalpost.com/most_popular/story.html?id=1073285

 Canadian taxpayers and auto union butt heads over bailout

Linda Nguyen, Canwest News Service 

Published: Saturday, December 13, 2008

An estimated $3.5-billion Cdn bailout to North America's struggling auto industry is an unfair financial burden on the average Canadian and is just another excuse the Big Three automakers need to postpone much needed change, according to the Canadian Taxpayers Federation.

Ontario director Kevin Gaudet said Saturday that this plan is likely to do more harm than good.

"They (Big Three) just can't continue to operate the way they do. Executives get paid too well. Labour is overpaid," Mr. Gaudet said. "The whole supply chain is too expensive. They're building too many cars -- importantly, cars that people don't want to buy," he added. "When governments step in, all it does is keep the industry from making the changes it needs to make."

The bailout, announced late Friday by federal Industry Minister Tony Clement, will see the federal and Ontario government contribute 20 per cent of a proposed U.S. bailout package based on Canada's share of the North American auto sector.

That figure, pegged at $3.5-billion, is contingent on whether American politicians are able to draft a rescue plan for General Motors, Chrysler and Ford.

Mr. Gaudet said the collapse of the auto industry remains inevitable despite this latest surge of public cash.

"There is no evidence in the past that corporate welfare works," he said. "At the end of the day, you're going to see both the government of Ontario and the federal government push themselves into deficit and they're going to do it by having thrown money at an auto industry that's likely going to go belly-up anyhow."

This bailout will only lead other financially struggling companies and industries in this tough economic time to also expect a government shell-out, Mr. Gaudet warned.

"The government can't bail them all out," he said. "It's hard to justify to a laid-off Nortel worker why his or her tax dollars should go to support artificially inflated salaries in the auto industry."

Last week Mark Zandi, a chief economist with U.S.-based Moody's Corp., estimated that the Big Three may need as much as $75-billion to $125-billion US to stay in business. His prediction is based on the expectation that U. S. auto sales volumes will average only 11 million units in 2009 and 13.5 million units in 2010.

Mr. Gaudet says this shows that Canada's bailout will have little impact on the ailing auto industry.

It's estimated that the Canadian government has already spent $782-million in the past five years on the Big Three, the non-profit interest group reported.

"These have been a bottomless pit of requests for cash," Mr. Gaudet said. "It was $780-million in the last five years, and it's another $3.5 billion now . . . It is likely that they'll be back with their cap in hand soon."

But Ken Lewenza, president of the Canadian Auto Workers, said that this bailout should be seen by Canadians as a loan that will be paid back when the country's economy is prosperous again.

"The last time Chrysler corporation got an investment in their business, it was totally repaid back to the taxpayers with dividends. The domestic Three, providing the economy picks up -- that's the key -- and the market conditions improve, will repay the government's every dime that's paid as a result of this temporary burp in this temporary crisis," he said from Windsor, Ont. "Ilook at this as an investment in the economy and they (CTF) look at this as a waste, and that's two philosophical differences."

Mr. Lewenza said that the three automakers have made changes to their production line to produce more environmentally-friendly and technologically advanced vehicles, but the demand is not quite there.

Due to the fallout in the U.S. economy, sales of all vehicles have dropped by as much as six million within the year, he said.

All Big Three assembly plants will undergo production freezes in the next two months, officials for the Canadian Auto Workers union said Friday.

Mr. Lewenza said these temporary layoffs were "imminent" and cannot be saved by the bailout.

"The pain from day to day is pretty significant but this bailout sends out a pretty good signal that this industry is important," he said. "We should be in good shape. We're feeling good today."

The CAW is Canada's largest union and represents 250,000 members in a variety of industries, including the auto-sector.
--------------------

No one will be surprised to hear that I think Kevin Gaudet and I are _on the side of the angels_ on this issue.


----------



## Kirkhill (14 Dec 2008)

> •   ”In the U.S., Toyota's market share has risen to 16 per cent in 2007 from just 7.5 per cent in 1990. Over the same period, GM's share has fallen to 24 per cent from 35 per cent.” – Although T-6 tells us that Americans want Hummers and SUVs the sales of Corollas and Camrays tell a different story;



One of the inherent contradictions of the Democrats, I believe.

I wouldn't be at all surprised to find that Red areas buy Pickups and SUVs from the Big Three (but the don't buy them often) while urbanites (Blue areas) buy imports.

One might expect city dwelling Democrats to support their Union brethren by buying American.  I don't believe that to be the case.


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## Edward Campbell (14 Dec 2008)

Of course the urban/rural (blue/red) split has some practical aspects, too:

•	Many rural people actually need pickups and SUVs make good sense in some areas; and

•	Most urban people find an _Accord_, _Corolla_ or _Sentra_ quite sufficient for their day-to-day needs; but

•	I notice, here in Dallas/North Dallas (30th Congressional District that went *Democrat* by an 82%+ landslide, 32nd Congressional District that went Republican by 57% and the 3rd and 4th than went Republican by 59% and 68% respectively), that there is a very large number of SUVs and pickups that I am about 99% certain have never left a city street or interstate highway - noticeably more than I see in Ottawa or Toronto. But, not all the trucks are Ford and GM; there are a lot of Toyota _Tundras_, and the Japanese SUVs and crossovers (_4Runner_, _CRV_, _Land Cruiser_, _Pilot_ and _RAV4_) are very popular.

There is no doubt that _taste_ (_informed_ by advertizing) and _style_ (informed by what the neighbours just bought) rather than need direct many purchase decisions. Many, many commentators have noted that many (just some? maybe most?) Americans define themselves by their possessions and the automobile is one of the most ‘significant’ of those possessions.

I’m reading The Big Sort which, like Richard Florida’s Who's Your City? and  The Rise of the Creative Class, attempts to grapple with the idea that people migrate to areas where _like minded_ people already live and, once there, reinforce the regional stereotypes by e.g. buying either a _Prius_ or a _Hummer_.


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## Kirkhill (14 Dec 2008)

I must pick up The Big Sort.

It will be fascinating to overlay it on Fischer's "Albion's Seed" and Garreau's "Nine Nations of North America".


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## a_majoor (14 Dec 2008)

A slight hijack here:

Richard Florida's work does not stand up to analysis; in fact the "Bohemian Index" that he popularized is almost a negative indicator of what cities will attract new people, create new industries or have higher median incomes. See "The Curse of the Creative Class" by Steven Malanga for a first class debunking.

Of course the article also shows what *does* work in attracting new people, investment and jobs: *low taxes and efficient (low cost) infrastructure.* Lets focus on that (for example, forcing cities to divest themselves of the ownership and management of expensive and money losing propositions like convention centers and sports arenas) and local economies will see a quick(er) recovery without the costs and inflationary pressures of a "stimulus package" or "bailout".


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## Edward Campbell (15 Dec 2008)

Here, reproduced under the Fair Dealing provisions (§29) of the Copyright Act from today’s _National Post_, is a detailed explanation of the danger posed by too much stimulus or stimuli that are implemented after the crisis is over:
------------------
http://www.nationalpost.com/story-printer.html?id=005ae66f-b33e-47bf-ad85-ff571a924b2e

 What if stimulus works too well?
*Once downturn is tamed, inflation could rear its head*

Jacqueline Thorpe,  Financial Post

Published: Monday, December 15, 2008

Things look dim now, but let us suppose Herculean efforts to reflate the global economy work. Rock bottom interest rates entice borrowing, hundreds of billions of dollars in government stimulus goose spending, and trillions of dollars in central bank liquidity unclog credit channels.

A potential deflationary spiral is averted.

So when do we have to start worrying about inflation? With economic activity falling off a cliff through much of the world, the answer would seem not for some time. History has shown, however, it is never too early to worry.

"Human nature tends to focus on the short term. And in the short term, the risk is deflation and it's a real risk," said Benjamin Tal, senior economist at CIBC World Markets. "But we are fighting it. We are fighting it much more aggressively than any time in history and there is a very high likelihood we will win. And if we win there will be inflation."

With this in mind, news reports that the U. S. Federal Reserve is considering issuing its own debt could be revealing, signalling perhaps the central bank itself is beginning to get antsy about all the liquidity in the system.

The Fed, according to a report in The Wall Street Journal, would issue bills or some form of debt, separate from the U. S. Treasury. Economists were still scratching their heads about it last week and could not even decide whether such a move would give the Fed a new tool to add further liquidity or drain it.

Goldman Sachs argued the Fed could issue debt and then use the proceeds to buy up longer-term risky assets, such as private-label mortgages and corporate bonds, an action authorities have been considering to push down yields and borrowing costs even further if deflation risks accelerate.

Merrill Lynch, however, saw it as a tool drain liquidity. The Fed could issue debt, get cash in return and then keep the cash rather than redeploy it.

Even Goldman Sachs, which has been hammering the deflation drum recently, admitted the Fed could be starting to get concerned about the speed with which the U. S. monetary base has been expanding. Bank reserves plus currency in circulation soared to US$1.47-trillion in the week ended Dec. 3, up from US$843-billion three months earlier, it notes.

Derek Holt, vice-president of economics at Scotia Capital, writes, however, that should not be alarming since it began to explode only once the Fed started paying interest on reserves left at the bank. The result was to suck liquidity out of money markets, and onto the Fed's balance sheet, which is then redirected out to U. S. financial institutions and other countries via currency swap lines.

It is clear, though, that the Fed is engaged in one giant brow-furrowing monetary policy experiment. Issuing its own debt seems absurd. It would open up bizarre arbitrage opportunities between central bank and treasury debt, allowing investors to trade directly on the credibility of the Fed.

Whether it goes ahead, there is no dispute the stimulus is piling up. Last week it was Europe's turn, with the European Union agreeing to a package of 1.5% of GDP, or around US$265-billion. U. S. president-elect Barack Obama's stimulus plan is rumoured to be anywhere from US$300-billion to US$1-trillion, while Canada is expected to announce a stimulus budget in January.

U. S. federal borrowing is likely to exceed US$4-trillion over the next three years and US$2-trillion next year --a whopping 16% of GDP.

All this fiscal and monetary stimulus is not seen as inflationary as it is merely replacing collapsed private-sector activity, but both central banks and governments always seem to miss the boat when they have to withdraw the stimulus.

The Fed missed it massively after the tech wreck, helping to create a housing bubble and the eventual bust. Governments missed it in the 1970s, 1980s and 1990s and deficits inevitably piled up.

This time around, central banks and governments are working so closely in tandem that Donald Coxe, global portfolio strategist at BMO Financial Group, worries neither will know when to take the punch bowl away.

"We will not get a response in time to head off inflation," he said.

Jeff Rubin, chief economist at CIBC World Markets, agrees.

"While politicians and financial markets fret about deflation risks, history has shown inflation to be a far more common dancing partner to massive government deficits," he said in a recent note.

Certainly Mr. Coxe and Mr. Rubin, both uber-commodity bulls, are undoubtedly hoping the Great Reflation will work.

The risk for the rest of us is it will work too well.

Copyright © 2007 CanWest Interactive, a division of CanWest MediaWorks Publications, Inc.. All rights reserved.
-------------------------

We need to remember that pretty well all members of the NDP (MPs and supporters) and most Liberals and quite a few Conservatives are economic illiterates, barely able to balance a bank book. Amongst the politicians, even the ones who do understand the perils of inflation are driven to buy our votes with our own money in order to secure their re-election prospects.

There is a time and place for stimulus: the time is right now (meaning projects that do not need e.g. long, drawn out environmental reviews) and the place is right here – our decaying infrastructure, especially in cities.


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## Edward Campbell (15 Dec 2008)

Thucydides said:
			
		

> A slight hijack here:
> 
> Richard Florida's work does not stand up to analysis; in fact the "Bohemian Index" that he popularized is almost a negative indicator of what cities will attract new people, create new industries or have higher median incomes. See "The Curse of the Creative Class" by Steven Malanga for a first class debunking.
> 
> Of course the article also shows what *does* work in attracting new people, investment and jobs: *low taxes and efficient (low cost) infrastructure.* Lets focus on that (for example, forcing cities to divest themselves of the ownership and management of expensive and money losing propositions like convention centers and sports arenas) and local economies will see a quick(er) recovery without the costs and inflationary pressures of a "stimulus package" or "bailout".



At the risk of going further off topic ...

While it is true that Florida _et al_ have made some ‘leaps of logic’ their critics fail to account for the *fact* that America (and the world) is being ‘sorted’ by, _inter alia_, education. It is also true, as Malanga says in the article referenced by Thucydides, that Las Vegas is (or, at least, very recently was) the fastest growing city in America, but  it has amongst the *lowest* rates of educated migrants – people flock to Las Vegas for _glitzy_ McJobs. But, the people who are most likely to ‘grow’ an economy – those with post secondary educations – are moving to the cities/districts that Florida and Bishop and Cushing mark as ‘progressive.’

Now, it is even more true that “figures don’t lie but liars can figure” and data can be sorted and arranged to prove almost anything, but some of the data in “the Big Sort” – that related to church attendance, education, migration and voting patterns over the past 40 years – is pretty compelling.


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## Edward Campbell (15 Dec 2008)

And, back on topic, see here, especially this from Harvey André: _“tax cuts and infrastructure spending are the best tools to get the economy moving again. Bailouts to large industry players are less effective, although they are inevitable in this political climate … It is futile and horrendously expensive to try to stop the job losses that are certain to take place in a recession … However, it is possible to help with job creation, particularly among small enterprises that can respond quickly to tax cuts by expanding their businesses [and] their horizons are primarily domestic, so Canada gets the direct benefits of any new jobs … [but] there is tremendous - and irresistible - political pressure to try to help big companies with large numbers of employees, even though that action may not really be that productive."_


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## Greymatters (17 Dec 2008)

E.R. Campbell said:
			
		

> And, back on topic, see here, especially this from Harvey André: _“tax cuts and infrastructure spending are the best tools to get the economy moving again. Bailouts to large industry players are less effective, although they are inevitable in this political climate … It is futile and horrendously expensive to try to stop the job losses that are certain to take place in a recession … *However, it is possible to help with job creation, particularly among small enterprises that can respond quickly to tax cuts by expanding their businesses [and] their horizons are primarily domestic, so Canada gets the direct benefits of any new jobs * … [but] there is tremendous - and irresistible - political pressure to try to help big companies with large numbers of employees, even though that action may not really be that productive."_



This works when new enterprises offer the right service/product - a) services/products needed on a practical basis, not those purchased as a status symbol or entertainment/recreation during times of excess disposable income, or b) product lines that are no longer cheap or possible to import and thus need to be produced locally. 

There are other ways the government can help, but they are reluctant to do so:
Minimize non-Canadian purchases.
Minimize imports that compete with local brands.
Increase the price of our energy exports.
Enforce payment of taxes/fees by transnational/international corporations with a presence in the country.
Let our fishermen fish locally and inject gained capital into local economies, instead of international fishing vessels paying a fishing fee to the federal government. 
(Of course, all of these have their own political and economic risks associated with them...)


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## Edward Campbell (17 Dec 2008)

Greymatters said:
			
		

> ... There are other ways the government can help, but they are reluctant to do so:



•	Minimize non-Canadian purchases. X - that would involve *trying* and, inevitably failing, to force consumers to buy a higher priced, sometimes lower quality domestic product

•	Minimize imports that compete with local brands. X - forbidden by the various free trade agreements we have signed

•	Increase the price of our energy exports. ? – we can do that but, since oil in a fungible product, I cannot see how that would have any benefit at all, except, perhaps, to that part of the environmental movement that wants to close down Alberta

•	Enforce payment of taxes/fees by transnational/international corporations with a presence in the country. X - forbidden by some free trade agreements (see Article 11 of NAFTA)

•	Let our fishermen fish locally and inject gained capital into local economies, instead of international fishing vessels paying a fishing fee to the federal government. ? – but are not our local fish stock gone? Isn’t that why (highly) state subsidized foreign fleets are fishing outside our territorial waters?


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## a_majoor (17 Dec 2008)

A bailout could become expensive in more ways than one:

http://www.theconglomerate.org/2008/12/will-toyota-sue.html



> *Will Toyota Sue if Treasury Bails Out GM?*
> Posted by David Zaring
> 
> If the TARP is given to Detroit, as I think is plausibly permitted by the statute (though others disagree), there may well be litigation over it.  This is because, unlike those ad hoc section 13 bailouts by the Fed, the government’s implementation of the TARP is clearly reviewable under the Administrative Procedure Act. So there is a cause of action out there, and a presumption that the court will not shy away from review.
> ...


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## Greymatters (17 Dec 2008)

E.R. Campbell said:
			
		

> •	Minimize non-Canadian purchases. X - that would involve *trying* and, inevitably failing, to force consumers to buy a higher priced, sometimes lower quality domestic product
> •	Minimize imports that compete with local brands. X - forbidden by the various free trade agreements we have signed
> •	Increase the price of our energy exports. ? – we can do that but, since oil in a fungible product, I cannot see how that would have any benefit at all, except, perhaps, to that part of the environmental movement that wants to close down Alberta
> •	Enforce payment of taxes/fees by transnational/international corporations with a presence in the country. X - forbidden by some free trade agreements (see Article 11 of NAFTA)
> •	Let our fishermen fish locally and inject gained capital into local economies, instead of international fishing vessels paying a fishing fee to the federal government. ? – but are not our local fish stock gone? Isn’t that why (highly) state subsidized foreign fleets are fishing outside our territorial waters?



Exactly my point - in order to do so you would be breaking some agreements and policies, or taking away consumer choices from the public.  Not easy decisions, but what's more important the economy or consumer choice?  At the moment the situation is not dire enough to require these measures, but reneging on a few international agreements would be a minor issue if things got really bad. 

Reference your point on forbidden practices, this hasn't stopped other countries from doing the same thing, and encountering resistance or legal issues, but they still do it when they think they can get away with it.    

Reference energy, I wasn't thinking of oil but all the hydroelectric power that is sold by BC and Quebec...

Reference payment of taxes/fees, I don't mean implementing new fees/cost, which would be illegal, but rather the payment of fees already owed by companies already present.  Our regulatory structure allows for this, but we lack an adequately staffed and supported enforcement/prosecution unit.


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## Redeye (17 Dec 2008)

What you're talking about - essentially protectionism - is exactly the sorts of policy moves that amplified the effects of the Great Depression - in the view of some scholars turning what would otherwise have been a mild recession in to a global disaster.  See, if we started being protections, we'd see reciprocation, and since our economy depends on exports the result of that could be absolutely devastating.  Take a look at the Smoot-Hawley Tariff Act and its implications during the 1930s.  As for increasing prices of energy exports, there's really no way to do that (except perhaps hydro we export, but that would still bring us afoul of NAFTA, which would not be good).

Consumer choice is ultimately what brings the market to sustainable equilibrium.  That's why I have a hard time with bailing out the Big Three - if no one is going to buy their products anyhow, at a sustainable, profitable price, then what could is shovelling tax dollars into them?  Obviously (and I live in the shadow of GM's Oshawa complex), the cataclysm of losing some half a million jobs could be very significant, but if the business can't succeed then it can't succeed, and we need to look at efforts to create new jobs for those folks - in growing industries.



			
				Greymatters said:
			
		

> Exactly my point - in order to do so you would be breaking some agreements and policies, or taking away consumer choices from the public.  Not easy decisions, but what's more important the economy or consumer choice?  At the moment the situation is not dire enough to require these measures, but reneging on a few international agreements would be a minor issue if things got really bad.
> 
> Reference your point on forbidden practices, this hasn't stopped other countries from doing the same thing, and encountering resistance or legal issues, but they still do it when they think they can get away with it.
> 
> ...


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## Greymatters (17 Dec 2008)

Redeye said:
			
		

> What you're talking about - essentially protectionism - is exactly the sorts of policy moves that amplified the effects of the Great Depression - in the view of some scholars turning what would otherwise have been a mild recession in to a global disaster.  See, if we started being protections, we'd see reciprocation, and since our economy depends on exports the result of that could be absolutely devastating.  Take a look at the Smoot-Hawley Tariff Act and its implications during the 1930s.  As for increasing prices of energy exports, there's really no way to do that (except perhaps hydro we export, but that would still bring us afoul of NAFTA, which would not be good).
> 
> Consumer choice is ultimately what brings the market to sustainable equilibrium.  That's why I have a hard time with bailing out the Big Three - if no one is going to buy their products anyhow, at a sustainable, profitable price, then what could is shovelling tax dollars into them?  Obviously (and I live in the shadow of GM's Oshawa complex), the cataclysm of losing some half a million jobs could be very significant, but if the business can't succeed then it can't succeed, and we need to look at efforts to create new jobs for those folks - in growing industries.



Hmmm, it can be seen that way cant it?  Well, if all of these options fall under 'protectionism' and history has shown that this only worsens a recession, what other options are available?


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## Edward Campbell (17 Dec 2008)

Greymatters said:
			
		

> ... history has shown that this only worsens a recession, what other options are available?



From and earlier post of mine in another thread:

--------------------
Smith's “What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom.” is good advice: work hard and work effectively and efficiently; keep your fiscal head above water; save for a rainy day (which, in Canada, may require some creative accounting given our laws and practices about public finance); deficits/debts need not be bad if they are managed well - consider your own mortgage, for example (I hope your mortgage is a good example of fiscal prudence); pay off your debts quickly; and so on.
--------------------  

Add to that: trade freely, drop all tariffs on all products from all countries; learn to specialize so that you can produce (and invent as necessary) goods and services that the world wants at prices the world wants to pay; educate the country - all of it, well; make sure every sewer and water main and hydro line is in good repair - doing its job at the lowest possible _*life cycle*_ cost; and so on.


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## Greymatters (17 Dec 2008)

E.R. Campbell said:
			
		

> From and earlier post of mine in another thread:
> Smith's “What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom.” is good advice: work hard and work effectively and efficiently; keep your fiscal head above water; save for a rainy day (which, in Canada, may require some creative accounting given our laws and practices about public finance); deficits/debts need not be bad if they are managed well - consider your own mortgage, for example (I hope your mortgage is a good example of fiscal prudence); pay off your debts quickly; and so on.
> --------------------
> Add to that: trade freely, drop all tariffs on all products from all countries; learn to specialize so that you can produce (and invent as necessary) goods and services that the world wants at prices the world wants to pay; educate the country - all of it, well; make sure every sewer and water main and hydro line is in good repair - doing its job at the lowest possible _*life cycle*_ cost; and so on.



The first part my family already does, as do many others, but it is a fact that most Canadian families dont practice this well.  It is shocking how many families are deep in debt (just in credit cards, not including mortgages).  The average personal debt load per family is reported to be in excess of $10,000 (again, this does not include house mortgages).  

You make good additional points, but isnt this essentially just 'riding the rough spots' and letting the problem follow its natural course?


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## GAP (17 Dec 2008)

Greymatters said:
			
		

> The average personal debt load per family is reported to be in excess of $10,000 (again, this does not include house mortgages).



This obviously means there are hordes of people with little to no debt, but conversely the are also scads that have massive debt.....and these last ones are the ones the recession is going to hurt the most...


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## Edward Campbell (19 Dec 2008)

Here, reproduced under the Fair Dealing provisions (§29) of the Copyright Act from today’s _National Post_ is news that I think is too little, too late:
--------------------
http://www.financialpost.com/news/story.html?id=1095212

 White House grants US$17.4B in aid to automakers

Reuters

Published: Friday, December 19, 2008

U.S. president George Bush announced Friday that his administration will make up to US$17.4-billion in loans available to U.S. automakers using the Troubled Asset Relief Program (TARP).

Loans of US$17.4-billion will be given out, of which the last US$4-billion will be contingent on a second drawdown of the TARP.

"In the midst of a financial crisis and recession, allowing the U.S. auto sector to collapse is not a responsible course of action," President Bush said Friday morning. "If we were to allow the free market to take its course now, it would almost certainly lead to disorderly bankruptcy."

The automakers will be able to use the funds for three months, during which time they must develop plans that will demonstrate to the U.S. government how they can become viable. President Bush said Concessions will be expected from all involved, including management, unions, suppliers, and lenders.
--------------------

I doubt that Harper can resist providing $3.5± Billion (≈ 2:1 Canada:USA) _relief_ just to keep the ruins of the Big Three in Canada.

I also doubt that Chrysler can survive – although the _Jeep_ brand may – or that GM can be anything but part of, maybe, a big five, or modest 10 or small 20 North American auto makers.

But, it will pacify those who believe, without a shred of evidence, in bailouts and Santa Claus.


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## tomahawk6 (19 Dec 2008)

For some reason people equate Chapt 11 with liquidation and thats not the case. Alot of companies have gone the Chap 11 route back to profitability.The biggest problem that is beyond the control of the Big 3 is the credit crunch and before that high gas prices. They need to stay with the hot selling brands and dump those that people dont want. The Prtesident said people wont buy cars from bankrupt companies and to that I say people fly bankrupt airlines why not cars ?


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## Kirkhill (19 Dec 2008)

"people wont buy cars from bankrupt companies and to that I say people fly bankrupt airlines why not cars ?"

In my opinion is the difference in scale in the investment:  An air ticket costs $300.  A car $30,000.  An air ticket is only at risk for a period of days or at most weeks.  A car, you expect support from the supplier for a period of years.

Right now I would have more confidence in buying a Toyota or Honda, that are reporting reduced profits, or even Ford, that has turned down assistance, than GM or Chrysler which are loudest in crying for assistance.

Having said that, I agree completely that Chapter 11, which is actually Bankruptcy Protection allowing a company to reorganize as if it had gone bankrupt without actually declaring bankruptcy, would be the way to go.  But one of the biggest contracts that would be affected would be the UAW/CAW contract - and that is where obstacle lies.


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## retiredgrunt45 (19 Dec 2008)

I hear all this hype about how Japanese autos are superior to North American autos. Well from experience and having paid the repair bills on my wife's 2004 Honda Odysee minivan, to replace the transmission at 126,000 Kms, Body control Module at 140,000 Kms, now there is a problem with the wiper motor. Japanese reliability, "Riiight"

We also own a 2002 Buick Rendezvous, we bought this SUV new, it has never been inside of a maintenace bay, other than to have routine maintenance done and it has over 200,000 Kms on it. It is by far a much more reliable vehicle than any Japanese car that I owned and it was built in Mexico of all places. The Mrs and I use it to travel because it ultra comfortable and its been down East, out West and to Florida twice without so much as a squeak among many, many trips to Detroit on weekend shopping trips. By everones standards this car should of been in the junkyard years ago or plagued with a multitude problems. 

I also had a 2003 Honda Fit up till six months ago, sold it after the warranty ran out. This was suppose to be my get to work car. "Junk"! Leaky gas tank, Faulty main relay (park it in the cold overnight you had to heat the interior up just to start it), Heater blower only worked on one setting (low), Rear window defroster kept on blowing fuses (dealer never found the problem). And best of all, when it rained the windshield leaked on the drivers side, found out the hard way when I took it through a car wash and came out soaked. The only thing it had going for it was the fuel mileage, which I admit was rather impressive, when it worked properly.

Owned two Japanese cars, did the research before purchase on both and read the reviews which said both were above average for reliability, whomever wrote the reviews obviously never owned either one of these vehicles.

My next car will be another Buick, providing GM is still around, if not then a Ford.

This Japanese vs US auto issue is getting really old.


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## Kirkhill (19 Dec 2008)

retiredgrunt45:

I drive a Ford.....for what that's worth.  

The issue with the Japanese is not the quality of their vehicles just now.....that's as may be.....the issue is that they aren't going broke while GM and Chrysler seem to be.


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## Koenigsegg (19 Dec 2008)

Well, Retiredgrunt45...My experience with the different nationalities of cars supports the hype.
Every american that anyone I know owns has problems or is just a POS, and every Japanese car is going just fine.  With the exception of a co-workers almost new Corolla.

My family used to have a Plymouth mini van (in the 90s), and every six months we had to replace the tranny...It was a very well documented issue with all those vans.  And guess what...for many years later, they were still using essentially the same tranny and all the same problems persisted.  Really good product improvement they have going.

I currently buy American motorcycles, and Japanese cars.  For trucks though the Americans are of course the benchmark.  Very good trucks.  And even with Trucks, the Americans are losing ground.

They are just continuing on with the downward spiral they started with their "Planned Obscelesence" in the 1970s.  They have no one to blame but themselves.
There is an interesting article on the American big 3s potential futures in the January 2009 issue of Car and Driver actually.

Even if one of  them totally fails...Good riddance in my opinion.  Looks like a very interesting 3 years coming up.


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## KingKikapu (20 Dec 2008)

While I'd be all for removing all trade barriers in existence, I think we can all agree that just won't happen.  The primary purpose of a government is to protect the interests of it's citizens.  We take care of our own first (more or less anyways) before offering to help others.  So long as we all fall under regional banners, I do not expect that to change.

The closest thing you will ever find to a free market is Ebay.  NAFTA is a start, but doesn't even come close.  The rest of the world is just as regulated.


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## a_majoor (20 Dec 2008)

Public anger against the "Coalition of the Inept" derailed that project; maybe there can be an arousal of public anger against the politicians who are destroying $17 billion of the American taxpayer's wealth and @ $4 billion of Canadian taxpayer's wealth as well.

It also wouldn't hurt to let the "Big Three" know that you resent their stealing your wealth and will never buy a car from their companies again. (Calling a Big Three dealer and letting them know that the corporation's alienating you has also screwed them out of sales will do wonders)

Negative publicity: it works.


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## retiredgrunt45 (20 Dec 2008)

> Well, Retiredgrunt45...My experience with the different nationalities of cars supports the hype.
> Every American that anyone I know owns has problems or is just a POS, and every Japanese car is going just fine. With the exception of a coworkers almost new Corolla.



And and 19 just how much experience is that  :. Please come back and talk to me when you know what your talking about. Autoshop doesn't count. What in the 90's you were, what 10-12 years old, the only thing your were driving was a bicycle. 



> The issue with the Japanese is not the quality of their vehicles just now.....that's as may be.....the issue is that they aren't going broke while GM and Chrysler seem to be.



The "reasons why" are a number of problems. 1st the type casting, that everything that comes out of Detroit must be garbage. 2ND is we allow these offshore companies to come over here and setup shop to build and sell their wares, but they in turn, turn around and forbid us from entering their market place. 3rd is we're fools, we allow this to happen then we wonder why our companies are going broke. Not very hard to understand. China has it right, they don't allow foreign companies in unless they've been invited in.

I admit the the big three were lagging in a few areas in the past, the biggest being the marketing of big gas guzzlers and lack of R&D into cleaner technology. The quality issue over the past decade has become less of a problem, because the big three and Japanese are essentially using the same parts suppliers for their north American plants, so if you say a US made car is junk, then a Japanese car that has been built in the US is also junk, because all the parts come from the same place. Again its all about Type casting and people following the hype.  



> It also wouldn't hurt to let the "Big Three" know that you resent their stealing your wealth and will never buy a car from their companies again. (Calling a Big Three dealer and letting them know that the corporation's alienating you has also screwed them out of sales will do wonders)



Yep and I guess that's why the European union just wrote a cheque for tens of billions or Euros to prop up Renault, BMW, Mercedes, Opel, and Ford in Europe. I guess these companies are also stealing our money eh, God with you it never seems to end, everyone is stealing from you. Have you looked around lately and seen the financial mess the world is in, or are you sitting with your head in the sand and ass in the air. I thought Harper was bad. If your going to phone someone, make sure you phone the banks and let them know to that their also stealing our money and you won't be asking for a loan anytime soon, last time I checked they got, what "$850 Billion". Ya, that works... : Matter of fact call Gordon Brown, he could use some witless humour right about now, gee he's about to sell the Crown jewels to finance the UK. Arm Chair economists, never leave home without one.


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## Michael OLeary (20 Dec 2008)

retiredgrunt45 said:
			
		

> The "reasons why" are a number of problems. 1st the type casting, that everything that comes out of Detroit must be garbage. 2ND is we allow these offshore companies to come over here and setup shop to build and sell their wares, but they in turn, turn around and forbid us from entering their market place. 3rd is we're fools, we allow this to happen then we wonder why our companies are going broke. Not very hard to understand. China has it right, they don't allow foreign companies in unless they've been invited in.
> 
> I admit the the big three were lagging in a few areas in the past, the biggest being the marketing of big gas guzzlers and lack of R&D into cleaner technology. The quality issue over the past decade has become less of a problem, because the big three and Japanese are essentially using the same parts suppliers for their north American plants, so if you say a US made car is junk, then a Japanese car that has been built in the US is also junk, because all the parts come from the same place. Again its all about Type casting and people following the hype.



And yet with the money the Big 3 put into advertising they haven't been able to turn around this "myth"?  Maybe it's because the product doesn't really measure up in enough people's experience.

Somehow I don't think that trade barriers forcing North American to buy domestic cars is really a solution.  How, exactly, would that make the Big 3 create cleaner technologies or cost effective business models?


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## a_majoor (20 Dec 2008)

Protectionism doesn't work both ways; Ford of Europe is doing very well indeed (and is the only reason Ford isn't in as bad shape as GM or Chrysler), while Buick is number one or two in.....China!

The "core business" in the United States is the part going in the tank, and the business, labour and regulatory environment the Big Three operated under, magnified by rather bone headed management decisions and substandard products over many years [GM may never live down their reputation in that regard], are the primary causes.


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## retiredgrunt45 (20 Dec 2008)

> Somehow I don't think that trade barriers forcing North American to buy domestic cars is really a solution.  How, exactly, would that make the Big 3 create cleaner technologies or cost effective business models?



Your nor paying much attention are you, GM and Ford are already spending billions into cleaner technology vehicles, but does anyone listen, no because their so hell bent on seeing them fail, that they are willing to buy a Japanese car that is built right here in north America, using the very same parts manafacturers that GM and Ford uses, just to what? Say it's a superior vehicle. 

I'm done, you people have already made up your mind long time ago, so why even try, go buy your Japanese cars and and i'll keep on buying my US junk and when the bottom truly falls out from under us, well at least I can say I didn't contribute to it.


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## Michael OLeary (20 Dec 2008)

Oh, I'm paying attention alright.  I drive a '95 Ford minivan that's going to need a replacement some time in the next few years.  I'm watching very closely to determine what company(ies) might even be around to provide parts and service to make my next vehicle last 10-15 years.  The Big 3 auto makers have been digging a hole in public confidence for a long time.  They don't deserve a bailout with my tax dollars if they can't convince me to spend my money on them directly.


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## muskrat89 (20 Dec 2008)

retiredgrunt - what's up with the tone of your last few posts? The information you are presenting is interesting, but we can do without the digs and jabs.

Everyone - keep it civil please

Army.ca Staff


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## retiredgrunt45 (20 Dec 2008)

All due respect for everyone on this thread and I do apologize for some of my of handed comments, (referring to the one direted at Thulycedes) Sorry. But I'm not going to apologize for the passion I have for what goes on in my own backyard or for seeing the repressions that will most certainly ripple through an already fragile economy if these companies are allowed to go under. 

That also brings up the subject of the news conference this morning of the PM and Premier McGuinty. McGuinty even said that he was at a meeting with the head of Toyota International and was told that they can't allow the big three to fail, because the consequences to the Japanese auto makers would be catastrophic. 

I guess all I'm asking is instead of closing your minds and being absolute in your thinking against the idea, think what would happen if this scenario played out the other way. Most of us on this board have the luxury of some sort of guaranteed income, pensions etc, so we can sit back and have the luxury of and outsider looking in, but what about the insider looking out on a world gone mad. Pretty scary prospect.

Michael I'm not asking you to buy a Chev, Ford or Chrysler, all I'm asking you to do is really look at what they have to offer before you condemn them to the junk heap. 

For those who think the big three are condemned to the junk pile, not going to happen, they will probably comeback as the (smaller three) or more likely the smaller two, with new management and a new lease on life and I will continue on buying their cars. This recession won't last forever and when its run its course, the (smaller two) will come out of it on top of their game and give the Japanese a run for their money.

Heres a few consumer reports to chew on about Toyota's so called reliability.

http://money.cnn.com/2007/10/16/autos/cr_reliability/index.htm

From "The truth about cars":

http://www.thetruthaboutcars.com/toyota-tumbles-in-consumer-reports-reliability-ratings/

AutoBlog.

http://findarticles.com/p/articles/mi_qn4158/is_20070120/ai_n17146844


_*I had a similar problem with my Honda minivan, but instead of admitting the problem, Honda handed me the bill*_.

People have been bamboozled into thinking that somehow Japanese auto makers are immune to having faulty products. God forbid my Toyota Carola has a problem, can't be, it's just not allowed! 

I've been to the other side and after seeing and having to pay for in some cases thousands of dollars in repair costs to cars that some said were the most reliable on the planet, I now know that it was all about the hype and an image that Japanese car makers continue to project under false pretences onto their customers that their cars are still the best. The truth sometmes comes with a hefty price tag, especially when you have to find that out the hard way...

Cheers.


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## Flip (20 Dec 2008)

I, for one have never thought American cars were so bad. (with the possible exception of my Tempo).  And since I see lots of American cars around (newish at that )I suspect sales isn't the whole problem.  There should be money in the bank left over from those sales. The downturn should  affect car maker about equally.

I won't go into Japans' de-facto consumer driven protectionism. If Americans only bought American we wouldn't be making comparisons.

In truth, I believe that the American business model is in failure.  Obscene salaries for management. Labour and regulatory costs that are not being controlled and a failure to protect the companies from foreseeable ups and downs.

Wall Street's reputation is suffering from frauds and scams.  Expectations are just not reasonable.......... ???

I think (what do I know?) American business culture needs some adjustment. That simple.


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## retiredgrunt45 (20 Dec 2008)

> In truth, I believe that the American business model is in failure.  Obscene salaries for management. Labour and regulatory costs that are not being controlled and a failure to protect the companies from foreseeable ups and downs.



On that I agree, there must be concessions by labour, unions and management in order to make the North American auto sector profitable again.


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## Snafu-Bar (20 Dec 2008)

Do not forget to include the regulatory body from the government requiring such engineering inefficiencies as airbags, crumple zones and other such NON needed but must have items driving the costs up for what should be "basic transportation".
  
 Everyone should be able to march into a dealership and sit down with a "sales person" and build their own vehicle to wants and needs before the assembly is even attempted. They have the technology and the means to do per order manufacturing.

 If i want a vehicle with RAW BASICS i should have the option to get just that, 2 or 4 doors, roof, glass, seats ,drivetrain and paint, the rest should not be forced down my throat by someone saying it IS a necessary evil, when we all know it is not.

 The entire industry IS and has been corrupt on all levels for more than 40 years, and i highly doubt it's going to change any time soon.

 Cheers and happy mass transiting.


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## tamtam10 (20 Dec 2008)

Canada announced just hours ago a plan to contribute $4 Billion to Canadian subsidiaries of the Big Three US automakers. You can an article about it here:

http://informedvote.ca/2008/12/canada-approves-4-billion-auto-bailout-plan/#more-330

What do you guys think about this decision. Is it justified?


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## KingKikapu (20 Dec 2008)

retiredgrunt45 said:
			
		

> McGuinty even said that he was at a meeting with the head of Toyota International and was told that they can't allow the big three to fail, because the consequences to the Japanese auto makers would be catastrophic.



It's about friggin time that people start to recognize this.  I, along with the rest of the business admin group, have been saying this for weeks.


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## Snafu-Bar (20 Dec 2008)

I think it stinks.

 Thankfully there are strings attached to this money to keep the greedy bastards in check. So hopefully no one gets a nice big fat thanks for the paycheck now i'm retiring deal. I still feel that the industry needs to be left to it's OWN demise and shouldn't be hand held through this situation. Sure there are tons of jobs at stake but they are also at thier own make it break it points. Those companies with proper management and employee's are doing just fine and are capable of making profits. The rest through ineptitude, greed and corruption are failing, and they justifiably should be left out of the loop when it comes time for this handout.

 No matter how you look at this deal, it's not in anyone's BEST interest to keep throwing money in the money pit.

Cheers.


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## Blindspot (20 Dec 2008)

retiredgrunt45 said:
			
		

> I hear all this hype about how Japanese autos are superior to North American autos.



Well, how about another anecdote for you then? I still drive a 1990 Nissan Pathfinder. Has 200,000kms on it and been in 6 accidents from every angle. Each vehicle that has hit that truck has been a right-off including an old, steel buick boat that t-boned me. The body shows its age, it creaks and groans in different spots, sometimes it leaks something but it gets patched up and drives on another year. I'll be surprised if my father's 7 year old Jimmy lasts half as long.


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## Edward Campbell (20 Dec 2008)

I just did a very unscientific survey. This morning we attended an athletics event at a suburban Dallas (Texas) sports/recreation complex. During a break I decided to go for a walk (it was sunny and 65º+(F)) and I decided to count the first 100 cars in the lot and keep track of the _region of origin_ of the brand (Asia = Honda, Hyundia, Kia, Nissan, Toyota) (European = Audi, BMW, Mercedes Benz, Volkswagen, Volvo) and (North American = Chrysler, Ford and GM).

A word, first about the survey: The sports event was for kids in the 10-15 year age group so the parents were, in the main, in their 30s and 40s. The event included North Dallas plus three North Dallas suburbs (Allen, Plano and Richardson) these four districts contain three or four of the Dallas area’s major universities and almost all of its (many) high tech companies so there was a disproportionate (to the American population) number of Asian because, like Canada, the US would rather import its tech and scientific talent than bother to grow it at home.

As is customary here in North Texas SUVs, crossovers and pickups predominate in the parking lot. Vans and full-sized/mid-sized sedans finish a distant second; there are very few compacts – I did not see a single Honda _Fit_ or Toyota _Yaris_ (but I did see one _Mini Cooper S_ and one VW _Beetle_). I’m guessing (I’m not a car expert) that almost all the cars I counted were 2005/06/07/08. I’m pretty sure than only one was built prior to 2000.

My count: *66 Asian* vehicles; *21 North American* vehicles and *13 European* cars.

I went, later, to a small private lot (35-40 vehicles) in the same complex and found about the same ration of Asiathers but the North American vehicles outnumber the European cars by 6:1. But in this lot every single one of the dozen or so American vehicles was a truck – 100% - and a substantial majority of the truckes were Ford 150s.

Not all Asians prefer Asian cars. As we pulled out of the lot we waved goodbye to some Asian neighbours as they climber into their huge Dodge Ram pickup and we waited until the Americans in the vehicle beside us left: it was a Toyota _Highlander_ SUV.

Some Americans have voted on the auto industry with their wallets.


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## Nfld Sapper (20 Dec 2008)

I've owned 2 Japanese vehicles both Nissans 94/95 Sentra (Can't remember the model year  :-\), and my current 05 Altima and my parents owned an 88/89 Mazada 323 (1st Generation). Also had our share of American Cars. 

I've got nothing but good reviews for the Japanese Cars. The only reason I got rid of them was that the Sentra was 10 yrs old didn't want to take the chance on major repairs and the 323 well that one was pushing 11 yrs and again did want to take the chance on major repairs.


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## GAP (20 Dec 2008)

Everyone DOES realize don't they that this is only for the next 100 days.....more will be needed.

One economist is saying the three will need a total of 85-125 Billion over the next two years, with Canada having to come up with 25-30 Billion....


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## Kirkhill (20 Dec 2008)

E.R. Campbell said:
			
		

> ....During a break I decided to go for a walk (it was sunny and 65º+(F)) .......



Nasty individual.  Wings off of flies.  Salt in wounds.  ;D


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## Kirkhill (20 Dec 2008)

I'm not sure that it is a sure thing that the industry will be bailed out under Obama - a "controlled" restructuring might be more likely.



> Obama: Auto Bailout 'Necessary'
> December 19, 2008 4:17 PM
> 
> ABC News' Sunlen Miller Reports:
> ...


  Source


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## muskrat89 (20 Dec 2008)

I spent 9 years working as a manager at a Tier II automotive supplier. I have seen 1st hand the ruthless mandates handed down from the the automotive manufacturers. Negotiate a piece price, demand cost reductions every year after that, regardless of what was negotiated. Insist on QS9000, ISO 14000, TS16949, regardless of plant size, cost or effectiveness of these programs. Right or wrong, the same kind of heavy-handedness that Wal-Mart often gets accused of - while CEOs and Union members alike get wages that "normal" CEOs and production workers can only dream of.

My old plant ceased operations yesterday. 100 or so people out of work. No severance, no package, no golden parachute, no "job banks". Nada. Nyet. Not even a ham for Christmas or a "kiss my a$$". Where is their "bailout"?

I know my perspective is skewed, but I have no sympathy for the automakers.


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## a_majoor (21 Dec 2008)

To RG45: If the Big Three, politicians and unions were not busy looking to take our money and destroy the taxpayers wealth, then I would not be so cranked about this issue. After all, if they were concentrating on business (i.e. producing a product that people were interested in at a price that they were willing to pay), they could have come out with this first:

http://thesecretsofvancouver.com/wordpress/china-beats-the-big-3/tech-goodies



> *China’s first mass-produced hybrid car goes on sale*
> 
> China’s first mass-produced hybrid electric car hits the market on Monday, in a move aimed at driving the nation to the cutting edge of the world’s green auto industry.
> 
> ...



Considering that President Clinton provided $800 million to the Big Three to produce this type of car in the 1990's and they produced exactly nothing (Toyota and Honda came out with Hybrid cars during that time period without government funding), and their current business model produces losses measured in _*billions per month*_, I don't see any indication that they can continue to exist as currently constituted.

A chapter 11 produces an orderly bankruptcy, releases the companies from all current contracts and obligations and allows them to shed their liabilities and non productive "assets". A bailout means they will not have incentive to restructure in an efficient and timely manner, and only set the stage for handouts for years to come.

Let them fail.


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## KingKikapu (21 Dec 2008)

I'm still scratching my head in wonder at how people expect a chapter 11 to play out like they think it will.

Because it won't.


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## retiredgrunt45 (21 Dec 2008)

> Looks a lot better than a Prius, blows away the Smart Car, and has everything you’d want in a luxury sedan, for the price of a Honda Civic… think the Big 3 could possibly match this?



Thucydides the day I have to buy a car made in China is the day I hand in my license and start taking the bus. Besides I would be afraid I may get lead poisoning from the paint. I can just imagine the fun the insurance industry will have with this one, the crash test dummies will walk out and go on strike. 
I'm sorry, but this will be a total death trap "1980's Hyundia Pony", kind of garbage. The Chinese are not concerned with the safety or longevity of this product, but simply with cashing in on sales from naive foreigners and since Buffet owns 9.9%, he will want to see numbers. If it's a lesson in what Communist countries are good at making, safe relaible cars are not one of them.

Heres what the Chinese don't want us to see: http://www.break.com/index/failed-chinese-crash-test.html


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## Koenigsegg (21 Dec 2008)

retiredgrunt45 said:
			
		

> And and 19 just how much experience is that  :. Please come back and talk to me when you know what your talking about. Autoshop doesn't count. What in the 90's you were, what 10-12 years old, the only thing your were driving was a bicycle.



By "My experience", maybe I should have put every single person I know who drives.  Please, don't patronize me, I did nothing to offend you.
You don't know what I know, and I don't pretend to know much.  So how would one know if I "know what I am talking about or not"?  Just because someone is being vague, doesn't mean they're clueless.

I also don't get the 4 billion sum from Canada.  A drop in the ocean really.  Ford has about 38 billion in the bank, and that is expected to last about 3 years.  3 billion, for the companies in general?  I fail to see the point really.  Nice gesture, but it's like giving a starving homeless man a bread crumb.  And Ford is currently the best off out all three in terms of cash on hand.  Chrysler could be done in less than a year.  Potentially, worst case.  It is private company, so who knows really, other than the company itself.


*Nevermind, it has already been adressed in a round about way.  Danke*


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## retiredgrunt45 (21 Dec 2008)

I'm sorry I offended you, but maybe in the future you should heed your own advice and stick to what you do know. 

In the 70's and 80's the Japanese were making junk, North American auto makers were making gas guzzlers because that's what the people wanted, gas was cheap 35 cents a gallon in the mid 70's and .90 cents a gallon in the early 80's. When the clean air act of 1972 came about cars stayed the same size but they put in smaller engines and that's when the big 3's demise came about. No one wanted a yacht with a row boat engine. 

In the end of the 80's and beginning of the 90's the Japanese started to manufacturer better cars, they were still rust buckets but they had improved. The big 3 made all kinds of mistakes during this time, but they had also had some success stories. This is when they parted ways, or so we think they did. The US was making smaller cars and now the Japanese were making bigger SUV's and full size trucks, but the big 3 already had the truck market wrapped up, with the Ford F-150, the Chevy Silverado and the Dodge Ram. 

Next came the hybrids, the Japanese led the way in the mid 90's with the Prius, which seen nominal sales, the big 3 didn't make any hybrids until the turn of the century and that's we're we find ourselves today.

Its not that the big 3 make bad cars, its just that the Japanese have already notched out the market the big 3 are now trying to play catch up to enter.


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## Koenigsegg (21 Dec 2008)

In the 70s and 80s the Japanese were making what they were advertising, Cheap vehicles.  And cheap often comes with problems.  They improved quickly though, and their strategies worked (at least for Honda).

I agree, Not necessarily bad.  But they are playing a mean game of catch up.

Again, you don't know what I know, and it is the same the other way around.  I'm not getting too involved in this, as I have learned that there is no point in arguing.  No one on this site knows what industry I work in, or what primary sources I have.  And I don't care if they don't because it doesn't make a difference, every ones minds seem to be made up.

You can continue supporting the American manufacturers (some of which I strongly would like to see stay for a very long time), and I will continue purchasing from the companies that I have not, nor my family or friends have had any big problems with.  And yes, individual dealers play a big part.  The ones my family goes to treat people really well, and that itself makes a big difference.  Where as the Big 3 dealers in Barrie can at times be less than stellar.

I won't buy a Triumph motorcycle because the local (and only one anywhere near here) dealer, pushes too hard to sell, doesn't know the competition, and at times doesn't know their own product.  Great machines, but no thanks.  Not right now.  So in my opinion, it is not just the car or motorcycle.
Barrie Harley has customers from all over Ontario.  And some have said that if they hadn't found that dealer, they wouldn't be riding an American bike.


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## Kirkhill (21 Dec 2008)

Koenigsegg said:
			
		

> ..... have learned that there is no point in arguing....... every ones minds seem to be made up.



I too get frustrated with not being able to convince the regular correspondents of the error of their ways.  Sometimes that results in me throwiing my hands up and walking out of the debate.

But.

On the other hand there are many people who read these Fora for a variety of reasons, and don't actively contribute to the debate.  They are just gatherinng ideas or enjoying the fight.  They are as much your "audience" as the debaters themselves.  We may seldom get our antagonists to cry "Uncle" and yet still have an enjoyable, and productive, debate.

And I ask other members of the Forum to quote this back at me the next time I fly off the handlle myself.   ;D


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## reccecrewman (21 Dec 2008)

How did it even get to this point? How far from their roots have Unions gone and now they have a huge portion of responsibility to accept for the current state of affairs. I feel no sympathy for any of them. Even at 50.00 an hour, this is still over 100K a year and not including overtime...... There's no need for that. Then throw in the benefits they also get handed to them..... Let em sink


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## aesop081 (21 Dec 2008)

retiredgrunt45 said:
			
		

> And and 19 just how much experience is that  :. Please come back and talk to me when you know what your talking about.



I'm 33 and have owned both domestic cars and imports.

My last 3 cars have been Mitsubishi's. I will never go back to the Big 3. All the domestic cars were unreliable, the service from both the various dealerships and parent companies was junk, they often refused to honour their waranties and never managed to do simple repairs on time. The quality of workmanship of each domestic car i owned was ridiculous. Interior parts did not line up properly, often fell of due to poor instalation.

My foreign cars have none of these issues.

Please come back and tell me something smart about not being old enough or something.........


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## Old Sweat (21 Dec 2008)

I also was driving in the 70s, both foreign and domestic. In general terms the quality of today's vehicles is light years ahead of those of three decades ago. Domestic cars were designed to be replaced every two or three years and one with 60,000 miles or 100,000 kilometres on the clock was considered to be on its last legs. Planned obsolescence was the term used for the concept that saw the big three pumping out millions of cars a year. It also was the era that saw huge problems with quality, especially as legend has it, with vehicles produced on Mondays and Fridays. At one time or other during this period my wife and I both had Ford/Mercury Cougars which were rust buckets. In fact there was a grass roots movement to boycott Ford because of the tendency of their products to turn to rust, although this was eventually fixed. 

In other words, a void developed created by some poorly designed and built domestic models aided by the energy crisis of 1973, and the Japanese stepped into it. The big three lost the initiative which means market share and were unable to get it back, except in the field of SUVs and pick ups. And they at least at this time proved to be an evolutionary dead end.

I am unable to predict the future of the Detroit three, but I am not optimistic. Even if they are able to fix themselves and produce the types of vehicles the driving public wants, the population is aging and the work force is shrinking. There still will be a large market, but will it resemble the present one?


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## FastEddy (21 Dec 2008)

reccecrewman said:
			
		

> How did it even get to this point? How far from their roots have Unions gone and now they have a huge portion of responsibility to accept for the current state of affairs. I feel no sympathy for any of them. Even at 50.00 an hour, this is still over 100K a year and not including overtime...... There's no need for that. Then throw in the benefits they also get handed to them..... Let em sink




I've tried to stay quiet during the reads, but your post really gots my dander up, not that I disagree  with it, but it reminds me again what a spoiled bunch of A.. Holes the Auto Workers and their Unions are. Considering that the heaviest physical out put they are required to do is use a power  tool, every thing else is robot or power  assisted and any body with a grade seven education could do any job going, on the Line.

$50.00 a hour is still to God Dam much. I had the misfortune to visit our Local Hospital ER this Friday and witnessed the Nurses there and what they do for $32.00 per hour, God knows what the Medical Asst's. and Orderly's get. To all you MED's out there, my Heart goes out to you and I don't know how you do it.

And for American Cars, they stopped making them from 1969 on. 

And as a foot note to this Rant, I just sold my 1974 Mercedes 280S 4 door Straight 128/6 cyl. The next day the add was out, still in perfect condition. How many Detroit Crap are still on the road after 35 years, only the classics's and check what year they were made in.


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## axeman (21 Dec 2008)

Why should my tax dollars be used to prop up something like the auto industry with the problem THEY created. If they truly were looking to stay current streamlined andall the rest of the buzz words they would of seen this cominga long time ago and started on restructuring then not now.. Sc$ew them  there are many other industries that need the help and why is it the Unions get it . What about the private sector out here in the west and the East? if you watch the news in the US the banks and other institutes said no bonuses as part of their bailout package but they were caught doing it anyway ..   i think they should be allowed to fail in the mess they created


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## Edward Campbell (21 Dec 2008)

Auto workers are not the problem; their (earned at bargaining tables) wages and benefits are a symptom of the problem.

All the anecdotal evidence from all the Army.ca members is totally, completely worthless. The statistical evidence of the past 50 years tells a far, far different story:

http://blog.macleans.ca/2008/11/20/the-decline-of-the-north-american-car/3/


> In the early 1960s, they controlled almost 95 per cent of the U.S. auto market. By 1980, that had slipped to around 80 per cent. Even a decade ago, GM was still the world’s largest company. Today, the label “Big Three” is about as dated as the tail fins on a ’50s Cadillac. With a market share of around 44 per cent, they’ve been downsized to “the Detroit Three.” The Asian carmakers, like Toyota, Honda, Hyundai and Kia, now hold 48 per cent of the U.S. market, according to Autodata Corp. And last year, Toyota sold more cars globally than GM for the first time. German carmakers like Volkswagen have also established themselves as industry giants. Thirty years ago, these companies were afterthoughts in North America. This summer, the Honda Civic overtook the Ford F-series pickup as the bestselling vehicle in America.
> 
> GM, on the other hand, has gone nowhere. In 1962, it sold 4.2 million automobiles and employed 605,000 people. In 2005, GM sold 4.5 million cars and employed 335,000 people—26 per cent of the market, with 11 major competitors. And while critics often point to rich employment contracts as the culprit in GM’s decline, that is only part of the story. While labour accounts for roughly $1,500 of the cost of each vehicle, GM, Ford and Chrysler offer anywhere from $3,500 to $7,000 in incentives to car buyers, says Ken Lewenza, the new head of the Canadian Auto Workers. “It’s not about labour rates, it’s about market, market, market. We could work for nothing and it still wouldn’t improve the bottom line or market conditions.”



Read those numbers again: over the past 45± years GM has produced about 200,000,000 vehicles but its market share, in North America, has dropped from around 45% of nearly 10,000,000 cars per year to about 20% of nearly 25,000,000 cars per year. Ruthless, effective and efficient competition from Asia and Europe has made most cars much more affordable (as a percentage of _normalized_ take family income), thus ‘growing’ the entire market (there are many, many more two and three car families in 2008 than there were in 1958) and ‘growing’ the range of passenger vehicles available (from the tiny _Smart fortwo_ through to the mighty _Dodge Ram_ with everything imaginable in between).

Toyota is not, now, the world’s top automaker because it made or makes junk. The fact that eight of the world’s top ten automakers are Asian (four) and European (four) is not because they undercut the Big Three’s prices around the world.

Starting in the ‘50s the Europeans began a serious assault on the rich North American market, offering cars Ford executive were reputed to have described as “not worth a damn!” 












North Americans wanted these small, economical and cheap cars – the growth of suburbia created demand for a second car to augment the big family sedan that dad drove to work.






By the late ‘70s Asian and European cars had a strong foothold in North America, thanks, in part, to the 1973 energy crisis that focused North American minds on fuel economy. The Japanese, especially, under the guidance of Deming and Juran focused on quality just as the Big Three were revelling in the idea of _planned obsolescence_ which made quality a second tier consideration. By the ‘90s the Japanese were able to charge a premium price for their modest cars and increase their market share at the same time.

The simple fact is that the Big Three are dinosaurs and, like the real dinosaurs of 65 million years ago they are going to go extinct. Just as the dinosaurs’ descendants remain amongst us, in the form of chickens, for example, so the descendants of the Big Three will remain – smaller, more utilitarian and less threatening.

We, American and Canadian taxpayers (and probably Australian, Brazilian and Chinese taxpayers, too) are going to throw billions and billions (only just starting with $20+ billion in 2008) at the dinosaurs in a vain effort to stop them from slipping into the tar pits – that may help to ease the inevitable, for the benefit of a few tens of thousands of middle class working men and women.

We need a new business model for the automotive sector. Asia will, almost certainly provide it.


----------



## zipperhead_cop (21 Dec 2008)

How about the Big Three merge into one company?  That cuts off two of the Hydras heads and make the worker pool non-union with reasonably good wages and benefits?  They they could take the best of all of their R&D, make a car that kicks the crap out of anything Asian or European (cross bred innards aside) and retain the industry?  
All you would have to do is get 2/3 of the executives to step down and get the workers to agree to working in a non union environment.  Everyone works together to save the business and make a quality product that lasts.  




 :rofl:

I know.  I crack me up too.


----------



## KingKikapu (21 Dec 2008)

I have no doubt that Asia, Europe and Eurasia would pick up the slack after several years, but wow, would that ever mess up the economy more than it already is in the meantime.  Big time.

Currently, what's bad for the big three is bad for the rest of them.  That will eventually change of course, but for now were gambling with some pretty big dice either way.


----------



## Greymatters (21 Dec 2008)

It sounds very similiar to the coal mining crisis in England a few decades back... the government had to inject miliions of dollars to bolster a dying energy sector because too much money had been invested in the infrastructure and too many workers were unwilling to retrain for a new occupation...


----------



## a_majoor (21 Dec 2008)

zipperhead_cop said:
			
		

> How about the Big Three merge into one company?  That cuts off two of the Hydras heads and make the worker pool non-union with reasonably good wages and benefits?  They they could take the best of all of their R&D, make a car that kicks the crap out of anything Asian or European (cross bred innards aside) and retain the industry?
> All you would have to do is get 2/3 of the executives to step down and get the workers to agree to working in a non union environment.  Everyone works together to save the business and make a quality product that lasts.
> 
> 
> ...



Small furry mammals replaced dinosaurs (and the remaining dinosaurs morphed into birds), so history and ecology tells us the opposite approach is needed.

GM can splinter into GMC, Corvette, perhaps Saturn and the European brands (Opal, SAAB), Chrysler will devolve into Jeep and probably MOPAR high performance parts while Ford seems able to survive on its own (although it may actually have to shed its US division like a skin and become an importer of Ford of Europe products and its luxury division vehicles like Volvo and Land Rover. Maybe Checker can be revived as a manufacturer.

They can then successfully compete against the Japanese, Germans, Indians and Chinese, as well as new US manufacturers like Carbon Motors.


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## Koenigsegg (21 Dec 2008)

Rumours are flying around about talk of a merger between GM and Chrysler.  The Nissan-Renault group is also looking at Chrysler.
The thing about a merger between GM and Chrysler, is that GM would be the one with most of the wealth and power.  If a merger were to take place, there would a whole bunch of redundant companies, and poor selling companies.  And they can be just as expensive (exaggeration) to terminate as they are to operate (Oldsmobile, Plymouth) and it is very hard for the mother company to retain the customers of the deceased brands.  On the bright side, there would a lot of technology sharing and streamlining of production.  No matter what, a lot of money will be spent...and hopefully for the companies it pays off.

It's all speculation however (at least when the public is involved...I have no clue what goes on behind closed doors), but mergers could be worth their while.


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## KingKikapu (21 Dec 2008)

5 bucks says it would still be cheaper to merge than chapter 11.


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## Koenigsegg (22 Dec 2008)

They'd still be around for a while sure.  But there is still no gaurantee it will keep them here.  It would be more of a way to buy time, instead of being a cure.

Some people say the merger of GM and Chrysler will save them 10 billion a year.  GM is spending 1.5 billion a month as is, and Chrysler is supposedly losing 2 to 3 billion a year.  Chrysler is also believed to have about 10 billion in the bank. So the merger may not buy them much more than a couple years, but maybe that is all they will need?

Combined they are losing about $21 billion a year (worst case?).
GM has $20 billion on hand, and Chrysler has approximatley $10.  Even combined, not looking too good.  But maybe it will be enough.


----------



## KingKikapu (22 Dec 2008)

I'm not necessarily for saving these companies.  I'm for saving the economy from one hell of a wollop at the worst possible time.  *IF it is even possible.*


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## aesop081 (22 Dec 2008)

KingKikapu said:
			
		

> I'm for saving the economy from one hell of a wollop at the worst possible time.  *IF it is even possible.*



These companies will go under....now or later. How much public money are we goigng to waste in the process ?


----------



## Michael OLeary (22 Dec 2008)

Koenigsegg said:
			
		

> Rumours are flying around about talk of a merger between GM and Chrysler.  The Nissan-Renault group is also looking at Chrysler.
> The thing about a merger between GM and Chrysler, is that GM would be the one with most of the wealth and power.  If a merger were to take place, there would a whole bunch of redundant companies, and poor selling companies.  And they can be just as expensive (exaggeration) to terminate as they are to operate (Oldsmobile, Plymouth) and it is very hard for the mother company to retain the customers of the deceased brands.  On the bright side, there would a lot of technology sharing and streamlining of production.  No matter what, a lot of money will be spent...and hopefully for the companies it pays off.
> 
> It's all speculation however (at least when the public is involved...I have no clue what goes on behind closed doors), but mergers could be worth their while.




So, if GM and Chrysler merged, and then they started to drop redundant suppliers, what kind of a "bail-out" package do you think they'll be offering those second and third tier manufacturers and their employees?


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## Koenigsegg (22 Dec 2008)

Michael O`Leary said:
			
		

> So, if GM and Chrysler merged, and then they started to drop redundant suppliers, what kind of a "bail-out" package do you think they'll be offering those second and third tier manufacturers and their employees?



I'd say nothing.  I'm not sure what the employees of Olds and Plymouth got...if anything.
The Big Three seem to really want money handed to them, but it doesn't look like they want anything to do with helping the people they let go.

But I couldn't really tell you what they would do, I may just be cynical.
For some reason I think in the past employees got a lump sum amount of money.  Not all that much though.  Or maybe I'm thinking of a different company.


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## Kirkhill (22 Dec 2008)

I wonder what makes Cerberus, or anyone else for that matter, think that GM or Nissan-Renault will have any better luck with Chrysler than Daimler had?


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## KingKikapu (22 Dec 2008)

CDN Aviator said:
			
		

> These companies will go under....now or later. How much public money are we goigng to waste in the process ?


Depends on what you call waste.  If it protects the world from a serious credit/financial calamity, then it's worth it.  If it doesn't protect us, then certainly you would be right.

None of what I just said had anything to do with the well being of these companies.  They can die when we can afford them to, and I wouldn't lose much sleep.  Is this really the right time for it though.  If it is, be prepared to have damn good reasons.

Them being crappy car companies is not one of them.


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## Michael OLeary (22 Dec 2008)

Sorry Koenigsegg, that should have had a "rhetorical" smilie.  

I don't expect to hear about any hand-outs from the Big 3 if they start to drop suppliers.

The irony is that the difference in manpower figures offered by E.R. Campbell above (reposted below) probably include a lot of manufacturing capacity that GM owned in 1962, but let go to independent status to cut their own costs since.  I would expect the others went through similar restructuring.



> GM, on the other hand, has gone nowhere. In 1962, it sold 4.2 million automobiles and employed *605,000* people. In 2005, GM sold 4.5 million cars and employed *335,000* people—26 per cent of the market, with 11 major competitors.


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## Edward Campbell (22 Dec 2008)

Even the world’s biggest automaker, Toyota, is not shielded from the economic storm according to this report, reproduced under the Fair Dealing provisions (§29) of the Copyright Act from today’s _Globe and Mail_:
--------------------
http://business.theglobeandmail.com/servlet/story/RTGAM.20081222.wtoyota1222/BNStory/Business/home

 Toyota forecasts its first operating loss

CHANG-RAN KIM

Reuters

December 22, 2008 at 5:03 AM EST

NAGOYA, JAPAN — Toyota Motor Corp. forecast a first-ever annual operating loss, blaming a relentless sales slide and a crippling rise in the yen in what it said was an emergency unprecedented in its 70-year history.

Toyota, the world's biggest auto maker, had been expected to issue its second profit warning in less than seven weeks after domestic rival Honda Motor Co. also cut its outlook again last week, but the downward revision was bigger than predicted.

“This is very, very, very bad,” said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments. “There's a chance they could fall into the red in the next business year as well.

“This is also not just a problem for Toyota. What is good for Toyota is good for the Japanese economy.”

Auto makers around the world face their toughest business environment in recent memory, caught in a sharp reversal of demand as the financial crisis spreads, squeezing credit and consumer sentiment.

Toyota cut its group operating forecast to a loss of ¥150-billion ($1.7-billion U.S.) for the year to end-March, after shocking financial markets last month by slashing its group operating profit forecast by ¥1-trillion to ¥600-billion.

It made a record profit of ¥2.27-trillion last year.

Toyota now expects group net profit of ¥50-billion instead of ¥550-billion.

Toyota shares closed down 0.2 per cent ahead of the announcement in a firmer Tokyo market. Its Frankfurt-listed shares fell 2.4 per cent in light trade.

Like the rest of the industry, Toyota has idled factories, slowed assembly lines and delayed manufacturing projects, such as the start of a Mississippi plant under construction to build the Prius hybrid model, and said it would continue those moves until the tide turned.

“We are facing an unprecedented emergency,” president Katsuaki Watanabe told a year-end news conference. “This is a crisis unlike the crises of the past.”

Toyota will postpone all projects to expand capacity, move 16 of its 75 global assembly lines to a single shift, and cancel directors' bonus payments for this year, among a wide range of steps aimed at improving near-term profitability, he said.

Even the electric hand dryers at the company's Nagoya office building have been unplugged in an effort to cut costs.

Mr. Watanabe stopped short of projecting what global car sales and earnings would do next year, saying only that Toyota hoped to return to profit and cut capital spending to below ¥1-trillion next year, compared with the ¥1.4-trillion planned this year.

“Conditions next fiscal year could be more severe given the yen's strength and worsening market conditions, unless the company and the government cope flexibly with external factors,” Shotaro Noguchi, auto analyst at Mitsubishi UFJ Securities, said.

Toyota lowered its U.S. dollar assumption for the remainder of the year to ¥90 and its euro assumption to ¥120, versus current rates of ¥90 and ¥126.

Honda made a similar move last week, cutting its annual profit forecast by 67 per cent, and outlined a list of counter-measures such as putting off non-urgent investments to prop up its profitability.

In the United States, auto makers are in even bigger trouble, with President George W. Bush throwing General Motors Corp. and Chrysler LLC a lifeline of up to $17.4-billion to stave off bankruptcy.

India's Tata Motors Ltd. has agreed to inject “tens of millions” of pounds into Jaguar Land Rover to prevent an immediate cash flow crisis, the Financial Times reported.

Elsewhere, Japanese small-car makers Suzuki Motor Corp. and Daihatsu Motor Co. announced more production cuts, of 29,000 units and 16,000 units, respectively, by the end of March, along with a reduction of non-permanent workers. Germany's BMW was also considering further production cuts, an executive said.

Bridgestone Corp., Japan's largest tire maker, on Monday cut its operating profit forecast for 2008 by 24 per cent to ¥118-billion on slower tire demand for new cars and replacement purposes.

Its French rival Michelin said it faced costs of nearly €150-million ($209-million U.S.) as it cuts back operations to cope with a decline in tire demand.

Departing from past practice, Toyota did not disclose its sales and production forecasts for the coming calendar year, saying it was impossible to predict where the bottom for the global vehicle market lay.

“We need to be prepared for the tough conditions to continue, and maybe even worsen,” Mr. Watanabe said. He said Toyota was undecided about what to do with its dividend, which rose to a record ¥140 last year and is widely feared to fall.

For 2008, Toyota estimated group-wide global sales, which include sales at units Daihatsu and Hino Motors Ltd., at 8.96 million vehicles, down 4 per cent from last year.

For the business year to March 31, Toyota lowered its vehicle sales forecast to 7.54 million vehicles from 8.24 million. It sold 8.913 million vehicles last business year.
--------------------

Do not look for any recovery, anywhere in the auto sector, until 2010. While China (still growing at 6.5%+) and, perhaps, India might be able to absorb a lot of ‘surplus’ production the big, rich European, Japanese and North American markets are, effectively, back at 25 year old consumption/production levels.


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## Edward Campbell (22 Dec 2008)

Here, reproduced under the Fair Dealing provisions (§29) of the Copyright Act from today’s _Globe and Mail_, is a report that should warm the heart of those who blame it all on the workers:
--------------------
http://business.theglobeandmail.com/servlet/story/RTGAM.20081222.wautos22/BNStory/Business/home

 Compromise may be only choice, CAW head says

OMAR EL AKKAD AND KAREN HOWLETT

From Monday's Globe and Mail

December 22, 2008 at 4:07 AM EST

OTTAWA AND TORONTO — The head of the Canadian Auto Workers union is signalling he may be prepared to compromise on the contentious issue of pay and benefits for auto workers, a day after Ottawa and Ontario announced a $4-billion lifeline for Detroit car makers.

CAW president Ken Lewenza signalled that his union may have no choice but to follow in the footsteps of its larger U.S. counterpart, much as the Canadian government followed Washington's lead on the auto bailout package.

"When you include our productivity, when you include some of the advantages we have in Canada, we're in pretty good shape, but that doesn't stop the fact that you have to watch what people are doing throughout the world," Mr. Lewenza said in an interview yesterday.

"What the [United Auto Workers union in the United States] would do, for example, would have an impact on us, what they would do in Japan ... would have an impact on us."

If the Bush administration calls on the UAW to bring its compensation into line with that of Japanese auto makers, and the CAW is forced to follow suit, some analysts have estimated that the resulting cuts for the Canadian union members could range from $15 to $25 an hour.

Prime Minister Stephen Harper and Ontario Premier Dalton McGuinty announced on Saturday that they are providing $4-billion in emergency loans to General Motors of Canada Ltd. and Chrysler Canada Inc., in lockstep with the $17.4-billion (U.S) bailout package U.S. President George W. Bush unveiled a day earlier. The loans represent Canada's one-fifth share of the Detroit car makers' production in North America.

"We are doing this on the assumption that we cannot afford, either in the U.S. or Canada, a catastrophic short-term collapse," Mr. Harper said at a news conference in Toronto. "But on the other hand, we are doing this with the knowledge that the auto makers must change the way they are doing business."

The loans come with strings attached. GM and Chrysler must present plans by Feb. 20 outlining how they will restructure their operations so that they can remain viable. They have until the end of March to present evidence that the plan will actually proceed, including striking a deal with the CAW, showing how they plan to cut costs.

The Detroit Three car makers have asked for at least $6-billion (Canadian) to help their Canadian subsidiaries cope with a massive decline in vehicle sales. According to the terms of the loans, GM will get $3-billion, while Chrysler will receive $1-billion. They will receive the money in three instalments, beginning next Sunday.

(Ford Motor Co. of Canada Ltd. is in better financial shape than its Detroit rivals and is seeking a $2-billion line of credit.)

GM and Chrysler will receive all of the money by the end of February. In return, Ottawa and Ontario are putting them on a short leash. The companies must put limits on executive compensation and report any transactions exceeding $125-million.

Ottawa and Ontario will also become shareholders of GM and Chrysler. They are to receive warrants for non-voting, common shares in the companies, equal to their 20-per-cent share of the U.S. bailout package.

The federal and Ontario governments are hoping to retain Canada's 20-per-cent share of domestic production. But the big unknown is whether they can do so as the auto sector braces for another tough year. Opposition politicians seized on that uncertainty yesterday.

"Our point is that if we put up 20 per cent of the money, we should have a guarantee that Canada has 20 per cent of the production and the jobs," Toronto-area Liberal MP John McCallum said on CTV's Question Period yesterday.

Both auto makers and their suppliers expressed widespread approval of the package. "The support announced today sends a significant signal of stability in the face of the economic and credit challenges faced by Canada's auto sector," GM Canada President Arturo Elias said in a statement, entitled GM To Earn Canada's Trust.
--------------------

Good, even excellent wages and benefits do not harm well managed corporations and high wages and good benefits are, broadly, beneficial to the economy as a whole.

Hounded by a pack of (conservative) economic illiterates, the CAW will not lead a race for the bottom.


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## Greymatters (22 Dec 2008)

Misleading title - very little of the article focused on the union, and what did focus on the union was vague at best...


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## a_majoor (23 Dec 2008)

Mark Steyn sums things up in his incomparable way:

http://article.nationalreview.com/print/?q=YTMxODc2NzY0OTNhODNhNmUwMjY5MzU2NzliMjA2NDY=



> *Can You Still See the USA in Your Chevrolet?*
> Route 66 is looking ever more like a one-way dead-end street to Bailoutistan.
> 
> By Mark Steyn
> ...


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## KingKikapu (23 Dec 2008)

Jesus Christ, Market Capitilization!?!!  What's next?  Measuring a company's worth by net book value!?!?!


I literally just smacked my hand to my forehead.


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## a_majoor (23 Dec 2008)

KingKikapu said:
			
		

> Jesus Christ, Market Capitilization!?!!  What's next?  Measuring a company's worth by net book value!?!?!



Pretty amazing, huh? Most Canadians would seem to think so as well:

http://freedomnation.blogspot.com/2008/12/why-would-politicians-support-auto.html



> *Why would politicians support the auto bailout if the majority is against it?*
> 
> I can't stand the corporate welfare that has exploded over the last few months. It seems like politicians don't understand the harm that bailouts or subsidies do to people. They are taking capital away from the economy and giving it companies that have already proven that they are failures. This strikes down any entrepreneurial spirit that Canada has; this stops new jobs from being created.
> 
> ...


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## KingKikapu (23 Dec 2008)

I meant I had a problem with the previous article using market capitalization as an accurate metric during an economic cluster****.

I'd smack the author upside the head if I could for that one.  Grossly misleading.


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## Greymatters (23 Dec 2008)

"An autoworker who lost their job is almost guaranteed to vote for a party that will give the corporations the most money. Everyone else may be pissed about it, but they are not guaranteed to vote for the party that gives the least or even no money. That is the calculation that every politicians make, and that is why most of our elected officials support something that most people do not."

I would disagree - political loyalties are formed by lifelong experience, not just a few bucks when times are hard.  Just because higher levels of business and government suck up to the money doesnt mean the rest of the population does...


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## Michael OLeary (23 Dec 2008)

Greymatters said:
			
		

> I would disagree - political loyalties are formed by lifelong experience, not just a few bucks when times are hard.  Just because higher levels of business and government suck up to the money doesnt mean the rest of the population does...



That may well be true, and if so, the core vote for each party in a riding changes rarely.  But the "politickin' process" (not to be confused with the political process) doesn't pursue the core vote, they already have that. They seek to persuade the swing vote, which does react to sound bites, emotional appeals and short-term (real or imagined) issues.  That swing vote can determine who gets the closely contested ridings, and winning them relies upon that volatile voter sector without life long loyalties to one party or another.


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## Greymatters (23 Dec 2008)

Michael O`Leary said:
			
		

> ...They seek to persuade the swing vote, which does react to sound bites, emotional appeals and short-term (real or imagined) issues...



True, there are always those who will be swayed by a coin waved in their face...

Wait, isnt the swing vote only a small percentage of the population?  So once again its an appeal to a minority?


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## Kirkhill (23 Dec 2008)

Flash News - Kirkhill's synapses sparked again.

Quote partially remembered from someplace recently:  GM is a Pension Plan that makes cars on the side - something like 1,000,000 people receive benefits (health and retirement) from the labour of something like 50,000 line workers.

Also:  Reductions in the labour costs are necessary to maintain market competitveness

Also: Reductions in labour costs are possible through robotics

Also: Robotics are opposed by Labour as a loss of jobs 

Also: Jobs are required for income.

Solution:

Designate employees as legacy shareholders of the corporation.

Release them all and supply them with a pension income and benefits (as opposed to dividends)

Fund their dividends by an entirely robotized assembly facility.

PS (offload some of the US health costs to the government - but keep private insurance as well)

It would make for an interesting world 2-3 generations hence with the heirs of current lineworkers having some of the inheritable advantages of an aristocracy......

PPS would the UAW find a voice as the agent of the aristocrats?


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## chanman (24 Dec 2008)

The presence of a large and ready supply of unsold automobiles raises an interesting question - getting less than break-even is still better than sitting on the cars as they deprecieate away, paying rent on storage lots, wages for mechanics to keep them in working order, etc.

Where will the cars go?  Selling them cheaply in emerging markets may be one option.  But that seems likely to trip anti-dumping provisions.  Of course, the idea of Chinese automakers bringing up a case of being pressed by the dumping of foreign cars is a development most people probably didn't forsee last year, eh?


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## Colin Parkinson (28 Dec 2008)

Start dropping them into the NWF,FATA. Use some as bombs, sell the 4x4, SUV's with tracking devices.  ;D


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## a_majoor (31 Dec 2008)

The WSJ on the woes of the "big three"

http://online.wsj.com/article/SB123060246925441479.html#



> *Why Detroit Has an Especially Bad Union Problem*
> Collective bargaining agreements mean the UAW can make or break Big Three CEOs.
> 
> By LOGAN ROBINSON
> ...


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## thunderchild (4 Jan 2009)

I Used to work for Magna international, there a very good reasons that the big 3 are collapsing.
1. Building SUV's when they should have been developing cars.
2. Over producing low demand high priced vehicles.  (just drive up the Allen express way in Toronto and look at the airfield!)
3. Borrowing to cover for their payrolls.
4. Not having access to some country's markets while those countries companies ( subsidised by these countries) ship in cars built overseas, while offering few 2nd tier programs in the west.
5. Difference in wages ($19.00 per hr Canada vs $2.00 per hr China vs 12.50 in  Japan {subsidised}).
6. Changes in Can dollar make doing business here way too expensive  if the Canadian dollar is over Can$.80 . here is an example, a part we used to make for 4 years cost us $1.23 per part, which we sold for $2.00.  When the Canadian dollar was over 1 dollar US what happened was that we were sending the part for $.98 when it was suppose to be $1.23 we lost a ton of money on a program that shipped over 5000 parts per week.  Not only that we had to start paying back the big 3 for doing business with them.  That is normal but with the decrease in sales and increase in the Canadian dollar we had to give back more than our business plan allowed for.  Our cost for raw materials went way up because most parts came from the US like Aluminium.  And that is just to start.


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## a_majoor (15 Feb 2009)

Reality sets in at last. All that money extracted from you and I for exactly nothing....

http://www.damianpenny.com/archived/012686.html



> *From General to very specific motors*
> 
> Things may be reaching the grim breaking point:
> 
> ...


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## a_majoor (22 Mar 2009)

While Studebaker is long gone, the story of the Avanti contains a clue as to one possible future for the Detroit Three. Some very successful marques exist within the Detroit Three, and it is very possible that the production rights and tooling for such icons as the Corvette and F-150 (among others) might be purchased by enterprising individuals and carry on after the parent corporation is gone.

http://www.carlustblog.com/2008/07/car-lust-avanti.html



> *Avanti*
> by Cookie the Dog's Owner on July 22, 2008
> 
> I saw my first Avanti one summer in the mid-1970s when I was 12 or 13. It must have belonged to someone who liked to golf, because it showed up at the local par-3 course at least once or twice a week. Standing out from the rococo "personal luxury" cars surrounding it, the clean-lined Avanti was a jet-age marvel that belonged in the driveway of the House of the Future.
> ...


----------



## retiredgrunt45 (22 Mar 2009)

Seeing that my "Ricer" minivan hasn't lived up to all its lofty hype. I tried both American and Japanese and have been left with a thin wallet both times. I think i'll save my money and go Omish next time with a good horse and buggy. I hear you can get a bail of hay for about $3.00 and theres no need for insurance, savings all around.


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## Kirkhill (22 Mar 2009)

retiredgrunt45 said:
			
		

> Seeing that my "Ricer" minivan hasn't lived up to all its lofty hype. I tried both American and Japanese and have been left with a thin wallet both times. I think i'll save my money and go Omish next time with a good horse and buggy. I hear you can get a bail of hay for about $3.00 and theres no need for insurance, savings all around.



Not to mention all that free, and marketable, fertilizer.


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## retiredgrunt45 (22 Mar 2009)

> Not to mention all that free, and marketable, fertilizer.



Good idea "kirkhill", my own sh** pile to park the POS pile of Honda rice beside, along with the POS buick thats still sitting in my driveway. 

Maybe I can recoupe some of the money I spent fixing these two POS by selling my horse poo.  ;D


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## daftandbarmy (23 Mar 2009)

Abridged letter from Troy Clarke, President of General Motors

 Looks like it’s true:

http://www.snopes.com/politics/soapbox/knox.asp
======================================

Dear Employee,

Next week, Congress and the current Administration will determine whether to provide immediate support to the domestic auto industry to help it through one of the most difficult economic times in our nation's history. Your elected officials must hear from all of us now on why this support is critical to our continuing the progress we began prior to the global financial crisis...................

As an employee, you have a lot at stake and continue to be one of our most effective and passionate voices. I know GM can count on you to have your voice heard.  Thank you for your urgent action and ongoing support.

Troy Clarke
President
General Motors North America
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Here is a response from one supplier:

In response to your request to call legislators and ask for a bailout for the United States automakers please  consider the following, and please also pass this on to Troy Clark, the president of General Motors North America for me.

You are both infected with the same entitlement mentality that has bred like cancerous germs in UAW halls for the last countless decades, and whose plague is now sweeping the nation, awaiting our new "messiah" to wave his magical wand and make all our problems go away, while at the same time allowing our once great nation to keep "living the dream".  The dream is over!

The dream that we can ignore the consumer for years while management myopically focuses on its personal rewards packages at the same time that our factories have been filled with the worlds most overpaid, arrogant, ignorant and laziest entitlement minded "laborers" without paying the price for these atrocities and that the masses still will line up to buy our products.

Don't tell me I'm wrong. Don't accuse me of not knowing of what I speak.  I have called on Ford, GM, Chrysler, TRW, Delphi , Kelsey Hayes, American Axle and countless other automotive OEM's and Tier ones for 3 decades now throughout the Midwest and what I've seen over the years in these union shops can only be described as disgusting.

Mr Clark, the president of General Motors, states: "There is widespread sentiment in this country, in our  government, and especially in the media that the current crisis is completely the result of bad management. It is not."  You're right - it's not JUST management. How about the electricians who walk around the plants like lords in feudal times, making people wait on them for countless hours while they drag ass so they can come in on the weekend and make double and triple time for a job they easily could have done within their normal 40-hour week?

How about the line workers who threaten newbies with all kinds of scare tactics for putting out too many parts on a shift and for being too productive (mustn't expose the lazy bums who have been getting overpaid for decades for their horrific underproduction, must we)? Do you really not know about this stuff?  

How about this great sentiment abridged from Mr. Clarke's sad plea: "Over the last few years,we have closed the quality and efficiency gaps with our competitors."  What the hell has Detroit been doing for the last 40  years?!?  Did we really JUST wake up to the gaps in quality and efficiency between us and them?  The K car vs. the Accord?  The Pinto vs. the Civic?  Do I need to go on? 

We are living through the inevitable outcome of the actions of the United States auto industry for decades.  Time to pay for your sins, Detroit ..

I attended an economic summit last week where a brilliant economist, Alan Beaulieu surprised the crowd when he said he would not have given the banks a penny of "bailout money".  Yes, he said, this would cause short term problems, but despite what people like George Bush and Troy Clark would have us believe, the sun would in fact rise the next day.  And something else would happen.  Where there had been greedy and sloppy banks new efficient ones would pop up.  That is how a free market system works.   It does work . . . ...if we would let it work.  But for some reason we are now deciding that the rest of the world is right and that capitalism doesn't work - that we need the government to step in and "save us". 

Save us?  Hell, we're nationalizing.  And unfortunately, too many of this once fine nation's citizens don't even have a clue that this is what's really happening.  But they sure can tell you the stats on their favorite sports teams.  Yeah - THAT'S important.  Does it occur to ANYONE that the "competition" has been producing vehicles, EXTREMELY PROFITABLY, for decades now in this country?....  How can that be???

Let's see:
* Fuel efficient 
* Listening to customers 
* Investing in the proper tooling and automation for the long haul 
* Not being too complacent or arrogant to listen to Dr W Edwards Deming four decades ago 
* Ever increased productivity through quality, lean and six sigma plans 
* Treating vendors like strategic partners, rather than like "the enemy" 
* Efficient front and back offices 
* Non-union environment. 

Again, I could go on and on but I really wouldn't be telling anyone anything they really don't already know in their hearts. 

I have six children, so I am not unfamiliar with the concept of wanting someone to bail you out of a mess that you have gotten yourself into - my children do this on a weekly, if not daily basis, as I did at their age. I do for them what my parents did for me (one of their greatest gifts, by the way) - I make them stand on their own two feet and accept the consequences of their actions and work them through.  Radical concept, huh.   Am I there for them in the wings?  Of course - but only until such time as they need to be fully on their own as adults. 

I don't want to oversimplify a complex situation, but there certainly are unmistakable parallels here between the proper role of parenting and government.   Detroit and the United States need to pay for their sins. Bad news people - it's coming whether we like it or not.  The newly elected Messiah really doesn't have a magic wand big enough to "make it all go away".  I laughed as I heard Obama "reeling it back in" almost immediately after the vote count was tallied.  "We might not do it in a year or in four."  Where was that kind of talk when he was RUNNING for the office.  Stop trying to put off the inevitable. 

That house in Florida isn't worth $750,000.

People who jump across a border really don't deserve free health care and welfare benefits.

That job driving a forklift for the big 3 really isn't worth $85,000 a year.

We really shouldn't allow Wal-Mart to stock their shelves with products acquired from a country that unfairly  manipulates their currency and has the most atrocious human rights infractions on the face of the globe.

That couple whose combined annual income is less than $50,000 really shouldn't be living in that $485,000  home.

Let the market correct itself people - it will.  Yes it will be painful, but it's gonna be painful either way.   And the bright side of my proposal is that on the other side of it is a nation that appreciates what it has, doesn't live beyond its means, gets back to basics, and redevelops the work ethic that made it the greatest nation in the  history of the world, and probably turns back to God.

Sorry - don't cut my head off. I'm just the messenger sharing with you the "bad news".

Gregory J Knox
President
Knox Machinery, Inc.
Franklin , Ohio45005


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## retiredgrunt45 (23 Mar 2009)

Good read, but the only thing he did got wrong was that to allow the world market to correct itself as he suggests at this point we will end up in a fatal depression that will make the 30's look like childs play. I do agree with most of what he writes but I think its a bit to late, because we've gone far beyond the point of no return this time.


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## [RICE] (25 Mar 2009)

retiredgrunt45 said:
			
		

> Good read, but the only thing he did got wrong was that to allow the world market to correct itself as he suggests at this point we will end up in a fatal depression that will make the 30's look like childs play. I do agree with most of what he writes but I think its a bit to late, because we've gone far beyond the point of no return this time.



Indeed, he makes it sound like some other company will spring out of the ground to cover their retreat and the whole ordeal will be painless. At this point, I don't think Hayek's economics are suitable, as the big 3 are a little too big. Keynesian economics worked with the airlines, why not with the auto industry?


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## a_majoor (26 Mar 2009)

[RICE] said:
			
		

> Indeed, he makes it sound like some other company will spring out of the ground to cover their retreat and the whole ordeal will be painless. At this point, I don't think Hayek's economics are suitable, as the big 3 are a little too big. Keynesian economics worked with the airlines, why not with the auto industry?



Keynsian economics worked with the airlines? Only for political rent seekers who got the bailout money, and the free market airlines like WestJet here in Canada are doing far better than the one with the subsidies and special Keynsian favors...

As for car companies ready to spring from the earth, just go back a bit on this thread (I'll even help you: here) and you will see ten American companies who's products will never see the light of day if billions of investment dollars are taxed away to support the Detroit three. As well; individual makes and models from the existing lineup might continue: do you think people might want a Corvette or F-150 without the rest of GM or Ford?


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## retiredgrunt45 (26 Mar 2009)

> do you think people might want a Corvette or F-150 without the rest of GM or Ford?



I don't think Ford or GM are going anywhere and there will always be a market for whether it be a GM Siverado, Ford F-150 or a Toyota Tundra. 

The Japanese market share are hurting right now right along with the big three. How much longer do you think they can go before they have their hands out also, 6 months a year maybe if this market meltdown continues into 2010-11? They may have been in better shape at the beginning of this meltdown than the big 3 but if your not selling cars and your market share has dropped of by 70%, their going to be in the same shape GM is in right now a year from now, Layoffs- and handouts. No ones immune, not even the mighty Toyota and if this made in America solution doesn't work, we won't have to worry to much about what we drive, because all us working poor are going to be able to afford are bycycles anyway.

This is just the beginning: http://www2.canada.com/cars/toyota+jobs+canada/1211681/story.html?id=1211681

The big American consuming machine has stalled and has thrown a monkey wrench into the Asian markets: http://www.pbs.org/newshour/bb/asia/july-dec08/globaleconomy_12-24.html


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## COBRA-6 (26 Mar 2009)

And there are many other automakers out there that could move in to fill the gap left by the breakup of the big 3, ie Alfa Romeo, Peugeot, and a bunch of other brands that make cars people may actually want to buy!


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## retiredgrunt45 (26 Mar 2009)

> And there are many other automakers out there that could move in to fill the gap left by the breakup of the big 3, ie Alfa Romeo, Peugeot, and a bunch of other brands that make cars people may actually want to buy!



ya and I can just see how much it will cost you to repair that Alpha Romeo or Peugeot when it breaks down. 

I went form American made to Japanese in 2004 and I'm still having the same problems with my Japanese made van as I had with my American one, only this time its costing me more to repair. You want to hype about how well Japanese cars are made, I also listened to the hype and read all the reviews before I purchased my van and what I was left with was another lemon and I'm not the only one.

There may have been a time when Japanese and German cars were far superior to anything that the North American industry could put out, but from my empty wallet it has become painfully clear to me that its mostly and illusion these days.

 Transmission replacement for 1999 Dodge Minivan $2400.00
 Transmission replacement for 2004 Honda Odyssey $3200.00 

http://www.consumeraffairs.com/automotive/honda.html
http://www.ohiolemonlaw.com/honda-lemon.shtml
http://www.carcomplaints.com/Honda/Accord/2003/transmission/
http://www.hondaproblems.com/Accord/transmission-failure.shtml
http://blogs.cars.com/kickingtires/2008/05/honda-owners-fo.html Issuing a TSB doesn't mean they have to repair it as I found out the hard way.

 The avergage shelf life of any car today is about 6 years after they reach 100,000 Kms or more they literally self destruct. On both my vans, the Dodge and the Honda the transmissions went at almost the same mileage, that tells me that this so called Japanese quality is an illusion and the only difference now is that it will cost me more to repair the Japanese car. The grass always looks greener on the other side of the fence, until you step over...

The only reliable mode of transportation right now is your feet or a bicycle.

Anyone in the market for a used minivan , give me call and make sure you buy a good used car warranty.


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## [RICE] (26 Mar 2009)

Thucydides said:
			
		

> Keynsian economics worked with the airlines? Only for political rent seekers who got the bailout money, and the free market airlines like WestJet here in Canada are doing far better than the one with the subsidies and special Keynsian favors...
> 
> As for car companies ready to spring from the earth, just go back a bit on this thread (I'll even help you: here) and you will see ten American companies who's products will never see the light of day if billions of investment dollars are taxed away to support the Detroit three. As well; individual makes and models from the existing lineup might continue: do you think people might want a Corvette or F-150 without the rest of GM or Ford?



I'd prefer to have to have a larger and competitive variety in the auto industry, but the period between now and then is what I'd rather do with out. I should have been more clear: I didn't mean to advocate Keynesian economics entirely, rather some measure of redundancy to prevent a total collapse.


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## a_majoor (27 Mar 2009)

The market is redundency; interference in the markets is what is causing the problem.

Wagner act unionism strangles the labour market in the auto industry (non unionised plants in Canada and the US have few of the labour costs or issues that Detroit Three plants have), government mandates on saftey and fuel economy burden the automakers with fixed costs (affects all: it's a wash), government interference in the Financial markets caused the current collapse (see how the Democratic Congress refused to allow oversight and regulation of "Freddie Mac" and "Fannie Mae" in 2003 and 2006), and billions in TARP money and bailouts takes resources away from those who *could* fill the gaps.

Really, all that is happening now is the Obama Administration is paying off its supporters in the unions, and the collapse of GM and Chrysler may have been staved off for a few years at the expense of the destruction of literally billions of dollars of taxpayer wealth (if GM loses $2 billion/month, how likely will it be for any of the bailout money to be repaid?)

The best solution would be to write off the losses, allow a chapter 11 bankruptcy so the Detroit three can rewrite their business plans, contracts and obligations and rebuild from there. If Ford, GM and Chrysler are overtaken by "Carbon Motors" or foreign competition, then that is a natural result of the market, and we don't cry too much about the fact that "Wang Microcomputers" or "NeXT" no longer compete for our IT business.


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## TimBit (27 Mar 2009)

Thucydides said:
			
		

> The market is redundency; interference in the markets is what is causing the problem.
> 
> Wagner act unionism strangles the labour market in the auto industry (non unionised plants in Canada and the US have few of the labour costs or issues that Detroit Three plants have), government mandates on saftey and fuel economy burden the automakers with fixed costs (affects all: it's a wash), government interference in the Financial markets caused the current collapse (see how the Democratic Congress refused to allow oversight and regulation of "Freddie Mac" and "Fannie Mae" in 2003 and 2006), and billions in TARP money and bailouts takes resources away from those who *could* fill the gaps.
> 
> ...



Wouldn't writing off the losses be intereference in the market? They're failing because people don't buy their cars: that is markets in action. I agree with you, interference in the market is part of the problem. But I think writing off the losses would only perpetuate the american motor industry's lack of judgement as well as  the "market's" greed and lack of long-term vision. GM's decision to go with Hummers and big trucks instead of EV's and fuel-efficient vehicles is a bad strategic decision and a lack of forethought, and should be punished by the markets.


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## a_majoor (30 Mar 2009)

TimBit said:
			
		

> Wouldn't writing off the losses be intereference in the market? They're failing because people don't buy their cars: that is markets in action. I agree with you, interference in the market is part of the problem. But I think writing off the losses would only perpetuate the american motor industry's lack of judgement as well as  the "market's" greed and lack of long-term vision. GM's decision to go with Hummers and big trucks instead of EV's and fuel-efficient vehicles is a bad strategic decision and a lack of forethought, and should be punished by the markets.



Writing off bad debts is part of the clearing house function of the markets, and if you were to hypothetically default on a credit card or mortgage, the bank sells your debt for pennies to the dollar to collections and writes it off. The problem arises when these debts are *not* written off; the banks still carry them as valuable assets on the books, but in reality they cannot utilize this "asset".

Handouts are what would perpetuate the lack of judgment on the part of the US auto industry, that is, if the Administration dosn't nationalize GM and Chrysler and drive them into the ground the way the UK motor industry was destroyed (in which case much more taxpayer wealth is written off and a greater deflationaly surge is set in motion. I doubt this will be timed or sized to counteract the Administration's inflationary "surge" either).

The decision to go for trucks and SUV's was indeed a bad one, and the market corrected it very swiftly last summer when gas prices spiked and sales dropped 50% and more. The real problem is most consumers don't have much interest in small fuel efficient vehicles, or see the opportunity costs as negative (I spend "x" on a fuel efficient car but the payback in savings is longer than the lifetime of the car, or the car is too small to carry my stuff/get me across America or some combination of factors).

The market is like a complex ecosystem, and companies are a bit like living things in the ecosystem, they must adapt to their *immediate* environment or die. Suggesting they change their business plans to satisfy a bureaucrat's vision or to fulfill some "green" fantasy simply sets them up for death or endless life support on taxpayers monies (with the irony being taxpayers are now *less* able to afford a car....)


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## a_majoor (31 Mar 2009)

The only good thing about the Obama administration nationalizing the auto sector is the ultimate failure will clearly belong to the Administration. Their attempts to keep the UAW afloat will run into serious difficulties as the legacy costs increase to $6 billion/year....

http://business.theatlantic.com/2009/03/whither_gm.php



> *Whither GM?*
> The more I read about these plans, the more I wonder what the end game is supposed to be.  The administration is acting serious:  firing Wagoner, and threatening to cut off funds if Chrysler doesn't make a deal with Fiat.  Then you read the report, and the government's statements seem . . . kinda silly.  It recognizes GM's deep problems.  Some highlights:
> 
> 
> ...


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## Fishbone Jones (31 Mar 2009)

Nationalized auto company.

Can you say, Lada? Or will it be named something more domestic? Like Obamobile 8)


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## karl28 (31 Mar 2009)

This is a very sticky situation with the Auto industries . I agree that the blue caller workers in the auto industries should make some concessions for Roll back of there extremely high wages but at the same time what about the white caller workers in these plants  you don't here any thing about them taking cut backs  ?    
       Now comes the sticky part of this situation is if the Auto industries can force the CAW members to take deep pay cuts than other industries can do the same to other workers and blame it on the rough economy situation ,  but some of these people may not be able to afford the cuts in other industries .  We already saw the liberal Government in Ont try to due that with next years (2010)minimum wage increase but due to public and media pressures they decide to proceed with the next years minimum wage increases .      All I can say is that its scary times ahead for every one  .


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## a_majoor (1 Apr 2009)

Well _no wonder_ the Detroit three are in trouble!:

http://www.politico.com/politico44/perm/0309/white_house_by_car_4f93340a-58bb-44c9-ae1b-44c741fa5c3a.html



> *Who's driving what?*
> 
> By AMIE PARNES & CAROL E. LEE
> 
> ...


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## old medic (2 Apr 2009)

http://www.nytimes.com/2009/04/01/business/01bankruptcy.html?em
U.S. Hopes to Ease G.M. to Bankruptcy
By MICHAEL J. de la MERCED and JONATHAN D. GLATER
Published: March 31, 2009


> The government may seek to ease General Motors into what it calls a “controlled” bankruptcy, somewhere between a prepackaged bankruptcy and court chaos, by persuading at least some creditors to agree to a plan that would cleave the company into two pieces, according to people briefed on the matter.
> 
> Instead of signing on every creditor as is typically required in prepackaged deals, administration officials are using as leverage the promise of taxpayer financing. Many regard the government as the only lender willing to step up with money — in bankruptcy or out.
> 
> ...


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## Michael OLeary (15 Apr 2009)

*Fiat to Chrysler: Cut costs or we walk*

By ERIC REGULY AND GREG KEENAN,  From Wednesday's Globe and Mail



> ROME and TORONTO — *Fiat SpA will abandon Chrysler LLC, leaving it to fend for itself in bankruptcy court, unless Chrysler's Canadian and American unions agree to substantial labour-cost reductions by the end of the month*, Fiat CEO Sergio Marchionne says.
> 
> For Chrysler, which is subsisting on cash borrowed from the U.S. and Canadian governments, the deal with Fiat is the last chance to avoid a bankruptcy filing and possible liquidation.
> 
> ...



More at link.


Well, I guess we get to see how committed the Unions are to saving those 600,000(?)  jobs they say are dependent on their industry being rescued.


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## mediocre1 (15 Apr 2009)

Thucydides said:
			
		

> The only good thing about the Obama administration nationalizing the auto sector is the ultimate failure will clearly belong to the Administration. Their attempts to keep the UAW afloat will run into serious difficulties as the legacy costs increase to $6 billion/year....
> 
> http://business.theatlantic.com/2009/03/whither_gm.php



Nationalization is  not the cure, Sir Thucydides. As somebody who studied macroeconomics, my suggestion is for the car manufacturers to lower the prices in a way that it will attract buyers to save costs, buy them and let them deplete a large chunk, then an equilibrium shall be attained, hence, the work to recovery.

Another IMHO of mine, is that if there is recession, prices of houses should be low as 50 thousand dollars. My opinion is that there is no recession. Prices of houes are still in the 300 thousands. My brother took advantage of recession 12 years ago and was able to buy a 5 bedroom house with attic and basement for 50 thousand which should had cost 200 thousand during those times.


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## George Wallace (15 Apr 2009)

Did the Housing Market in Windsor not just reach an all time low, with houses going for $35K?


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## mediocre1 (15 Apr 2009)

George Wallace said:
			
		

> Did the Housing Market in Windsor not just reach an all time low, with houses going for $35K?



If there is recession, the law of supply and demand shall govern the city of Windsor. The lesser the price,  the greater the demand , the greater the supply.The higher the price, the lower the demand, the lesser the supply.


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## Michael OLeary (15 Apr 2009)

mediocre1 said:
			
		

> As somebody who studied macroeconomics, *my suggestion is for the car manufacturers to lower the prices* in a way that it will attract buyers to save costs, buy them and let them deplete a large chunk, then an equilibrium shall be attained, hence, the work to recovery.



That's brilliant Captain Obvious.

Now that we're ready to put the world's economy into your uniquely capable hands, how about you tell us how you're going to convince the auto manufacturers and their workers (present and retired) how they're going to lower prices?


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## mediocre1 (15 Apr 2009)

Michael O'Leary said:
			
		

> That's brilliant Captain Obvious.
> 
> Now that we're ready to put the world's economy into your uniquely capable hands, how about you tell us how you're going to convince the auto manufacturers and their workers (present and retired) how they're going to lower prices?



As I said, sir O'Leary, to be able to reach an equilibrium, then the road to recovery. They will dispose of their products and price them to the extent that they will have reach between net profit and break-even. Or even break even.They cannot sell their products anyway. So they have to reduce prices to attract buyers. I am sure they will attract buyers. It's only the Soviet Lada which cannot attract buyers. With such low price, they will buy them. The market is not saturated with cars. People everywhere wants to buy them. That is if they can afford. Chrysler and GM are in the losing end anyway with competition from durable Japanese cars. They've got nothing to lose.

But once you nationalize them, there'll be no competitive edge for them because managers will tend to be lax and complacent. They'll run out of creative streak as compared to Japanese car manufacturers which make stress and tension the drive to create durable and efficient cars.

Almost all people in AMerica are capitalistic.  I wonder why Obama cannot accept that reality.


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## Michael OLeary (15 Apr 2009)

mediocre1 said:
			
		

> Almost all people in AMerica are capitalistic.  I wonder why Obama cannot accept that reality.



Obviously he and his staff lack your all-seeing eye.


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## Fishbone Jones (15 Apr 2009)

mediocre1,

Stop with all that 'sir' shit in your posts.

Milnet.ca Staff


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## a_majoor (16 Apr 2009)

What mediocre1 and most other people don't seem to realize is the clearing house functions of the market are *not* working *precisely* because of State interference in the markets.

Banks can't or won't write off bad loans because of TARP, GM and Chrysler can't go into chapter 11 and repudiate unworkable contracts and create new business and pricing models because they are receiving tax dollars that eliminate the incentive to change, and on and on. Even housing prices are being propped up by stupid and counterproductive policies that let people who cannot afford their houses continue to live in them for notional mortgage payments.

In Japan, a similar policy was tried in the 1990's when their real estate bubble popped, and they suffered a decade of 0 economic growth. Some of us remember the Stagflation which closed out the Carter years, the Obama administration seems determined to recreate the conditions that led to stagflation.

Sadly, the one true hope for "us" lies in the fact that US municipal debts (particularly unfunded pensions) are reaching a tipping point and cities might have to go into bankruptcy or call for bailouts of almost a trillion dollars (on top of the other trillions pledged). Taxpayers will see they are being fleeced to pay very generous pensions they cannot even hope to receive, and these pension tax payments will be to cities they don't even live in, which might trigger a "shock and awe" tax revolt and lead to an escalating series of repudiations of municipal and then State debts. IF it escalates to the Federal level, repudiating the $12 trillion debt will wipe out @ 22% of the value of the estimated $54 trillion stock of US wealth (adding in the other repudiations could total 1/2 or more of the value of the stock of wealth, depending on what figures you use).

The short term results will create a global tsunami in the financial markets which no one has ever seen before. Oddly enough, once freed of this burden (and the repudiation will also destroy the US welfare state and those institutions that underpin it), the American people will be in a unique position to recover far faster than any of the other ruined economies that will be pulled down with the repudiation.


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## Greymatters (16 Apr 2009)

Thucydides said:
			
		

> ... the one true hope for "us" lies in the fact that US municipal debts (particularly unfunded pensions) are reaching a tipping point and cities might have to go into bankruptcy or call for bailouts of almost a trillion dollars (on top of the other trillions pledged). Taxpayers will see they are being fleeced to pay very generous pensions they cannot even hope to receive, and these pension tax payments will be to cities they don't even live in, which might trigger a "shock and awe" tax revolt and lead to an escalating series of repudiations of municipal and then State debts...



Is this perception valid - It seems that cities are now being treated the same as the major corporations?  Technically they should also apply the concept of letting cities with bad management flounder and sink as a result of their own errors?  Unlikely to happen of course...


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## Michael OLeary (16 Apr 2009)

*GM may drop Pontiac and GMC brands: report*
Wed Apr 15, 2009 10:16pm EDT



> NEW YORK (Reuters) - General Motors Corp, facing a June 1 deadline to restructure under U.S. government oversight, may drop its Pontiac and GMC brands as part of broader cost-cutting moves, Bloomberg reported, citing people familiar with the matter.
> 
> The two brands are being studied as part of talks with an Obama administration task force assessing whether GM can be restructured without bankruptcy, sources told Bloomberg on Wednesday.
> 
> ...



More at link.


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## Michael OLeary (17 Apr 2009)

*Ottawa willing to let GM, Chrysler collapse*



> JANET MCFARLAND
> Globe and Mail Update
> 
> April 16, 2009 at 12:22 PM EDT
> ...



More at link.


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## R. Jorgensen (17 Apr 2009)

Michael O'Leary said:
			
		

> *Ottawa willing to let GM, Chrysler collapse*
> 
> More at link.



I don't know if this is a good choice.

Collapse = Massive amounts of workers laid off, no longer can provide for family (and there's A LOT of autoworkers)

Help out = Government debt, taxpayers angry, blah-blah-blah-blah


Actually, on second thought, when I remember my point of view on these kinds of situations: 

*"Multi-Billion dollar and/or Transnational corporations bitching and complaining that they've lost $5 dollars and asking the Gov't to bail them out only for them to possibly give themselves HUGE bonuses and have taxes go up again which in turn, would make a city like Calgary nothing but a colossal complain-fest."*

It does seem like a good idea. Some may disagree with my opinion but all I have to say is the Gov't is doing what it thinks will preserve the interests of the majority of the Canadian population (I don't know if that's the right phrase to use).


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## Michael OLeary (17 Apr 2009)

The common media statement is that if the domestic auto industry fails 600,000 will lose their jobs.

The CAW website says they have 225,000 workers.

So, who are the other 375,000 Canadians that the CAW will screw when it refuses to accept wage and retirement benefit cuts?

How many of the 375K are in the 2nd and 3rd tier parts manufacturers that the bIg 3 cut away years ago - to make themselves leaner and more efficient. (How many of them have wage and benefit packages even close to the average CAW union member?)  For the most part, I suspect that many of the 375K already work for leaner and more efficient companies, the ones that have learned how to meet demands from multiple assemblers of cars. That they have probably also diversified and are ready to support new Toyota and Honda lines without missing a beat. 

If there's going to be government subsidization, support those smaller companies through the shift to supporting new product lines.  Offer tax benefits to the expansion of successful car manufacturers.

*Don't reinforce failure*.

The failing domestic auto industry, long supported by the greed of the CAW, has dug its own grave and they have no-one to blame but themselves.


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## Michael OLeary (17 Apr 2009)

On average, Canadian auto-sector workers make about $35 an hour—*$72,000 a year*—plus benefits. The average wage of a Canadian manufacturing-sector employee, by comparison, is $20.75 an hour, or $41,500 a year. (LINK)

To put that $72K per year into a CF perspective:

*Warrant Officer* - IPC4 - $5770 monthly = *$69,240*
*Captain* - IPC1 - $5933 monthly = *$71,196*


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## a_majoor (17 Apr 2009)

And as so many of us point out, a large fraction of the 600K workers affected would probably be picked up in other industries, although they would be making a lot less than their CAW wage and benefit package. For that matter, Alberta and Saskatchewan have been crying for workers during the boom, and will need lots even now, so another large fraction of the 600K can go west, and I'm sure more can go east to follow the oil boom happening there.

Who would be left? Probably the people who bought into the entitlement mentality of the CAW and their political hangers on, and they probably would not be usefuly employed in any really competative job or industry anyway. Wal-Mart is always looking for staff.....


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## Michael OLeary (21 Apr 2009)

Let the feeding frenzy over the rotting carcasses begin.

*Group interested in buying Saturn brand*
Members include some of brand’s dealers and private equity group

http://www.msnbc.msn.com/id/30229593/



> updated 5:19 p.m. ET, Wed., April 15, 2009
> 
> DETROIT - An Oklahoma City private equity firm has teamed with a group of Saturn dealers in an effort to buy the money-losing brand from General Motors Corp.
> 
> The proposal from a group led by Black Oak Partners LLC is among several that GM has received for the brand, said GM spokesman Mike Morrissey.



More at link.


----------



## Michael OLeary (21 Apr 2009)

Has the message begun to sink in?

*CAW softens stance on Chrysler cuts*
http://www.thestar.com/Business/article/621557



> Auto union says it may mull deeper concessions than were accepted in recent GM Canada contract
> Apr 21, 2009 04:30 AM
> Tony Van Alphen, Business Reporter
> Richard J. Brennan, Ottawa Bureau
> ...





> Federal Industry Minister Tony Clement said Chrysler workers can either accept more concessions or lose their jobs. "People are not interested in a union protecting its entitlements that have been garnered over a period of time," Clement said. "I feel badly for workers who are put in these situations, of course. But ... the alternative is no job at all and taxpayers expect everybody to be at the table if taxpayer dollars are going to be at risk."



More at link.


----------



## Greymatters (22 Apr 2009)

Thats just PR spin - this is a fluff piece to try and make them look like they are being cooperative.  They still need to come down to -$19 in cost/hr to be considered competitive with other Canadian manufacturers...


----------



## Michael OLeary (22 Apr 2009)

*Sources: GM to shut most US plants up to 9 weeks*
AP Sources: GM to close most US factories for up to 9 weeks this summer to reduce inventory 

Article link.



> DETROIT (AP) -- General Motors Corp. is planning to temporarily close most of its U.S. factories for up to nine weeks this summer because of slumping sales and growing inventories of unsold vehicles, two people briefed on the plan said Wednesday.





> *Thousands of workers could be laid off but would still get most of their pay because their United Auto Workers union contract requires the company to make up much of the difference between state unemployment benefits and their wages.*



More at link.


----------



## Michael OLeary (22 Apr 2009)

*GM Won't Make Debt Payment, Sending Stock Lower*

Article link.



> General Motors is unlikely to make a $1 billion debt payment due June 1 because it expects to be in the process of restructuring its debt through a voluntary exchange or bankruptcy court by that point, a spokeswoman for the automaker said on Wednesday.



More at link.


----------



## a_majoor (23 Apr 2009)

A short "Sum Up" moment:

http://corner.nationalreview.com/post/?q=NDU2OGI5NjFjY2Y1MDBkZGNiMTNhNzM2NDVmOWU3NDM=



> *GM to Default on Its Debt*   [Stephen Spruiell]
> 
> So says the WSJ. Just yesterday it was reported that the Obama administration had approved the company for $5 billion in additional loans. I wonder if the check already cleared.
> 
> ...



and Glen Reynolds (Instapundit) asks:



> better question: What did the people who approved the investment get?


----------



## Michael OLeary (24 Apr 2009)

*Chrysler could file bankruptcy next week*
Alliance with Italian automaker Fiat would happen under protection

http://www.msnbc.msn.com/id/30366383/



> By Micheline Maynard and Michael J. de la Merced
> updated 7:06 p.m. ET, Thurs., April 23, 2009
> 
> DETROIT - The Treasury Department is preparing a Chapter 11 bankruptcy filing for Chrysler that could come as soon as next week, people with direct knowledge of the action said Thursday.
> ...



More at link.


----------



## a_majoor (24 Apr 2009)

With some venture capital.....oh wait, um if inefficient companies like GM fail and clear the market....oh, wait, um, if competitors are not subsidized by our customers tax dollars......oh, crap!

http://blog.wired.com/cars/2009/04/we-drive-the-ap.html



> *We Drive the Aptera, and It's a Real Car*
> By Chuck Squatriglia EmailApril 21, 2009 | 4:42:54 PMCategories: Electric Vehicles
> 
> Aptera5
> ...


----------



## Michael OLeary (24 Apr 2009)

News Toronto & GTA
*Thousands of CAW workers protest at Queen's Park*

Article Link.



> Thousands of CAW retirees amassed on the front lawn of Queen's Park today to demand pension protections as GM and Chrysler engage in do-or-die negotiations with American and Canadian governments.
> 
> Inside the Legislature, Premier Dalton McGuinty called for a national summit on pensions.
> 
> ...


----------



## Michael OLeary (24 Apr 2009)

*Ford posts $1.4B loss, but it burns less cash* 

Article link



> By Sharon Silke Carty, USA TODAY
> DETROIT — Ford (F) posted a $1.4 billion net loss for the first quarter Friday, a huge swing from the profit it posted in the first quarter last year, but the automaker said it is burning less cash.
> 
> *The automaker says it still plans to break even in 2011 without government assistance. But that could change if there's an uncontrolled bankruptcy among one of Ford's major competitors or large suppliers*, CEO Alan Mulally said on a conference call Friday.



More at link.


----------



## Michael OLeary (24 Apr 2009)

APRIL 24, 2009, 3:59 P.M. ET

*GM to Shed Pontiac, Close More Plants *
http://online.wsj.com/article/SB124060030328753755.html



> General Motors Corp. is readying plans to shed its Pontiac brand, shutter more factories and launch a bond exchange aimed at eliminating billions in debt, people familiar with the matter said Friday.
> 
> *The auto maker, facing a June 1 federal deadline to dramatically restructure or go bankrupt, is preparing early next week to detail the progress it has made on the stepped-up recovery plan demanded by the Obama administration.* GM is expected to announce plans to eliminate or sell its poorly performing Pontiac brand, according to several people who have been briefed on the plan



More at link (with subscription).


----------



## Michael OLeary (24 Apr 2009)

*Chrysler, CAW still talking over concessions*
Last Updated: Friday, April 24, 2009 | 11:59 AM ET 

Article link.



> Chrysler and the Canadian Auto Workers continued talking Friday to try to hammer out a deal on union concessions as part of an effort to keep the company afloat.
> 
> A CAW spokesman said the two sides are close to an agreement and he expects an announcement after union leaders meet later in the day. Negotiations have been going on since Monday.
> 
> ...



More at link.


----------



## FastEddy (25 Apr 2009)

[/quote]

A $19.00 reduction in wages, just goes to prove they were always overpaid along with their CEO's for really doing sweet F... all.

There's no way a person should be paid $40.00 ph for picking screws from a tray and putting them in a hole and probably accompanied by a Robot because it might be too laborious.

It's to bad Society can't give a bit of attention to our Teachers,Nurses,Firemen,LEO's and our Armed Forces, who earn their livelyhood by their Intelligence,Sweat of their Brows and their Very Lives.

Oh yeah ! their Union is going to make up the difference of their UIC cheque for the nine weeks they are shut down.

Sung to the tune of (Don't Cry for Me Argentine) as the members of the poor laid off workers of the CAW & AAW on their march to the Manpower Offices.

Cheers.


----------



## mariomike (25 Apr 2009)

FastEddy said:
			
		

> It's to bad Society can't give a bit of attention to our Teachers,Nurses,Firemen,LEO's and our Armed Forces, who earn their livelyhood by their Intelligence,Sweat of their Brows and their Very Lives.



I would like to add to your list: Corrections, Coast Guard, Paramedics, and Peace Officers:
http://www.gg.ca/honours/medals/hon04-esm_e.asp


----------



## Greymatters (25 Apr 2009)

FastEddy said:
			
		

> A $19.00 reduction in wages, just goes to prove they were always overpaid along with their CEO's for really doing sweet F... all.



Its not all in actual wages - most of the costs are in the form of non-salary benefits...


----------



## a_majoor (27 Apr 2009)

Opinion from the Star:

http://www.thestar.com/comment/article/624245



> *Union, Big 3 negotiated their demise*
> 
> Apr 26, 2009 04:30 AM
> Angelo Persichilli
> ...


----------



## FastEddy (27 Apr 2009)

mariomike said:
			
		

> I would like to add to your list: Corrections, Coast Guard, Paramedics, and Peace Officers:
> http://www.gg.ca/honours/medals/hon04-esm_e.asp



By all mean's, and note, they were not mentioned because of lack of importance, but only because they are extentions or variations.

Cheers.


----------



## a_majoor (28 Apr 2009)

Instead of pouring money down the drain, we could have not bailed everyone out and got this powerful stimulus package instead!

http://www.thepolitic.com/archives/2009/04/27/bailing-out-poorly-run-companies-is-poring-money-down-the-drain/



> *Bailing Out Poorly Run Companies is Poring Money Down the Drain
> *
> April 27, 2009 · By Greg Farries
> 
> ...


----------



## Fishbone Jones (28 Apr 2009)

Obama could've given every person enough money to pay their mortgage. The banks would have still gotten their money and everyone would have kept their house.

They should do the same with the automakers, give everyone a cash voucher for a new fuel efficient car. The union keeps their jobs, the company make more (and better) cars, and no one needs a loan to get one. Everyone wins.

OK, it's too simplistic and sensical. There has to be a catch there somewhere why it wouldn't work.

Other than the banks not making billions more in interest from the same taxpayer that bailed them out, and the guv'ment telling the auto companies and unions how to do bid'ness. :


----------



## a_majoor (28 Apr 2009)

The comments on the link are telling as well. Virtually no one believes for a second that Government Motors will be profitable in any real sense, the Obama administration will use Enron like accounting tricks, mandated purchases of Government Motors cars for State and Federal contracts and punishing regulatory burdens against competitors in order to make "GM" seem like a viable company.

Perhaps the best advice is to invest in a mechanically sound used car (the more recent the better) and learn how to coax every last kilometer out of the beast, since it must last for at least 4 years and possibly 8....

http://tigerhawk.blogspot.com/2009/04/gm-bankruptcy-and-test-for-american.html



> *The GM bankruptcy and a test for American socialism*
> By TigerHawk at 4/28/2009 08:00:00 AM
> 
> Larry Kudlow via Glenn Reynolds:
> ...


----------



## a_majoor (4 May 2009)

Chrysler saved from the market. Too bad about us.....

http://www.slate.com/blogs/blogs/kausfiles/archive/2009/05/03/obama-s-first-debacle.aspx



> *Obama's First Debacle?*
> 
> 1) NYT's Sanger and Vlasic, with what must be willed credulousness, describe how President Obama's "hard line" against Chrysler gives them the "leverage" they will need going into the GM negotiations. Hard line? On Saturday, Micheline Maynard, also of the NYT, described how the United Auto Workers is slated to get a deal of unprecedented sweetness in the Chrysler bankruptcy. Despite all the press releases, the union didn't give up that much, apparently--the word "lucrative" is even used:
> 
> ...


----------



## Michael OLeary (6 May 2009)

*Chrysler HQ Designed To Convert Into Shopping Mall*

Article link



> The Chrysler headquarters building is a spectacular sight from I-75 in Michigan. But the Auburn Hills edifice and its sprawling campus sit in the middle of one of the most economically depressed areas in the country. *When the building was erected in the early 1990s, it was designed so it could be repurposed into a shopping mall without too much modification if the perennially troubled Chrysler should go out of business.* But there is no interest in another shopping mall in a commercial corridor where unemployment and foreclosure rates are both above 20%, and one of the best-performing malls in the state, The Somerset Collection, sits 15 minutes away in Troy, Mich.



Yup, government bail-outs for a corporation that actually has a long-term corporate strategy of planning for failure.    :


----------



## a_majoor (6 May 2009)

More cold water being thrown on the hypemobiles. Of course the Administration will continue pour taxpayer dollars into these projects and push them on the market regardless of real world performance (unlike the Clinton era's $800 million dollar "Project for a New Generation Vehicle" extravaganza, where the Detroit three concluded they had technology but no viable product, so the first Hybrids sold in North America were Japanese).

Look for angry and dissapointed customers wondering why their GM (Government Motor's) "plug ins" don't get anywhere near the advertized MPG.

http://www.wired.com/cars/coolwheels/news/2009/05/plugins0506



> *Plug-In Hybrids: More Hype Than Hope?*
> By Scott McCredie  18 hours ago
> 
> Seattle Mayor Greg Nickels speaks at the unveiling of one of the plug-in hybrids the city added to its fleet last year. Although advocates say the cars can deliver triple-digit fuel economy, those in Seattle's test fleet are actually averaging about half that, leading some to question the technology.
> ...


----------



## Michael OLeary (7 May 2009)

*CAW, GM told to go back to bargaining table*





> The president of the Canadian Auto Workers said the union and General Motors Canada are being ordered back to the negotiating table by the Canadian and Ontario governments.
> 
> Ken Lewenza said the two governments have given the union and the company until May 15 to reach a new deal on concessions to help GM save money.
> 
> ...



And the sympathy from the public is summarized in this response:



> I will try to be brief. *The money offered in any bail-out package comes out of all Canadian workers pockets. Many of whom are not fortunate enough to have auto sector jobs located in their provinces. as such the vast majority of them do not enjoy super high wages and benefit packages that allow for retirees to receive a pension increase whenever a working group of people obtain one just because they used to be a union member.* take a look at the country outside of your bubbles. you are asking the people of Canada to save your jobs when most of us are struggling to make it ourselves. then the union wonders why people see them as having an atitude of entitlement. Make the cuts tell retirees to sell the 200,000+ cottage at the lake and return to the world of today. Most of all be reasonable it is your children who will pay the rest of their lives for the greed of their auto worker parents. step back I can only imagine your anxiety, your whole lifestyle is being threatened. Yet you seem to feel you are owed something from those of us who can only dream of the oportunity the unions need for power gave you and now is powerless to secure for you. I feel foe you but many times you have been told YOU HITCHED YOUR HORSE TO THE WRONG WAGON. Now unfortunately the truth is out.
> 
> I'm Just Say'in


----------



## a_majoor (7 May 2009)

There is only one reason to do these bailouts; pay off the union supporters of the Democratic party:

http://meganmcardle.theatlantic.com/archives/2009/05/how_do_i_know_that_the_chrysle.php



> *Megan McArdle*
> 
> How Do I Know That the Chrysler Bailouts are About the Unions?
> 
> ...


----------



## Larkvall (7 May 2009)

I have an idea. If the automakers need to sell more cars to be profitable then we should start using assembly plant parking lots for obstacle courses for Leopard 2s. Autoworkers can afford to buy new cars.......... :2c:


----------



## Michael OLeary (8 May 2009)

*GM draws closer to bankruptcy in first quarter *

Article link



> DETROIT (AP) -- *General Motors drew closer to bankruptcy Thursday, acknowledging that its revenue fell by nearly half as car buyers worldwide steered away from showrooms for fear that the auto giant would not be around to honor its warranties.*
> 
> .....
> 
> "I think bankruptcy is highly likely, not because the losses are so bad, but because everyone has realized that this company needs fundamental restructuring," said Douglas Baird, a University of Chicago law professor who specializes in bankruptcy cases.



More at link.


----------



## Kirkhill (8 May 2009)

Michael O'Leary said:
			
		

> *GM draws closer to bankruptcy in first quarter *
> 
> Article link
> 
> More at link.



What's not to like about a bankruptcy when the government lets you stiff your creditors, keep your job and ponies up for re-training?

Why wouldn't GM tread water and wait?  They're not incentivized (Caution-MBA Buzz Word) to do anything else.


----------



## Brad Sallows (9 May 2009)

Lewenza whines about being ordered back to the bargaining table and how unfair it is to revisit recent bargains.

He is correct.  No gift of an extraordinary opportunity to seek a less painful result than bankruptcy should be forced on/granted to the CAW.  Proceed straight to bankruptcy; let the contracts be revisited there.


----------



## a_majoor (12 May 2009)

The ultimate result of leaving GM and Chrysler as zombie corporations will be to cripple everyone:

http://www.professorbainbridge.com/professorbainbridgecom/2009/05/you-dont-need-banks-and-bondholders-to-make-cars.html



> *"You don't need banks and bondholders to make cars"?*
> 
> The WSJ’s "USA Inc" series continues today with detail on how the US got secured lenders to abandon their fight to get paid more than 30% of their claims, as against giving more than half the company to unsecured workers. Which prompts this zinger from Larry Ribstein:
> 
> ...


----------



## a_majoor (30 May 2009)

Government Motors believes this will be the vehicle that saves it's corporate bacon. I suspect that Toyota or Honda might whip out a serial electric vehicle in 2010 just to rub their technological and marketing superiority in the faces of Government Motors and their sponsors. 

As Glenn Reynolds says, 



> I was pretty interested in the Volt, but now that it’ll be a government product I’m not so interested any more. Maybe an Aptera, though . . . .



http://www.popularmechanics.com/blogs/automotive_news/4319235.html



> *2011 Chevrolet Volt Prototype Test Drive: Smooth-Driving EV Good Enough to Save GM?*
> Chevy Cruze Volt
> 
> WARREN, Mich.—It's been a long road. But with 18 months to go before the 2011 Chevrolet Volt heads into production, GM has allowed us a chance to experience its innovative Voltec drivetrain technology from behind the wheel of a test mule based on the Chevy Cruze. The Volt and Cruze share GM's global Delta architecture so the mule is representative of the Volt's basic chassis. But these mules are already old news. They will soon be retired and replaced by "production-intent" prototypes that use the Volt's actual body, interior and the model-specific floor pan that accommodates the battery pack, rather than the modified Cruze version found under the mule.
> ...



If you have any issues or complaints, please write to the head of Government Motors at The White House, 1600 Pennsylvania Avenue NW, Washington, DC 20500.


----------



## tomahawk6 (30 May 2009)

They wont be able to sell any cars but perhaps the government will just give away whatever GM makes ?


----------



## Colin Parkinson (31 May 2009)

You can bet the list of authorized vehicles for the government of both Canada and the US will lean heavily towards GM products, having a hybrid will mean the Prius will get booted from the list.


----------



## a_majoor (4 Jun 2009)

Laying it all out. The Obama Administration cannot let them fail since this is the payoff for political support: how much support will the UAW give the Administration and the Democrat Party if they are handed a poisioned chalice or nothing at all?

http://volokh.com/archives/archive_2009_05_31-2009_06_06.shtml#1244077649



> *Chrysler Bankruptcy Case to Be Heard by Second Circuit Friday:*
> 
> Bankruptcy judge Arthur Gonzalez has permitted an appeal by Indiana pension funds to the Second Circuit on his ruling allowing a sale of the company to Fiat. According to the NYT:
> 
> ...


----------



## a_majoor (8 Jun 2009)

GM will slide into the twilight because they no longer have products that will appeal to their consumer base. Note the true effect of the Prius for Toyota:

http://thesecretsofvancouver.com/wordpress/meet-bob-lutz-the-man-that-could-have-saved-gm/economy



> *Meet Bob Lutz - The Man That Could Have Saved GM*
> June 8th, 2009 Posted in Economy
> 
> The only Ford I would ever consider buying is the Mustang. This is because Ford has yet to build a rival to the best car they ever built. Here’s an excerpt of a great article from the Washington Post on how the Volt (a car that can only go 40 miles and will cost $40K) came to be. And why it spells the end for GM.
> ...


----------



## a_majoor (16 Jun 2009)

Changing the narrative. By the end of this administration you wil need a huge index file to keep track of what's what:

http://www.slate.com/blogs/blogs/kausfiles/archive/2009/06/15/steve-rattner-saves-detroit.aspx



> *Steve Rattner Saves Detroit!*
> 
> Embarrassing suck-up post by Henry Blodget crediting "Barack Obama and Steve Rattner" with more-or-less saving General Motors, which "now plans to be profitable ... at a 10-million-unit US annual rate of sales, versus the 15 million previously" and which "has a new car that some people actually want to buy--the Camaro--which apparently gets 29 miles per gallon with 300 horsepower." ... Blodget's analysis: "Exciting!" ... a) "Barack Obama and Steve Rattner." I wonder how poor Ron Bloom feels. Bloom may have more power on the Obama auto task force than Rattner but he doesn't have the media connections. b) If General Motors doesn't "turnaround," will we be allowed to blame Rattner? ['Even Steve Rattner couldn't save GM'--ed Sigh] c) Rattner shows up and, boom, suddenly GM has "a new car that some people actually want to buy"!  It's amazing Rattner had time to design and produce the new Camaro so quickly with all his other financial and filmmaking activities. d) The 300-hp. Camaro gets 22 mpg overall--not bad, but it's deceptive for Blodget to use the higher "highway" estimate. e) The Camaro, with projected sales of around 100,000, isn't nearly a big enough deal in itself to save GM. And do you really think the Camaro's "halo" is going to get people to buy this? ...
> 
> ...


----------



## a_majoor (28 Jun 2009)

The burning of the heritics begins!:

http://www.slate.com/blogs/blogs/kausfiles/archive/2009/06/26/the-uaw-has-a-long-memory.aspx



> *The UAW Has A Long Memory*
> 
> The U.A.W., now a major GM shareholder, has delivered its final punishment to those auto workers who dared move to Spring Hill, Tennessee and show up the rest of the union by building reliable car without Wagner-style work rules.  GM's new small car will be made in Michigan, and the Spring Hill plant will close. .... P.S.: Nikke Finke has a better chance of making money producing this car than GM does. ... 3:52 P.M.


----------



## a_majoor (24 Jul 2009)

So the government spent all those billions to ensure customers could replay the Monty Python  Cheese shop skit:





> *WaPo blogger wants to buy Camaro, gets dealer runaround instead*
> by Alex Nunez on Jul 21st 2009 at 6:01PM
> 
> For many, car-buying is an experience that rates somewhere between pouring a basket of scorpions into your underwear and a visit to the dentist from Marathon Man. Some dealerships feel like hives of villainy more wretched than even the Star Wars Cantina, though being held at gunpoint by Greedo is likely preferable to enduring the overall auto-buying process at one of those retailers. After all, as Han Solo demonstrated, one can actually "deal" with Greedo in a satisfactory manner.
> ...


----------



## muskrat89 (25 Jul 2009)

A co-worker has a leased vehicle and the lease is almost up so she's looking at buying new, buying out her lease, leasing a different vehicle, etc.

She's getting frustrated because the "dealers don't need to negotiate these days. Since the bailout stuff, they don't need the business"


----------



## tomahawk6 (25 Jul 2009)

With the $4500 cash for clunkers bill there are alot of good deals out there. Some dealers are matching the government money so its like having a $9000 down payment.


----------



## a_majoor (24 Aug 2009)

Cash for Clunkers failed for the same reason Medicare/Medicaid is failing now and Obamacare will fail if ever implimented; perverse incentives upset market equilibrium (and clueless bureaucrats are running it).

Since most clunkers are worth (at most) a few hundred to a thousand dollars, the $4500 incentive brought an overwhelming number of applicants who were getting 4 or more times the market value of the clunker. Given the dealers pay the $4500 out of their own pockets and have to wait for rebates, many are now hanging on a thread as they wait for the Government to refund their payout (which is happening at a glacial pace).

In other news, Government motors claims for the Chevy Volt's economy are wildly overstated:

http://green.autoblog.com/2009/08/21/auto-x-prize-throws-water-on-gms-230-mpg-claim-offers-mpge-cal/



> *Auto X Prize throws water on GM's 230 mpg claim, offers mpge calculator*
> by Sebastian Blanco (RSS feed) on Aug 21st 2009 at 11:56AM
> 
> With all of the attention being paid to the 230 mpg number that the Chevy Volt will apparently be granted by the EPA, the Automotive X Prize thought it was time to weigh in on the subject of calculating fuel efficiency for vehicles that use energy sources other than gasoline. They don't like it. Instead, the AXP prefers MPGe, a "rigorous and more neutral measure" of fuel efficiency. The AXP's John Shore walked us through how the long-running competition thinks about MPGe. They've been at it for a while.
> ...


----------



## tomahawk6 (24 Aug 2009)

I heard an interview with the Director of the Volt program - his last name rhymn's with kilowatt Tony Posawatz. As he desribed the Volt it did sound interesting. Battery life of 10 years. The battery is built in modules so you could replace only the bad part. The Volt has an onboard generator to replenish the battery as it is driven. It takes 6-8 hours to charge plugged into your standrad outlet. It still has a gas engine for conventional driving. It seems they are selling the car as an electric commuter car for drives of 40 miles. While the car may be green it still will rely on fussil fuel driven electric plants. He hopes this will encourage electric power plants to transition to green energy - definitely on the same page with Obama.


----------



## a_majoor (2 Oct 2009)

We better seize the assets and auction them off right now if we ever want to see any of that tax money back....

http://www.slate.com/blogs/blogs/kausfiles/archive/2009/10/02/rattner-s-legacy-the-chooch-is-at-the-door.aspx



> *Rattner's Legacy: The Chooch Is At the Door*
> 
> GM's sales are down 45% from last September (when sales were already bad enough to drive the company into banrkuptcy). Chrysler is down 42%. Ford is only down 5%. Car buyers are clearly punishing the two bailout recipients brutally. Robert Farago of Truth About Cars predicts that GM and Chrysler will both "go down by the end of next year" without a second, new federal bailout. The only question, he says, is whether the two bailed out manufacturers will need the cash before the 2010 midterm elections. He adds:
> 
> ...


----------



## GAP (2 Oct 2009)

The worst thing they could have done was the $4500 subsidy....everybody came out of the woodwork, got their deal and the others will simply wait....did they think people wouldn't react this way?


----------



## a_majoor (17 Nov 2009)

Downward spiral for Government Motors:

http://www.slate.com/blogs/blogs/kausfiles/archive/2009/11/16/when-gm-says-here-s-your-money-back-they-mean-it.aspx



> *When GM says 'Here's your money back,' they really mean it!
> *
> GM "says it will begin to pay back U.S. loans." But of course it's paying back that debt to taxpayers with money from ... taxpayers. Even the new, nicer Truth About Cars isn't falling for it. GM got $50 billion from the government, after all, mainly for a 60% share in the company. It's planning to pay back $1.2 billion in December--basically a PR attempt, TTAC speculates, to erase its negative consumer image as a bailout baby. The only hope for the taxpayers actually being repaid for their entire $50B investment is an IPO. TTAC pinpoints 2010 as the ideal year, when the innovative Chevy Volt will be conveniently not yet released. "GM’s hail-mary will provide a speculative upside to GM’s value as long as it’s still just around the corner." ...
> 
> P.S.: Also, these financial results are not GAAP-ready. "North American Operations are still bleeding cash. And, as Henderson has admitted, the fourth quarter results for 2009 are only going to bring worse news." [TTAC again]  ...  P.P.S.: But GM will launch a company-wide sale this week to clear excess U.S. inventory. A sure sign of success!



And an upward spiral for China! (Via Next Big Future)


----------



## a_majoor (6 Jan 2010)

Results are in:

http://volokh.com/2010/01/05/ford-sales-surge/



> *Ford Sales Surge*
> 
> Jonathan H. Adler • January 5, 2010 2:03 pm
> 
> ...


----------



## zipperhead_cop (11 Jan 2010)

Thucydides said:
			
		

> Results are in:
> 
> http://volokh.com/2010/01/05/ford-sales-surge/



So what you are saying is that we should have given them a bigger bailout?  Can we give them another one?


----------



## a_majoor (11 Jan 2010)

zipperhead_cop said:
			
		

> So what you are saying is that we should have given them a bigger bailout?  Can we give them another one?



I hope the sacasm smiley was supposed to be on that post!

Ford. $0 bailout; sales up 33%
GM.   $50 billion destruction of taxpayer wealt after post bailout writeoffs; sales down 6%
Chrysler: Billions of dollars in bondholder value destroyed by US government's takeover of firm, sales down 4%

So going by that formulation, a $0 bailout will provide the most impressive results!


----------



## a_majoor (25 Jan 2010)

Says it all:


----------



## a_majoor (27 Jan 2010)

One of the first cars I ever owned was a SAAB 99 Turbo, so this news really puts a warm feeling in my heart. Now that SAAB is out of the clutches of Government Motors, there may be a revival:

http://www.carlustblog.com/2010/01/its-officialsaab-saved.html



> *It's Official--Saab Saved!*
> by Chris Hafner on January 26, 2010
> 
> I'm taking a few seconds off from dancing in my cubicle to help spread the word--GM's rumored sale of Saab to small Dutch carmaker Spyker is now official. As always, Saab United is the right place to go for the latest news and analysis.
> ...


----------



## a_majoor (24 Feb 2010)

Government ownership of private industry. What could go wrong?

http://www.examiner.com/examiner/x-12977-Cars-Examiner~y2010m2d24-Thirtyone-House-Dems-quizzing-Toyota-execs-got-UAW-campaign-cash



> *Thirty-one House Dems quizzing Toyota execs got UAW campaign cash*
> February 24, 5:34 PMCars ExaminerMark Tapscott
> 
> Two committees in the U.S. House of Representatives are holding hearings this week concerning allegations of sudden acceleration problems in Toyota cars and trucks sold in this country.
> ...


----------



## a_majoor (12 Mar 2010)

Such trustworthy sources. I seem to racall another American news network once rigged pyrotechnics in a pickup truck to "prove" the fuel tank was unsafe.

Based on the integrity of the reporter I am convinced it is perfectly safe to buy and drive a Toyota now:

http://news.ca.msn.com/top-stories/cbc-article.aspx?cp-documentid=23621295



> *ABC admits tinkering with Toyota report*
> 
> Toyota Motor Co. has recalled millions of cars worldwide due to concerns that the accelerator pedals could become stuck. (Associated Press)
> 
> ...


----------



## a_majoor (8 Apr 2010)

Lets see the results of the current bailout:

http://www.theatlantic.com/business/archive/2010/04/gm-more-troubles-coming-down-the-road/38603/



> *GM: More Troubles Coming Down the Road*
> 
> Apr 7 2010, 3:02 PM ET
> The Government Accountability Office has a report out today on the unfunded liabilities of the GM and Chrysler pensions.  The most controversial aspect of the bankruptcy reorganizations orchestrated by the Obama administration is that the companies reaffirmed their obligation to their retirement plans, which are often terminated when a company undergoes a bankruptcy.
> ...



Look for them coming cap in hand in 2013...


----------



## a_majoor (18 Apr 2010)

I want one of these to replace my 03 Caravan!

http://nextbigfuture.com/2010/04/toyota-will-have-lithium-ion-battery.html#more



> *Toyota will Have Lithium Ion Battery minivan Version of the Prius Hybrid*
> 
> In the picture is the Toyota Estima hybrid minivan that has been available only in Japan
> 
> ...


----------



## Kat Stevens (18 Apr 2010)

I just bought my daughter a 1990 Chevy Sprint.  It gets 55 MPG, never has to be plugged in to the wall, and doesn't have 1000 lbs of batteries to dispose of.  I got it up to 130 KMH with lots of pedal left, it doesn't look like it designed by Elroy Jetson, and it's 20 year old technology.  Progress my lily white English arse.


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## a_majoor (19 Apr 2010)

Kat Stevens said:
			
		

> I just bought my daughter a 1990 Chevy Sprint.  It gets 55 MPG, never has to be plugged in to the wall, and doesn't have 1000 lbs of batteries to dispose of.  I got it up to 130 KMH with lots of pedal left, it doesn't look like it designed by Elroy Jetson, and it's 20 year old technology.  Progress my lily white English arse.



My family is bigger, so I need the room


----------



## Kat Stevens (19 Apr 2010)

More of a shot at the alarming lack of progress than anything else.  All the green talk in the world and we can't do better than a 20 year old internal combustion engine that anyone could afford?


----------



## zipperhead_cop (19 Apr 2010)

Kat Stevens said:
			
		

> More of a shot at the alarming lack of progress than anything else.  All the green talk in the world and we can't do better than a 20 year old internal combustion engine that anyone could afford?



Actually, with rotary engines, efficient fuel systems and modularity there is no reason current vehicles couldn't be 100% better.  But that doesn't make auto makers any money.


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## a_majoor (19 Apr 2010)

The company profiled here expects to start delivering to engine makers by 2014.

25% improvement in fuel milage for diesel engines and an incredible 40% + for otto cycle engines, but no word (yet) on who is going to introduce this first.


----------



## Kat Stevens (19 Apr 2010)

zipperhead_cop said:
			
		

> Actually, with rotary engines, efficient fuel systems and modularity there is no reason current vehicles couldn't be 100% better.  But that doesn't make auto makers any money.



Just another part of the rip off that is the Great Green Movement.  We have two (yes, two!)  grocery stores in the relatively nearby town that serves as my admin centre, Sobey's and Extra Foods.  Extra Foods doesn't give a rodents rectum whose reusable grocery bags I use.  The Sobey's,  after ringing up $250+ in groceries inform me that I can't use my EF bags there.  So I say, quite loudly "so, you're not really interested in saving the planet, just selling grocery bags?" Manager comes over, it gets heated, I take my unacceptable bags and leave the groceries piled up at the till.  Have a nice fucking day to you too!


----------



## PMedMoe (19 Apr 2010)

Kat Stevens said:
			
		

> Just another part of the rip off that is the Great Green Movement.  We have two (yes, two!)  grocery stores in the relatively nearby town that serves as my admin centre, Sobey's and Extra Foods.  Extra Foods doesn't give a rodents rectum whose reusable grocery bags I use.  The Sobey's,  after ringing up $250+ in groceries inform me that I can't use my EF bags there.  So I say, quite loudly "so, you're not really interested in saving the planet, just selling grocery bags?" Manager comes over, it gets heated, I take my unacceptable bags and leave the groceries piled up at the till.  Have a nice fucking day to you too!



Unbelievable!  Are you going to write a letter to their head office?  I would.


----------



## Kat Stevens (19 Apr 2010)

Nah, the local manager is an obsequious little toad who would just slither out of it.  He's slowly bringing about his own demise with inane policies like this one.  Torches and pitchforks are still pretty common in this part of the world.


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## xo31@711ret (20 Apr 2010)

Write the letter anyway Kat; get the little s**t-bubble canned.


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## Michael OLeary (20 Apr 2010)

Kat Stevens said:
			
		

> The Sobey's,  after ringing up $250+ in groceries inform me that I can't use my EF bags there.



And how would he have intended to stop you from using them?


----------



## a_majoor (26 Apr 2010)

Back to cars, or at least the theft of taxpayer dollars to car companies:

http://diogenesborealis.blogspot.com/2010/04/truth-about-gms-bailout-repayment.html



> *The truth about GM's bailout repayment*
> 
> Shikha Dalmia, writing in Forbes Magazine, debunks GM's recent claim that they have repaid the US & Canadian governments "in full, with interest, years ahead of schedule" for their bailouts last summer:
> 
> ...



Actually the "repayment" was made using other government funds, so it is just an ENRON type accounting trick. We will never see our money back.


----------



## a_majoor (27 Apr 2010)

At least some politicians are willing to expose the GM fraud:

http://www.foxnews.com/politics/2010/04/26/lawmakers-accuse-gm-administration-misleading-public-loan-repayment/?test=latestnews



> Lawmakers Accuse GM, Administration of Misleading Public Over Loan Repayment
> 
> FOXNews.com
> 
> ...


----------



## GAP (30 Apr 2010)

Sweet.....for GM..

No wonder they're smiling at GM
By MICHAEL HARRIS Last Updated: April 30, 2010
Article Link

It’s time to admit that the taxers run the universe and the rest us of are just revenue serfs.

That doesn’t make it less crazy.

Take those self-congratulatory ads General Motors is now running — the avuncular, silver-haired president telling the world that the good ol’ car company has paid off all its good ol’ government loans early and is on its way to great things again.

The message conjures up a pretty nice picture.

Smiling assembly line workers full of pride in their work. Award-winning cars blowing the foreign imports away. Executives so canny that they have somehow managed to go through bankruptcy faster than undigested matter through a goose. 

And then the loan repayment portrait taken with the prime minister to reinforce the impression that our money was not pissed away on a failed corporate elite but heroically invested in a good cause that turned out well.

I sincerely hope the future is as good as the commercials for GM. But just how did those government loans get repaid? Why with government money of course.

That’s right. During GM’s bankruptcy, the Obama administration created a special escrow account to assist the company. The balance was nothing to sneeze at — a cool $16.4 billion — part of the price Obama paid to get 61% of GM shares. Pretty good deal for GM; back in May of 2009 the company had an estimated worth of $500 million. With GM posting a $4.3-billion loss for 2009, Greek bonds were a better deal.

But the auto executives couldn’t get their hot little hands on all that moolah without permission from the U.S. Treasury. After all, the new government owners didn’t want to see it disappear into corporate jets and more Hummers.

So GM drew on its piggybank of taxpayers dollars very prudently. It paid off the Delphi bankruptcy resolution and other loans. The company understood just how profitable it could be under the Treasury’s rules if it “paid off” its government loans by June 30. By doing that, the restrictions on what was left in the escrow account would be lifted. 

And that was no small matter. It meant that any money remaining in that taxpayer funded account could be “added” to GM’s cash reserves. So here’s the deal: In return for paying off $8.1 billion in government loans in the U.S. and Canada, GM can claim $5.5 billion still in the escrow account and spend it as they wish. Public money has made that exotic journey to private money through the wonders of government intervention.

The last stage of the GM miracle will be the sale of the company’s stock still held by the U.S. and Canadian governments. No doubt there will be new commercials when that happens celebrating the fact that the governments actually made profits on their investment and Stephen Harper and Barack Obama will have another photo opportunity to attest to their shrewdness. By then, the public money scarfed away will be long forgotten.

And who knows? After Toyota was knee-capped by the Obama administration (the majority shareholder in General Motors), GM might spring back into competitiveness once again — by using one government credit card to pay off another.   

No wonder that nice-looking old gentleman in the TV ads is smiling. 
More on link


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## a_majoor (5 May 2010)

Pushback:

http://cei.org/news-release/2010/05/04/general-motors-deceptive-advertising-challenged-watchdog-group-ftc-filing



> *General Motors Deceptive Advertising Challenged by Watchdog Group in FTC Filing*
> By Christine Hall
> Created 05/04/2010 - 12:17
> subhead:
> ...


----------



## a_majoor (13 Aug 2010)

Now that GM is planning an IPO, more inconvenient truths are coming out:

http://www.nypost.com/p/news/opinion/opedcolumnists/model_corruption_ttyHIpNuoQRwVTkBZuhHeM



> *Model corruption*
> By MARK MODICA & HAL JOHN
> Last Updated: 10:31 AM, August 13, 2010
> Posted: 11:48 PM, August 12, 2010
> ...


----------



## a_majoor (2 Oct 2010)

The once and future IPO? Love the Monty Python reference

http://www.newsweek.com/blogs/kausfiles/2010/10/02/will-gm-s-ipo-actually-happen.html



> Will GM's Big IPO Actually Happen?
> 
> Is GM's IPO going DOA?: When General Motors was bailed out last year, its recovery plan was based on acheiving at least a 19 percent share of the U.S. market. Here is a report from late 2009:
> 
> ...


----------



## a_majoor (12 Oct 2010)

While this is really of interest to techno-geeks, it seems the GM Volt isn't even the type of car it was hyped and advertized to be. Rather than a serial electric car, it is a hybrid like the Prius, where the IC engine actually drives the wheels and electric engine(s) suppliment the IC engine when needed. The Prius is already on it's third generation, and this technology was funded in the United States under the Clinton Administration in the early 1990's  under the Partnership for the Next Generation Vehicle (remember that next time they tell you how "advanced" the Volt is):

http://green.autoblog.com/2010/10/11/flashback-bob-lutz-says-the-batteries-always-drive-the-volt/



> *Flashback: Bob Lutz says the "batteries always drive" the Volt*
> by Sebastian Blanco (RSS feed) on Oct 11th 2010 at 7:50PM
> 
> The big green car news today was that General Motors revealed that the 2011 Chevrolet Volt actually does have a direct mechanical connection between the gas engine and the wheels. For most everyone out there who's thinking about dropping $41,000 on the car (minus $7,500 in federal tax rebates and any local incentives), this little distinction won't make a lick of difference, especially since GM says the car's all-electric performance has been improved because of the connection.
> ...


----------



## a_majoor (2 Jan 2011)

Stay far away from GM stock (you lost enough money already):

http://www.newsweek.com/blogs/kausfiles/2010/12/29/the-bull-in-gm-bullishness.html



> *The Bull in GM Bullishness*
> 
> 'Banks in GM's IPO Bullish on Outlook'! [Wall Street Journal] Last graf, best graf:
> Money managers say it is common for analysts who work for an IPO's underwriters to issue upbeat reports, in spite of reforms adopted in 2003 that were meant to bolster analysts' objectivity. "I would be astounded if they were anything but bullish," said Jack Ablin, chief investment officer at the Harris Bank unit of BMO Financial Group, which didn't underwrite the IPO or buy shares in it.
> ...


----------



## a_majoor (12 Jan 2011)

Tyota may offer a Prius based pickup truck. The pictures look something like the old Honda Ridgeline, which I kind of liked as a semi practical SUV. Of course if I really need to haul great quantities of stuff or tow large loads, then a full sized truck is needed.

http://www.autoblog.com/2011/01/11/rumormill-toyota-considering-prius-pickup/



> Rumormill: Toyota considering Prius pickup
> by Noah Joseph (RSS feed) on Jan 11th 2011 at 9:27AM
> 
> 
> ...


----------



## a_majoor (3 Feb 2011)

More GM accounting trickery. Make sure your RRSP or mutual funds do not have (or have a very small weighting) of GM stock.

http://www.newsweek.com/blogs/kausfiles/2011/02/02/mikileaks-top-secret-content-generation-template-revealed.html



> GM sales surge 23% in January": What's the catch? This is GM—there must be a catch ... Were they less desirable rental and fleet sales? No ... Did GM lard on the profit-sapping incentives? ... Bingo! ... Also: Like other manufacturers, GM counts as "sold" cars that have been shipped to dealers but not bought by actual customers. There were half a million GM cars sitting on dealers' lots last month that were part of the mighty sales "surge"—that's up from a mere 390,000 a year earlier. This increase in parked, unsold cars accounts for the entire January-to-January "sales" increase, no? ... Zero Hedge has a chart. ...
> 
> P.S.: I'm not irretrievably anti-GM—really. For one thing, GM's current cars tend to be better-looking than the competition simply because, thanks in part to ex-product czar Bob Lutz's old-school Europhilic tastes, they haven't caught up to the latest absurd fashions. For another, I've sat in a Chevy Volt and seen one on the street—and it at least looks very well made. Early reviews are favorable. We'll see how it holds up, especially after they "take $10,000" in cost out of it.
> 
> But hype is hype. I pledge not to go soft on GM until a) they make a Cadillac ("Standard of the World") with above-average reliability in Consumer Reports' ratings (right now the flagship CTS is actually "below average," an average that includes humble Kias and Mazdas); and b) the Lordstown, Ohio-built Chevy Cruze proves as bulletproof as a Honda or Toyota ... These are achievable goals! ... After that, of course, GM has to rapidly adjust to nonunion competition while it's saddled with cumbersome post-World War II Wagner Act decision-negotiating mechanisms. Good luck with that ...



I was pleasantly surprised by the quality of the Kia van I recently bought to replace the Caravan (which had literally fallen apart...). I now have between 5 and 7 years to contemplate what sort of vehicle to buy next...


----------



## GAP (14 Feb 2011)

GM hourly workers to get $4,000 bonuses
Tom Krisher Detroit— The Associated Press Monday, Feb. 14, 2011
Article Link

General Motors Co. (GM-N36.29-0.16-0.44%) will pay more than $189-million (U.S.) in profit-sharing to 48,000 U.S. hourly workers and millions more in performance bonuses to salaried employees, according to company documents obtained by The Associated Press.

GM will pay most hourly workers more than $4,000 each as compensation for its strong financial performance last year, said a person briefed on the bonuses. The payments come less than two years after the automaker emerged from bankruptcy protection with the help of a huge government bailout. They're more than double the previous record payment of $1,775 in 1999, at the height of the boom in sales of sport utility vehicles and pickup trucks. 
More on link


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## a_majoor (15 Feb 2011)

Timing is off; the mid terms already happened and the 2012 Presidential election is too far in the future to influence yet...


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## a_majoor (1 Mar 2011)

For $50 billion we should have gotten somthing that would enthuse everyone:

http://detnews.com/article/20110228/AUTO01/102280401



> *Consumer Reports: GM's Volt 'doesn't really make a lot of sense'*
> David Shepardson / Detroit News Washington Bureau
> 
> Washington — Consumer Reports offered a harsh initial review of the Chevrolet Volt, questioning whether General Motors Co.'s flagship vehicle makes economic "sense."The extended-range plug-in electric vehicle is on the cover of the April issue — the influential magazine's annual survey of vehicles — but the GM vehicle comes in for criticism.
> ...



Just to set the record straight, the Volt is a hybrid like the Prius, not a serial electric car as had been implied (the gasoline engine provides direct torque to the wheels like the Prius; the primary difference seems to be the proportion of work between the gasoline and electric engines in each vehicle). Given this, a direct comparison between the vehicles is justified, and the Volt is distinctly inferior.


----------



## a_majoor (3 Mar 2011)

Keep an eye on your mutual fund portfolio, and get rid of aything with GM stock:

http://dailycaller.com/2011/03/02/behind-gms-sales-surge/



> Q. GM’s recent sales surge–what’s their secret? Great new models? Superior quality? A:  Heavy price-cutting to goose sales (at an inevitable cost in profits). … Maybe that’s why GM stock is  plunging  priced so realistically. … P.S.: GM has now begun selling Chinese-made GM cars outside of China. Right now these are small Chevies aimed at developing markets.  How long before they are Buicks and Cadillacs marketed in this country? You think Americans won’t buy a Chinese-made Cadillac? Those must be the same Americans who would never buy a Japanese luxury car. … True, the Chinese Caddies won’t be as well made. They will almost certainly be better made.  (In the latest Consumer Reports survey, Cadillac still had “below-average reliability“). …
> 
> Read more: http://dailycaller.com/2011/03/02/behind-gms-sales-surge/#ixzz1FZ87RDvO


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## a_majoor (7 Apr 2011)

"Atlas Shrugged Motors" (heh)

http://www.pjtv.com/?cmd=mpg&mpid=86&load=5199

One key point is GE (who's CEO is on the Administration's economic policy board) will be able to pocket over $7 million of taxpayer dollars for the privilage of "purchasing" half of the production run. Sales of under 300 cars in the month of February does not bode well either....


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## a_majoor (19 Apr 2011)

More on the GM IPO:

http://dailycaller.com/2011/04/18/gm-suckers-update/



> They sneered when kausfiles said GM was looking for “suckers” to buy its stock. They were not sneering all the way to the bank!  The stock has plummeted relative to the Dow and just dipped below $30. (The IPO price was $33.)  No way the taxpayers get their money back at this rate–for that to happen shares need to climb to around $50. And that’s under a conservative estimate of the government’s investment, one that ignores the tax … “spending.”  Sorry, Steve! … Underlying the decline: GM’s market share is not looking good. … P.S.: I’m thinking of leasing a Chevy Malibu myself: nice-looking car, supposedly handles well, OK reliability. And it’s not selling. Soon the dealers might be desperate. …
> 
> Update: GM stock dilution on the way? …
> 
> Read more: http://dailycaller.com/2011/04/18/gm-suckers-update/#ixzz1JwQCCKiT


----------



## a_majoor (2 Jun 2011)

The Volt seems to attract all the wrong type of attention:

http://www.msnbc.msn.com/id/43243050/ns/business-autos/



> *Some Volt dealers take tax credit for themselves*
> Limited supply of electric cars creates opportunity to 'game the system'
> 
> An enlarged label shows fuel economy information for a 2011 Chevrolet Volt. GM sold fewer than 500 Volts in May as it slowly ramps up production.
> ...


----------



## a_majoor (26 Jun 2011)

How well did those bailouts work anyway?

http://www.financialpost.com/news/Another+Chrysler+billion+lost+Canada/4915944/story.html



> *Another Chrysler billion lost in Canada*
> 
> In this story:TM US$81.29  $0.47F US$13.24  -$0.23
> Data delayed at least 15 min
> ...


----------



## a_majoor (14 Jul 2011)

So what was gained for the expenditure of $50 billion US tax dollars and the overturning of the rule of law?

http://www.realclearpolitics.com/articles/2011/07/13/the_truth_about_the_auto_bailouts_110558.html



> *The Truth About the Auto Bailouts*
> 
> By Todd Zywicki
> Last month, President Obama barnstormed through Ohio, unveiling his surprising decision to claim credit for the success of the multi-billion dollar government bailouts of General Motors and Chrysler.
> ...


----------



## a_majoor (7 Aug 2011)

Make sure you check your mutual funds and investments to ensure you are not exposed to GM:

http://dailycaller.com/2011/08/05/will-obama-dump-his-gm-stock-at-this-price/



> Psst. Despite recent reported profits, GM stock is trading at around $26–below its IPO price of $33 and about half what it would take for the government to break even on its investment. Is the Obama administration really going to dump its GM stake at such an embarrassingly low price? Wouldn’t that provoke a lot of stories, not about how the government is finally out of GM’s hair as promised but about how poorly the bailed-out company is doing? … P.S.: Yes, the entire market is down. But GM has done worse than the overall market, trailing the major stock indexes by a significant margin. …
> 
> Read more: http://dailycaller.com/2011/08/05/will-obama-dump-his-gm-stock-at-this-price/#ixzz1UJJZ8GsY


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## a_majoor (13 Aug 2011)

Since GM has been taken over by the US government and now exists to satisfy various political agendas, there should be no surprise that they produce vehicles that are not competative and are still bleeding money. A total shakeup is needed, perhaps in 2013 the new Administration will admit defeat and simply sell its shares in the market at a loss and allow the company to really reorganize through a Chapter 11.

http://www.investors.com/NewsAndAnalysis/Article.aspx?id=581078&p=1



> *General Motors Needs A Shake-Up*
> 
> By KEN BLACKWELL Posted 08/10/2011 06:52 PM ET
> 
> ...


----------



## a_majoor (22 Aug 2011)

As if we need more confirmation; this alone will make great political hay in the next election:

http://biggovernment.com/smotley/2011/08/22/general-motors-again-ripping-off-americans-warranties-edition/



> *General Motors Again Ripping Off Americans: Warranties Editionby Seton Motley/b]
> The transformation of General Motors (GM) to Government Motors (GM) has cost a lot of Americans a lot of money.
> 
> Many, many of them under questionable and in fact illegal circumstances.
> ...


*

*


----------



## a_majoor (19 Sep 2011)

Nice to know where all your money (and yes, GM and Chrysler got a huge chunk of Candian taxpayer cash as well) is going:

http://dailycaller.com/2011/09/19/why-not-pay-back-taxpayers-first/



> How about paying back the $15 billion first? I’m sure there are sophisticated arguments for why the UAW members shouldn’t pay back the taxpayers who bailed their employer out of bankruptcy before they negotiate a deal that gives them each a $5,000 bonus. I just can’t think of them right now. … Just from a PR standpoint, repaying the debt would seem like a good idea. …
> 
> Sure, as a going concern, GM has to pay to keep its employees from bolting to a competitor. But what are the odds that most of GM’s UAW workers (i.e, the ones not in the $14-an-hour Tier Two) could find jobs anywhere near as good as the ones they now hold? Almost all their leverage comes from the Wagner Act’s power to strike and not be fired. Without Wagner, they’d be free to quit, which they would not do. (Go ahead. Make GM’s day.)
> 
> ...


----------



## Rifleman62 (20 Sep 2011)

> General Motors Again Ripping Off Americans: Warranties Edition
> 
> The transformation of General Motors (GM) to Government Motors (GM) has cost a lot of Americans a lot of money.



I believe this. My daughter in OK is going through this now after a major failure on their truck. First it was "We don't leave our servicemen stranded" to "no warranty".


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## a_majoor (24 Sep 2011)

The UAW discovers $50 billion dosen't buy what it used to:

http://www.thetruthaboutcars.com/2011/09/carpocalypse-now-at-the-uaw/



> *Carpocalypse, Now At The UAW*
> By Bertel Schmitt on September 22, 2011
> 
> A bloated management, run-away costs, declining market share, imploding volume, a sell-off of assets and investments, headquartered in Detroit – what is it? No, it’s none of the Detroit automakers. It is their former nemesis and current co-owner, the United Auto Workers.
> ...


----------



## a_majoor (27 Sep 2011)

Wow, these people don't believe they have to live with the consequences of the bailout?





> Report: Ford pulls bailout ad after criticism from press, questions from White House
> Published: Tuesday, September 27, 2011, 11:24 AM     Updated: Tuesday, September 27, 2011, 3:52 PM
> By Jonathan Oosting | MLive.com
> 
> ...



w.youtube.com/watch?v=b_mwjaEI_hM&feature=player_embedded


----------



## Nemo888 (27 Sep 2011)

Manufacturing plants make sense. They are an *essential *strategic resource. Where do you think all the gear used in WWII was made? Retooled plants in Detroit baby!

Banks on the other hand,...(expletive deleted)


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## a_majoor (9 Nov 2011)

An interesting story to follow:

http://dailycaller.com/2011/11/08/project-voltwatch/



> *The Mystery of the Volt*:
> 
> Where Will They All Go? General Motors is sticking by its prediction that it will sell 10,000 electric/hybrid Chevy Volts by the end of the year. Only 5,000 had been through October, meaning GM has to double that amount in just the final two months of the year.  Until now, Volt production seems to have been wildly outstripping actual sales.  But GM CEO Dan Akerson says sales are “starting to hit the pace,”  some reporters claim the Volt is “hot,” and the company has made a big show of allowing dealers to sell off their demo models, allegedly to supply the now-insatiable “customer demand.”  …
> 
> ...


----------



## a_majoor (14 Nov 2011)

Just in case you thought the company had any fiduciary duty to you (you know, the shareholders or bondholders....)

http://dailycaller.com/2011/11/13/the-u-a-w-s-impolitic-misprint/



> *Corporatism Watch: Blame the Proofreader!*
> 
> Was a representative of the Obama administration “literally sitting in the room” for recent UAW/GM negotiations—as a newsletter to members of a UAW local said.  Or was the union report just a “misprint, as an official of the local now claims? … P.S.: Does it matter? The  government owns 32% of GM, after all. Why shouldn’t it watch over its investment? I suppose there are two fears: 1) The Obama administration might order GM’s managers to give the UAW a break the union otherwise wouldn’t get, or 2) The Obama administration might try to facilitate any agreement–including perhaps one that includes concessions the UAW otherwise wouldn’t give–by promising to make it up to everyone involved by steering business or favorable government rulings their way or by simply bailing them all out again.  Both sorts of favoritism can be accomplished, however, whether government officials are “in the room” or merely get second-hand reports and make a few phone calls. It’s mainly a question of “optics.” …
> 
> ...


----------



## a_majoor (18 Nov 2011)

How bad is it really? This is only GM, no one seems to have released the figures for Chrysler yet:

http://reason.com/blog/2011/11/17/treasury-admits-what-everybody-already-k



> *Treasury Admits What Everybody Already Knew: Taxpayer Losses On GM Bailout Are Going to be Massive*
> Shikha Dalmia | November 17, 2011
> 
> Am I allowed to say, I told you so?
> ...


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## a_majoor (22 Nov 2011)

The future of cars, according to VW:

http://green.autoblog.com/2011/11/21/volkswagen-r-cars-future-is-diesel-awd-light-weight-trumps-hy/



> *Volkswagen R cars' future is diesel, AWD; light weight trumps hybrids*
> 
> By Damon LavrincRSS feed
> 
> ...


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## RangerRay (22 Nov 2011)

YES!  We need more small diesels for passenger cars, SUVs and compact pick-ups.  They are far more fuel efficient and cleaner than petrol engines.  The rest of the world runs on diesel, yet we in North America are still in the dark ages with gasoline.

It's funny that you can buy a diesel powered Jeep, Land Rover, Toyota Hilux or Land Cruiser anywhere in the world...except for North America.


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## a_majoor (22 Nov 2011)

I especially like how versatile diesel engines are. Two and four stroke diesels, super and turbocharged models, even turbocompound models that use the turbine to send energy back to the transmission.

For perhaps the ultimate expression of diesel engine technology, Google the Napier "Nomad" engine and then the Napier "Deltic" engine. Gearheads will salivate at the British obsession of bodging things together to squeeze the absolute maximum performance from the engine. The "Nomad" took turbocompounding to the logical conclusion (the deisel engine was essentially the gas generator for the turbine), while the "Deltic" took volumetric efficiency to unexplored realms (and then taking the turbine stage from a Rolls-Royce Nene turbojet for the ultimate turbocompounded version, generating close to 6000 Hp from a 5384 cubic inch displacement engine....)

Rudolf Diesel had calculated the ultimate thermal efficiency of his engine could be has high as 75%, although the state of the art in the late 1800’s and early 20th century was not able to support anything near these numbers. Diesel’s calculations were based on the idea of a massive 52:1 compression ratio, air injection of fuel (to promote atomization) and water injection (to reduce the flame temperature). The flame temperature at TDC (where fuel was injected and combustion initiated) was calculated to be over 20000, while the temperature at BDC was to be about 3000, ensuring as much thermal energy as possible was extracted.

While these are probably not the sort of engines you might find in the family minivan, they give you a good idea of how far IC technology can go.


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## FlyingDutchman (28 Nov 2011)

With gas locally at 100.9 and diesel at 137.9 I would rather drive gas for a little longer.


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## psionic0 (28 Nov 2011)

With gas locally at 100.9 and diesel at 137.9 I would rather drive gas for a little longer.

You must live on the west coast or something!? I haven't seen gas that cheap in a long time. Here in Pet, it's still at 122.9


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## Canadian.Trucker (28 Nov 2011)

FlyingDutchman said:
			
		

> With gas locally at 100.9 and diesel at 137.9 I would rather drive gas for a little longer.


I can see your thinking, but hypothetically if overall the fuel efficiency of diesel is greater and upon comparison in the same vehicle you get approximately 700km's/tank with gas and 1,000km's/tank with diesel, does it not even out and perhaps bring greater benefit to drive diesel?  I say this also with the historical tendency that diesel prices don't seem to fluctuate as much as gas prices.

Oh, and I am quite jealous that you're paying just over a buck/litre for gas... you lucky devil!


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## RangerRay (29 Nov 2011)

psionic0 said:
			
		

> With gas locally at 100.9 and diesel at 137.9 I would rather drive gas for a little longer.
> 
> You must live on the west coast or something!? I haven't seen gas that cheap in a long time. Here in Pet, it's still at 122.9



The west coast (Vancouver) would be around 150.9 with carbon taxes and transit taxes.  Sounds more like Alberta gas prices, though diesel seems kinda high.

Here in Winnipeg, petrol is around 108.9...not bad!


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## FlyingDutchman (29 Nov 2011)

I am in BC, and bought gas for less than a dollar a litre last night.  I only had $5 on me, but I had no idea how much longer the price would be 99.9.  

At the time when I was buying my current car, I did look at diesel vehicles, and diesel was cheaper then.  None of them really fit the needs my wife and I had.  I echo the statement about there not being enough diesel vehicles.


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## a_majoor (2 Dec 2011)

Trying to keep the bubble inflated for just a little longer....

http://www.zerohedge.com/news/gm-channel-stuffing-surges-all-time-record



> *GM Channel Stuffing Surges To All Time Record*
> Submitted by Tyler Durden on 12/01/2011 17:15 -0500
> 
> Gross Domestic Product
> ...


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## a_majoor (11 Dec 2011)

Crony capitalism at work:

http://www.coyoteblog.com/coyote_blog/2011/12/dispatches-from-the-corporate-state-a-study-in-contrasts.html



> *Dispatches from the Corporate State: A Study in Contrasts*
> December 9, 2011, 11:39 am
> 
> It is interesting to study the contrast between the handling of the Toyota accelerator problems, which turned out to be pretty much all driver error, and the Chevy Volt fire issues.
> ...


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## Greymatters (14 Dec 2011)

FlyingDutchman said:
			
		

> I am in BC, and bought gas for less than a dollar a litre last night.  I only had $5 on me, but I had no idea how much longer the price would be 99.9.
> 
> At the time when I was buying my current car, I did look at diesel vehicles, and diesel was cheaper then.  None of them really fit the needs my wife and I had.  I echo the statement about there not being enough diesel vehicles.



You must be in the 'gas war' area, cause I havent seen gas below 1.00 in several years.  Price across the Island and Vancouver averages between 1.20 and 1.30 depending on what station, what city, and day of the week (Fridays and Holidays are usually the highest prices).


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## Rifleman62 (14 Dec 2011)

Source: Gas Buddy

Regular Gasoline Average Prices
  	                  USA 	Canada
Today 	        3.270 	117.589
Yesterday 	        3.276 	116.790
One Week ago 	3.308 	118.218
One Month ago 	3.425 	121.471
One Year ago 	2.976 	108.969
Current Trend    steady       up (of course)

Canada Fuel Taxes by Province

Gasoline (¢/L)
	                                                                           Comment
Alberta 	                23.877¢ 	GST
*British Columbia 	35.864¢ 	GST + Includes carbon tax of 5.56 ¢/L as of July 1, 2011 (scheduled to rise to 6.95 ¢/L on July 1, 2012).*
Manitoba 	                26.602¢ 	GST Manitoba's PST does not apply to gasoline or diesel fuel.
New Brunswick 	        37.307¢ 	GST + PST
Newfoundland 	        41.126¢ 	GST + PST
Northwest Territories 	27.376¢ 	GST
Nova Scotia 	        41.650¢ 	GST + PST
Ontario 	                38.208¢ 	GST + PST
Prince Edward Island 	31.271¢ 	GST PST does not apply to gasoline or diesel fuel. Fuel tax is adjusted monthly and includes an amount     equivalent to PEI's PST. The fuel tax is capped at 15.8%
Quebec 	                42.761¢ 	GST + QST of 13.5% is applied on top of sales amounts after the GST has been added.
Saskatchewan 	        30.446¢ 	GST PST does not apply to gasoline or diesel fuel.
Montreal 	                45.601¢ 	GST + PST + 1.5¢ Transit Tax.
*Vancouver 	        45.034¢ 	GST + PST + 15¢ Transit Tax. Includes carbon tax of 5.56 ¢/L as of July 1, 2011
Victoria 	                39.021¢ 	GST + PST + 3.5¢ Transit Tax. Includes carbon tax of 5.56 ¢/L as of July 1, 2011*
Yukon 	                22.876¢ 	GST + PST

Please note the above rates are meant as only guidelines of pump taxes and may not represent the full tax amount at the pump. Source: Compiled by GasBuddy Organization from various sources.


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## a_majoor (22 Dec 2011)

The Volt is certainly a money spinner. Everyone gets to pay for it!

http://www.michigancapitolconfidential.com/16192?utm_source=Mackinac+Center+Publications&utm_campaign=ccd8597a9a-MichCapCon_12_1312_12_2011&utm_medium=email



> *Chevy Volt Costing Taxpayers Up to $250K Per Vehicle*
> Analyst: 'This might be the most government-supported car since the Trabant'
> By Tom Gantert | Dec. 21, 2011     Twitter Follow Tom Gantert on Twitter
> Chevy Volt
> ...



Of course, GM sucks at building and selling real cars, so the Volt model may be the only way it survives:

http://dailycaller.com/2011/12/20/big-trouble-for-obamas-gm/



> *Obama’s going to run on this bailout? Really?*
> 
> GM’s make-or-break compact Chevrolet Cruze, hyped as a “home run,” is actually “headed for flopsville,” according to Edward Niedermeyer of Truth About Cars. He has the damning chart. Cruze sales were great at first, when its competitors from Honda and Toyota had been crippled by the Japanese earthquake and tsunami.  …
> 
> ...


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## a_majoor (31 Dec 2011)

Part of the larger argument not to subsidze business at all:

http://www.nationalpost.com/todays-paper/cent+110M+Quebec+loan/5931316/story.html



> *GM yet to pay cent on $110M Quebec loan*
> 
> Nicolas Van Praet, Financial Post · Dec. 31, 2011 | Last Updated: Dec. 31, 2011 3:09 AM ET
> 
> ...


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## a_majoor (5 Jan 2012)

Well, the taxpayers should be relieved their money was well spent for them:

http://pjmedia.com/tatler/2012/01/05/congratulations-to-general-motors-worst-car-stock-of-2011-chevy-volt-a-worst-product-flop-of-2011-winner/?print=1



> *Congratulations to General Motors: Worst Car Stock of 2011; Chevy Volt a ‘Worst Product Flop of 2011′ Winner*
> Posted By Seton Motley On January 5, 2012 @ 5:52 am In Economy | 11 Comments
> 
> General Motors stock (NYSE: GM) finished 2011 down 46.1% - the absolute worst car or car-related product stock on the board.  Besting (so to speak) the second worst by 4.5%.
> ...


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## a_majoor (3 Feb 2012)

Maybe GM could do better by buying and rebadging the Prius?

http://pjmedia.com/blog/the-follies-and-foibles-of-the-chevy-volt/?print=1



> *The Follies and Foibles of the Chevy Volt*
> 
> Posted By Mike McDaniel On February 3, 2011 @ 12:00 am In "Green" tech,Cars,Environment,Lifestyle,Politics,Science & Technology,US News | 16 Comments
> 
> ...


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## a_majoor (23 Feb 2012)

If you can't sell the car to the public...

http://gas2.org/2012/02/20/ge-forcing-employees-into-chevy-volts/



> *GE “Forcing” Employees Into Chevy Volts*
> February 20, 2012 By Christopher DeMorro 386 Comments
> 
> General Motors and General Electric are two companies that have been in the political crosshairs lately. GM stands accused of “crony capitalism,” while GE is under fire for paying no Federal income taxes in 2010. The two companies share more than that though, with GE placing an order for 12,000 Chevy Volts and other hybrid vehicles.
> ...


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## a_majoor (27 Feb 2012)

Yup, the bailout created a lean, new, efficient GM....

http://www.thetruthaboutcars.com/2012/02/edmunds-spring-for-u-s-car-sales-winter-for-gm/#more-432676



> Edmunds has handed in its predictions for February sales. Its bottom line is similar to the forecast made by Kelley Blue Book a few days ago: More than a million cars sold, GM the big loser of the month. Edmunds has better news for Ford. And much better news for Chrysler, if that is at all possible.
> 
> Sales Volume 12-Feb 11-Feb YOY YOY adj
> GM 196,742 207,030 -5.0% -8.8%
> ...


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## a_majoor (27 Apr 2012)

It looks like the American public has caught on. Another economy question to throw at the Administration during the election campaign:

http://www.rasmussenreports.com/public_content/business/auto_industry/april_2012/59_view_money_losing_auto_bailouts_as_a_failure



> Many Americans view the bailouts of General Motors and Chrysler more favorably these days, believing incorrectly that the government made money or broke even on them. But the view grows a lot more negative when the actual price tag is attached.
> 
> A new Rasmussen Reports national telephone survey finds that 20% of American Adults now believe the government made money on the billions in taxpayer dollars given to the two automakers to keep them afloat, while 19% more say the government broke even. However, a plurality (46%) recognizes that the government lost money on the auto bailouts. Fifteen percent (15%) are not sure. (To see survey question wording, click here.)
> 
> This survey of 1,000 Adults nationwide was conducted on April 23-24, 2012 by Rasmussen Reports. The margin of sampling error is +/- 3 percentage points with a 95% level of confidence. Field work for all Rasmussen Reports surveys is conducted by Pulse Opinion Research, LLC. See methodology.


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## a_majoor (2 May 2012)

Best line in the report:  “Why would GM cut R&D so profits look good in the short term? Is something happening in November?”. Of course the more urgent matter should be the waste of billions of taxpayer money for the bailout and the continuing loss of taxpayer value ($30 billion loss). Don't forget the Government of Canada and the Government of Ontario also have this albatross tied to the necks of Canadian taxpayers; we will also partake of a proportionate loss as well:

http://pjmedia.com/vodkapundit/2012/05/01/hide-the-decline-chevy-volt-edition/?print=1



> *Hide the Decline, Chevy Volt Edition*
> 
> Posted By Stephen Green On May 1, 2012 @ 12:58 pm In Uncategorized | 41 Comments
> 
> ...


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## a_majoor (16 Jul 2012)

Government subsidized competitors is about right:

http://american.com/archive/2012/july/the-essential-lesson-of-the-auto-bailout



> *The Essential Lesson of the Auto Bailout*
> By Steve Conover
> Saturday, July 14, 2012
> 
> ...


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## a_majoor (30 Jul 2012)

Another government sponsored subprime loan bubble. You just *know* this is isn't going to end well....

http://news.investors.com/article/620090/201207271807/gm-risky-subprime-auto-loans-fuel-sales.htm



> *GM Ramps Up Risky Subprime Auto Loans To Drive Sales*
> By DAVID HOGBERG, INVESTOR'S BUSINESS DAILY
> Posted 07/27/2012 06:07 PM ET
> 
> ...


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## Nemo888 (30 Jul 2012)

Do you post all these articles so they get picked up by Google Trends when it periodically searches the site?


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## a_majoor (30 Jul 2012)

GM is also a $16 billion dollar anchor attached to the Canadian economy (through the fereral government's portion of the bailout) and Ontario is also in for a huge amount, although the number escapes me at the moment. So it should be every thinking Canadian taxpayer's concern about how GM is doing, since when they crater, it isn't just $50 billion of the US taxpayers wealth at risk, it is yours and mine as well....


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## a_majoor (31 Jul 2012)

And more reasons for concern by Canadian taxpayers (and of course our American cousins):

http://dailycaller.com/2012/07/30/mayhem-at-gm/



> This wasn’t supposed to happen until Nov. 7: It’s like the last act of Titus Andronicus over at GM corporate headquarters.
> 
> Two weeks ago, Opel chief Karl-Friedrich Stracke presented numbers to Dan Akerson. Akerson fires him. Opel gets two interim chiefs in a week. Last Thursday, Opel’s new design chief Dave Lyon doesn’t even start his job. Today, media in the U.S. and Germany report that Lyon had been escorted from the building and to a waiting car by GM’s head of personnel. A day later, global marketing chief Joel Ewanick suddenly leaves. Instead of wishing him all the best for his future endeavors, GM spokesman Greg Martin puts a knife in Ewanick’s back: “He failed to meet the expectations the company has of an employee.”
> 
> ...


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## a_majoor (11 Aug 2012)

Well, more evidence that the GM bailout wasn't for the benefit of everyone, just the politically connected (read UAW):

http://dailycaller.com/2012/08/09/bipartisan-group-of-legislators-demands-stronger-probe-into-delphi-pension-scandal/?print=1



> *Bipartisan group of legislators demands stronger probe into Delphi pension scandal*
> 
> 4:33 PM 08/09/2012
> 
> ...


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## a_majoor (13 Aug 2012)

And the accounting. GM's losses are in the same order of magnitude as our national deficit, which should give everyone pause. Don't forget, both Canada and Ontario own portions of GM as part of the bailout, so these losses will fall, in part, on us:

http://www.detroitnews.com/article/20120813/AUTO01/208130392



> *Treasury: U.S. to lose $25 billion on auto bailout*
> By David Shepardson
> Detroit News Washington Bureau
> 
> ...


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## a_majoor (16 Aug 2012)

There is also a $3 billion dollar lawsuit outstanding against GM by Spyker, the company that purchased SAAB AB, so lots of money is now at risk. The extralegal scheming that was done to make a government bailout possible is the proximate cause of this lawsuit, and I can imagine that if it is even partially successful, many other people who were cheated (particularly the bondholders who were cut out) will be back looking for justice:

http://business.financialpost.com/2012/08/07/us3-billion-lawsuit-could-unravel-new-general-motors/



> *US$3-billion lawsuit could unravel new General Motors*
> Tiffany Kary, Bloomberg News | Aug 7, 2012 9:02 PM ET | Last Updated: Aug 7, 2012 9:07 PM ET
> More from Bloomberg News
> 
> ...


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## a_majoor (4 Sep 2012)

By the numbers. Continuing weak sales by GM (and indeed the auto industry in general) could also put this in the US economy or election 2012 spot, but we will focus on automobiles here:

http://pjmedia.com/instapundit/   (on 04 Sep 12)



> I WONDER IF WE’LL HEAR A LOT ABOUT ELECTRIC CARS AT THE DNC? Chevy Volt production to be suspended for a month.
> 
> UPDATE: Pushback from Volt-owning reader Matt Hennessy:
> 
> ...


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## a_majoor (15 Oct 2012)

Our tax dollars at work. At this rate the final tab for GM will far exceed the simple costs of letting them go bankrupt in the first place (and GM may well go belly up anyway despite the tens of billions lavished upon it):

http://www.thetruthaboutcars.com/2012/10/how-the-gm-bailout-turned-into-foreign-aid/



> *The GM Bailout Turned Into Foreign Aid*
> By Tyler Vandermeulen on October 13, 2012
> 
> Longtime reader and new contributor Tyler Vandermeulen is a financial analyst by day. He took a deep dive into the EDGAR database to unearth how much of GM’s money flows abroad. Please welcome Tyler with the respect he deserves. Rude comments will not be tolerated.
> ...


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## GAP (18 Oct 2012)

Hey....a sale is a sale...gotta get those numbers up

GM offering discounted cars through Costco
October 04, 2012 FoxNews.com
Article Link

General Motors has teamed up with Costco to offer members of the warehouse club preferred pricing on a selection of GM products through January 2nd.

Eligible vehicles include the Buick Enclave, LaCrosse and Verano; GMC’s Acadia, terrain and Sierra; and the Chevrolet Cruze, Camaro, Malibu, Equinox and the Silverado pickup, so you’ll have plenty of room to carry home all of those bulk purchases of toilet paper and pretzels barrels.

After signing up online, customers are referred to local GM dealers to complete their purchase.

Along with the low, low price on the vehicles, customers will also get a $500 Costo Cash Card, but there’s a catch: the offer is only good for customers who were members before Oct 1st, so no late comers allowed.

This is the second time GM and has run this type of promotion. In 2011 the automaker used it to sell more than 5,000 vehicles, according to The Automotive News. The preferred prices are similar to what GM employees pay.

Costco previously worked with Volvo and Subaru on similar programs
end


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## a_majoor (19 Dec 2012)

It will be just as bad for us when the GoC and the Ontario government divest themselves of GM. Frankly, it might be better to simply write the entire deal off as a loss and ensure they never can crawl back for more tax dollars:

http://reason.com/blog/2012/12/19/enjoy-the-red-ink-from-gms-share-buyback



> *Have Your Cereal with Red Ink, Courtesy GM's Share Buyback, Taxpayers*
> 
> Shikha Dalmia|Dec. 19, 2012 9:27 am
> 
> ...



and bonus: the Canadian figures are in as well.

http://business.financialpost.com/2012/12/19/canada-could-keep-gm-stake-until-after-next-election-experts-say/



> *Canada could keep GM stake until after next election, experts say*
> 
> John Tilak and Susan taylor, Reuters | Dec 19, 2012 4:30 PM ET | Last Updated: Dec 19, 2012 4:42 PM ET
> More from Reuters
> ...


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## a_majoor (23 Jul 2013)

An interesting article about how cars are being made now by major manufacturers. Rather telling is how GM missed the boat (again), your tax dollars were certainly not spent on making a lean and efficient "new" GM, just paying off the crony's:

http://www.thetruthaboutcars.com/2013/06/mqb-fud-burdened-by-legacy-platforms-gm-fights-off-the-kits-and-what-are-those-kits-anyway/



> *MQB FUD: Burdened By Legacy Platforms, GM Fights Off The Kits – And what are those kits anyway?*
> By Bertel Schmitt on June 15, 2013
> 
> (Note: This story is not for the TL;NR crowd. If you need it in one short sentence: If your car company isn’t working on a kit architecture, kiss them good-bye.)
> ...


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## a_majoor (6 Jan 2014)

GM cost the US taxpayer about $50 billion (and the final shares were sold at a $10 billion loss), and Canada was in for @ $16 billion between the Federal and Provincial governments, so it is <sarc>_really reassuring_</sarc> to know that the moneyu was well spent:

http://dailycaller.com/2014/01/03/gm-loses-market-share-again/



> *GM Loses Market Share, Again?*
> 
> 
> The press won’t make it easy for you to discover–gets in the way of the pre-packaged “Detroit is back!” narrative–but it looks like General Motors lost market share again in 2013. According to Ward’s Auto, GM sales grew 7.3%–but the market as a whole grew 7.5%. … GM sales for December unexpectedly cratered, despite “high inventory levels … unseen since before the Great Recession.” … If this is a good year for GM, I wonder what a bad year will look like. ….


Read more: http://dailycaller.com/2014/01/03/gm-loses-market-share-again/#ixzz2pd3Kb3uw


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## a_majoor (5 Apr 2014)

A real scandal here. Using political power and influence to damage a competitor, hiding a lethal flaw in a product and other shenanigans:

http://reason.com/archives/2014/04/04/general-motors-scandal-worse



> *The General Motors Scandal May Be Worse Than You Think*
> Does anyone believe the Obama administration took as hard a look at GM as it did Toyota?
> David Harsanyi | April 4, 2014
> 
> ...


----------

