New Insight on the GM, Ford & Chrysler BAILOUT (loan?)

[Patrick H. Crowe]

At today's hearings Congressman Croker pointed out that GM was the only treason the big 3 were there at all.

He noted GM wants billions before the end of the year "to survive".

Ford, quite differenntly, wants no loan, only a line of credit in case things "get much worse"

Chrysler wants an immediate loan but admits because they are privately owned their request is very differnt from GM & Ford.

All seemingly agree the request is now 34B not the origianl 5B.

Here are three companies with almost nothing in common. Need for a loan varies widely, type of ownershop the same, right?

GM, it's agreed it th principal reason all three are here in D. C.

Plese ladies & gentlemen vote by your conscience.

Patrick H. Crowe

 

[JK Xpress]

Actually, the original loan request was for $25B not $5B.

Additionally, they have a lot in common.

1) all 3 employ members of UAW
2) all 3 have labor costs that are out of control
3) all 3 failed to react to changes in the market-place
4) all 3 failed to react to/ recognize the shift in consumer buying patterns
5) all 3 failed in terms of Research/Development of fuel efficient autos

Finally, the main reason behind any business failure is management and their mistakes.

 

[Patrick H. Crowe]

Dear JK Express:

Many thanks for the correction on the loan amount. It was 25B, not 5 as I mistakenly reported. It's now 34B so in two weeks they have raised the request by 36%. What's that tell us about them?

I agree with the similarities you give but please look at the gross differences:

CHRYSLER:This is a PRIVATE company; quite unlike Ford or GM. A group of investors used their money to buy the company. They hired management to run the company and make a profit. Before long management went to the investors and said we need more capital to make the company profitable. The investors said no - - borrow from the American taxpayers. Isn't that goofy? How could that happen? Can we do that on car washes? Let the greedy investors put up the capital or suffer the consequences of a foolish purchase. Haven't many of us done that on stocks?

Chrysler still has no Hybrid - - Toyota has had the Prius for ten years. How can you be ten years behind your compitition and survive?


FORD: They don't even need the loan. They state they probably won't use it. Apparently they thought if there's a "FREE MONEY LINE" we sure want to get in it and not let our competitors get all the goodies. Their hybrid has been out for about 3 years - - poor milage compared to Honda and Toyota but they are opnly about 7 years behind the Insight, Prius & Civic. Such management! Even more goofy. Give us what we don't need.

GM: They need an immediate loan, right NOW 4B. Their Hybrid, just out, gets 20 mpg and costs almost fifty grand. How far behind are they? How badly managed can a company be? They have five private jets, yes five. In a PR stroke of complete foolishness they sidelined two of the five. Let 'em go chap 11.

The three are very different companies with vastly different needs. If they want my money they will dance to my tune and they will not like it one bit.

Patrick H. Crowe

 

[Washmee]

Dear JK Express:
GM: They need an immediate loan, right NOW 4B. Their Hybrid, just out, gets 20 mpg and costs almost fifty grand. How far behind are they? How badly managed can a company be? Patrick H. Crowe

As usual Pat, you have no idea of what you are talking about.

http://www.chevrolet.com/2009malibu/

Hybrid
Malibu2009 hybrid: Starts at $26,225*

 

[Sequoia]

An oddity of the auto industry is the skewed perception by people and politicians about the companies and the market.

How often have you heard that the U.S. automakers are "not building cars that consumers want?"

Now, find me any other industry, world wide, where the U.S. company is virtually tied for global sales with our foreign competitor, and yet with a reaction that the company with such high sales is "not building the products the consumer wants." Sure, the auto companies did have larger market share in past years, but the concept that Detroit doesn't build what the consumer wants is just flat out wrong. Shifting sales numbers is called .... competition.

With the assistance of the Japanese government and extreme protectionist barriers, Fuji film totally annilihated Kodak film sales in Japan, and then in this country. Could you really argue, with a straight face, that Kodak "wasn't making the film that customers want?"

Regarding popular models, didn't the Cadillac CTS earn "Car of the Year?" And ditto for the Chevy Malibu? All recently?

My opinion is that the auto companies are not building the cars the politicians would like to see-- green, cheap, low cost battery/hybrid combos.

 

[Washmee]

All thats going on in DC is a dog and pony show by the politicians to deflect any criticisim of their failures to the auto industry. This way we aren't demanding explanations later as to why they weren't "Tough Enough" on those evil CEO's when the next election cycle begins. Classic CYA in action.

 

[Patrick H. Crowe]

The Hybrid that's "just out" from GM is the Cadillac SUV and it does get about 20 mpg. I probably should have noted the Malibu but compared to the Prius it gets far poorer milage and costs as much or more than the Prius - - it's not "just out". To me that's way, way too little and way, way too late. Bad management to the core.

If GM seriously expects any sort of loan here are just a few of the cobnditions: Nobody in management makes a total compensation package of more than 3 times the average line worker. That iuncludes all benefits - - no executive dining rooms, no executive cars - - - let these greedy, incompetent fools study the Lincoln Electric model and put it to use. All eat in the same dining room and pay the same for food - - many other things at Lincoln scream at the arrogance these guys show. They are whiners and crybabies.

Meantime any loan approval must have the UAW agree to wages at or below what Honda & Toypta pay their American workers.

The GM people & the union have proven beyond any doubt that they need outside independent controls imposed on them or they get no loan. Moreover there have to be four consecutive quarters of profitability and full repayment of the loan before any salaries can be raised.

These clowns have earned, merited and deserve this treatment. Of course they are many years behind the folks at Toyota and Honda - - way way behind them. Obviously they are not building the cars Americans want as Americans have proven in spades.

About a decade ago Brock wrote the Decline and Fall of the American Auto Industry. Please read it.

Had I run car washes like these fools run GM I'd be broke and if I then asked my fellow taxpayers to bail me out I would fully deserve the laughter which would greet me.

Patrick H. Crowe

 

[Ben's Car Wash]

About 4-5 months ago I read an article that GM was going to use the VOLT to beg Congress for a bail out. Well here we are and sure enough GM is leading the charge. Proof? here's a link to a July 3 artilce! It link to the WALL STREET JOURNEL artilce.

http://blogs.edmunds.com/greencarad...a-tool-to-coax-a-bailout-from-washington.html

http://online.wsj.com/article/SB121495482307421193.html

This is not about building cars that "American's want"... BS. Tell me in Germany, they don't build cars that Germans want, or in Itally? They built cars that sucked down gas and got $10K more because they knew "how to market to Americans desires". Ok so I like to go fast! Check out TESLA motors... 0-60 in under 4 secs and goes 240 miles on one charge.

http://www.teslamotors.com/


The VOLt will go 40 miles before the gas engine has to engage to charge the batteries. This is the best GM has you you still blame the workers?

This is like when Harley went AMF and built crappy motorcycles. Maybe the employees/unions workers should just buy GM like they did to motorcycle manufactures.

 

[ted mcmeekin]

Chevy Impala is second in sales behind Toyota but well ahead of Honda and many others. Malibu is # 6. IMO they have too many products and terrible union burden. They are well ahead in technology but have trouble getting to market because of their other burdens.

Ted

 

[Washmee]

Boy Doug, that Tesla motors is going to teach those guys in Detroit a thing or 2. Whoops, maybe not.

An Electric Car Loses Its Juice

Tesla is a classic Silicon Valley project: it's late and over budget, still has bugs and, at $109,000, costs more than planned.

Tesla Motors didn't just set out to build an electric car. It set out to teach Detroit a lesson. Back in 2003, when these guys from Silicon Valley were launching their company, they didn't apologize for knowing next to nothing about the automotive industry. In fact, they took pride in this. They were rebels, disruptors, technogeeks operating at Internet speed?and they were convinced they could do better than the lumbering, clueless Big Three. Tesla's lead investor, Elon Musk, a charismatic Web entrepreneur who made a fortune as a cofounder of PayPal, last year boasted to BusinessWeek that "Silicon Valley is the best in the world at everything it does."

Well, five years after its founding, Tesla has shipped about 70 electric roadsters, and the car does in fact turn out to be a classic Silicon Valley product?it's late and over budget, has gone through loads of redesigns, still has bugs and, at $109,000, costs more than originally planned. Tesla's first 40 roadsters went out of the factory with a drivetrain that needs to be replaced. (Tesla will do the rip-and-replace for free.) Its second car, a sedan, has been delayed until 2011. Tesla, based in San Carlos, Calif., has raised $150 million and burned through almost all of it, plus millions more put down by customers in the form of deposits (the company won't give an exact figure). Now, hit by the downturn, Tesla has laid off 20 percent of its staff, closed its Detroit office and borrowed money to stay afloat.

.... http://www.newsweek.com/id/169161

 

[Ben's Car Wash]

Ted, LINK to your facts? According to business week:

http://www.businessweek.com/lifestyle/content/jul2008/bw20080717_015732_page_2.htm

The number of units for Chevy Impalla's sold is 1/3 that of Honda civics. GM% increase in "SALES GROWTH" for the impalla was the second largest as consumers moved to smaller vehicles. The small car market sales is dominated by imports.

Jon, the point about TESLA (I know about the cost and the over runs, I read the same artilces last week) is that if they can produce speed and a battery that gets 244 miles per charge, then why can't GM who expects US TO BAIL THEM OUT over a failed VOLT?

And I waited for someone to say what you did, TESLA, should they survive (like TUCKER, Packard, Desoto, Studabaker, Zimmer) like car manufacturers of yore who did something different has a sedan model electric at a base price of under $40K in a few years. This is better than the Volt and it's PRIVATE INVESTMENT... NOT US BAILING THEM OUT. Hell it's not even Government back research $$$$$$$! You should be PROUD as $hit about that?

 

[Washmee]

How can you call the Volt a failure. it's not even in production yet? The reason the Tesla costs over 100K is because of the battery. Even at $109 per copy they are losing money. I would suggest you stick to a topic you know something about, like nursing or Shriners hospitals and let people who run auto companies figure out how to make cars.

 

[Ben's Car Wash]

Jon, What's your problem man? GM (in their own admitance) said they expected to be "BAILED OUT" by the US government over the production of the VOLT! That's not me calling them a failure... it's them, and they expect us to pick up the tab.

Why you being such an a$$?

 

[Washmee]

Why you being such an a$$?

Doug, the only person acting like an a$$ on this mesage board is you! Do you realise your posting style makes you look like a raving lunatic?

 

[Ben's Car Wash]

Jon, your the one that tells me to basically "butt out" or "F off" by saying "stick to nursing or Shriner's". That's a personal attack and your being the a$$ for saying it. This is about "our opinion on GM and the big three" to which none of us here have managed nor are experts. I'm entitled to my opinion without you trying to squelch it with a personal attack. Did I tell you not to comment? Did I limit your discussion? No.

 

[Washmee]

Jon, your the one that tells me to basically "butt out" or "F off" by saying "stick to nursing or Shriner's". That's a personal attack and your being the a$$ for saying it. This is about "our opinion on GM and the big three" to which none of us here have managed nor are experts. I'm entitled to my opinion without you trying to squelch it with a personal attack. Did I tell you not to comment? Did I limit your discussion? No.

Show me where I used any profanity or even insinuated it until you called me an A$$. Have a nice day.

 

[Jimmy Buffett]

From the little that I know about it the theory of the Volt makes the most sense of any of the hybrids. Using a small gasoline engine to charge the batteries seems more practical than having to have 2 cars in 1 like most hybrids. The problem is now the price is out of control. To spend an extra 10-20k for a car that gets better gas milage is just not practical imo.

 

[Greg Pack]