Bailing out the Detroit automakers

[Best Buckeye]

Originally Posted by Tresselbeliever

One of the greatest mistakes for a country that runs a huge capital surplus is to create the condition where all the capital are going to the treasuries, .

Or giving all your money to Buckyle to hold.

[Tresselbeliever]

Originally Posted by Best Buckeye

Or giving all your money to Buckyle to hold.

Buckyle says he only accepts bottles for deposit not currency.


j/k Buckyle.

[generaladm]

YouTube - The White Stripes - The Big Three...

[fourteenandoh]

edit: erased because im a drunk

[berryfan]

I don't see how a bailout is going to help them do what they haven't been able to do for some time, and that's to sell cars. The economy is in the toilet.

[fourteenandoh]

Originally Posted by berryfan

I don't see how a bailout is going to help them do what they haven't been able to do for some time, and that's to sell cars. The economy is in the toilet.

thats the key right there they are basing their projections on the car market recovering in Q2 that aint gonna happen

[Sdgobucks]

Originally Posted by fourteenandoh

thats the key right there they are basing their projections on the car market recovering in Q2 that aint gonna happen

Agreed. This is going to be long and bad, we will be lucky if its over in 5 years. Losing 3M jobs from the auto industry will probably double or triple the problems we are already facing.

Right now it's already feeding off of itself. People are not buying things because they either don't want to spend cash, or take on debt when they might lose their job, business are cutting jobs because no one is buying things, and when people see job cuts they buy even less.

Throw in all the job losses from the big 3, and the jobs they support in their areas, and we might be looking at 20% unemployment in a couple months.

[fourteenandoh]

Originally Posted by Sdgobucks

Agreed. This is going to be long and bad, we will be lucky if its over in 5 years. Losing 3M jobs from the auto industry will probably double or triple the problems we are already facing.

Right now it's already feeding off of itself. People are not buying things because they either don't want to spend cash, or take on debt when they might lose their job, business are cutting jobs because no one is buying things, and when people see job cuts they buy even less.

Throw in all the job losses from the big 3, and the jobs they support in their areas, and we might be looking at 20% unemployment in a couple months.

i love the debates, but how many beers deep are you right now?

we won't lose 3m jobs if they go chapter 11, and even if we do, 3m jobs won't jump us from 6% to 20% umemployment

[BuckBackHome]

I've heard the 3mm number the auto industry is throwing around includes those employed by the foreign auto makers. Can anyone confirm this?

[sandgk]

Here is an interactive map from the Detroit Free Press which shows the geographic distribution of the >2.2 Million jobs directly involved in Automobile construction, parts making, automobile sales (dealer and wholesale) and wholesale parts:


http://www.freep.com/uploads/flash/autoEmploy1204.swf

Three points,

1 -- the figures associated with the graphic do include Domestic and Foreign makers.
2 -- the higher figure cited by some rolls out further down the supply chain
3 -- foreign car makers are very worried that a failure to provide support for their US competitors will result in a failure of supplier companies (who are owed an estimated $8 Billion by GM et al). This would imperil the Foreign car makers abilities to make product in the States, as they share many suppliers with the Big 3.

[Sdgobucks]

Originally Posted by fourteenandoh

i love the debates, but how many beers deep are you right now?

we won't lose 3m jobs if they go chapter 11, and even if we do, 3m jobs won't jump us from 6% to 20% umemployment

Well I might or might not have been drinking , but I think that its a good possibility that if even 1.5M of all the US auto jobs (dealers, parts, and assembly) vanish, then it will send people further into a panic.

Sure the 1.5, or even 3 million jobs that could be lost wont send us alone to 20% unemployment, but I think the ripple effect could. I think its also important to consider that all those employees and retirees would be on the governments bank roll for unemployment, or some other social programs. No one knows how to soak up unemployment better than union members. They wont step off of it a day earlier than they are forced too.

How far is the government willing to go to prevent what they seem to think will or, would have been another great depression? It seems like Bush at least thinks that without stepping in to save the banks from themselves we would have had the "end to life as we know it" as someone put it. Right now it looks like he thinks letting the auto industry collapse would have the same effect, as rumors are he will use the money from the financial bail out to keep them afloat at least until March or so.

[Muck]

BTW has anyone seen the national media talk about the fact that GM was thinking about buying Chrysler just a few months ago because Chrysler had around $12 Billion in cash saved up? Why exactly does Chrysler need $7 Billion of that loan money?

Originally Posted by sandgk

Absolutely agreed Muck.
If there was one meme I wish the Green Car group would drop it is the "GM killed the EV-1" conspiracy. It's embarrassing, ill-informed and doesn't address the real issues. [/i]

Yeah people tend to forget that those saintly Japanese companies killed their available ZEVs as well once California eased the restriction.

(Like how you can get all that nifty research and still fail to bring the Volt to Market at a reasonable price).

The technology isn't as mature as everyone wants to believe. :shrug:

There's a reason that the major auto companies aren't looking at pure electrics even for the mid-long term and hybrids are a stop gap until Hydrogen/CNG become more viable.

[jimotis4heisman]

Tax Bill Threatens GM's Overhaul - WSJ.com

General Motors Corp. is reaching out to the U.S. Treasury Department and Congress in hopes of avoiding a multibillion-dollar tax burden that could be attached to a new restructuring plan the auto maker is working to create by mid-February, according to people familiar with the effort.
GM, racing to submit a viability plan to the White House by Feb. 17, could face an income-tax bill of as much as $7 billion that would be associated with a plan to give much of the company's outstanding stock to debtholders, the United Auto Workers union and the federal government
...

oh no, youd actually have to pay taxes...

[jimotis4heisman]

Ford's Sales Fall 40%, Toyota's Drop 32% - WSJ.com

Ford Motor Co. said its U.S. light-vehicle sales for January fell 40%, further intensifying the financial pressure on the auto maker, which so far has sidestepped federal assistance.
Meanwhile, Toyota Motor Corp. reported a 32% drop, as the Japanese company sold 117,287 vehicles in the U.S. last month. Its passenger-car sales dropped to 67,263 from 94,586, while its light-truck sales fell to 50,024 from 77,263.

...

gm numbers in -49%

[jimotis4heisman]

Nissan to Slash Payroll, Pare Japanese Output - WSJ.com

TOKYO -- Nissan Motor Co. Monday announced plans to slash more than 20,000 jobs world-wide, shift production out of Japan and seek government assistance from Japan, the U.S. and elsewhere, part of a broad new effort by the Japanese car maker to weather the economic downturn.