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  (Source: Bill Pugliano/Getty Images North America)
GM to detail its recovery plan on Tuesday

As 2008 came to a close, General Motors and Chrysler came to Washington with hats in hand requesting funds to keep afloat through the remainder of the year. Although rival Ford was also experiencing record losses and lagging sales, it too came to Washington not for government assistance, but for moral support.

Now that the Tuesday deadline is fast approaching for GM and Chrysler to give progress reports on their current financial state and plans for remaining viable, more grim news is being leaked to the press. According to Wall Street Journal, the $13.4 billion USD that was handed over to GM and Chrysler simply wasn't enough. For its part, GM is said to be contemplating two options:  1) request more money to remain viable in the current marketplace or 2) file for bankruptcy protection.

According to both GM sources and U.S. Treasury officials, GM will need more than $5 billion in additional assistance from the government just to limp through the first quarter of 2009. The $5 billion figure doesn’t even take into account the $3 billion in tax breaks that the company will receive thanks to the economic stimulus package that was passed by Congress this weekend and will be signed by President Obama on Tuesday.

Although GM widely dismissed the option to file for bankruptcy last year when it was asking for government assistance, the option is becoming a much more palatable one at this time. Bankruptcy could result in GM resurfacing as a leaner, meaner company with fewer brands to market and lower operating costs.

GM has already stated in the past its intention to ditch the Saab and Saturn brands. The company is also actively seeking a buyer for its Hummer division.

Despite the company’s current financial troubles, GM is staying committed to its Chevrolet Volt program. GM reaffirmed its commitment to the program in mid-December and said that it would go forward with the program no matter what.

GM Vice Chairman of Global Product Development Bob Lutz also expressed his confidence in the Volt program last week when he announced his upcoming retirement. “There has been speculation that I would stay until the debut of the Chevrolet Volt next year. When I do retire at the end of this year, the Volt program will be well on its way to launch and I’ll feel the same sense of pride and accomplishment that the entire Volt team will feel when the first ones are silently rolling off the assembly line.”

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NO MORE $$$$!!!
By RaistlinZ on 2/15/2009 7:37:03 PM , Rating: 4
Seriously, enough is enough. Tax payers can no longer subsidize the U.S. car industry. They're never going to stop asking for money to fund their operations. THEY NEED TO FILE FOR BANKRUPTCY SO THEY CAN RESTRUCTURE. No more government bailouts for the auto industry, or the root of the problem will never be fixed.




RE: NO MORE $$$$!!!
By Goty on 2/15/2009 8:21:29 PM , Rating: 4
See, Congress, common sense isn't that hard to grasp after all! Just ask RaistlinZ here.


RE: NO MORE $$$$!!!
By Cypherdude1 on 2/16/09, Rating: -1
RE: NO MORE $$$$!!!
By ebakke on 2/16/2009 9:23:55 AM , Rating: 3
quote:
Did our leaders just round file 13.4 BILLION DOLLARS?!
I think the recent figure was around $787B.


RE: NO MORE $$$$!!!
By paydirt on 2/16/2009 11:37:01 AM , Rating: 3
(1) No the economy is not headed for another depression. It sure is a recession. A depression is a ceasing of economic activity. In the depression, 40% of bank deposits were allowed to disappear. In the depression, the government initially pulled money out of the economy (the opposite of what it should have done). In the depression, there was a trade war, and despite retoric will not happen this time.

(2) The GM money went to pay interest on loans, pay employees to leave, pay retiree benefits. GM really isn't doing enough quickly enough to save its skin, so I agree their feet should be held to the fire. GM has only done half measures to save itself. The unions paid a lot of money to Democrat politicians in 2008 (at least $500M), so for their $500M payoff, the government gives them $13,000M plus.


RE: NO MORE $$$$!!!
By JonnyDough on 2/16/09, Rating: 0
RE: NO MORE $$$$!!!
By mmcdonalataocdotgov on 2/17/2009 11:50:03 AM , Rating: 2
Actually, one of the biggest problems during the depression was that we had overfarmed the prairie states with wheat, and then there was a long drought, followed by dust bowl conditions, and a good deal of the US economy was still taking its income from farming. Bank accounts were not insured, as they are now, and there was a run on banks to get money out while it was still there. And the US government had not yet discovered Keynesian economics.

So the conditions aren't exactly the same. Which is not to say we couldn't have a depression again.


RE: NO MORE $$$$!!!
By oab on 2/15/2009 8:37:11 PM , Rating: 3
People won't buy cars from bankrupt companies, at the very least the feds will need to guarantee their warranties either directly or through some kind of 3rd party insurance.

However, during restructuring companies need financing to continue to operate while they trim their operations, with the credit markets as they are (and the US banks basically insolvent and not admitting it yet) it will be hard for them to be able to restructure (though with the the banks getting public financing, the government may be able to force the banks to lend to GM).

Chrysler should be allowed to go bankrupt. They have been insignificant for years. GM will need some kind of help however, either directly (warranty guarantees) or indirectly (pressure on the banks to finance GM while it restructures).

The UAW did just today walk out on talks with GM. http://www.cbc.ca/money/story/2009/02/14/gm-talks....


RE: NO MORE $$$$!!!
By mdogs444 on 2/15/2009 8:55:36 PM , Rating: 4
quote:
People won't buy cars from bankrupt companies, at the very least the feds will need to guarantee their warranties either directly or through some kind of 3rd party insurance.

What are you crazy? The Feds do not need to provide anything, much less a warranty. This is part of free market capitalism (minus the socialist bailout of course). A publicly traded company must make their financial public, and available for everyone to view. People who purchase now, or have purchased in the recent past, have had the ability to look at the company and see that they've been losing money. This is part of what happens. You really expect when any American company goes out of business due to low sales or lack of money, that our tax dollars should warranty everyone's products?!


RE: NO MORE $$$$!!!
By mcnabney on 2/16/2009 12:50:22 PM , Rating: 1
The United States without a car industry would be a very sad day.

The Feds subsidize everything. If you claim your children on your taxes you are claiming a Federal subsidy. If the Big Three cratered, estimates are that 7-9 million jobs would be eliminated (parts, support, general economic impact). That would bring unemployment up to around 14% - Depression-like numbers. I think the bailouts need to go away, but some form of warranty insurance could make for a soft-landing while restructuring.


RE: NO MORE $$$$!!!
By Fanon on 2/16/2009 2:49:11 PM , Rating: 1
"That would bring unemployment up to around 14% - Depression-like numbers."

That is absurd. "Depression-like" numbers are 19%-25%.

Sure people will lose their jobs, but keeping a dead company artificially afloat will do worse for the economy than for the same company to file bankruptcy, restructure, and execute the new plan. I failed plan is still a failed plan, no matter how many billions they receive from the government.


RE: NO MORE $$$$!!!
By Hiawa23 on 2/15/2009 8:57:03 PM , Rating: 3
People won't buy cars from bankrupt companies

problem is it seems many aren't buying cars, or enough to begin with which is part of the problem. Taxpayers can't keep paying for an induystry that needs restructuring. Suck it up now while the economy is in the tank & by the time it rebounds, hopefully they can too rebound & come out stronger, but why keep throwing money away when they have not fixed the root cause of the problem.


RE: NO MORE $$$$!!!
By Murloc on 2/16/2009 7:17:46 AM , Rating: 3
if they loan them more money they will ask for more the next quarter!
they have to file for bankrupty otherwise they won't really restructure.


RE: NO MORE $$$$!!!
By ice456789 on 2/15/2009 9:39:22 PM , Rating: 4
quote:
People won't buy cars from bankrupt companies

Just like people won't fly on bankrupt airlines... oops, I guess they will. Warranties can be guaranteed through 3rd party companies so that's not even a problem. And if the UAW wants to walk out... good luck getting a better deal from a company going through bankruptcy. Part of the benefit of a bankruptcy would be getting out from under the terrible deals they have worked out with the UAW. Assembly line workers are making $30 an hour with benefits. Forget about getting your MBA, go work on the line!

Sure, short term it might be easier just to put the gov't into more debt to keep a struggling company out of bankruptcy. But 10 years from now the company will still be struggling with the same problems. If they are forced to restructure then they have a chance of being not only viable but a dominant company in the industry again.


RE: NO MORE $$$$!!!
By just4U on 2/15/09, Rating: -1
RE: NO MORE $$$$!!!
By oab on 2/16/2009 12:05:01 AM , Rating: 2
GM really doesn't make money with their Saturn line. The good cars that Saturn makes can be easily folded into their Chevy brand.


RE: NO MORE $$$$!!!
By ice456789 on 2/16/2009 12:09:55 AM , Rating: 2
I don't fault the UAW or the union members either. They negotiated a heck of a contract and have gotten their members supremely overpaid. Kudos to them, they did exactly what they were supposed to do. I fault the people at GM who got rolled. They have repeatedly gotten worked when it comes to the negotiating table.

I don't put any more weight on that problem than their other issues. Things like focusing solely on low MPG large cars and all but giving up the normal passenger car market to the Japanese companies. GM is a mess, and I think Bankruptcy is their best option for the long term.


RE: NO MORE $$$$!!!
By BZDTemp on 2/16/09, Rating: -1
RE: NO MORE $$$$!!!
By FITCamaro on 2/16/2009 7:18:16 AM , Rating: 3
They do not require those man hours. Union strong arming forces them to have all those man hours. UAW jobs are guaranteed in the contract. If they end up not needing all those people they still have to pay them.

This is certainly the fault of the unions. They didn't negotiate a good contract. They put a gun to the automakers head and said "give us what we want or we shut your company down for months".


RE: NO MORE $$$$!!!
By just4U on 2/16/2009 9:45:54 AM , Rating: 2
SO your saying that the automakers "are" in the bind they are in because of their workforce and how it operates? I haven't heard that at all...


RE: NO MORE $$$$!!!
By CurtOien on 2/16/2009 9:56:33 AM , Rating: 1
Nobody made the company agree to anything. It was their choice.

When I was in a union, people used to complain about what the company "gave" us in the contract. I would always tell them that it was not the companies fault and that they got what they voted for.


RE: NO MORE $$$$!!!
By rudolphna on 2/16/2009 10:45:48 AM , Rating: 2
It was agree to union demands or the entire workforce goes on strike and they make NO money at all.


RE: NO MORE $$$$!!!
By juserbogus on 2/16/2009 1:34:37 PM , Rating: 3
if they did that, then gm can fire them all and hire new workers.


RE: NO MORE $$$$!!!
By Athena on 2/16/2009 2:17:49 PM , Rating: 1
quote:
if they did that, then gm can fire them all and hire new workers.
Which would still not enable the company to operate a solvent business. GM is suffering from many, many other problems --an overextended dealership operation, too much production capacity, too many models, etc. The structural problems are immense.

By focusing the labor issues, the press and government may have found a convenient whipping boy but they not come close to a solution. Why have we not seen any congressmen demand that their own states abolish, or at least alter, their laws that require the companies to maintain outdated dealership structures? We read about the job bank but nothing about the company practices that made it seem like a "solution" to overproduction. Why is there so little coverage that deals honestly with the benefit costs? How can anyone talk about a national heathcare plan built on employer paid coverage when the folly of such dependence is writ large for all to see?

This is an immense problem for the entire economy and we all deserve better than blaming those at the end of the chain.


RE: NO MORE $$$$!!!
By juserbogus on 2/17/2009 9:01:07 AM , Rating: 2
oh I agree.... I was just pointing out that labor's (even organized) costs are negotiated just like any other resource and the company can change providers at any time. republicans are so hypocritical on the issue.


RE: NO MORE $$$$!!!
By Athena on 2/16/2009 10:58:27 AM , Rating: 2
quote:
They do not require those man hours. Union strong arming forces them to have all those man hours. UAW jobs are guaranteed in the contract. If they end up not needing all those people they still have to pay them.
At some point, the popular press will have to stop using the "job bank" the whipping boy for Detroit's problems.

The biggest problem with the UAW relationship is not wages and hours, or even the notorious job bank (which BTW the UAW already agreed to drop); it is the pension and healthcare benefits. No one "held a gun" to GM when Walter Reuther encouraged them to support national coverage for these things. He was standing up for the people he represented and management's ideological position was that the company did not want any governmental involvement. GM knew 15 years ago that its healthcare costs were eating up profits but again, management chose ideology and did not support the Clinton effort to do something about healthcare nationally.

If you read the details about the current negotiations, you'll see that the hangup is about the $20 billion GM owes the union: an amount BTW that represents less than half of what GM promised in exchange for dropping retiree healthcare. The deal was that GM would give the money to the UAW and the UAW would then be responsible for retiree health benefits. Now they want to stiff those who already retired after 30+ years of service. The UAW's refusal to let that happen seems reasonable to me.

To blame the unions for management's chronic lack of foresight --which afterall is the primary job of management-- just repeats the cycle of denial.


RE: NO MORE $$$$!!!
By Chaser on 2/21/2009 9:40:56 PM , Rating: 2
quote:
At some point, the popular press will have to stop using the "job bank" the whipping boy for Detroit's problems.

For some reason people seem to have issues with thousands of people being paid for days, weeks, months, even years at a time when they don't work. Aka supplemental pay, gen pool, etc.

That's not very popular.


RE: NO MORE $$$$!!!
By TSS on 2/16/2009 7:53:37 AM , Rating: 1
http://www.theautochannel.com/news/2009/02/04/4052...

i don't fault the UAW, the japanese car makes, pretty much even GM themselves at this point.

"The industry's sales of 656,976 vehicles, compared with just over a million in January 2008, translates to a seasonally adjusted annual sales rate of 9.57 million"

9.57 million annually. the decade before 2008 that was 16 million a year.

i can't find the link on cnn (their search engine is horrible i tell ya) but in the original plan for carmakers to become viable again, they all expected (the worst case beeing i belive ford) to be profitable again if carsales reached 10.5 million annually in the second half of this year.

i don't think any of them considered an annual rate of less then 10 million at any point in time. it's over now.

the only question remaining is this: do we trust the goverment (bail them out, negociate new plans and support the jobs) or do we trust the free market (GM goes bankrupt, can't find new financing and dies, assests get seized by creditors who then find new buyers for it).

personally, i'd say let both GM and chrysler die. ford doesn't seem to have that many problems right now, why is that?

also, if history tells us anything it's that any and all powervacuums get filled up again, usually fairly quick even though the transistion is brutal.


RE: NO MORE $$$$!!!
By ice456789 on 2/16/2009 8:18:19 AM , Rating: 2
Good point, but well run companies can ride the ebbs and swells of demand. The 'decade before 2008' was pretty darn good for the economy and I would say that those 16m/year sales are more than their average. When sales are high, the company swells. When sales are low, the company gets lean. But those UAW contracts they signed when everything was roses are killing them now. They are unable to get lean, unable to lower salaries, unable to release workers in a scale comparable to the dip in sales. They are unable to react to the economy. And really they have only themselves to blame. They signed those contracts with the UAW, they backed themselves into a corner focusing on SUV's instead of sedans, they created/bought 100 different brand names and product lines. They have tried to control the market, making the SUV the new family car. While the economy was up they succeeded, but now that people want cars that get double the mileage at half the sticker price GM is unable to give them what they want.


RE: NO MORE $$$$!!!
By Atheist Icon on 2/16/2009 9:15:11 AM , Rating: 1
quote:
Just like people won't fly on bankrupt airlines... oops, I guess they will.


Your right, the last time I checked, airline tickets cost $12,000 or more...


RE: NO MORE $$$$!!!
By Steve1981 on 2/16/2009 10:48:20 AM , Rating: 2
Then again, if a bankrupt airline folds, you might be stuck with a worthless piece of paper, whereas if the auto manufacturer folds, you at least still have the car.


RE: NO MORE $$$$!!!
By shiznit on 2/16/2009 6:51:56 PM , Rating: 1
A car with no barely any resale or trade-in value.


RE: NO MORE $$$$!!!
By akosixiv on 2/20/2009 10:46:57 AM , Rating: 2
but you still have your car.

you can still use it.


RE: NO MORE $$$$!!!
By callmeroy on 2/16/2009 2:27:40 PM , Rating: 2
The analogy of not buying a car from a bankrupt car company and not flying on a bankrupt airline have very little, if any, correlation.

I buy a car its mine for years -- I'm responsible for the repair bill (and service bills)....I buy a ticket on an airline I'm not buying the plane , just a ride.


RE: NO MORE $$$$!!!
By BaronVonAwesome on 2/16/2009 5:05:11 PM , Rating: 2
There isn't any need for the government to offer warranties. Third party companies can handle that.

After all, Circuit City's extended warranties are still covered through third parties for example. And we all get junk mail and phone calls from third party companies offering extended car warranties. GM can make a deal with them if they want.


RE: NO MORE $$$$!!!
By SavagePotato on 2/17/2009 12:12:10 AM , Rating: 2
I dunno, people will buy bagged dog crap if it is cheap enough. Do not underestimate the power of the will to save a buck.

People probably will not buy expensive cars however, from a bankrupt company.


RE: NO MORE $$$$!!!
By Hiawa23 on 2/15/2009 8:53:15 PM , Rating: 3
Please no more of this. There is noway GM will even be able to pay back the money they already loaned them given the state of the auto industry, so please don't give em more money, & I say give them because there is noway in hell they will be able to pay back this and anymore money right now, so they need to file bankruptcy to finally get things in order from what I can see.


RE: NO MORE $$$$!!!
By theapparition on 2/15/2009 9:07:13 PM , Rating: 2
Amazing the level of hatred towards US domestic auto manufacturers. While I'm not enthused about 14+ billion being given out as loans, how about the 700 billion given to banks that have since completely squandered the sums.

Helping out the domestic manufacturing industry, I feel, is much more important than going to help fund managers take 40,000/night "business" expenses in the Bahamas.

This isn't new, BTW. The original plan was that the automakers got a smaller amount and had to submit a restructuring plan. If the government doesn't like the plan, then it's on to plan "B", as in bankruptcy. Restructuring plan is due Tuesday, and then we'll find out what happens. This really isn't news.


RE: NO MORE $$$$!!!
By oab on 2/16/2009 12:08:11 AM , Rating: 2
People were more than willing to give white-collar workers $700 billion dollars in "free" money, and yet the blue collar workers, who actually make things, got $25 billion as loans which they needed to submit restructuring plans to actually see the whole amount of.

Just shows how little people who shower after work are cared for compared to those who shower before work.


RE: NO MORE $$$$!!!
By Athena on 2/16/2009 1:33:01 AM , Rating: 4
quote:
People were more than willing to give white-collar workers $700 billion dollars in "free" money, and yet the blue collar workers, who actually make things, got $25 billion as loans which they needed to submit restructuring plans to actually see the whole amount of.
Quite a few people had misgivings about the TARP too and those misgivings have proved justified.

Instead of pouring money into life support for these companies, the government should be focused on mitigating the effects of the inevitable fallout of their demise.


RE: NO MORE $$$$!!!
By FITCamaro on 2/16/2009 7:22:48 AM , Rating: 2
Dude it has nothing to do with hatred of the domestic auto industry. I've never owned a car that wasn't made my an American owned car company. How about you?

But I still hate these bailouts. I love GM and have only owned their products. These bailouts do nothing to fix their problems. Only provide a bandaid while the true problem still remains. These terrible union contracts which have been bleeding GM, Ford, and Chrysler dry for years.

Only bankruptcy which gets them out of those contracts will fix their problems. Don't act like we're for the bank bailouts either. I was just as against those as I am against the auto industry getting a bailout.


RE: NO MORE $$$$!!!
By theapparition on 2/16/2009 12:36:40 PM , Rating: 2
quote:
I've never owned a car that wasn't made my an American owned car company. How about you?

Don't call me out young'n. I've owned far more US models than you can dream of. Starting with my first car it totals around 40 cars over the years, including 10 camaros/firebirds of various gens. Respect?

quote:
But I still hate these bailouts.

My point wasn't that I'm a fan of them either. Just that for 2% of what was overnight authorized for TARP, the automakers got raked over the coals. Something doesn't seem right about that to me.


RE: NO MORE $$$$!!!
By Hiawa23 on 2/16/2009 10:01:56 AM , Rating: 2
Amazing the level of hatred towards US domestic auto manufacturers.

It's more amazing for someone to even make that comment. Most of us Americans want nothing but for our automakers to succeed, so there is no hate here, but sometimes you have read the writing on the wall & this is many years in the making.


RE: NO MORE $$$$!!!
By rudolphna on 2/16/09, Rating: 0
RE: NO MORE $$$$!!!
By Steve1981 on 2/16/2009 11:23:50 AM , Rating: 2
A good number of people don't like the products that the big 3 put out, but that hardly translates into wanting a company to fail.

I personally like my Mazda 3 better than any car in its class, and I did comparisons with both foreign and domestic automakers to come to that conclusion. However, to think I want Ford to fail would be downright stupid. Rather, I would like them to bring the Euro Focus here...


RE: NO MORE $$$$!!!
By 4runnerxp on 2/16/2009 11:31:31 AM , Rating: 2
the European ford mondeo won BBC's Top Gear's car of the year but we do not see it here in the US...that just does not make sense to me.


RE: NO MORE $$$$!!!
By Steve1981 on 2/16/2009 11:38:48 AM , Rating: 3
Indeed. I thought the Mondeo was pretty sharp in Casino Royale.


RE: NO MORE $$$$!!!
By Whaaambulance on 2/16/2009 12:16:03 PM , Rating: 2
If you compare foreign cars to domestic cars, you will see that foreign cars are cheaper, better built and hold a higher resale value. Why should American car workers be paid more than foreign car makers when they make an inferior product?

The 'Big 3' had so much time and so many chances to set things right. They failed and thus, deserve whats coming to them. Would I buy an American car if it was built better, held its value and lasted longer? Yes. Too bad they do none of the above. I will stick with my BMW.


RE: NO MORE $$$$!!!
By theapparition on 2/16/2009 12:41:59 PM , Rating: 2
quote:
If you compare foreign cars to domestic cars, you will see that foreign cars are cheaper, better built and hold a higher resale value.

Foreign cars usually cost more.
Better built is questionable now.
Hold a higher resale is pretty justified.

How about cost of replacement parts? Import lovers fail to post a reason why those parts cost 3X-10X. Hmm.

quote:
Why should American car workers be paid more than foreign car makers when they make an inferior product?

Inferior only in your mind. However, the union workers are paid way to much and that needs to change.

BTW, BMW is at the bottom of the pack reguarding reliability. Only Mercedes is worst. So they both must be crap too, right?


RE: NO MORE $$$$!!!
By Whaaambulance on 2/16/2009 2:38:16 PM , Rating: 2
Your logic is full of holes. Mine is backed by evidence.

quote:
Foreign cars usually cost more


Really? Last time I checked you could drive away in a Honda Civic for less money than the equivalent Chevy or Ford. But then again, you cannot really call them "equivalent" now can you?

You even contradict yourself by saying:
quote:
Hold a higher resale is pretty justified


That statement alone justifies everything I have just said.

quote:
How about cost of replacement parts? Import lovers fail to post a reason why those parts cost 3X-10X. Hmm.


Where do you get your numbers? Out of thin air? You're an idiot. If you are going to post some outrageous costs of auto parts, you may want to back them up with proof.

quote:
BTW, BMW is at the bottom of the pack reguarding reliability.


I am going to go out on a limb here and just guess that you probably have never owned a BMW. Why don't you go to any reseller website or dealership... hell even private sellers and tell me the average price of a 2000 year 5 series BMW and compare that to any top-end cadillac or other american car in that class.

Idiot.


RE: NO MORE $$$$!!!
By i3arracuda on 2/16/2009 7:46:41 PM , Rating: 2
quote:
Your logic is full of holes. Mine is backed by evidence.

quote:
Where do you get your numbers? Out of thin air? You're an idiot. If you are going to post some outrageous costs of auto parts, you may want to back them up with proof.

quote:
Idiot.


I am most intrigued by your hearsay and would like to subscribe to your newsletter.


RE: NO MORE $$$$!!!
By Whaaambulance on 2/16/2009 8:06:38 PM , Rating: 2
As a matter of fact, I do have my own newsletter.

Check it out: smouch.net/lol/


RE: NO MORE $$$$!!!
By theapparition on 2/17/2009 6:58:07 AM , Rating: 2
Yeah, name calling, real mature there.

I love how you claim evidence, but you yourself provided none.

quote:
Really? Last time I checked you could drive away in a Honda Civic for less money than the equivalent Chevy or Ford.

For example, base price of a Ford Focus is less than the base price of the Civic you mentioned. And it includes more standard features. I suggest you check again since your plain wrong.

quote:
That statement alone justifies everything I have just said.

No, I just happen to agree that SOME foreign models command a premium in the resale market. That alone does not equal a conclusion.

quote:
Where do you get your numbers? Out of thin air? You're an idiot. If you are going to post some outrageous costs of auto parts, you may want to back them up with proof.

This coming from a BMW owner??????????????? This cracks me up to no end. I suppose you've never heard of BMW tax? Example you say.

How about a cat back exhaust. GM Corvette for $800. BMW for $2000. How about a new rear differential for a 335i? Four times the cost of a corvettes. Don't believe me, go price something simple such as alternators for a civic and a focus. You'll find the Focus' alternator far cheaper. No quetion about that. If your still under the delusion that import cars aren't more expensive to fix, than the only thing I can suggest is medication.

quote:
I am going to go out on a limb here and just guess that you probably have never owned a BMW.

Fine automobiles but not my cup of tea. I however have many friend with them and know quite a bit. You can continue to lose credibility by calling me names all you want but check the facts. BMW is at the bottom of dependability surveys.

Now, give your daddy's BMW keys back and get back to constructing a decent argument.


RE: NO MORE $$$$!!!
By Whaaambulance on 2/17/2009 12:49:34 PM , Rating: 2
Hey look, idiot is back!

The epitome of hypocrisy has spoken. You are complaining about me not providing any evidence, when you tout the same thing, yet provide nothing. Let me provide you with some evidence. (BTW, I am using my BMW as the basis for comparison since it is an older and supposedly 'less reliable' model, right?)

quote:
For example, base price of a Ford Focus is less than the base price of the Civic you mentioned. And it includes more standard features. I suggest you check again since your plain wrong


By the way, it's YOU'RE, not YOUR. As in: YOU ARE (YOU'RE) terrible at spelling.

2009 Model Comparison between Focus and Civic:
http://www.cars.com/go/compare/modelCompare.jsp?my...

Let's break this down here:
Price range of 2009 Honda Civic - $15,305 - $25,190

Price range of 2009 Ford Focus - $15,520 - $18,265

As far as features are concerned, when you get up into the higher end range of models, Honda obviously pulls a higher price premium as the Civic Si clearly has the performance advantage and options available.

quote:
This coming from a BMW owner??????????????? This cracks me up to no end. I suppose you've never heard of BMW tax?


Could you supply me with a link to this supposed "BMW" tax? Must be new. Do more question marks make your question any more important? That is usually a sign of low intellect. Now perhaps you are referring to a luxury tax. When I bought my car in 2003 it was used. I didn't pay a luxury tax. Luxury tax no longer exists since 2003. It used to be cars over $40,000.00 would have to pay $1,200.00. That is gone. If you did your research rather than talk out of your ass you would know that, kid.

http://www.sptimes.com/2003/01/03/Business/Luxury_...

quote:
How about a cat back exhaust. GM Corvette for $800. BMW for $2000


2000 BMW 5 series cat back exhaust: Lowest price - $629.10
http://www.google.com/products?q=2000+bmw+5+series...

2000 Corvette cat back exhaust: Lowest price - $499
http://www.google.com/products?q=2000%20corvette%2...

I don't happen to see any that cost anywhere near your distorted prices, kid.

quote:
How about a new rear differential for a 335i? Four times the cost of a corvettes


Again, im comparing apples to apples. My 2000 BMW 540i to a Corvette 2000 model.

2000 BMW E39 (5 series) Rear Differential: $1,395.00 (+$800 refundable core charge, pretty standard)
http://www.diffsonline.com/product/customdiff5.sht...

1997-2004 Corvette Rear Differential: $1,499.99
http://www.ecklers.com/product.asp?pf_id=40399&dep...

quote:
You can continue to lose credibility by calling me names all you want but check the facts. BMW is at the bottom of dependability surveys


Guess what, I checked all my facts and I am sure you feel pretty stupid.

Here's more facts on reliability:

http://autos.msn.com/research/vip/default.aspx?mak...

You should learn to shut your pie-hole unless you are ready to back your fat mouth up.

Guess you got served, kid.


RE: NO MORE $$$$!!!
By theapparition on 2/17/2009 10:12:40 PM , Rating: 2
quote:
BTW, I am using my BMW as the basis for comparison since it is an older and supposedly 'less reliable' model, right?

If you notice in my previous posts, I said overall brand reliability. You can't use your model as a singular example to apply universally across all models. You failed to see that even though many surveys rate BMW low, they are fine cars. It was an example that was intended to show how ratings and surveys can be misleading. No where did I say they were poor, rather it was sarcasm that you didn't pick up on.

However, if you do want to compare apples to apples, a 5 series vs. a Corvette is hardly a good indicator. At least get to similar power levels and go with a M3. The reason is that parts that are hardened for higher hp applications cost significantly more.

Or if your inclined to stick with your E89, than perhaps you should compare it to something else in it's class, such as an older Buick. Now go reprice everything. I'll leave that to you.

BTW, Ecklers is known to have some of the highest prices out there. If you go to a real parts site, such as GMpartshouse, you'll find that a standard rear diff is $899, and the 3rib Z06 upgraded unit is about $1300. Now price that against a limited slip M3 diff.

Now, unless you plan to install it yourself, labor rates for import cars (at authorized dealers) are almost always higher, but certainly not lower. A similar repair on a BMW vs. a Chevy would certainly be in the Chevy's favor.

quote:
Could you supply me with a link to this supposed "BMW" tax? Must be new. Now perhaps you are referring to a luxury tax. When I bought my car in 2003 it was used. I didn't pay a luxury tax. Luxury tax no longer exists since 2003. It used to be cars over $40,000.00 would have to pay $1,200.00. That is gone. If you did your research rather than talk out of your ass you would know that, kid.

I know plenty of what luxury tax is since I've owned cars and boats where I had to pay it. If you've never heard the term, it's just because your not a car enthusiast.
BMW tax is something that is talked about all the time at a BMW enthusiast site like bimmerforums. Put quite simply, it is the extra amount that you must pay for a part, just because it's a BMW. For example, bolt X may cost $2, but buy it from the BMW dealer and it's now $30. Similarly, aftermarket parts are often priced the same. While a performance cat-back exhaust for a Honda accord may use the same amount of stainless and cost the same amount to make, you'll find the similar setup for your car to be significantly more. The thought is that the more expensive the car, the more their owners are willing to pay. It's this difference between what should be charged and what is charged that is called "the tax". Surprised you've never heard of this.
FYI, there is also Corvette tax. F-bodies used many of the same parts, and if you buy the same part using the Camaro p/n, it is almost always cheaper.

For the Focus vs. Civic base price, you're right. The Focus was cheaper in 2008, but the 2009 models had a price increase.

quote:
Hey look, idiot is back! That is usually a sign of low intellect. Guess what, I checked all my facts and I am sure you feel pretty stupid. Guess you got served, kid.

Unfortunately, I don't see a good future for you in a professional environment. You have some relatively valid counter-arguments, unfortunately your presentation will lead to you being dismissed without accord.

Insults are just a poor excuse for covering up your own inadequacies. So go ahead, doesn't affect me in the least. I own a successful engineering company, have a beautiful family, race cars in my spare time, and never had to buy any of my 3 corvettes used. With falling prices, I may yet pick up a ZR1. Beautiful one in Cyber Grey sitting on the local dealer’s lot.

So I wish you the best with your life.


RE: NO MORE $$$$!!!
By Whaaambulance on 2/18/2009 11:09:05 AM , Rating: 2
hahahhahahhahahhahhaha.

That is about all I could muster. I didn't bother reading through more than 1 paragraph of your babble. My presentation doesn't matter. I proved you are an idiot, and you still didn't back any of your statements with fact.

You got served, kid.


RE: NO MORE $$$$!!!
By Whaaambulance on 2/18/2009 11:13:10 AM , Rating: 2
Oh and one more thing, for every point you made in your last post, I could counter it all with evidence. But you really are a waste of my typing.

Peace, wanna-be.

(3 Corvettes, loving family, lolololol) *Yawn*


RE: NO MORE $$$$!!!
By KCjoker on 2/16/2009 5:51:00 PM , Rating: 4
That used to be true. Here's a copy and paste from an article that can't be accessed anymore. I had posted on another forum a while back.

6 myths about the Detroit 3

The debate over aid to the Detroit-based automakers is awash with half-truths and misrepresentations that are endlessly repeated by everyone from members of Congress to journalists. Here are six myths about the companies and their vehicles, and the reality in each case.

Myth No. 1
Nobody buys their vehicles.

Reality

General Motors Corp., Ford Motor Co. and Chrysler LLC sold 8.5 million vehicles in the United States last year and millions more around the world. GM outsold Toyota by about 1.2 million vehicles in the United States last year and holds a U.S. lead over Toyota of about 560,000 so far this year. Globally, GM in 2007 remained the world's largest automaker, selling 9,369,524 vehicles worldwide -- about 3,000 more than Toyota.

Ford outsold Honda by about 850,000 and Nissan by more than 1.3 million vehicles in the United States last year.

Chrysler sold more vehicles here than Nissan and Hyundai combined in 2007 and so far this year.

Myth No. 2
They build unreliable junk.

Reality

The creaky, leaky vehicles of the 1980s and '90s are long gone. Consumer Reports recently found that "Ford's reliability is now on par with good Japanese automakers." The independent J.D. Power Initial Quality Study scored Buick, Cadillac, Chevrolet, Ford, GMC, Mercury, Pontiac and Lincoln brands' overall quality as high or higher than that of Acura, Audi, BMW, Honda, Nissan, Scion, Volkswagen and Volvo.

Power rated the Chevrolet Malibu the highest-quality midsize sedan. Both the Malibu and Ford Fusion scored better than the Honda Accord and Toyota Camry.

Myth No. 3
They build gas-guzzlers.

Reality

All of the Detroit Three build midsize sedans the Environmental Protection Agency rates at 29-33 miles per gallon on the highway. The most fuel-efficient Chevrolet Malibu gets 33 m.p.g. on the highway, 2 m.p.g. better than the best Honda Accord. The most fuel-efficient Ford Focus has the same highway fuel economy ratings as the most efficient Toyota Corolla. The most fuel-efficient Chevrolet Cobalt has the same city fuel economy and better highway fuel economy than the most efficient non-hybrid Honda Civic. A recent study by Edmunds.com found that the Chevrolet Aveo subcompact is the least expensive car to buy and operate.

Myth No. 4
They already got a $25-billion bailout.

Reality

None of that money has been lent out and may not be for more than a year. In addition, it can, by law, be used only to invest in future vehicles and technology, so it has no effect on the shortage of operating cash the companies face because of the economic slowdown that's killing them now.

Myth No. 5
GM, Ford and Chrysler are idiots for investing in pickups and SUVs.

Reality

The domestic companies' lineup has been truck-heavy, but Toyota, Nissan, Mercedes-Benz and BMW have all spent billions of dollars on pickups and SUVs because trucks are a large and historically profitable part of the auto industry. The most fuel-efficient full-size pickups from GM, Ford and Chrysler all have higher EPA fuel economy ratings than Toyota and Nissan's full-size pickups.

Myth No. 6
They don't build hybrids.

Reality

The Detroit Three got into the hybrid business late, but Ford and GM each now offers more hybrid models than Honda or Nissan, with several more due to hit the road in early 2009.


RE: NO MORE $$$$!!!
By theapparition on 2/17/2009 7:06:33 AM , Rating: 2
Stop posting facts. You'll distort the media reality field.

Seriously, great post. Here's another one I'd like to see added.

Myth:
No one wants cars from the Big 3/They build models no one wants.

Reality:
Over half the cars sold in the US come from the Big 3, so someone must want them.


RE: NO MORE $$$$!!!
By bgm063 on 2/15/2009 9:59:20 PM , Rating: 1
Not so sure if you can say the auto industry is the root of the problem. It was the banks who took the money and refused to lend any of it... collectively around 350 billion, "have no idea where the money went", and still gave themselves bonuses.

True, the auto industry have got their hands out... and do need some help internally before they receive anything else, but as an American, I'd hate to see this country as no more than a consumer of other countries goods. Heck, a lot of what we do is outsourced so that we can, as our fellow Republicans say, cut spending.


RE: NO MORE $$$$!!!
By taber on 2/16/2009 12:49:08 AM , Rating: 2
The auto industry is the root of the problem, they need billions of dollars in loans because they're losing billions of dollars. If they were making money, the state of the financial industry wouldn't matter nearly as much.

The problem with bailing the auto industry out is why do we stop there? I work in IT and would love if tech jobs weren't outsourced and we kept all US tech jobs in the US, but that's not going to happen. I hope the US auto industry survives, but I don't think they deserve special treatment.


RE: NO MORE $$$$!!!
By Athena on 2/16/2009 12:10:38 PM , Rating: 2
quote:
If they were making money, the state of the financial industry wouldn't matter nearly as much.
Actually, the reverse is true...if the financial industry wasn't in such disarray, GM (and Ford) would be better able to work themselves into some semblance of solvency.

Personally, I find it appalling that Geithner and Summers will be heading up the oversight committee for the auto industry bailout. Geithner can't see anything beyond propping up Wall Street bankers and neither one of these people has any background in the longstanding problems with the unfunded liabilities that comprise so much of the problem.


RE: NO MORE $$$$!!!
By taber on 2/16/2009 9:46:48 PM , Rating: 2
The reverse may also be true, but that doesn't make what I said any less true. They're in this mess because they're losing billions of dollars, even though it's being exacerbated by the current financial and economic condition.

The problem with situations like this are justifying its fairness, I bet many Circuit City employees would have appreciated a little government help. I think the new economic stimulus package already included tax breaks for car buyers, so there's some help already most industries aren't getting. If the government does continuing loaning money and the industry still fails, there will be some pissed of voters.


RE: NO MORE $$$$!!!
By teckytech9 on 2/15/2009 10:42:06 PM , Rating: 2
Regradless if they file for bankruptcy, the government will still be providing some form of financing. Be it debtor-in-possession financing , or another cash infusion will just add to the total bailout amount.

The bondholders and stockholders will be the ones most affected as their investments trend lower. It's an overall catch-22 situation, as the company is obligated to pay interest and dividends to its financiers, pay retirees benefits, health care plans and take charges on employee buyouts. Its evident that the auto industry is consolidating with Toyota and Honda now being the key players in the market.


RE: NO MORE $$$$!!!
By Athena on 2/16/2009 2:19:43 AM , Rating: 5
quote:
No more government bailouts for the auto industry, or the root of the problem will never be fixed.
Well no one wants to deal with the root of the problem: We have an entire economy that is dependent on people living beyond their means. It's not just about GM and the UAW, it's the entire economy. Whether it is 7-year car loans that include rolled over balances, 100$ adjustable rate mortgages, or multiple credit cards (also with rolled over balances), the economy has become a never ending exchange of IOUs.

Far too many people think that is normal and all of the energy in Congress is going to how to prop up what is essentially an unsustainable model.


RE: NO MORE $$$$!!!
By TSS on 2/16/2009 9:00:15 AM , Rating: 2
The best way to destroy the capitalist system is to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. - John Maynard Keynes

did i mention the money system is based on that guy's idea's?


RE: NO MORE $$$$!!!
By atlmann10 on 2/16/2009 2:26:26 AM , Rating: 2
I'll say this much when your in the desert and you look at your bucket of water and the bottom got ripped out on a rock what happens. Well GM and you there bucket of water is the taxpayer and the economy is the rock. At least they can restructure and maybe come back better.


RE: NO MORE $$$$!!!
By Byte on 2/16/09, Rating: 0
RE: NO MORE $$$$!!!
By clovell on 2/16/2009 11:35:45 AM , Rating: 2
I'd actually say No more bailouts, period. Confining this to the auto sector is not being able to see the forest through the trees.


Extreme amounts of money wastage
By thebeastie on 2/15/2009 8:05:22 PM , Rating: 1
A lot of countries around the world are using these sized sums of money to stimulate "their entire economy's" Its amazing to see the USA spend so money money on just GM.
If you want to keep them going just merge them into Ford or something, and make sure you sack all the money hole punchers at the top of the tree.




RE: Extreme amounts of money wastage
By Rodney McNaggerton on 2/15/2009 8:35:36 PM , Rating: 2
This shouldn't amaze you. Most countries GDP's are a fraction of ours.


RE: Extreme amounts of money wastage
By dflynchimp on 2/15/2009 8:48:06 PM , Rating: 3
quoted for truth.

In my opinion, the GDP and national debt system is probably the most retarded thing that we as a nation ever took up. It also sucks even more that by now most of the world has bought into the same inane system. Anyone who's taken a class in macroeconomics knows that as of status quo, no country tied to the world economy can ever expect to pay off its national debt, and has to be content knowing that as long as their GDP is greater than the national debt, they're still "technically" in the green.

both the US's annual GDP nearly rivals the entire European Union (14 trillion vs 18 trillion USD) with Japan and China taking up a very distant 3rd/4th (just over 4tril for both) . That's nearly 20% of the world accumulative GDP that exists here in the states. This is the reason that the US is largely responsible for the worldwide recession right now, because we're so damn tied to everyone that we drag them down with us.


By dflynchimp on 2/15/2009 8:51:40 PM , Rating: 3
belay those numbers. Depending on which list you're looking at the U.S either trail behind, rivals, or even exceeds the entire EU.

The general picture doesn't change tho. EU, US, Japan and China are the world heavy-weights in the GDP output.


RE: Extreme amounts of money wastage
By InfantryRocks on 2/15/2009 9:30:51 PM , Rating: 2
quote:
A lot of countries around the world are using these sized sums of money to stimulate "their entire economy's"
So? Are we supposed to feel ashamed now?
quote:
If you want to keep them going just merge them into Ford or something, and make sure you sack all the money hole punchers at the top of the tree.
If they want to keep running, they'll produce high quality cars at good prices. If they can't do that in a competitive economy, then they don't deserve to be around. Toyota will do just fine for me and my family.

It is not the job of the U.S. taxpayer to subsidize failing companies. They either adapt to the economy as is or they go out of business. It's that simple.


RE: Extreme amounts of money wastage
By mindless1 on 2/15/2009 10:20:38 PM , Rating: 5
They've been producing high quality cars at good prices, has nobody noticed just how many GM cars there are out on the roads, in addition to trucks, SUVs, etc? Granted Ford got one over on GM in the truck dept.

There was a time when foreign automobiles had a substantial quality advantage per $. That time has passed, GM's troubles now are catering to what the market wanted which was larger vehicles, then along came high gas prices and a recession so it is no wonder companies tailoring to the luxury-for-the-middle-class market will find those middle class earners can't buy in the same quantity or frequency anymore.

Cars also last longer than they used to, including GM's. It's no wonder sales have gone down when the main draw to replacement is slightly higher MPG and an ipod dock. When will I replace my Ford truck? When it's not cost effective to repair anymore which is a long way off, unless it gets totaled in a wreck or stolen but people don't plan these things in advance.


RE: Extreme amounts of money wastage
By TheSpaniard on 2/16/2009 8:12:56 AM , Rating: 2
really? when I went shopping for a SUV recently I was stunned on how lines like HUMMER (luxury SUV?), SATURN CHEVY had intertiors that looked inferior to a 2002 ACURA or even new HONDA...


RE: Extreme amounts of money wastage
By rudolphna on 2/16/2009 10:51:57 AM , Rating: 2
For one thing, hummer isnt considered a "luxury" SUV. If your going to look at an SUV, look at a GMC Yukon, or, even better, the Ford Expedition, which as much as I like GM, is superior to anything they offer. Ford and Honda are tied for top quality mfr according to JD Power & Ass, and Consumer Reports.


RE: Extreme amounts of money wastage
By Adul on 2/16/2009 1:18:01 PM , Rating: 2
The thing is interior quality matters to many people.Use of cheap materials in the interiors to keep cars cost competitive gives the wrong impression. I bought my mazda 3 and one of the reasons why, the interior quality was vastly superior to anything ford or GM had. And GM is the worse at this. Ford is at least descent and getting better.


By mindless1 on 2/17/2009 12:17:20 AM , Rating: 2
You're entitled to pay more for whatever you want in a car, as are others to not pay for what they don't care as much about. Personally for the same money, I'd rather drive a car with an interior made out of string and glue if it were larger than a Mazda 3, it's all relative.


RE: Extreme amounts of money wastage
By TheSpaniard on 2/16/2009 7:30:11 PM , Rating: 2
I think the H2 qualifies as a luxury vehicle.... its price tag commands it!

but I have to agree that the Ford expedition is a much nicer vehicle, but much too large for me... I was actually refering to vehicles like Ford Escape, Hummer H3, Chevy Colorado, and Honda CR-V. of which IMO: Honda -> Ford -> Hummer -> Chevy.

which is sad b/c the utility of those vehicles is the revers of that chart


RE: Extreme amounts of money wastage
By mindless1 on 2/17/2009 12:25:47 AM , Rating: 2
If you want a certain artistic styling more than utility, it's your call to make. The important thing is we continue to have choices. And competition.


By TheSpaniard on 2/19/2009 7:11:43 PM , Rating: 2
I was refering to interior build quality... I personally think the american SUVs are damn good looking (from the outside) but inside they command around 3/4 of the features in the foreign vehicles and the interior seems to be 1/2 the quality (fit and finish as well as durability)


By mindless1 on 2/17/2009 12:14:27 AM , Rating: 2
Apples and oranges comparison. You don't mention which Acura, but they are fairly high priced for their size while a Saturn was always a budget car. Of course you get more when you pay more. Hummer isn't meant to be pretty or hadn't you noticed? I could say something like I was stunned when I saw a 2002 Acura and a Saturn stuck in a sand dune and the Saturn owner had more money left over to call a tow truck.


Maybe the time is right
By ClockerXP on 2/15/2009 11:06:47 PM , Rating: 5
I work for GM as an Engineer on the Volt. I'm not sure what to think. Given that the whole auto market is down so bad, maybe now is the time to go Chapter 11 and re-organize before the market comes roaring back? Fewer sales will be lost by filing in such a down market. I just want my vehicle to come to market to show what we can really do. I'm not a fan of the styling but it is a great vehicle.




RE: Maybe the time is right
By 67STANG on 2/16/2009 12:22:05 AM , Rating: 2
Sorry to hear you are actually on the sinking ship-- whereas the rest of us are just watching it go down. I would like to see the Volt come to market too, would be a shame for all the money spent and engineering time to be wasted.

You could always go over to work at Ford or ... errr..., I guess just Ford.


RE: Maybe the time is right
By theapparition on 2/16/2009 12:50:57 PM , Rating: 2
Something tells me Ford isn't hiring right now, they're still bleeding cash too.

So let's all cheer for GM and Chrysler to go down, and instead of letting the goverment give them 30 billion in loans, we can now rejoice in the government "giving" the resultant 3 million newly unemployed around 10 trillion in entitlement programs such as unemployment, food stamps and wellfare. Horray for big government!!!
/sarcasm

BTW, bankruptcy guarantees are still funded by the government and will cost far more. Only advantage is that contracts can be renegotiated, which is huge, but will also put other suppliers out of business. Net result is that it is better if they can do this with just loans.


RE: Maybe the time is right
By Steve1981 on 2/16/2009 2:12:36 PM , Rating: 2
Few are interested in the Big 3 "going down". I imagine most people would like to see a healthy Big 3 with viable long term business plans. The question is how to go about achieving that.

I personally am not inclined to believe that the government giving them loans will suffice. If it only took a loan and light negotiations with the UAW to solve the mess the Big 3 are in, a bailout wouldn't be needed.

IMO, the Big 3 need a restructuring that is only feasible under chapter 11 bankruptcy protection. That involves a lot of negotiation, a good bit of pain, etc. If the government assists in finding the auto manufacturers a loan or three during bankruptcy, so much the better. But I suspect you'll find a lot of people opposed to the bailout would find such a plan infinitely more palatable.


Give it to them... sheesh
By wordsworm on 2/16/2009 6:52:46 AM , Rating: 2
I don't know why so many folks are up in arms about helping the big car makers. Has anyone of you, who are angry about them asking, calculating the loss of tax money that would be involved should these automanufacturers fold?

288,000 http://www.simplyhired.com/a/salary/search/q-Gener..." employees earn an average of $40,000 per year with, I'm guessing, about 21% in federal taxes, equals about a total of 2.4 billion in federal coffers annually. Then there's the state and municipal taxes that would be lost if they lost their jobs, and all the jobs that revolve around those jobs.

The effect of losing GM, Ford, and Chrysler, would be catastrophic for the American economy. Frankly, I'd never buy any of their cars, I don't like their gas guzzlers at all. I'm just saying that the consequence of not helping them out is greater than the cost of helping them out for a year or two. Maybe it is good money after bad, but these workers deserve to have a chance given to them after so many years of paying into the system.




RE: Give it to them... sheesh
By Snoop on 2/16/2009 9:06:21 AM , Rating: 2
I would not mind the government helping GM/Chrysler out if they had a sustainable business model. But, currently, with the CRUSHING union contracts, horribly inefficient facility's(from union contracts), and top heavy management, their business model is not sustainable, even in a good economy. They need to fix there problems, reorganize, get costs inline with foreign competitors, and then the government could step in.


RE: Give it to them... sheesh
By Beenthere on 2/16/2009 9:41:18 AM , Rating: 1
If you check the facts, you'll see that your perceptions of GM's situation are untrue out of date beliefs.

UAW salaries are within $3/hr. of Honda and Toyota U.S. The TOTAL cost of labor on any vehicle produced in the U.S. by any auto company is ~10% of the sticker price. UAW salaries are not the problem nor are inefficient factories. Retiree and health care issues that will be resolved in '10 are major financial challenges that have been addressed. Both production and management head count has been reduced - including 10,000 more employees last week.

All car companies will suffer thru a brutal economic depression for the next decade thanks to failed leadership in Congress and OPEC/oil company greed.


RE: Give it to them... sheesh
By Snoop on 2/16/2009 12:22:16 PM , Rating: 2
quote:
If you check the facts, you'll see that your perceptions of GM's situation are untrue out of date beliefs. .....snip. Both production and management head count has been reduced - including 10,000 more employees last week. All car companies will suffer thru a brutal economic depression for the next decade thanks to failed leadership in Congress and OPEC/oil company greed.


http://www.heritage.org/Research/Economy/wm2162.cf...


RE: Give it to them... sheesh
By Whaaambulance on 2/16/2009 5:27:00 PM , Rating: 2
BAM! You just owned his face with facts.


RE: Give it to them... sheesh
By Hiawa23 on 2/16/2009 10:31:01 AM , Rating: 2
I would not mind the government helping GM/Chrysler out if they had a sustainable business model. But, currently, with the CRUSHING union contracts, horribly inefficient facility's(from union contracts), and top heavy management, their business model is not sustainable, even in a good economy. They need to fix there problems, reorganize, get costs inline with foreign competitors, and then the government could step in.

I agree with this. No one is hatin on the auto companies, but if your business model isn't sustainable enough for you to make money, then something has to give.

Some of you are under the impression that we are angry or want them to fail. No one wants that but isn't this how a capitalistic market goes? The companies who can keep their heads above water will go on, & those who don't, well, I guess they keep getting taxpayer money, who cares if they are able to pay it back, right. Given the economic crisis, & the industry as a whole, why keep giving them money when it's clear they will not be able to sell enough cars, trucks, whatever to pull themselves out of this rut. I say they should go into some kind of restructuring now while the economy is in the toilet & by the time things turn around, hopefully they will be in a better position, it's that simple, but for some of you to say that just cause we feel this way, we hate them is ridiculous.


More cash down the drain
By Richeem on 2/15/09, Rating: 0
RE: More cash down the drain
By dflynchimp on 2/15/2009 8:36:13 PM , Rating: 4
It's not just the democrats fault. Our government as a whole decided on the relief package; not out of some twisted sense of sentimentality for the American auto industry, but for the temporary (if only) stabilization to the employment the industry incorporated.

It was a catch 22 situation. You tighten your belts and don't throw money at the problem (what the government of 1929 tried and failed), and the sudden influx of unemployed workers accelerate the dragdown of the economy. Meanwhile throwing exorbitant amounts of money at the problem doesn't fix it at all in the long run because, pardon my analogy, the auto industry is run by a bunch of morons.

The problem's been 20 years in the making, and it's a lose lose situation for everyone around. Right now I'm leaning towards letting them go bankrupt and shifting out very limited funds elsewhere where there might be more of a possitive effect.


RE: More cash down the drain
By Richeem on 2/15/2009 9:42:34 PM , Rating: 2
I'm not saying its the Democrats fault I'm saying what will happen is they will throw more money at it like they always do. They've already shown they'll act unilaterally and vote through anything they feel is worthy.

The government as a whole has failed miserably with most of these bailouts. The bank bailout was a joke and this Auto bailout is looking to be the same thing. They need to let one of the bleeding three die off and maybe the industry as a whole will come out better off.


RE: More cash down the drain
By clovell on 2/16/2009 2:31:46 PM , Rating: 2
One minor correction - there isn't a republican in the Senate that voted for the latest 'relief package'


RE: More cash down the drain
By mindless1 on 2/15/2009 10:24:22 PM , Rating: 2
How is it actually a loss if the money stays in our economy? Wouldn't it be a bigger loss if they went under and the money started flowing overseas at a higher rate?

Some say UAW workers are overpaid. What about their taxes? What about the entire infrastructure? GM et al must tighten their belts, restructure/downsize, but we can't say so simply that spending money on them is a loss of billions compared to so many other governmental expenses which don't have much of a return for society, are simply wasted without any return revenue through consumption, taxation, etc.


Bye Bye GM
By Rob94hawk on 2/15/2009 11:15:38 PM , Rating: 1
While Toyota and Honda where rolling inovative hybrids off the assembly line, the UAW were looking to fatten their pockets rather than compete. So I say, time to die GM.




RE: Bye Bye GM
By Beenthere on 2/16/2009 10:05:01 AM , Rating: 1
If you check the facts... you'll see that GM offers more models in the U.S. that get 30+ mpg than either Honda or Toyota U.S. That's right - GM offers more 30+ mpg models including hybrids than Honda or Toyota U.S.


RE: Bye Bye GM
By 4runnerxp on 2/16/2009 11:22:02 AM , Rating: 2
Ok what are GM's 30+ MPG cars?? Are you sure they are not just re branded so Chevy, Saturn, Saab all get a few because the power train all look pretty familiar. Also their 30+ MPG is on the highway not around town, I have a 525 manual BMW and I get over 30+MPG on the highway in that car so woohoo. IMO the government needs to suspend the CAFE standards and allow the automakers to create good sized cars and gradually move to 30+ not forced to.


RE: Bye Bye GM
By Steve1981 on 2/16/2009 11:27:08 AM , Rating: 2
How many do they offer that get 40+?


RE: Bye Bye GM
By 4runnerxp on 2/16/2009 3:19:21 PM , Rating: 2
Gm doesnt offer any 40+ mpg cars...if your point was to say toyota and honda do I dont understand the purpose of your arguement. Our government for years have held the car companies hostage by issuing stricter CAFE laws and crash standards....It is really hard to make a car get more fuel economy when you have to pack on pounds of safety features that must be there.


RE: Bye Bye GM
By Steve1981 on 2/16/2009 3:37:57 PM , Rating: 2
Ahh what is the point of it all...

I suppose my point is this: GM likes to point to the fact that they offer numerous models that can attain 30mpg or more as testament to their dedication to fuel efficiency. To their credit, a 30mpg car is reasonably fuel efficient.

However, I question GM's dedication when its competitors can offer vehicles that break the 40mpg mark handily, and they cannot.


Best to get the facts before judging...
By Beenthere on 2/15/2009 9:01:46 PM , Rating: 4
Anyone who cares about the world wide economic meltdown that is turning into a world wide economic depression, knows that the $17 Billion provided to GM and Chrysler were an asset based BRIDGE LOANS to get them through to March '09. It was fully understood by all involved that additonal long term LOANS would be required along with major business restructuring to create a viable long term business model for the bold cruel world that exists after the raping and pillaging by OPEC and the oil companies.

Is was mandated that GM and Chrysler must provide detailed restructuring plans by Feb. 17th before any further LOANS will be provided by Congress. In addition if Congress or the Car Czar yet to be appointed - believe that GM and Chrysler are not meeting the desired restructuring plan agreed upon, the loans can be recalled at any time and the fixed assets of these companies which is in excess of $100 Billion, can be seized by the government for repayment of the loans.

Unlike the Wall Street free lunch bailout, the auto industry LOANS are asset based and come with a mandatory repayment and accountability clauses. For the record the CEOs are also working for $1/yr. until all tax payer backed loans are repaid. Chrysler had a similar loan in 1979 that they repaid with interest and went on to be successful for another 25 years until Damler bought them and ran them into the ground with German national management...

I would caution people to be careful what they wish for because if any of the Detroit auto makers go under they will likely take the entire U.S. auto industry and economy with them. Detroit directly and indirectly provide close to 3 million U.S. jobs. For every person who loses their job at any company, there can be up to a 10 to 1 loss of other jobs because those who lost their job no longer buy the goods and service they previously consumed. Then those suppliers of goods and service also cut jobs and the downward economic spiral continues unabated. That is precisely why we are losing 20,000 jobs per day - everyday in the U.S., month after month after month.




By ClockerXP on 2/15/2009 11:10:58 PM , Rating: 2
amen to thtat


By 16nm on 2/16/2009 5:36:05 PM , Rating: 2
But these are VERY risky loans the American people are providing.

What needs to happen is that one of the big three need to close its doors. We can not support three domestic automakers during a recession. One needs to go so may the strongest survive. The entire US auto industry will not disappear due to a recession. No one is suggesting this. Could GM and Chrysler merge AND successfully restructer? I don't know but the bottom line is that many -- not all -- auto workers will be losing their jobs. I hope this little experience has been a wakeup call for the industry.


This
By ToughHoBo on 2/16/2009 1:27:35 AM , Rating: 2
I hate to say this but I saw it coming, they've been performing poor since the last century and haven't made any improvements. The auto bail out just bought them time.




RE: This
By rudolphna on 2/16/2009 10:53:52 AM , Rating: 2
Uh... They are way better than they were. The make cars with quality and reliability on par with Japanese automakers now... Where have you been?


Recession or Depression
By Spind on 2/16/2009 6:36:47 AM , Rating: 2
Why dont DT start a special column/section along with H/w, S/w, internet, IT, Science etc., for Recession related news?




RE: Recession or Depression
By 16nm on 2/16/2009 5:22:48 PM , Rating: 2
Because they would become DailyNews not DailyTech.

And DailyNews.com is already taken:
http://www.networksolutions.com/whois-search/daily...

;)


Give the taxpayers something too.
By crleap on 2/15/2009 9:17:29 PM , Rating: 2
I'm sick of seeing these tax-dollar bailouts going to certain markets without anything to show to the regular taxpayers that foot the bill. They bail out the banks so business-as-usual can continue and the banks can continue drilling fees and screwing over the very people whose money bailed them out.

Then the auto industry? That sure doesn't benefit anyone but the auto workers who didn't exactly stay relevant to the changing economy/market situation anyway. The US just isnt a manufacturing economy anymore.

If we want tax dollars to go to an industry to bail it out, the people paying the bills should damn sure get something out of it too. Instead of handing them a check, the govt should buy every American a car. We get something to show for the tax dollars we pay every week, and the auto industry gets business and work to do.... everyone wins. Not so much when we're paying them to do nothing.




By Beenthere on 2/16/2009 9:55:18 AM , Rating: 1
First of all, the auto industry is not getting any tax payer "bailout". GM and Chrysler received $17 Billion in asset based LOANS, not a "bailout" like Wall Street banking CEOs got. Second the Detroit auto company execs are working for $1/yr. unlike Wall Street types who are taking multi-million dollar salaries and bonuses for '08.

What tax payers get from providing asset based LOANS to the auto companies is:

1. Lower unemployment so you aren't paying for social care

2. A return on your tax dollars via loan interest

3. Retention of most of the 3 million auto industry jobs in America

4. A much higher chance of keeping YOUR non-auto related job

5. A restructured U.S. manufacturing segment that has a viable future


uh
By sprockkets on 2/15/2009 8:36:35 PM , Rating: 2
quote:
THEY NEED TO FILE FOR BANKRUPTCY SO THEY CAN RESTRUCTURE


And if they can't restructure, they cease to exist. Ever though that is probably why they want more money, because they can't afford to pay off what they owe and will end up being dissolved?

Oh well, opinions aside, this and the whole situation with the economy was doomed to happen, it was just a matter of time before it collapsed on its own weight. Infusing the banks with cash will only again delay the inevitable (which already happened)and will serve to make a bigger crash.




Hey Congress...
By xphile on 2/15/2009 9:44:20 PM , Rating: 2
Give me and a dozen or two Daily tech readers a few hundred million dollars and:

A) We wont ask for more money every 60 days.

B) We'll start making economical safe cars that sell at a profit.

It can't be THAT hard - foreigners from all the way on the other side of the Pacific ocean can come here to the USA and do it. Surely It should be EASIER to do it 5500 miles closer to the customers.




Time to laugh...
By The0ne on 2/15/2009 11:17:26 PM , Rating: 2
Now it's time to cynically laugh at GM and those that continue to support a company that cannot change and will continue to lose money.




By MrX8503 on 2/16/2009 1:24:21 AM , Rating: 2
Oh how enthusiastic we were giving banks $700B where they won't even disclose to the public how its being spent. This is taxpayer's money and its pissing me off, they're supposed to answer to us, not the other way around.

Chrysler deserves to go out of business. Before, during, or after the bailout, Chrysler has not shown any innovation or progress in their vehicles. As for GM, they have been making strides to become more profitable and I believe should get some government help.




the volt
By supergarr on 2/16/2009 3:36:10 AM , Rating: 2
I get the feeling GM is banking way too hard on the success of the volt. I don't think it's going to be that great, especially with its starting price. If you really are concerned about gas, you can buy a 10k 4 cylinder at ~30mpg and save the extra 30k on buying gas for the next 20 years or so. It just doesn't pay.

But I am one of those guys that hates cars. They are such a burn on the wallet, and it makes no sense buying an expensive car, unless you like to piss money away or have the money to piss away.




By A Stoner on 2/16/2009 11:19:50 AM , Rating: 2
Watch how fast American car companies can start to become competitive. The worker retention program, where if a job is replaced with automated equipment the worker is retained at a high % of his salary plus ALL benifits and his new job is to sit around doing nothing. While the cost of keeping these employees in the overall does not add up to a large % of the cost of doing business, just imagine how many unproductive employees are being kept in their jobs when automation is not even attempted because the cost of automation plus the cost of the retained unproductive employee makes it not cost effective, or maybe just not right. This keeps GM, Ford, Chrysler from being innovative and being able to improve the quality of the product.

I think I read somewhere the union contract is 15,000 pages with GM. I mean seriously. How much does it cost to comply with that 15,000 pages? I worked at a company that had a union. If I, as an engineer, had a part that needed to be taken from one place to another place, I had to make a requisition, wait three days for the union employees to come over and get it and take it to where it needed to be. If I just picked it up, walked it over to the next building and one of those union employees saw me, they wrote it up, and got like 4 hours of pay for doing so. How exactly does this make the company I work for more productive? The union employees were constantly hanging out, always on break, and could never be bothered to get anything done quickly. Every other employee could be counted on to get the job done.




Bailout = good
By gamerk2 on 2/16/2009 12:32:15 PM , Rating: 2
The car companies should get a bailout. Look at the Chevy bailout of the 70's; government made a PROFIT of several Billion dollars, as a result of interest on the loan.

Remember people, its not cash government is giving out, its a loan, subject to intrest. If the bailout is successful and the companies do not file for bankrupcy, government is guarenteed to at least break even over the length of the loan.

When you factor in all the industries that will get hit if the car companies go over (manufacturing, steel, plasic, computers, radio, plus smaller service companies and the locally owned dealerships), I'd be shocked if unemployment was under 20% if any two of the three went under and did not immediatly return from bankrupcy. Then we would enter depression territory.

And you can't compare this to the airline bankrupcys, as the car companies still need to be able to service cars (as required by their contracts), where as a ticket on an airline is a one time purchase.




$5 billion US
By 16nm on 2/16/2009 5:17:39 PM , Rating: 2
quote:
According to both GM sources and U.S. Treasury officials, GM will need more than $5 billion in additional assistance from the government just to limp through the first quarter of 2009. The $5 billion figure doesn’t even take into account the $3 billion in tax breaks that the company will receive thanks to the economic stimulus package that was passed by Congress this weekend and will be signed by President Obama on Tuesday.


If the 5 billion USD figure does not take into account the 3 billion USD tax break then why mention it? Would it not be quite a bit less than the $5 billion now or did you mean the 5 billion USD does take into account the tax break?

Assuming it is not a typo, I'm hoping that with the 3 billion USD tax breaks taken into account, the figure will be more like $2 bil. I'm sick of forking over my money to save these loser companies. If they've been run into the ground then they should fail, creating an opportunity for competitors. Bailout does not seem like the solution. There just are not enough buyers to support three domestic producers and Ford seems to have been run the best given its position. Propping up GM will hurt Ford and then we will have to bail Ford out, too. Nuts!




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