# Auto bailout in doubt?



## david85 (Nov 12, 2007)

http://www.theglobeandmail.com/servlet/story/RTGAM.20081211.wautowrap1211/BNStory/Business

The plot thickens.....


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## Jordan (Oct 29, 2008)

What a big steaming pile this whole thing has turned out to be. 

There is some irony in this whole situation. Normally when a company files Chapter 11 bankruptcy (GM has already hired the lawyers to file) a bank gives the company a loan to ensure that the doors stay open and business fully operational. They get some of the money back pretty quick as they profit from liquidating the assets of the company and then a repayment plan is set-up based on the restructuring (overall projected profitability). In the depressed credit market and the fear that the company could still go out of business even with bankruptcy there is not any banks that are going to loan a company like GM money. So either GM will completely shut down and never make it out of the bankruptcy process or the government is still going to have to give them a loan anyway. Most likely the government is still going to give them a loan and honor the manufactures warranties. This ultimately will cost more money then what they are asking for. They will have less control over what dealers and suppliers go out of business, they will start dropping like flies. The main resistance to passing any bill is lack of control over the business, kind of funny hearing republicans talking so highly of oversight for some reason. Seems very suspect to me.

Paulson or Bush could still pull money out of the "tarp fund" regardless of what the House or the Senate have to say about it. Highly unlikely I would think. 

In my opinion if GM fails it will be the marker in history for when the depression started. I do not believe that these manufactures can be restructured in bankruptcy to any type of a profitable business, I doubt they will ever come out of bankruptcy. I realize that many business come out of bankruptcy alright but this is different. Most of the successful bankruptcy turn around s are retail not a massive manufactures. 

Some more irony:
Average GM worker makes $27 an hour
Average Toyota worker (in America) makes $30 an hour

I personally do not like unions but I don't see how they are crippling the car industry right now. Especially not enough to risk a depression. These are dangerous games being played on all sides.


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## ClintK (Apr 27, 2008)

Jordan said:


> I personally do not like unions but I don't see how they are crippling the car industry right now. Especially not enough to risk a depression. These are dangerous games being played on all sides.


Isn't it the unsustainable pension / healthcare / unemployment plans that are the real financial killer to GM right now? (Sounds like where the country as a whole is heading.) Of course they also have the problem of not being able to build a car people want to buy.

Hey, I just heard on the news the bailout failed in Congress.


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## mark1030 (Jul 28, 2008)

ClintK said:


> Isn't it the unsustainable pension / healthcare / unemployment plans that are the real financial killer to GM right now? (Sounds like where the country as a whole is heading.) Of course they also have the problem of not being able to build a car people want to buy.
> 
> Hey, I just heard on the news the bailout failed in Congress.


Yes, GM is paying something like 460,000 pensioners while employing only like 130,000 workers. That's what I read a few weeks ago. I'm sure it's worse now with more people getting buyouts or early retirement. Wonder why a new car costs so much? There ya go.


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## david85 (Nov 12, 2007)

Well, I think I'm ready to call it.

Unions have become a victim of their own success. They served a purpose when worker's safety was still a problem, but they went too far over the years and now we see the result. The net cost per average worker at GM is around $72/hour when you tally up all of the costs of having the employees as well as wages.

How is that sustainable?


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## ricksmol (Jul 7, 2008)

We are witnessing the instant when a virus (UAW), after having decimated its host (Big Three) is taking abode in another victim's system (Tax payers) for sustenance. We need a big...big...vaccine (Bankruptcy) to save us all.

Rick


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## ClintK (Apr 27, 2008)

ricksmol said:


> We are witnessing the instant when a virus (UAW), after having decimated its host (Big Three) is taking abode in another victim's system (Tax payers) for sustenance. We need a big...big...vaccine (Bankruptcy) to save us all.
> 
> Rick


Beautifully put.


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## electric85 (Apr 10, 2008)

I grew up in Oshawa Ont. Canada

my family still lives there. many of my friends parents work for GM. or should i say worked for...apparently it hasn't been officially anounced but the auto workers union said that GM is closing all Canadian plants in jan...i hope thats just a rumor.


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## Voltswagen (Nov 13, 2008)

Sit back this weekend and watch how much money The White House and Paulson will suck off the TARP to create an 11th hour Band Aid for these fools. 
Socializied Medicine? We're well on our way to Socialized Auto Production.


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## david85 (Nov 12, 2007)

electric85 said:


> I grew up in Oshawa Ont. Canada
> 
> my family still lives there. many of my friends parents work for GM. or should i say worked for...apparently it hasn't been officially anounced but the auto workers union said that GM is closing all Canadian plants in jan...i hope thats just a rumor.


Actually I am hearing that prduction will stop on all north american plants in january, with at least 2 plants to be perminantly closed, one being in canada.

To this day the CAW is still blaming imported cars for the problems they are facing, and by default is blaming the government. What universe does he live in?

Theres just a huge vacuum of leadership on all sides.


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## saab96 (Mar 19, 2008)

david85 said:


> Unions have become a victim of their own success.


They are more a victim of globalization. Globalization is a race to the bottom as far as wages go.


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## david85 (Nov 12, 2007)

Don't they use more automation in Japan?


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## Technologic (Jul 20, 2008)

saab96 said:


> They are more a victim of globalization. Globalization is a race to the bottom as far as wages go.


 
For now... until all wages are higher and the socialists take the places of the Eastern countries and provide them with cheap wages


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