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Tesla Roadster
Tesla Motors asks the government for much-needed funds

While the traditional auto industry appears to be in a free fall with industry giants like General Motors, Chrysler, and Ford take the brunt of the hits; electric car companies are also facing similar hardships. DailyTech reported last week that the electric car industry is also noticing a steep downturn in sales.

Tesla Motors has been a headliner when it comes to electric vehicles thanks to its Roadster which features a $100,000+ price tag. However, the downturn in the economy forced the company to fire 90% of its employees in Rochester Hills, Michigan. In an incredibly tacky move, employees first found out about the layoffs from automotive blogs and then later from the corporate website.

It appears that the worst is not over for Tesla Motors. According to The Detroit News, the company is joining GM and Chrysler and is asking for a cash infusion from the government. Tesla Motors’ CEO Elon Musk is asking the government for a $350 million loan.

"We can't move forward with that without a major amount of capital," proclaimed Musk. "If we don't get any government funding, then what we need to do is we need to wait until the capital markets recover, which could be a year or two years from now."

According to Musk, the money will used to build a $250 million assembly plant in California and develop its four-door, all-electric Model S sedan which will be priced less than $60,000. Without the low-interest loan, the company will have to delay the introduction of the vehicle.

If Tesla Motors is indeed approved for the $350 million, the money will come from an existing $25 billion Department of Energy fund that was put in place to stimulate the development of "green" vehicles.

Tesla Motors' sole current offering is the Roadster. The two-seater is priced at $109,000 and has a driving range of 220 miles. The vehicle can accelerate to 60 MPH in less than four seconds and can reach a top speed of 125 MPH.



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No more BAILOUTS!
By Bateluer on 12/11/2008 9:37:56 AM , Rating: 5
I'm stick of ailing companies asking the tax payers for loans and bail outs. Let Creative Destruction prevail. Where one company dies, several are born to take its place.

Unfortunately, I think the public will be more receptive to giving an EV company a bailout there they were to bailing out the Three Big Dinosaurs.




RE: No more BAILOUTS!
By TheSpaniard on 12/11/2008 9:41:31 AM , Rating: 5
especially this company which produces what... luxury cars?

since when do rich people toys need to be federally subsidized?


RE: No more BAILOUTS!
By bighairycamel on 12/11/2008 10:04:08 AM , Rating: 2
Not to mention, they have already laid off 90% of their workers. So we should give them money to do what??? Save the CEO's job... or to create more jobs for another electric car in an already failing market... gimme a break.


RE: No more BAILOUTS!
By TheSpaniard on 12/11/2008 11:00:28 AM , Rating: 4
or how about the fact that they are essentially a brand new company...

let me start an automotive group drag my ass into debt over the course of 2 years and then cash in on the government awesome!


RE: No more BAILOUTS!
By othercents on 12/11/2008 11:09:12 AM , Rating: 3
1) Tesla isn't talking about bailing out their debt. The article doesn't even mention that they are in financial burden only that they wouldn't be able to build a new facility or launch the new line of 4 door cars for 2 years because they can't get a traditional loan.

2) Car technology usually starts at the race track before it is implemented into the lower priced vehicles. This is one of the reasons for starting with the roadster. The second is because they didn't have a plant that could handle mass production of a vehicle which will be required for lower cost vehicles.

So right now they only have the high end roadster without the ability to build the lower cost vehicles because they can't get a loan to build their plant. As it is stated there are two options. Stimulate economic growth and new technology by providing a loan, or don't which means Tesla will wait 2 years.

Other


RE: No more BAILOUTS!
By Spuke on 12/11/2008 11:42:58 AM , Rating: 1
1. Well since they've laid off most of their employees, I would say they are having financial issues. A healthy company hires not fires.

2. There are no electric race cars and electric motors aren't high tech, they're old tech just like gas engines.

Like the OP has stated, NO MORE BAILOUTS, especially for luxury items like this car.


RE: No more BAILOUTS!
By Chernobyl68 on 12/11/2008 12:38:58 PM , Rating: 3
did any of you even read the article? The money comes from an EXISTING FUND intended for development of green vehicles. This money essentially is ALREADY SET ASIDE SPECIFICALLY FOR THIS PURPOSE.

and yes, the roadster is expensive. it's got a lot of Li-Ion betteries which aren't cheap. Since this was driving the cost of the car up anyway, they decided to market it at that price point by making it a luxury item. In other words, people who are considering porsches might consider this car.

in the original plan, the next step was to produce a luxury 4-door sedan at around $60 thousand, and after that a more affordable car in the $30-40 range. To do this they needed experience and a factory for producing on a larger scale. Profits from the Roadster might have built up this capital had the price of gasoline remained so high, but with gas down to $1.60 and the economy in the crapper, nobody's buying cars, let alone electric ones. The money Tesla can get from this fund would do just that.

But the need for this type of vehicle is there. When the economic recovery comes around the price of oil will climb again and drives will start looking for electrics once more. Lets not forget, whether or not you believe that global warming is real, nobody is making oil anymore, and it will run out.


RE: No more BAILOUTS!
By FITCamaro on 12/11/2008 1:15:52 PM , Rating: 2
Nobody is making oil anymore? Where did they make oil to begin with?

If you meant to say no one is pumping it anymore, are you on crack?

Yes oil will run out some day but that day is many decades away. And we've already shown we have the ability to produce diesel and jet fuel from altered algae. So if we ramp up that, we can have all the fuel we will ever need. We'll just have to switch from gas engines to diesel.


RE: No more BAILOUTS!
By codeThug on 12/11/2008 6:03:12 PM , Rating: 2
Down rated to zero? Eh?

This is the most honest and accurate appraisal I've seen in a long time. The down rate speaks volumes to the idiots on this forum.

What FIT is saying is the truth.


RE: No more BAILOUTS!
By Totally on 12/11/2008 4:15:26 PM , Rating: 2
Ok so they're seeking a pre-approved bailout. I remember that the fund was for R&D, create upstarts. Not to save their failed business plan with a very narrow scope.

as for your last sentence:

http://www.nzherald.co.nz/biotechnology/news/artic...


RE: No more BAILOUTS!
By othercents on 12/11/2008 4:30:10 PM , Rating: 2
1. Not true... I have had triple digit growth over the year, but I have fired 20% of my workforce. A healthy company stays competitive by changing with the economy and with demand. Still doesn't mean they have a "financial burden" (which was the word I used since "financial issue" is totally different than what I said).

2. Yes there are electric race cars, but those are at such a small scale they don't use the same type of technology. BTW. electric motors have changed significantly over the past 10 years, so have batteries, and transmissions. We are continually moving forward in making things better and usually the race track is the proving grounds for these items. BTW. I'm glad you ignored my second part of what I said which was a large plant is needed to be able to produce at a high enough production rate to be able to produce the lower cost vehicles.

Lastly... I didn't say they should or shouldn't bail them out just that everyone was saying why pay for a companies debt where there wasn't information to show they were in debt.

I guess my best question is if you worked for the auto industry and the choice was loose your job or help your company get a bailout which would you choose? The government really has to decide if the bailout is less than the amount of money they would loose from taxes if they didn't bail the auto industry out. If they bailout costs them less then it is prudent business to bail them out. However, there is more to it since you don't want to "award" those who miss managed themselves (which they did for the banking industry).

Other


RE: No more BAILOUTS!
By Moishe on 12/11/2008 12:30:05 PM , Rating: 3
If the financial industry won't loan them money then the government shouldn't loan them money. Risk is risk.


RE: No more BAILOUTS!
By BZDTemp on 12/11/2008 12:39:31 PM , Rating: 3
Seems stupid to me if the US government should give some $350 mill for someone to build a new factory while on the same time other factories are far from running at peak capacity. Surely it would be cheaper for Tesla to pay an existing factory to refit and produce their cars.

Fisker Automotive has their cars build in factory which also builds Porsches and (something else I can't remember). That is the clever way to start out since you can spend money on development and not so much on production facilities. Once you're getting big you can then build your own.


RE: No more BAILOUTS!
By Zoomer on 12/11/2008 11:28:17 PM , Rating: 3
Too bad nobody wants to touch a michigan UAW plant with a 10 mile long pole.


RE: No more BAILOUTS!
By randomly on 12/11/2008 12:59:56 PM , Rating: 5
They did not lay off 90% of their workers. The article is deceptively written.

They laid off 90% of the employees only in the Rochester Michigan office. There were only about 30 who worked there. The bulk of the 300+ employees are in California.


RE: No more BAILOUTS!
By MrBlastman on 12/11/2008 9:42:14 AM , Rating: 1
When these guys at Tesla get a clue that the Average American can not afford a 120,000+ car, nontheless a 60,000.00 car, then perhaps they will figure out they need to make a more marketable product.

Until then, they can take a hike. I admire their desire to make a sporty electric car - but seriously... to ask for money based on the fact that their high priced, energy saving car is not selling enough, is rediculous.

GM, Chrysler, Ford - far more at stake if they go under. Tesla? One less high-priced car company that very few people can afford to buy from. They need to go back to the drawing board.


RE: No more BAILOUTS!
By BBeltrami on 12/11/2008 10:43:09 AM , Rating: 3
Revisionist history mixed with angst toward "Bailouts".

A year ago Tesla was being lauded as visionary, providing a clearly green alternative while bringing an electric car to market that provided performance on par with fossil-fuel-powered vehicles.

Now, the economy is in tatters and it's Tesla who doesn't have a clue that they need to make a more marketable product? Really?

We both agree that there's far more at stake if the Big 3 go under. But nobody has given a crap for 20 years. Why the rush to care now? Buying Toyota, KIA, Lexus, Subaru, Honda, et al. IS buying American. This is all the fault of a handful of CEO's. Don't let anyone tell you different.


RE: No more BAILOUTS!
By Spuke on 12/11/2008 12:38:45 PM , Rating: 2
quote:
A year ago Tesla was being lauded as visionary, providing a clearly green alternative while bringing an electric car to market that provided performance on par with fossil-fuel-powered vehicles.
It wasn't even a year ago. LOL! The fact that people here have turned on them so quickly shows how much of a joke the average DT poster is. They don't even try to make their comments consistent. People here, literally, go where the wind blows.


RE: No more BAILOUTS!
By Raidin on 12/11/2008 12:53:57 PM , Rating: 2
Why do people always ignore the initial marketing period of new products?

Since when did the first PCs or LCDs or Plasma screens or anything really cost the same as they do now? How in God's name do you expect Tesla to market something we can afford right off the bat? Electric cars that function at the same level as gasoline cars are very expensive to develop and build because it hasn't been done on a large scale before. The industry as a whole is still in its infancy.

We need companies like Tesla to pioneer this market. If they can produce a sports car that's all electric with that kind of range, at a bargain price for sports cars of that calibur, then obviously it can be done. They are showing the industry that it's possible.

As they continue to pioneer and advance the development and manufacturing process, not to mention the invaluable customer base for feedback, other companies can get into this market without the huge investment in R&D required for new things.

I don't know what Tesla's reason for a new facility is, but if they can't get a loan just because of the state of the economy, then I think they are entitled to something.

Remember, we're talking a LOAN here. We're not giving away out tax money. I for one though, want to see Tesla flourish, so that the electric car industry continues to advance and get less expensive with each model made.


RE: No more BAILOUTS!
By Ringold on 12/11/2008 1:37:11 PM , Rating: 3
quote:
then I think they are entitled to something.


Oh, boy.

That somewhere in the preamble? Maybe one of the amendments, perhaps the 2nd? Hm, no. The 10th? Yeah, the 10th. Wait, no, that one attempts to reinforce limited government, nevermind..


RE: No more BAILOUTS!
By Raidin on 12/11/2008 4:12:09 PM , Rating: 2
A matter of opinion, not a matter of fact.


RE: No more BAILOUTS!
By Ringold on 12/11/2008 7:08:23 PM , Rating: 2
If we gave every company a loan because we feel bad about because after thousands of years the business cycle still exists then we'd be bankrupt as a nation by this time next week.

Entitlements corrupt and weaken society. It amounts to a subsidy, and this is no different than giving GSE's easy money, which lead to private profits and public risk, and home being cheaper and far easier to get than the free market equilibrium. That turned out fantastic.

How about we not blow tax payer money, confiscated from everybody, on people and businesses because we pity them? If you've got money and feel others are entitled to it, by all means, form a charity or donate to an existing one. If you write Tesla a check, I bet you they'll be happy to deposit it.


RE: No more BAILOUTS!
By Raidin on 12/12/2008 2:17:31 PM , Rating: 2
Someone completely missed the point.


RE: No more BAILOUTS!
By Spuke on 12/11/2008 1:50:24 PM , Rating: 2
quote:
How in God's name do you expect Tesla to market something we can afford right off the bat?
Why in "God's name" are you assuming that one of Tesla's goals is to make a product for the common man? Do you know what kind of capital it takes to make a car for the masses? Even a niche one like a sports car? Tesla is NO WHERE near making an affordable car for the masses and we don't even know if they're even planning on making one. If you want an affordable electric car, you'll have to wait until one of the established car makers does it. They have the money and facilities to get it done unlike a niche, startup car company like Tesla.


RE: No more BAILOUTS!
By Raidin on 12/11/2008 4:16:48 PM , Rating: 2
Everyone has to start somewhere. There's no assurance that they will ever market something like you suggest. The point is, they are producing one, regardless of market, and how well it does will affect what other manufacturers decide to do regarding when and if to enter the electric car market. You don't need a huge company to develop the technology, only to produce a product based on that technology in mass numbers.

If Tesla ever does plan on making something like that, they have to start as a niche market producer, because I doubt they have a choice. It's not like they can spend 10 years to develop something inexpensive, and somehow survive without a product. You gotta start somewhere!


RE: No more BAILOUTS!
By Totally on 12/11/2008 5:19:17 PM , Rating: 2
Phoenix motors is doing exactly what you are saying Tesla can't by producing affordable all-electric vehicle. They are playing it smart by trying to create a people's car instead of going for the big bucks. Tesla motors is trying to market itself as a luxury brand, I doubt an inexpensive product will roll out of their facilities.


RE: No more BAILOUTS!
By Spuke on 12/11/2008 5:44:15 PM , Rating: 2
quote:
You gotta start somewhere!
You are most correct!!! And I'll start with buying an electric car from an automaker that's been around the block not with some newbie startup company ALREADY asking for more money.


RE: No more BAILOUTS!
By Raidin on 12/12/2008 2:18:36 PM , Rating: 2
And which large automaker sells an electric-only car?


RE: No more BAILOUTS!
By Raidin on 12/11/2008 4:21:58 PM , Rating: 2
To add to that, I didn't make that assumption. I was only making the point that you can't judge Tesla for not making a cheap, mass-produced product, based on such an assumption, because regardless of whether they plan to or not, the point stands. You can't START with such a product, unless you have enough investment to R&D it. I doubt Tesla ever had that.


RE: No more BAILOUTS!
By gregpet on 12/11/2008 12:40:30 PM , Rating: 2
Why would anyone buy a $60k electric only 4-door family car with limited range when GM will be selling a $40k (not including the $7500 tax credit) electric car with unlimited range (with range extender). For the life of me I don't understand why anyone would buy a battery only car (unless it is a sports car for rich people). The batteries are not ready and there is no infrastructure to support away from home recharging.


RE: No more BAILOUTS!
By Spuke on 12/11/2008 1:51:56 PM , Rating: 2
quote:
The batteries are not ready and there is no infrastructure to support away from home recharging.
Because there are people here that think a car that's only used for commuting is financially responsible somehow. Probably the same people that bought a house they couldn't afford.


RE: No more BAILOUTS!
By foolsgambit11 on 12/11/2008 7:05:45 PM , Rating: 2
Well, obviously the Tesla Roadster isn't financially responsible. But an electric commuter car that costs the same as a regular commuter car isn't financially irresponsible, per se. And it should be financially responsible every time - if only we'd start taxing carbon emissions. And you'd have money left over to rent a gas car for long trips, if you needed one. That's my vision of the transition from fossil fuels.


RE: No more BAILOUTS!
By Raidin on 12/11/2008 4:25:30 PM , Rating: 2
The question is, why not?

If you can afford a $60K 4-door electric-only car, and you are the type of person who likes the idea of an all-electric car, why would you instead, go for a Volt?

And since when is range unlimited for any car? The Volt has a limited range like any car. Last I checked, infinite-capacity gas tanks don't exist.


RE: No more BAILOUTS!
By Spuke on 12/11/2008 5:53:10 PM , Rating: 2
quote:
The Volt has a limited range like any car. Last I checked, infinite-capacity gas tanks don't exist.
Volt has unlimited range because it's gas tank can be filled at one of the many hundreds of thousands of gas stations around the world . Last time I checked, there were NO electric car charging stations in my area. Oh that's right! It's takes HOURS to recharge an electric car too. Hope you never forget to plug yours in at night.


RE: No more BAILOUTS!
By foolsgambit11 on 12/11/2008 7:09:20 PM , Rating: 2
That's not unlimited range. After all, I've run out of gas before. And I could do it in a Volt, too. It is much less inconvenient to 'recharge' a gas car than an electric car right now, admittedly. But charging stations for electric cars are theoretically much more conveniently located. There are literally billions of electrical sockets around the world.


RE: No more BAILOUTS!
By Spuke on 12/12/2008 2:28:58 PM , Rating: 2
quote:
There are literally billions of electrical sockets around the world.
Yes and you can just plug in your car to ANY of those electrical sockets, anytime, anywhere. Oh wait, who's that guy waving the shotgun and screaming, "get off my property!" LOL! A gas car can fill up at ANY gas station around the world . I'll tell you what, we'll just settle this with a cross country cruise. You with the Tesla and me with a '76 Dodge van. First one to CA or FL wins!!


RE: No more BAILOUTS!
By Raidin on 12/12/2008 2:20:11 PM , Rating: 2
You need to go back and read the definition of 'unlimited'.


RE: No more BAILOUTS!
By Spuke on 12/12/2008 2:30:10 PM , Rating: 2
quote:
You need to go back and read the definition of 'unlimited'.
You need to go back a reread the definition of reality.


RE: No more BAILOUTS!
By Black69ta on 12/11/2008 5:03:35 PM , Rating: 2
So why should Intel make an 8 core Desktop CPU or Nvidia make a faster GPU? few programs are coded to take advantage of 4 much less 8 or 16 cores. Software follows hardware. The same is true of "green" infrastructure. why would a Gas station spend hundreds of thousands if not millions on Hydrogen, or Electric Quick chargers on the promise that someone "might" make a car that needs it within 10 years or even 5 or 2? they have bills to pay now not 2 years from now they have to immediately make profit to stay in business. That $100k Roadster with help fund cheaper cars. Just like the flat panel market it takes time to bring prices down but with out a company to market them to the early adopter they can never go mainstream. Tesla doesn't have a bad business plan just real bad luck. In a way much like a Midwestern farmer who just got hit by a Tornado. Oh and $60k for a Tesla Vs. $40k for a GM? many wouldn't buy the GM if it was $20k. Big Three have a bad rep and that is part of their problem.


RE: No more BAILOUTS!
By Spuke on 12/11/2008 5:54:34 PM , Rating: 2
quote:
That $100k Roadster with help fund cheaper cars.
Exactly how does it help fund cheaper cars?


RE: No more BAILOUTS!
By foolsgambit11 on 12/11/2008 7:11:32 PM , Rating: 2
Well, it helps to fund the 'upcoming' $60,000 Tesla sedan. That's cheaper.


RE: No more BAILOUTS!
By Spuke on 12/12/2008 2:33:53 PM , Rating: 2
quote:
Well, it helps to fund the 'upcoming' $60,000 Tesla sedan. That's cheaper.
If I have $60k to spend on just one car, it sure as hell isn't going to be anything new (depreciation) and it sure as hell isn't going to be on something that only works for one purpose (commuting or grocery shopping). I'll let those with huge disposable incomes (where a little imprudence here or there doesn't matter) take care of that.


RE: No more BAILOUTS!
By Hieyeck on 12/11/2008 9:42:50 AM , Rating: 1
While I agree with the overall gist of your post, I disagree with bailing out Tesla - at least until they apply their technology and make an affordable EV that can be used as a daily driver.


RE: No more BAILOUTS!
By bdot on 12/11/2008 9:55:13 AM , Rating: 2
What are you disagreeing with?

He never said he agreed to bailing out Tesla, in fact it says he is sick of companies asking for bailouts and that the public may be more receptive as they are an EV manufacturer.

I personally think this has even less grounds then the big 3. Producing only over priced vehicles puts them even more out of sync with market demand. Not to mention their intended market in general are not people who are feeling the hurt right now.


RE: No more BAILOUTS!
By bdot on 12/11/2008 9:55:14 AM , Rating: 1
What are you disagreeing with?

He never said he agreed to bailing out Tesla, in fact it says he is sick of companies asking for bailouts and that the public may be more receptive as they are an EV manufacturer.

I personally think this has even less grounds then the big 3. Producing only over priced vehicles puts them even more out of sync with market demand. Not to mention their intended market in general are not people who are feeling the hurt right now.


RE: No more BAILOUTS!
By FITCamaro on 12/11/2008 9:46:23 AM , Rating: 2
I already said it. If an electric car company asks for a bailout loan, they'll likely get it with little to no having to explain how they plan to use it.


RE: No more BAILOUTS!
By clovell on 12/11/2008 11:32:33 AM , Rating: 2
On top of the tax credits. Should we call those a bailout?

All else aside, this 'bailout' business is getting out of hand. It's slowing convincing me that we should just let em hang...


RE: No more BAILOUTS!
By mmntech on 12/11/2008 9:48:56 AM , Rating: 2
There's no way Tesla Motors should get taxpayer dollars. They're a company that only produces luxury vehicles that will only be niche products at best. There is no market for that kind of stuff. Are we going to start bailing out every failed business now, because half of startups fail in the first year. While we're at it, why don't we bail out John DeLorean too.

This is the point where it crosses the line from economic stimulus to the government micromanaging the economy. We might as well just declare ourselves socialist now if this goes through. Probably won't though.


RE: No more BAILOUTS!
By FITCamaro on 12/11/2008 10:41:59 AM , Rating: 1
It was the government trying to manage the economy the day the first dollar was spent on these bailouts. Actually before that when the Community Reinvestment Act was signed.


RE: No more BAILOUTS!
By foolsgambit11 on 12/11/2008 7:26:13 PM , Rating: 2
Actually before that. Alexander Hamilton was big on government management of the economy.


RE: No more BAILOUTS!
By napalmjack on 12/11/2008 11:29:54 AM , Rating: 2
quote:
While we're at it, why don't we bail out John DeLorean too.


Talk about beating a dead horse...


RE: No more BAILOUTS!
By heulenwolf on 12/11/2008 11:50:58 AM , Rating: 2
Lets compare and contrast:
A) $700 x10^ 9 in new money to the financial industry because they've miss-managed their finances.
B) $25 x10^ 9 in new money to the big 3 American car companies because they haven't kept up with the times and competition.
C) $350 x10^ 6 in existing money, already budgeted for green vehicle R&D, to help bring a whole new technology to production and onto American roads.

Hmm, one of these things is not like the others...


RE: No more BAILOUTS!
By Spuke on 12/11/2008 1:13:40 PM , Rating: 2
quote:
C) $350 x10^ 6 in existing money, already budgeted for green vehicle R&D, to help bring a whole new technology to production and onto American roads.
They're all exactly the same as the all give money to failed companies! If the market deemed that Tesla should survive, luxury marque or not, then their customers would've have kept buying their vehicles. Besides, new vehicle manufacturers don't usually do well in a good market.


RE: No more BAILOUTS!
By aGreenAgent on 12/11/2008 2:03:03 PM , Rating: 2
You're misunderstanding the issue. The problem is that Tesla is selling vehicles faster than they can make them. They want to produce more, but can't secure the funds to make more.

I've never considered a company that sells more than they can make to be a failed company...


RE: No more BAILOUTS!
By Spuke on 12/11/2008 2:47:21 PM , Rating: 2
quote:
They want to produce more, but can't secure the funds to make more.
If they can't get the money then they can't build more cars. Simple as that. I don't want to pay for some rich guys weekend play toy.


RE: No more BAILOUTS!
By aGreenAgent on 12/11/2008 2:59:07 PM , Rating: 2
I can't argue with that, but I think you're simplifying it.

The DOE has a big bunch of cash to help alternative energy vehicles get made, along with the research required to get to that point. It may be a rich guy play toy right now, but the research required to make it could lead to battery breakthroughs or something along the lines.

Also, you've already paid for it.


RE: No more BAILOUTS!
By Spuke on 12/11/2008 5:59:04 PM , Rating: 2
quote:
Also, you've already paid for it.
I know. :(


The only bailout was to the Banking industry
By Beenthere on 12/11/08, Rating: 0
RE: The only bailout was to the Banking industry
By Bateluer on 12/11/2008 10:50:32 AM , Rating: 2
Odd, when the Big Three first went to Congress to beg for money, they just wanted the money with no strings attached, for them to do with as they please. Which would have been simply business as usual. They would have continued to bleed money because they wouldn't have addressed their fundamental problem, that people are not buying their cars. The odds that they'll be able to repair these loans are slim to nil. Look at their leadership right now, they don't have what it takes to clean house and virtually gut the crud from their companies to make them profitable. They don't have a Lee Iacocca this time around.

Had they filed for Chapter 11, like a nonprofitable business is supposed to, they could have restructured without leeching of the tax payers.


RE: The only bailout was to the Banking industry
By Dreifort on 12/11/2008 11:22:01 AM , Rating: 2
they got the money with no strings attached as of last evening.

sure you and I can say..it is a "loan". but congress has no drawn out plan and neither do the auto companies.

even commandant Pelosi has said she "will not let the auto industry fail".

even if it were say, a real loan -- why would Google & former PayPal owners need a loan to keep their car company in business? Can they not take a "loan" from their own financial fortunes?


RE: The only bailout was to the Banking industry
By clovell on 12/11/2008 11:43:00 AM , Rating: 2
As I understand it, the bill still has to pass in the Senate.

I know we're all sick of this stuff, but let's not fuel the fire by being glib - none of these CEOs' personal fortunes can finance this bailout.


By Dreifort on 12/11/2008 1:30:05 PM , Rating: 2
i was talking about Telsa needing a "bailout".

The major and majority stockholders in Tesla are silicon valley billionaires...

Are you saying that Sergey Bin or Elon Musk...or even Jeff Skoll can't afford to "loan" Telsa (their own company as being large shareholders) a few 100 million to keep them going?


RE: The only bailout was to the Banking industry
By Beenthere on 12/11/2008 11:55:46 AM , Rating: 2
Actually there are many "strings attached". If you want to read the House Bill, it's online. In addition they haven't got anything unless the Senate approves the bill, which is uncertain because the A-Holes in Congress couldn't buy a clue with all of Bill Gates money. The FOOLS just got the memo that the U.S. economy has been in a recession for 12 months and that we have lost 1.9 million jobs. The FOOLS have no more clue about the economy than they do about the Detroit auto makers. Most Americans can't be bothered getting the facts and instead get duped by the media sound bites.

Key points of bailout legislation for the Detroit-based U.S. automobile manufacturers:

Loans

$14 billion in low-interest loans made available to General Motors Corp., Chrysler LLC and Ford Motor Co. GM and Chrysler are expected to apply for loans. Ford says it will not.

Restructuring plans

Companies receiving taxpayer assistance must develop plans by March 31, 2009 to restructure their businesses into viable enterprises. Failure to do so would require repayment of the loans within 30 days.

Car "czar"

President Bush will name a so-called car czar to facilitate negotiations among stakeholders such as the companies, the United Auto Workers Union, creditors, retirees, suppliers and automobile dealers to develop long-term plan for viability.

Taxpayer protections

Taxpayers would be first in line to be paid back — ahead of other creditors. The United States government would have the right to purchase non-voting shares in the companies.

Source: Associated Press


By Spuke on 12/11/2008 1:16:39 PM , Rating: 2
This is actually correct. Why did this get a one?


RE: The only bailout was to the Banking industry
By Dreifort on 12/11/2008 1:39:13 PM , Rating: 2
You give GM 4 billion.

They can't pay you back if their company goes under. Even if they don't go under and are barely hanging by a thread...how are they going to pay the money back?

What if congress doesn't like their "resturcturing" plan. March '09?? That gives them 4 months to spend money and then say "oops...didn't work, need more".

How can you collect money from a company that is losing money? oh...you take over the company...so then GM would be gov't owned and taxpayers would STILL be owed money. How do you get that money back? If GM cars are not selling - where will the money come from to pay taxpayers back?

You can call it strings...and you can even call it a loan -- if it makes you feel better.


RE: The only bailout was to the Banking industry
By Spuke on 12/11/2008 1:55:08 PM , Rating: 2
quote:
You can call it strings...and you can even call it a loan -- if it makes you feel better.
There's nothing feel good about it. It IS a loan and they are REQUIRED to pay it back. Whether YOU feel good about it or not is up to you to decide. Write your Congressman and make sure he knows that you disagree. It does make a difference.


RE: The only bailout was to the Banking industry
By Dreifort on 12/11/2008 2:36:48 PM , Rating: 2
It made Pelosi & Reid feel better.

And if the company NEVER makes money fron now until they go under - how is it a loan that BENEFITS the taxpayer?


RE: The only bailout was to the Banking industry
By Spuke on 12/11/2008 2:50:11 PM , Rating: 2
quote:
And if the company NEVER makes money fron now until they go under - how is it a loan that BENEFITS the taxpayer?
If, when, why, how. Whatever! A loan is a loan. All of those mortgages that people are failing on are STILL loans. Whether or not they paid them back doesn't change the definition of loan.


RE: The only bailout was to the Banking industry
By Dreifort on 12/11/2008 3:00:28 PM , Rating: 2
Theoretically it's not a loan. The auto companies didn't put in money down and have nothing for collateral.

Even those given loans the 90s, 00s that couldn't afford homes at least put SOME sort of down payment.

That's a loan. Even if those with the loans in the 90s & 00s couldn't pay their loan, their house was foreclosed and the house still had value - even if it was lower than the loan amount.

The car companies will have no value if they default on a loan. They have more liabilities than assets. They have zero collateral and paid zero down for this so called "loan". Congress wants you to believe it's a loan - but not in banking terms. It's a post-condition loan which doesn't exist...until now.


By Spuke on 12/11/2008 6:27:42 PM , Rating: 2
quote:
Even those given loans the 90s, 00s that couldn't afford homes at least put SOME sort of down payment.
So if I buy a house with no money down, it's not a loan? LOL! So I guess all of those people that got mortgages with no money down (there are many) technically don't have loans either.


By foolsgambit11 on 12/11/2008 7:31:33 PM , Rating: 2
Um. They have no collateral? Luckily, the government can put themselves at the front of the line for payback, turning all of the companies' assets (even those currently leveraged) into collateral. Even if the companies go under, the plants, investments, properties, &c. are still worth something - even if it was lower than the loan amount (it isn't).


By k20boy on 12/11/2008 1:02:06 PM , Rating: 2
The whole issue with Chapter 11 is to allow restructuring. This is not possible in our current economic climate because of the huge loss of liquidity and capital available due to a major failure of the worldwide financial system. It is becoming less and less likely that companies will emerge from bankruptcy protection in one piece because they simply can't get the funds they need to restructure and settle their debts with creditors. This issue is further compounded by the fact that cars are bought mainly with credit and a faith system in a manufacturer. How many of you would be willing to buy a car from a company that might not be around in the future and whose cars have worthless warranties and are unserviceable? It's bad PR on top of an already nightmarish problem. I realize what's at stake: our free market ideology and that is very important. However, we must not use Laissez-faire economics on this one. Two many industries were effected by the financial system by no fault of their own (although obviously the reaction time of the US automakers to trends is awful, this was not what caused their short-term liquidity crisis or impending downfall). Just my two cents. Everyone on both sides (left and right) needs to be more open-minded and maybe drop the ideology for a second and fix the problem.


RE: The only bailout was to the Banking industry
By BansheeX on 12/11/2008 12:23:05 PM , Rating: 3
These companies were posting losses at the height of the phony boom, their legacy costs to union employees are unbelievable compared to the Japanese makers and will cause them to be right back at the trough less than ten years from now. Everybody with a brain knows that, and that's why it isn't a loan. The whole reason the Big 3 are going to government is BECAUSE no private entity wants to voluntarily loan them capital. The government has no money it earned for itself, it by nature is funded from forced appropriations. Besides taxes, they currently have the (illegal) capacity to siphon value from existing dollars into newly created ones, thereby redistributing wealth anywhere they please, even from responsible entities to non-viable ones. They don't have to raise taxes and elicit the resistance of that obvious appropriation, they can just make new money in a back room and exclude the results from the CPI (homes, food, and energy are excluded and manufactured goods are discounted with assumed quality increases using subjective adjustments introduced in 1995). The whole reason the gold standard worked was because it neutered political desires to do this crap. If you want to steal from responsible people and destroy good businesses to entrench bad management and union contracts, you are going to delay a REAL recovery by decades. This is how the soviets tried to solve bankruptcy, it's a shot of heroine for short-term speculators on wall street, but it doesn't produce sustainable economic growth.

And to sit here and blame the symptoms of inflation for the problem rather than inflation itself and bad management is totally inept. It proves how easily politicians can understate their excesses with bogus official calculations and shift blame to the market, who were only drinking from the punch that the Fed spiked.


By Ringold on 12/11/2008 1:57:29 PM , Rating: 2
Agreed. Beenthere's "FACTS" I believe have to be checked by his UAW overlords prior to posting.

This idea they were at a "PROFIT" (which is greater than a 'profit', lowercase?) prior to the recession almost makes me giggle.

Here is GM's income statements. Check 2007, the last full year available and a year when the economy was still booming (except for December).

http://www.quote.com/us/stocks/financials.action?s...

And compare to Toyota's (which also has 08 through March, but we can stick to 2007 for apples-apples)

http://www.quote.com/us/stocks/financials.action?s...

They sold, according to Beenthere's own links in another article, roughly the same number of cars. GM did it while posting a massive loss. Toyota did it while posting a decent profit. Checking the balance sheet, looks like GM has net value (assets - liabilities) of -60b.. Toyota? About 12b.

Quite a wonderful "profit" indeed.


RE: The only bailout was to the Banking industry
By FITCamaro on 12/11/2008 1:04:51 PM , Rating: 2
Our economy did not fall because of expensive gas. It fell because a) people bought houses they could not afford on the premise that interest rates would stay low and b) our government forced lenders to give out said loans to those who could not afford them in an effort to increase home ownership amongst the poor (so they could look like heroes and get elected).

Expensive gas was just one of many things that tipped the scales.


By Dreifort on 12/11/2008 1:34:26 PM , Rating: 2
but you're wrong FIT...according to the mainstream media - it was president Bush's fault.

Am I not supposed to believe news when it is being shown as news on tv?

But I do feel really bad that I took the high ground and didnt get a loan for a house right out of college. I took the high road and make myself save money and took efforts to improve my credit score...1st by paying off my credit cards before worrying about buying a house. I guess I got special treatment when amazingly, some places actually offered me the opportunity to 'rent' a place to live.


RE: The only bailout was to the Banking industry
By callmeroy on 12/11/2008 2:11:08 PM , Rating: 2
I agree with FIT but he did leave out reason number 3 erm um rather "C" -- which was also Wallstreet's greedy behinds buying and selling loans from said horrid mortgage market, thus furthering encouraging thieves...oh sorry I meant "BANKs" to continue making said crap loans..


By Dreifort on 12/11/2008 2:40:20 PM , Rating: 2
You know what some of the banks did with the 'free of strings' bailout money? did they invest it back into the American economy, thus benefiting consumers? no.

They bought a bank in China...

I sound like that stupid etrade commercial. "Hong Kong..that's in China"


RE: The only bailout was to the Banking industry
By Beenthere on 12/11/08, Rating: 0
RE: The only bailout was to the Banking industry
By Dreifort on 12/11/2008 3:09:10 PM , Rating: 2
if these same vendors supply other car companies... how are some of these other car companies able to sell their cars cheaper than the big 3? and how does a BMW charge more than the big 3 ... if they all use the same vendors?

Is a BMW chasis worth $20k more than a Chevy Malibu chasis?...even if the Malibu can beat the BMW in road tests?

If GM is charging more than some other companies, where is that extra money going? Leer jets? Corporate high rise buildings?


By Reclaimer77 on 12/11/2008 4:43:50 PM , Rating: 2
quote:
Is a BMW chasis worth $20k more than a Chevy Malibu chasis?


Yup.

quote:
.even if the Malibu can beat the BMW in road tests?


Never has, never will.


This is an all electric car
By xxsk8er101xx on 12/11/2008 12:01:14 PM , Rating: 2
It uses zero gas.

The reason why they go for luxury cars first is because they don't have an assembly plant. All the cars are hand made. That means only the rich can afford it right now.

If they can have an assembly plant they can produce cheaper luxury cars. Yes still luxury but they will be able to enhance the technology and produce consumer cars.

This is just how technology works people. It always gears for businesses or the rich first and then as the technology gets cheaper it's ready for mainstream so people can buy.

Again this is an all electric car and uses no gas.

We should be spending billions on this technology!!!!!




RE: This is an all electric car
By gregpet on 12/11/2008 12:48:21 PM , Rating: 2
Who gives a crap if it uses a little gas. Buy a Volt for $32,000 (with tax credit) and use no gas during your daily commute and if you want to take a longer trip you burn a couple of gallons of gas (he Volt is estimated to get about 100 MPG). We will always burn some form of fuel (no electric airplanes on the horizon!). We should just try to use as little as possible. $60,000 for an all electric battery onlt electric car is a failed concept until the battery technology gets better. The Volt and other gas/electric hybrids will be the bridge to an battery only car LATER when batteries are better. Don't give Tesla a dime.


RE: This is an all electric car
By Bateluer on 12/11/2008 5:01:01 PM , Rating: 2
I want to comment on this post as well. We should be spending R&D efforts into all electric vehicle technology. FACT: Fossil fuels are a finite resource. Exactly how finite they are is up for debate, but they are finite. EVs can draw their energy from the grid, which can be supplied by any form of electrical generation, whether it be coal, natural gas, hydro, solar, nuclear, tidal, or something else. EVs will only get cleaner while gasoline powered cars will pollute more and more while the fuel to run them becomes steadily more expensive.

Automakers, whether they be US, Japanese, Korean, European, or somewhere else, should be spending their efforts into R&D for all electric vehicles.

Saying that they don't work right now because the battery technology isn't there doesn't hold any water on several levels. If nobody produces 'primitive' EVs, then nobody can buy them. If nobody buys them, then the auto makers will state there is no demand. Same argument that GM used for their recall of the EV1, despite its customers wanting to keep the cars.

If there's no effort going into battery R&D, then the technology won't improve at the levels we want.

And lastly, ironically, existing battery technology will easily provide the needs of 95% of the US population. The people who drive more than 40 miles a day are the minority. And most likely, if you need to drive more than that, you could simply rent a U-haul truck.


By foolsgambit11 on 12/11/2008 7:44:27 PM , Rating: 3
Fossil fuels may be a finite resource, but complex hydrocarbons are not. It is a (currently) non-trivial exercise to create gasoline equivalents in an economical manner, but it can be done.

Just thought I'd throw that out there. I support R&D into green technology and infrastructure. But not because we are going to run out of gas. In a pinch, we can make gas from coal, like the Nazis did when their gas supplies were lost in WWII.


RE: This is an all electric car
By Screwballl on 12/12/2008 4:55:38 PM , Rating: 3
so we should only give money when it is for a company that is building electric or hybrid cars under X amount of dollars that YOU can afford?

Tell me, does Intel release the Celeron cheap processors or Extreme high dollar CPUs first? So are the Extremes useless to you because you cannot afford them so therefore Intel should not even bother making or releasing them?

Wow love the Socialistic tendencies there Obama!


RE: This is an all electric car
By FITCamaro on 12/11/2008 1:11:17 PM , Rating: 2
"We" should not be spending billions. I do not want one. Why should my money be spent so that others can have $100,000 electric cars? Those who want to invest in this technology on the hopes it succeeds should be spending billions. Not the American public.

Same with the automotive companies. I like American cars. They're all I've ever owned and all I hope to ever own. But I don't think my money or anyone elses money should be used to essentially make sure the UAW will maintain its stranglehold on the industry. Which is what the Democrats are going for because the union voting base supports them (which is retarded since the same politicians want them out of business as they further their environmental agenda).

Then there's the banks. Yes the government forced them to give out the loans. But why reward risky behavior? All we're doing is saying "Hey. You f*cked up. Here's some cash so you don't have to learn your lesson.".

Finally, nowhere in the Constitution does it allow the government to give money to private companies to prevent them from having to declare bankruptcy or go out of business. And as others have pointed out, anything that the Constitution does not indicate the government is allowed to do, they are not allowed to do it. If they want to, they are supposed to have to have an amendment. But hey who cares about a silly piece of paper right?


RE: This is an all electric car
By Spuke on 12/11/2008 1:36:53 PM , Rating: 2
You COULD say that by bailing these companies out that the government is promoting the general welfare of Americans.


RE: This is an all electric car
By foolsgambit11 on 12/11/2008 7:57:56 PM , Rating: 2
No, no, no. Not the general welfare of Americans. The general welfare of the United States. It could be argued that the welfare of the country and the welfare of its people are not exactly the same thing.

Although it all does bring up the ineffectiveness of the 10th Amendment when pitted against the 'Necessary and Proper' provision. I think the conscience can best be assuaged by rationalizing away the 10th Amendment. If the government is "of the people, by the people, and for the people", then any rights reserved to the people would also be rights of the government, right? Then we argue that states only have the powers expressly designated them by either the U.S. Constitution or their own citizens. So the rights that are reserved for the states includes precious little.


RE: This is an all electric car
By Spuke on 12/12/2008 2:37:56 PM , Rating: 2
quote:
The general welfare of the United States.
That's what I really meant but thanks for the correction and the information.


My Toaster.
By Reclaimer77 on 12/11/2008 4:52:11 PM , Rating: 2
Reclaimer here speaking about my new Totally Turbo Toaster !

It will use 1/2 the electricity of a standard toaster. Comes in a high gloss black or white finish to match your kitchen appliances, and has a revolutionary self cleaning Turbo Crumb Eradicator mode ! First of its kind !!!

All for only $15,000 USD !!!

Now where, you ask, may you purchase such a revolutionary item .......?

NOWHERE ! I need a few million from the government first so I can hire a team to perfect my prototype. And to build a factory for Turbo Toaster of course. And maybe a few million more to hire workers etc etc.

But hey, you guys work that out. The important thing is, this toaster DOES use less power. And if more people dropped 10-15 grand for TTT (tm), we could help save the planet !




RE: My Toaster.
By Raidin on 12/11/2008 5:19:32 PM , Rating: 2
You realize you made no sense, right?

A better analogy would be the convection oven.


Where are your friends now?
By Suntan on 12/11/2008 11:49:33 AM , Rating: 3
Come on. Can’t get your buddies George Cluny or Barbra Streisand to loan you that? It’s a drop in the bucket for them.

Or do they only care to put money forward when it is something that they will get instant publicity for, or get to have a flashy eco-status-symbol to drive around Beverly Hills? Not too flashy to buy into a factory that would build cars for “the common man.”

-Suntan




Bailouts for luxury car makers?
By BansheeX on 12/11/2008 9:46:09 AM , Rating: 2
Not only should nobody get bailed out, but if you were going to steal money and throw it at somebody, why a company that makes luxury cars? Why not Aptera motors for making a 300mpg $30k product?




bailout for the rich? ha
By Dreifort on 12/11/2008 9:52:21 AM , Rating: 2
does Brin & Page still own Tesla? and didn't the paypal entrepenuers originally own Tesla? Those guys made it rich when eBay bought PayPal.

wow...can't they bail themselves out?




By Screwballl on 12/11/2008 9:56:01 AM , Rating: 2
Watch this, there is a key point where he says:
"We have no need for government funding... if they do ask, it will only be used for accelerating the advent to the mass market"

http://video.forbes.com/fvn/economy/km_auto1200908




By Ordr on 12/11/2008 10:09:10 AM , Rating: 2
Especially with the whole environmentalist fad going on.




Lining up for DOE money ?.
By fteoath64 on 12/11/2008 11:57:28 AM , Rating: 2
After the Big Three seeking bailout, every other company that has anything automotive wants to line up. Yes, Tesla can line up, does not mean they will get it.

In fact, DOE can give based on conditions like :
- Tesla needs to commit to releasing a car costing under $40K in 5 years.
- They need to sell at least 10K of such cars.
- Need to create X number is US based jobs within the next 3 years. {Hey they are supposed to be growing, and your servers and software cannot make cars}
- etc etc.




No. Let them wait 2 years.
By callmeroy on 12/11/2008 2:07:56 PM , Rating: 2
if the only impact would be if they didn't get the money is they'd just wait 2 years i say let them wait 2 years. There are misunderstandings in these threads that need pointing out...the energy fund money to producer greener cars was for the big three to develope technology to make greener consumer cars sooner rather than later...not to produce ANY "green" car that only rich could afford (ie a six figure roadster)...ie. the criteria isn't JUST if the car is considered "green" or not.

Secondly folks keep bring up it just a LOAN.....well what happens if they default on the loan that's JUST a loan -- its not guaranteed a loan (even to a large company) will be paid back. So stop saying about the bailouts "folks its a LOAN...not a hand out..." -- as if there is zero risk involved.

Finally....even with a loan you are still taking money from one pot to fill another pot. The problem is the "pot" we NEED to keep the most money in should be used for more critical purposes right now than just helping someone produce a 100k electric roadster.

If the economy was soaring -- i'd say sure lend them the money, but its not.

And also..i'm still consistent on my view of the roadster...back when i first read about it i said "wow that's awesome"....today I still say "wow that's awesome"...but its not --- take more money away from the government that is struggling to right a nation in financial crisis awesome....priorities folks...priorities.




I SUPPORT THIS
By Screwballl on 12/12/2008 4:40:51 PM , Rating: 2
1) Other than the Chevy Volt which may end up a Toyota or Ford or Tesla Volt or whatever, this is one of the few manufacturers that are actually making a product that is street legal and has already gone through the federal red tape to get their cars on the road. See more on #3 about GM and the Volt.

2) Does Intel release its $80 Celeron before it releases its $1000 Extreme? No The Extreme come first and as the technology becomes cheaper and they can cut back a few things, the cheaper models follow. Same will happen with Tesla, they already have a plan for a cheaper vehicle that not a "rich mans" car but an "upper class" person's car... and if they do get the funding that means they can sell more and invest in a 3rd plant for a cheaper (MSRP $20,000) basic model car.

3) This is NOT a bailout, the money has already been set aside for purposes such as this ("green" vehicles). Regardless if it is for Tesla or GM, I think if they have a viable vehicle and plan then they should be allowed a piece of the pie. Also with the Volt, I think GM should be able to try to get some of this pie as well to continue the Volt testing/building and post-production support.




What an ugly car!...
By on 12/11/08, Rating: -1
"Let's face it, we're not changing the world. We're building a product that helps people buy more crap - and watch porn." -- Seagate CEO Bill Watkins














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