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GM Says It Has 'Substantial Doubt' It Will Survive
http://www.foxnews.com/story/0,2933,505130,00.html

GM has received $13.4 billion in federal loans as it tries to survive the worst auto sales climate in 27 years. It is seeking a total of $30 billion from the U.S. government. During the past three years it has piled up $82 billion in losses, including $30.9 billion in 2008.

I've said it before...stop giving these companies money. You might as well take it to the curb and burn it.
Please don't dent the planet.

Destinations by Roxanne

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GM Says It Has 'Substantial Doubt' It Will Survive
http://www.foxnews.com/story/0,2933,505130,00.html

GM has received $13.4 billion in federal loans as it tries to survive the worst auto sales climate in 27 years. It is seeking a total of $30 billion from the U.S. government. During the past three years it has piled up $82 billion in losses, including $30.9 billion in 2008.

I've said it before...stop giving these companies money. You might as well take it to the curb and burn it.



If GM had filed Chapter 13 months ago, instead of lobbying for a hand-out (which was wrong to begin with), they could be in the middle of a meaningful restructure. Now, what they've accomplished is adding Congressional lackeys to their bureaucracy and UAW is still not seeing the light.

GM needs to file, reorganize, payback that $13B government loan now, and sell off the companies it has pulled down with it (like Saab), sell the brands it can to new investors, and offer a pennies on the dollar payoff to bond-holders (ala Ford's plan), and renegotiate its labor and supplier agreements.

Both sides of this saw the writing on the wall years ago. Now, UAW has negotiated the loss of 200,000 jobs, and GM has bowed to the point of sub-standard quality implementation.

Drastic, courageous action is needed. It's not too late for GM in my view. Though, I do not think they have the ability to make these tough decisions.
So I try and I scream and I beg and I sigh
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!

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If I ran a drugstore, and I had a competing drug store right next to me, then what do I do? Lower prices, put up big signs, invest in other advertising. I want people to go to my drugstore.
Lets say I do it right. Then I have the customers, and the other drugstore is going out of business. Horray I win!!! Oh wait, on closing day, the Government comes by and signed them a check for all they need and then some. What the hell? Rewards for failure.
=========Shaun ==========


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Lower prices, put up big signs, invest in other advertising.



Don't forget, supply drugs that your customers want (like fuel-efficient, inexpensive, quality drugs), instead of giving them cheap, expensive products that they don't want.

This month's Adbusters has a fake ad - a picture of an American-built truck, with the text:

"You wouldn't to buy our shitty cars. So we'll be taking your money anyway."

That about sums it up.
Trapped on the surface of a sphere. XKCD

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They need to file bankruptcy and restructure WITHOUT the UAW. The UAW is a burden to the American Auto industry and it is a damn shame. GM is finally making cars I would consider buying but it may be too late.
The most terrifying words in the English language are: I'm from the government and I'm here to help.

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If I ran a drugstore, and I had a competing drug store right next to me, then what do I do? Lower prices, put up big signs, invest in other advertising. I want people to go to my drugstore.
Lets say I do it right. Then I have the customers, and the other drugstore is going out of business. Horray I win!!! Oh wait, on closing day, the Government comes by and signed them a check for all they need and then some. What the hell? Rewards for failure.



The drug store comparison is somewhat small in scale to use in my opinion. The drug store would not have the same implications on the economy as a whole when compared to a large manufacturer. It would not have the “ripple effect” that you hear so many speak about.

If GM were to be allowed to go under then the economy would take a huge hit. That really is not me trying to use fear as a tool, but rather just stating what I feel to be truth. In a lot of threads I see people saying basically “screw GM” let them die. But I just can’t believe that most of those people realize how deep into the manufacturing sector that GM goes.

It isn’t about the 275,000 jobs that will go away if GM were to close. Its all the supporting manufacturing that will cause the true pain for the economy. Along with that, you will have all of the supporting business (trucking, packaging and so on) that will also be in serious trouble, or, will go out of business.

I understand the argument that says that someone else will come along and buy up some of the lines and continue, but that kind of a deal would take months to finish, not days or weeks. Even if someone does come in and purchase some of the lines, it will be months after that before real production can begin.

In that time most of the supplying factories (the ones who actually make the parts that the 275,000 put together) will either be gone or diminished to a point that it will be some time before they can ramp back up. So, I don’t think that the idea of someone else coming in is a viable one.

The question is, even if they file for a reorganization of dept, will they be able to survive as they are. For me, I think the answer is no. The numbers you see thrown around in the media claim that they have lost around 80 billion dollars since 2005, with over 30 billion of that being lost last year. There was a time for action, but I personally fear that the time to act has passed. It is my hope that I am wrong about it being to late, but only time will tell at this point.

It is interesting to watch the representatives from management and the unions point fingers at each other. Both claim that it’s the others fault, but in truth, both are to blame. At the end of the day, they let other companies kick their butts. In that part, I think the comparison you gave is valid. Other car companies came in, built a better product, did a better job of marketing that product, and took business away from them.

None of it matters thought, because at the end of the day for our government its all about votes next time. If they let them go under after saving other companies it will give the people they are running against to my ammunition to use against them in the election. And its the elections that will cause them to continue to throw money at them to keep it alive. Atleast until the next round at the voting booth. Sad, but true (at least in my little world).

Pendejo

He who swoops the ditch and does not get out buys the BEER!!

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With numbers ranging from 1 out of 10 or even a bad as 1 out of 8 jobs related to the automotive industry when one of the 4 (counting Honda since it has so many US plants anymore) major manufacturers looks to fold that ripple effect is huge and would push unemployment numbers well into the double digits and potentially upwards of 15%. The system just is not funded to be able to support that level of unemployment.... [:/]

GM needs to be reorg'd and broken up to avoid pissing money into the wind like they are right now.

Yesterday is history
And tomorrow is a mystery

Parachutemanuals.com

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It isn’t about the 275,000 jobs that will go away if GM were to close



We're not talking about closing...reorganizing without the huge perrennial debt obligations that have tied their hands for too long.
Please don't dent the planet.

Destinations by Roxanne

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It isn’t about the 275,000 jobs that will go away if GM were to close



We're not talking about closing...reorganizing without the huge perrennial debt obligations that have tied their hands for too long.



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If GM goes under there would be a temporary dive in the economy but the US will buy x amount of cars this year and that means the other companies will sell more causing them to become stronger and have to hire more people thus relieving some of the problem caused by GM going under. Some of the company will survive and that part would be stronger and most likely without the UAW influence that is partially to blame for the currant situation.

The problem we are having is not that GM is going under, but is doing it at this fragile time in our economy.

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It isn’t about the 275,000 jobs that will go away if GM were to close



We're not talking about closing...reorganizing without the huge perrennial debt obligations that have tied their hands for too long.



Strange, I was under the impression that the post I quoted (all of I might add) at the top of mine was discussing a drug store causing another drug store to go out of business. I guess I must have missed the part of that post where that poster was discussing a reorganization.

Pendejo

He who swoops the ditch and does not get out buys the BEER!!

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you will have all of the supporting business (trucking, packaging and so on) that will also be in serious trouble, or, will go out of business.



I see your point but this is why I think you're wrong,

example:
There are (were) several tool/die companies in NE Ohio for which auto has always been a big customer. exhaust pipe molds, AC vents. etc.. stuff that is cheaper here in the US because of shipping costs.

The small business my Dad works for saw this coming and stopped bidding on auto. They are getting into different markets and are struggling but staying alive.

2 huge local machine companies just shut their doors because their main customers were auto.

So 2 things

1. It already IS happening (suppliers shutting down)
2. The only thing constant is change, if you are a trucker or packager you have to sell to someone who will buy your product or service. Auto companies or not.

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With numbers ranging from 1 out of 10 or even a bad as 1 out of 8 jobs related to the automotive industry when one of the 4 (counting Honda since it has so many US plants anymore) major manufacturers looks to fold that ripple effect is huge and would push unemployment numbers well into the double digits and potentially upwards of 15%. The system just is not funded to be able to support that level of unemployment.... [:/]

GM needs to be reorg'd and broken up to avoid pissing money into the wind like they are right now.



I agree completely.

I do however wonder where the magic money that some seem to think there is will come from during the restructure. The company will need funds to continue during that time as well. If they are really as cash strapped as they claim, then that will be an issue. It will be interesting to see how the public responds to their money being spent so a company can be broken up.

If you look at what is happening with AIG I think you will find a small picture of the answer. From the time that the government went in and bailed them out they have been selling (or attempting to sell) different parts of the business. I think the media will spin it (both ways) to make it look like our money has been wasted rather than showing how it is really saving jobs in the long run.

In our business we ship waste material from various manufacturing companies around the nation for disposal, reuse and processing. Anyone who has anything to do with the automobile industry has been notified that they are now on cod status.

We have seen in the past what it really means when a company files chapter 13 from a supplier point of view. The end result is that if you get any money at all on outstanding invoices it is a very small percentage of the original bill. And, contrary to what some might believe, that money has to come from some where.

In GM’S case those numbers are pretty large, and they trail all the way back to more than just assembly plants, parts producers, and package companies. It eventually goes all the way back to the raw material processors. I won’t question the numbers you gave about 1 in 10 jobs being part of that industry, but I would wonder where the people looking at it stopped counting.

I think the real reason that the government is trying so hard to find a way out for the auto makers is that it is more complicated that just letting them file chapter 13, and, lots of voters jobs are at stake (see my other post for why I think thats actually important to them).

Pendejo

He who swoops the ditch and does not get out buys the BEER!!

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you will have all of the supporting business (trucking, packaging and so on) that will also be in serious trouble, or, will go out of business.



I see your point but this is why I think you're wrong,

example:
There are (were) several tool/die companies in NE Ohio for which auto has always been a big customer. exhaust pipe molds, AC vents. etc.. stuff that is cheaper here in the US because of shipping costs.

The small business my Dad works for saw this coming and stopped bidding on auto. They are getting into different markets and are struggling but staying alive.

2 huge local machine companies just shut their doors because their main customers were auto.

So 2 things

1. It already IS happening (suppliers shutting down)
2. The only thing constant is change, if you are a trucker or packager you have to sell to someone who will buy your product or service. Auto companies or not.



I think I may have given the wrong impression with my explanation to the poster about why I feel that we can’t just let them go under. I do not feel that continuing to hand them money will fix the issues. There needs to be major change. What changes need to be made are things I am unsure of. As I said in my last post I think its more complicated than just letting them file chapter 13.

I agree with you that the businesses out there that are actively looking for new outlets for their products are going to survive. Saddly, that isn't an option for a lot of them. An example would be a plant that is producing window switches for Chevrolet. Retooling takes time. I don't know that I think they will have that time.

Pendejo

He who swoops the ditch and does not get out buys the BEER!!

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huge local machine companies just shut their doors because their main customers were auto.
_________________________________________________
As the owner of a machine shop, let me say that machine shops across this country are folding and auto is only one facet to that problem.The so called free trade we have with Asian countries who subsidize their manufactures with cheap steel is a bigger problem.
Now China wants to stimulate their economy by giving their citizens 2 free appliances of their choice.
The investment into manufacturing brought us out of the great depression.Now We export our manufacturing and China stimulates theirs.Whose economy will prosper first?

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>The investment into manufacturing brought us out of the great
>depression.Now We export our manufacturing and China stimulates
>theirs.Whose economy will prosper first?

Yep, there's the rub. One option is "let this company collapse and others will rise in its place." That's certainly true. Unfortunately it is also true for entire industries and economies.

So the question is - are we OK letting the US economy collapse while China's recovers and takes over the US's economic niche?

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are we OK letting the US economy collapse



We are nowhere near a collapse. I'm no economist but even with a 10% unemployment rate that means that 90% of Americans are working right?

I don't see bread lines..

I see lines for Wii's, iphones, tv's, fastfood, and all I hear is $advertising$ on the radio from internet get-rich schemes to the local mattress factory.

When I have to get in line for bread then I will worry :)

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I see lines for Wii's, iphones, tv's, fastfood, and all I hear is $advertising$ on the radio from internet get-rich schemes to the local mattress factory.



Interresting....the numbers don't back you up though. Retail sales in february rose by 0.7%. Before you start cheering, that numer is positive because of WalMart's performance.

If you take WalMart out of the equasion retail sales are down 4.1%

(And WalMart did not say their sales were driven by Wiis, IPhones or TVs, but simpler stuff like groceries.)

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