The US Big Three want more $$$

[StAndArdAU]

http://au.biz.yahoo.com/081205/33/22rhm.html

Hopefully not already posted. Key points of interest:

Ford CEO Alan Mulally was asked whether the failure of one of the Big Three could result in the demise of its competitors.

"If one of us goes in, it has the potential to take all of us in," he said.

&

United Auto Workers chief Ron Gettelfinger warned on Thursday that time was short.

"I believe that we could lose GM by the end of the month," he said.

[FPV8U]

Not looking good over there which in Turn is very bad for over here...

2009 is going to be a very interisting year..

[Yaw]

I know I will get flamed for this, but Governments cannot keep bailing out corporate business. It is simply unsustainable. I know the job losses and the welfare the governments would have to put up, but this is the system we have called capitalisim, the alternitive road we are fast going down is socialism, we are in danger of becomming the very thing most previous wars have been about. If these companies/banks/multi national coproate's do not fail when they are due to, we are just throwing good money after bad and postponing the inevitable. Wheather that be GM, Crylser or Ford. The stockmarket needs to have consquenses otherwise every company will take bigger risks with the knowledge that the government will bail us out.

[Romulus]

It's their own fault, this is what happens when you build vehicles that return 5mpg. GM's attitude was always what's good for GM is good for America. "We build it, you just buy it, ok?!"

The problem for the big three is their customers want better quality cars that burn less fuel, they've realised it 10 years too late. However, the government cannot let any of them go broke as it will affect over a million people directly and indirectly employed by the big three car manufacturers.

What I find hypocritical is the US government is balking at lending $50b to the automotive industry, yet they roll out the hundreds of billions of dollars to the support the financial industry who've had their noses in the trough for years, without any accountability used:

[chevypower]

Originally Posted by TVS Super Pursuit

It's their own fault, this is what happens when you build vehicles that return 5mpg.

Definitely the biggest load of crap I have read all day!

[Romulus]

Originally Posted by chevypower

Definitely the biggest load of crap I have read all day!

How do you figure that? I mean, aren't these car manufacturers going cap-in-hand to the Fed government asking for money because their cars aren't selling? What do you think is the end result of building cars of poor quality and poor fuel economy? Ummmm, lack of car sales perhaps?

[Clint Eastwood]

Originally Posted by TVS Super Pursuit

How do you figure that? I mean, aren't these car manufacturers going cap-in-hand to the Fed government asking for money because their cars aren't selling? What do you think is the end result of building cars of poor quality and poor fuel economy? Ummmm, lack of car sales perhaps?

I agree 100%,proping up failing car companys because they are unable to produce a product that sells is beyond stupidity,why should the tax payer have to bail out failed companys? It is the tax payer that stopped buying there products.

It is unfortunate that job losses will take place,but consumers have spoken with there feet by walking away from the types of cars ford and gm produce,and these companys have waited ten years to long to react to a very changed market.

[vztrt]

Originally Posted by Clint Eastwood

It is unfortunate that job losses will take place,but consumers have spoken with there feet by walking away from the types of cars ford and gm produce,and these companys have waited ten years to long to react to a very changed market.

Ford turned a profit in the qtr before the credit crunch hit.

[chevypower]

Originally Posted by Clint Eastwood

I agree 100%,proping up failing car companys because they are unable to produce a product that sells is beyond stupidity,why should the tax payer have to bail out failed companys? It is the tax payer that stopped buying there products.

It is unfortunate that job losses will take place,but consumers have spoken with there feet by walking away from the types of cars ford and gm produce,and these companys have waited ten years to long to react to a very changed market.

Hold on, ten years ago, everyone wanted a Hummer or an Excursion.... Customers may be to blame too?

[chevypower]

Originally Posted by TVS Super Pursuit

How do you figure that? I mean, aren't these car manufacturers going cap-in-hand to the Fed government asking for money because their cars aren't selling? What do you think is the end result of building cars of poor quality and poor fuel economy? Ummmm, lack of car sales perhaps?

5mpg Give me a friggen break. That is not correct, and even as an exaggeration is misleading, nor is the statement funny, it was just, as I said, the biggest load of crap I read all day.

The Impala, Focus, Malibu, Fusion, CTS, Acadia, Edge (just to name a few) all get good mileage in comparison to their Japanese equivalents. The fact is, every car manufacturer is down in sales (including the Germans and Japanese), and the big three are obviously overstaffed and have too many overheads. I don't know why people think of Toyota as being innovative or any better with fuel consumption, but Toyota has fooled many people.

[vztrt]

Originally Posted by chevypower

I don't know why people think of Toyota as being innovative or any better with fuel consumption, but Toyota has fooled many people.

It's called perception. You think American brand and you think big and gass guzzling. Japanese brand you think small and econimical.

[StAndArdAU]

Is it possible for these manufacturers to save money simply by cutting down on vehicle production numbers?

like, whats the ratio of cars that die everyyear to new cars produced?

[SB076]

Originally Posted by StAndArdAU

Is it possible for these manufacturers to save money simply by cutting down on vehicle production numbers?

like, whats the ratio of cars that die everyyear to new cars produced?

Not really cutting production may reduce some cost, but it also reduces return on investment (assuming you can selll the product) Plus if you cut production you need to cut jobs.... which leads to payouts that the companies might not be able to afford. I partially agree with Yaw, governments cant keep bailing out businesses (they will run out of money - the governments that is) But there are consequences to letting them fall that is what everyone is worried about. I personally think the problems started years ago, when businesses got greedy striving for massive profits etc, lending/borrowing money when they shouldnt have etc. Now everything is catching up and people are finding out things are not worth as much as they thought or had valued - thats just my opinion.

Pretty sure the US automakers pay the pensions of their former employees, is this correct?

[djst]

It makes you wonder where is it going to end.
GM need 4 billion before the end of the month to keep operating,thats just to keep the doors open.
It looks like the Senate will vote and pass a 15-17 billion dollar Bridge loan for GM and CHRYSLER,to get them through to March,if the US economy does not get worse.
This money then will probably have conditions on it.
Then there is still the question of how much more money is needed to reform the companies and turn them around to operating and being profitable.
People have estimated it could be as much as 120-140 billion of US taxpayers money. :

[vztrt]

Obama is going to put 5-700 billion US into the economy when he starts up.
http://business.theage.com.au/busine...d9.html?page=1


From the same article this is what they're saying about the big three.

Originally Posted by The Age

During the hour-long interview, Obama also said that while it's not an option to let the Big Three US automakers ``collapse'' amid a recession and throw more workers out of jobs, any government loans or aid they get must be conditioned on the companies revamping their business and their products.

That also may mean management changes at General Motors Corp., Ford Motor Co. or Chrysler LLC, he said. The executives must abandon their ``head-in-the-sand'' approach and develop a ``sustainable business model'' that begins by building fuel efficient vehicles.

``They can't keep on putting off the changes that they frankly should have made 20 or 30 years ago,'' Obama said.

[Bent8]

Originally Posted by vztrt

Obama is going to put 5-700 billion US into the economy when he starts up.
http://business.theage.com.au/busine...d9.html?page=1


From the same article this is what they're saying about the big three.

He can add it the $6.3 trillion so called "bailout"....

http://articles.moneycentral.msn.com...r-bailout.aspx

[vztrt]

Money going to the big three.....update

http://business.theage.com.au/busine...1210-6vqu.html

Originally Posted by the age

$22b car bail-out plan nears conclusionDecember 10, 2008 - 6:35PM
US Congressional Democrats and White House negotiators agreed on the outlines of a $US15 billion ($23 billion) plan to give General Motors Corp. and Chrysler LLC federal loans to stay in business while requiring them to restructure their operations.

A senior administration official said tonight the White House reached an agreement in concept with lawmakers and that negotiations on details were continuing.

``Bipartisan hard work has paid off and I understand an agreement has been reached,'' Senator Carl Levin of Michigan said in a statement. ``This gets us to the 20-yard line, but getting over the goal line will take a major effort, particularly in the Senate where we need 60 votes.''

GM and Chrysler have said they need at least $US14 billion in combined aid to keep from running out of cash by early next year.

The legislation would include protections for taxpayer money, including the appointment of a so-called car czar who could force the companies into Chapter 11 bankruptcy if the companies don't come up with a business plan by the deadline of March 31, according to the official, who briefed reporters on the condition of anonymity.

The car czar has until that date to negotiate with the companies and stakeholders to come up with a plan that satisfies the definition of long-term viability as set out in the legislation. The czar, who would be appointed by President George W. Bush, is required to call the loan if they haven't agreed to a strategy by the deadline.

30-Day extension

The senior administration official said the president's designee could grant one 30-day extension beyond the March 31 deadline if he or she decides there are ongoing, good-faith negotiations to come up with a road map for the future.

``We are making progress and are optimistic that we will have a reasonable compromise that will protect taxpayers and ensure the long-term viability of the American auto companies,'' Nadeam Elshami, a spokesman for House Speaker Nancy Pelosi of California, said in an e-mailed statement.

The measure will not include a provision sought by Democrats that would have barred automakers accepting federal loans from suing states that seek to impose tougher auto-emission standards than are set by the federal government, the administration official said.

Block transactions

The car czar would have the power to block the automakers' financial transactions over a certain amount. The administration official said the level at which the government could intervene would be for transactions ``significantly higher'' than the $US25 million in earlier drafts. The official didn't specify the new figure.

The official said the bill would seek to ensure that federal loans are not the first in a series to an industry that refuses to make fundamental changes, by barring the automakers from getting additional federal funds if they reach the deadline without an acceptable plan for viability.

The administration will consult with representatives of President-elect Barack Obama on the appointment of the car czar, the official said.

Levin, a Michigan Democrat, called on Bush and Obama to personally push for the measure's passage. Some Republicans in Congress are resisting giving the loans.

`Can't manage itself'

Senator Tom Coburn, an Oklahoma Republican, would support an effort to filibuster the bill, his spokesman said earlier today. ``He believes it's naive to trust Congress to manage the auto industry when it can't manage itself,'' said Coburn spokesman John Hart.

Jim DeMint of South Carolina said Senate Republicans have the 41 votes needed to force Democrats to allow amendments to the proposal.

Also earlier, Senate Majority Leader Harry Reid warned lawmakers may be in session this weekend if objections are raised to voting earlier. ``Everyone should understand we're going to work until we complete this,'' said Reid, a Nevada Democrat, on the Senate floor.

Senator Judd Gregg of New Hampshire, the top Republican on the Budget Committee, told reporters he would support the bill if the czar had authority to require debt restructuring and to force unions to accept reduced pay and benefits.

``I could support something I felt was going to lead to fundamental restructuring,'' Gregg said.

`Bone of contention'

Representative Edward Markey, a Massachusetts Democrat, said that Democrats' desire to bar automakers from suing over state-mandated emission requirements was ``a big bone of contention,'' adding that disagreement over the provision could unravel the deal.

GM and 21 carmakers in June lost a bid in court to block California from quickly enforcing carbon-reduction rules if the state wins Environmental Protection Agency approval for greenhouse-gas emission caps.

Ford Motor Co. yesterday fell 15 cents, or 4.4%, to close at $US3.23 in New York Stock Exchange composite trading. GM fell 23 cents, or 4.7%, to $US4.70.

Ford, which would be eligible to apply for the loans, said again yesterday it doesn't expect to.

[Bossxr8]

Originally Posted by vztrt

Money going to the big three.....update

http://business.theage.com.au/busine...1210-6vqu.html

This makes me shake my head. I realize that they must put conditions on the bailout money but what sort of conditions were put on Wall Street for their bailout package that cost a few thousand times more money than what the automakers want, and and was those greedy clowns that caused this whole financial meltdown in the first place. And I bet 99% of them won't be losing their jobs either. America stinks.

[irlewy86]

Originally Posted by Bossxr8

This makes me shake my head. I realize that they must put conditions on the bailout money but what sort of conditions were put on Wall Street for their bailout package that cost a few thousand times more money than what the automakers want, and and was those greedy clowns that caused this whole financial meltdown in the first place. And I bet 99% of them won't be losing their jobs either. America stinks.

They didn't even put the same conditions on their own banks as they did the major Asian banks during the Asian meltdown. Nice way to kiss a trillion dollars away. One of the largest US employers says they need all of $30 billion to survive and they want everyone sacked and have the whole place run by some Prius lovin hippy who's never had a job beyond politics

[vztrt]

Originally Posted by Bossxr8

This makes me shake my head. I realize that they must put conditions on the bailout money but what sort of conditions were put on Wall Street for their bailout package that cost a few thousand times more money than what the automakers want, and and was those greedy clowns that caused this whole financial meltdown in the first place. And I bet 99% of them won't be losing their jobs either. America stinks.

It was the government that changed laws that was one big factor in the Banking system getting themselves in this crapper. Before this happened the law makers actually changed the law over there from the banking secor having a debt to equity ratio of 12:1 to 33:1. But then money talks and the banks will lobby.

[mik]

does anyone think that greedy governments and oil companies have played a part in these companies demise? ....i do, if fuel had not sky rocketed in the last few years i suspect the status quo would have remained the same, in one way its probably the shake up the industry needed to become more efficient.

[damir05]

lol i tell you guys whats the problem, underpaid labor you and me. Just look at all the prices rising in super markets, loan rates, fuel in last few years while all this is happening and big guys pocketing their bigger and bigger profits my salary and probavly yours still hasnt changed much in last 4 years. I wont say i live bad now but if my salary went double or more like the price of food and prices of houses and prices of fuel and everything else i be able to buy new car, but if they keep increasing prices everywhere while our salaryes are down or incresed 100 dollaras in last 4-5 years how the **** can i pocket out extra money for new car. So gov first fix our salaryes so that we can live like maybe 5 years ago and ill for buy new car straight away help ford or gm or who ever, but if you keep increasing pressure on our pockets there will not be fix

[SB076]

Originally Posted by damir05

lol i tell you guys whats the problem, underpaid labor you and me. Just look at all the prices rising in super markets, loan rates, fuel in last few years while all this is happening and big guys pocketing their bigger and bigger profits my salary and probavly yours still hasnt changed much in last 4 years. I wont say i live bad now but if my salary went double or more like the price of food and prices of houses and prices of fuel and everything else i be able to buy new car, but if they keep increasing prices everywhere while our salaryes are down or incresed 100 dollaras in last 4-5 years how the **** can i pocket out extra money for new car. So gov first fix our salaryes so that we can live like maybe 5 years ago and ill for buy new car straight away help ford or gm or who ever, but if you keep increasing pressure on our pockets there will not be fix

As much as I would love for my Salary to be doubled, this isnt the answer, this will simply push more jobs overseas - Countries like Oz and US are struggling to compete with cheaper labor (and legistlive costs) from overseas countries. If salaries doubled we would all be out of work in a relatively short period of time

[vztrt]

Update on the Bill

http://news.theage.com.au/world/hous...1211-6wj4.html

Originally Posted by the Age

House backs US auto industry bailout; vote shifts to Senate

December 11, 2008 - 6:24PM


The House of Representatives approved a 14-billion-dollar government lifeline for the teetering US auto industry, but the proposal now faces stiff Republican opposition in the Senate.

The plan passed 237 to 170 late on Wednesday following several hours of intense debate, and after senior Democrats in Congress and the White House hammered out a bridge loan deal to rescue the Big Three automakers.

The bill now moves to the Senate, where strong Republican opposition in a chamber with a razor-thin Democratic majority threatens to derail the legislation.

The rescue funds for the bailout are to be drawn from a loan program set up previously to bankroll the development of fuel-efficient cars.

The bill called for up to 15 billion US dollars (11.4 billion euros) but in the end lawmakers chose to leave some funds remaining in the loan program for use by smaller companies, US media reported.

At the end of floor debate, House Speaker Nancy Pelosi said the legislation would serve as "a jumpstart for an industry and our country's economic health."

The bill "sets us on a new path to viability. It is a test. And we will soon see in a matter of weeks if the executive suites in Detroit are willing to make the choices" laid out in the legislation.

"We want to throw a lifeline for success. We do not intend to afford life support," she said, warning that auto industry bankruptcy would send US manufacturing "down into a deep pit."

In the most far-reaching intervention in US industry in years, The Auto Industry Financing and Restructuring Act calls for emergency government loans to the car companies within days to be overseen by a "car czar" appointed by outgoing President George W. Bush.

In return, automakers by March 31 would have to cut costs, settle debts and make other changes to show a path to profitability or face possible bankruptcy.

The government could choose to revoke the loans if the companies fail to make progress, or could refuse further assistance after March 31 if the Big Three have no promising survival plan, officials said.

House Majority Leader Steny Hoyer said it was critical that the government bailout proceed.

"There is a great reluctance to directly assist carmakers," he said, stressing that "the impact on the economy would be very severe" if the industry collapsed.

"If we do nothing, we face the real threat that sometime soon there will be no American auto industry," he said during the House debate.

The White House hailed the vote Wednesday night, with spokeswoman Dana Perino calling the bill "an effective and responsible approach to deal with troubled automakers and ensure the necessary restructuring occurs."

But there were serious doubts voiced by Republicans, who warned the intervention was doomed and would only postpone a day of reckoning for the car companies and autoworkers' union.

Republican Representative Tom Feeney slammed it as a "short-term solution" that would merely drain federal coffers and strain taxpayers.

"Micro-managing a business from Washington is the supreme act of hubris. It will never work," he said on the House floor.

Republican Senator Richard Shelby of Alabama agreed.

"I'm going to oppose the package because I think this is just the down payment on billions and billions to come," he said. "These are failed or failing companies."

Influential House Financial Services Committee Chairman Barney Frank, one of the bill's architects, acknowledged the extent of opposition in the Senate, where Democrats currently have only 49 seats, plus two Independents who usually vote with them.

To overcome that opposition and pass the auto bill Democrats need at least 60 votes.

Republican Senate Majority Leader Mitch McConnell said Wednesday the rescue bill would be considered by the Senate by the end of the week.

The proposed short-term loans are meant to sustain the car giants through March, allowing president-elect Barack Obama time to address the crisis after he takes office on January 20.

GM and Chrysler are first in line, after warning they are fast running out of cash. Ford, though equally hampered by slumping sales, says it faces no immediate liquidity crisis but wants a nine-billion-dollar line of credit.

The auto giants had initially asked for more than twice as much -- 34 billion US dollars -- to stave off a "catastrophic collapse."

[Gobes32]

People forget that we are in the midst of a once in a lifetime global crisis, no one supposedly saw it coming let alone prepared for it. Do you think anyone would care about fuel efficient cars if we had the same circumstances as five years ago? Low fuel costs and high wages and everybody's house suddenly doubling in value?