MSNBC - Ford Is Not In As Dire Straits As GM and Chrystler - Just Let GM Fail?

[Median Democrat]

I still don't understand why everyone is insisting on treating the Big Three automakers the same. They are competitors! They make different cars! Why must we bail all of them out? Based on the testimony, GM is not exactly offering much in terms of a plan for viability while Ford is saying that it does not necessarily need the money to survive. I say we give Ford the insurance policy, and let GM fail, since GM's proposed bailout still entails massive layoffs with no real plan for viability. GM seems like a poor investment of taxpayer dollars, since it looks like GM will go under in any event. We are just delaying the inevitable as to GM.

http://www.msnbc.msn.com/id/28047498/

/snip

Ford CEO Alan Mulally said in his prepared remarks that while his company isn’t in as desperate straits as rivals GM and Chrysler, his company could still use a federal guarantee of some $9 billion “as a critical backstop.”

/snip

[Sub Atomic]

1. I hope you have your teflon suit on.

:popcorn:

[Median Democrat]

2. Bring It On! Wish Someone Would Explain Why Its All Or Nothing.

For example, GM's executives have been outspoken in their criticism of environmental concerns. Lets see a DUer defend Bob Lutz's remarks:

http://www.reuters.com/article/environmentNews/idUSN2237297620080222

/snip

DETROIT (Reuters) - General Motors Corp Vice Chairman Bob Lutz has defended remarks he made dismissing global warming as a "total crock of s---," saying his views had no bearing on GM's commitment to build environmentally friendly vehicles.

Lutz, GM's outspoken product development chief, has been under fire from Internet bloggers since last month when he was quoted as making the remark to reporters in Texas.

In a posting on his GM blog on Thursday, Lutz said those "spewing virtual vitriol" at him for minimizing the threat of climate change were "missing the big picture."

"What they should be doing in earnest is forming opinions, not about me but about GM and what this company is doing that is ... hugely beneficial to the causes they so enthusiastically claim to support," he said in a posting titled, "Talk About a Crock."

GM, the largest U.S. automaker by sales and market share, has been trying to change its image after taking years of heat for relying too much on sales of large sport-utility vehicles like the Hummer and not moving faster on fuel-saving hybrid technology.

/snip

My point is that the testimony being given by the Big Three executives clearly shows that the Big Three are not the same. So, why are we treating them the same? Why not help those auto makers who actually have the best chance to survive and thrive, rather than extending taxpayer dollars to automakers (GM) that appear to be well on their path to failure. GM has been seriously mismanaged. Let it fail, because it is going to do so eventually. Put the taxpayer money into a company like Ford that is saying that it is in a stronger position, and that it merely needs the loan as insurance.

[Bozita]

13. Bob Lutz is to the Big 3 what Rush Limbaugh is to rational political discourse.

[RB TexLa]

3. It think it's clear, just wipe our hands of GM. They can try the bankruptcy route or sell off their

North American operations. If they are willing to sell, I say the government provide some assistance to buyers. They can become a company focused on parts of the world where they are competitive.

[Johonny]

29. You can probably make 2-3 viable companies out of GM

So I'm not sure why we shouldn't bust it up

[BeatleBoot]

4. Isn't it amazing that ALL of the competitors are in FAVOR of the LOANS

you know why?

Because if one company goes down, its going to take down thousands of suppliers.

And the competitors of the company that goes down use those suppliers, too.

And those competitors will fall faster when their supply base is DOA.

It's a symbiotic relationship.

And, by the way, its a loan - not a bailout.

[Median Democrat]

6. If That's The Case, Then Just Compel A Merger Of GM Into Ford...

If their is a symbiotic relationship, as you describe, then merge GM out of existence, so that you can get rid of GM's crappy management. Or, let GM go BK, then loan money to Ford or Chrystler to purchase GM's assets.

[dysfunctional press]

20. if those suppliers still sell to Ford, Chrysler and the domestic foriegn-carmakers-

why would the loss of gm cause them to go out of business...? :shrug:

[BeatleBoot]

22. Sales Mix

A ton of suppliers have their largest contracts with one of the OEMs, with much smaller contracts with the others.

If they lose their biggest line of business, bye-bye. And guess what? Those smaller contracts go bye-bye, too. Which is what the other OEM's are concerned with.

And those smaller contracts aren't easliy transferrable to other auto suppliers since alot of the product is niche (wood trimplates, plastic trimplates etc).

[DJ13]

5. If GM fails they will take down Ford with them

They both use many of the same suppliers, should GM fail those suppliers fail, then it wont matter if Ford claims they are okay because they wont be able to build cars without those suppliers.

Also, Senator Shelby wrongly assumes his own in state foreign automakers wont be effected, they too use many of the same suppliers as GM, so they wont be making cars either.

[BeatleBoot]

7. Exactly.

Great post.

[Median Democrat]

10. Cool, Government Subsidized Hummers. Yay!

[BeatleBoot]

15. The government is proposing stricter standards

in the terms of the loan which would probably make manufacturing a hummer no longer affordable.

Again, one company falls, you are looking at 2 to 3 million people out of work within 60 to 90 days.

Across all industries including Silicon Valley.

I don't think President Obama would want to walk into that.

[Median Democrat]

8. Then Merge GM Out Of Existence...

...and have Ford or Chrystler take over GM's viable product lines like the Chevy Malibu. Thus, the suppliers are spared.

According to your logic, the idea that the Big Three are separate companies is largely a fiction. So, why not wipe out GM's management by merging it into Ford. GM is proposing to layoff workers in any event. So, isn't it better to take GM's profitable brands and transfer them to the Ford or Chrystler?

I think it is a false assumption that you have to save all three as stand alone companies. The only thing that saving the Big Three really preserves is saving GM's management.

[DJ13]

12. Why do you hate the unions?

They are supposed to be allies of our party, not the enemy.

And no, hating on GM for past dumb statements by the CEO is not something that can be separated out in this crisis because the risks to our economy are too great.

The union IS General Motors.

And they represent our last manufacturing base left in this country, so we cannot throw them out just to get even with Wagner for a stupid statement about the sacred cow called Global Warming.

[Median Democrat]

17. Wrong - Ford Is Unionized. Try Again.

I did not say squat about unions. You are bringing up unions. Also, you wrongly assume that Ford is not unionized. It is. GM is in worse shape than Ford, and its because of management. Explain how a loan or bailout will cause GM to suddenly become profitable when their presentation sucks relative to Ford? Does GM have a hybrid hummer on board?

Again, I am favor of a bailout to just 1 or 2 of the companies. Not all three, since I recognize that they are not the same.

[BeatleBoot]

18. I don't even know what you are talking about anymore

Because no where in the post did the poster "assume Ford wasn't unionized"

I think everyone knows the sun rises in the east and sets in the west and that the Big 3 has organized labor.

It's evident that some have never worked in the industry and their prejudice of GM has clouded their decision making process. They have arrived at a conclusion and are back-filling their reasoning to fit that prejudice.

I worked (for more than a decade) for an auto supplier that went Chapter 11 and eventually Chapter 7. It has totally devastated towns and working families (including my own)across America and even Canada. So if we have a chance to prevent that and it is still decided to not allow the loans, then God help us all - our country really IS that stupid.

I had thought otherwise.

[Median Democrat]

25. DJ13 Was Saying I Hate Unions Because I Am Pro-Ford and Anti-GM

I was pointing out to DJ13 that just because I Am Pro-Ford and Anti-GM does not mean that I am anti-union, since as you note, the Big Three is unioned. So, being Pro-Ford and Anti-GM does not mean I hate unions.

<>

[JVS]

31. What a pathetic post.

Unions really shouldn't be so dependent on a single company.

[Kalyke]

14. Sen. Shelby is about as dumb as a box of rocks.

If he causes tons of Alabaman foreign car workers to lose their jobs as a result of his allowing GM to collapse, then HE should lose him job next time he's up for re-election.

That's one way to turn a red state blue.

[BeatleBoot]

16. I think Sen Shelby is actually jealous

of the Auto Industry's standard of living.

[burythehatchet]

19. Y'know, isn't the great market supposed to seal those gaps in supply?

What, suppliers can't themselves adapt? I find that a silly argument.

[BeatleBoot]

21. Capital Requirements to Adapt

Do you understand how capital-intensive the auto industry is?

To "adapt" for an auto supplier means investing millions of dollars - up front. Revenue is generated when product moves, so the payback is years down the road.

"Adapting" is not as easy in the auto industry as it is in others.

And with the current credit crunch which banks are going to loan money to suppliers in ordet r to adapt.

[Median Democrat]

27. Can You Link To An Article That Explains Why All Three Need To Be Saved...

I see many articles that assume this is the case, but no article that explains why ALL THREE must be saved. Why not let GM fail, and loan money to Ford or Chrystler to purchase the viable product lines? Afterall, GM itself is proposing to layoff thousands of blue collar workers. Why stop there? Lets layoff GM's management through a merger of the weak GM into the stronger Ford, since you are arguing that the Big Three is a fiction, and the auto industry is so interrelated.

[BeatleBoot]

30. I don't need to point to an article

I live in Detroit and have my entire life and my entire career has been based in one way or another with the auto industry.

I flew back from Washington D.C. earlier this week (on businesss) and on the ride back from the airport, I did hear a great report from John McElroy on WWJ (AM 950) discussing that the foreign automakers are lobbying Congress to save Ford, Chrysler and your beloved GM - all due to the facts I have previously stated (suppliers must stay afloat or the whole deck of cards goes).

It is what it is.

There are too many companies in corallary industries that rely on GM. Like I said, from Silicon Valley to those who raise cattle for leather. Like it or not.

The tentacles are everywhere and too many people rely on those jobs.

Personally, I would love to have Obama save the day in January. He could write his re-election speech of 2012 if he did.

But, I am afraid the Big 3 cannot hold on until then.

[natrat]

9. i wish i could figure out what the junta's end game is with this

is it 1)just break the union 2) ensure that a depression is kicked off so that they can really take over the country or 3)make sure we have no capacity to build fighting machines

whatever it is all these idiots who say let it fail don't seem to want to talk about the vastly larger sums of money given to banks that is literally unaccounted for. Serious bullshit thought involved.

[Median Democrat]

11. So, You Are Saying That Being Anti-Hummer Is Anti-Union? Explain

You are ducking the question. Are the Big Three the same? GM makes Hummers. Are you saying the government should subsidize Hummers? Or, if we close down Hummer lines, is that being anti-union? Why not let GM fail, but loan money to Ford, which is in better shape.

Are you saying that unions were anti-environment? That unions agree with GM Bob Lutz's "Global warming is a crock of shit."

Heck, as a consumer, I can tell the difference between a Ford Mustang and a GM Hummer. Yet, many folks think they are all the same, and the companies that make them should be treated the same.

[orleans]

23. i haven't listened to or followed these proceedings until today

for the past half hour...but

has anyone asked gm why they recalled the electric car, why they wouldn't let people buy them and why they were all destroyed?

i thought it was due to the fact that they were getting money/kickbacks from oil companies. which would also explain why the other car companies had such a low interest in developing the technology for great cafe standards.

did any senator bring up those cars? and ask how much money the car companies are planning to get from the oil companies this time around (assuming they have gotten $$ from big oil in the past)

[Median Democrat]

28. NY Times - Automakers Are Not Indentical

Here is the NY Times commenting on the Big Three's proposals. The key point is that Ford and GM are not in the same situation, thus they should not receive the same treatment. Indeed, it is false to assume that it is all or nothing. Congress could save Ford, but let GM fail.

http://www.nytimes.com/2008/12/01/business/economy/01auto.html?bl&ex=1228366800&en=999dc033151c2b6c&ei=5087%0A

[nadinbrzezinski]

24. You know the funny thing is that this is A LOAN, not a BAILOUT

in fact, they are talking of OVERSIGHT

The reality is that they are competitors, but if one fails you are talking of millions of jobs lost (called a web of relationships)

If the three fail... .then you are talking 14 million lost.

Now here is something for you to chew on... that my dear will FIT the technical definition of a DEPRESSION.. even with the failure of ONE

Now under NORMAL conditions we could possibly afford ONE company to go under or chapter 11... right now ANY chapter eleven will lead to chapter 7

I know that blue collar are hated round these parts... I just never realized how much.

Oh and the fact that people who understand this better than you do are saying they need this LOAN speaks volumes.

Try listening to those with a clue before you say this.

Oh and the Hummer as a CIVILIAN line was a BAD idea... but the HUMVEE is necessary for national defense.. you can tell the difference, right?

[Median Democrat]

26. Please Comment On GM's Proposal To Lay Off Thousands Of Workers

Once again, the Big Three are not identical. GM is not only asking for billions of dollars, it is also proposing to layoff thousands of workers, as well as shut down several lines of production. In other words, the evils you are complaining about with respect to GM are going to happen under GM's own proposals! Why exactly should I pay taxpayer dollars to for these evils you complain about?

Also, a loan assumes repayment. What about GM's proposals makes you think their plans result in viability? They are just shedding product lines and firing workers. Can't this be done by letting GM go bankrupt, and loaning money to Ford or Chrystler to purchase the profitable product lines? This way, you get rid of GM's management.

Also, you mention the Hummer. Again, if GM goes BK, Congress can loan money to Ford to purchase this product line.

If it is so interrelated as everyone insists, the it is a myth that the Big Three are three. We should just merge them all if they really are inseperable.

We let some banks fail, Lehman or Indymac, and save others. Why should the entire auto industry receieve special treatment where a single car maker can't fail.

<>

BTW Ford had the sense to stop manufacturing the Ford Excursion.

[BeatleBoot]

33. They are hated around this site

for one reason only: jealousy

Jealous of the standard of living that organize labor carved out for themselves.

Oh, they love their weekends and their paid time off. Some may even love their COLA that they receive.

But they hate the people that brought them all of that.

What we have here is a serious lack of respect. Anonymously.



But as far as your post:

:yourock:

And, by the way, I am not a Union Member. Never have been. But my Dad is a retired Union Member.

[KamaAina]

32. Get GM to quit competing with itself

no, really, they do.

http://en.wikipedia.org/wiki/General_Motors#Rebadging_era

By the 1980s, GM frequently "rebadged" one division's successful vehicle into several models across the divisions, all positioned close to one another in the market place. Thus a new GM model's main competition might be another model spawned off the same platform. This led to market "cannibalization" with the divisions spending time stealing sales from one another. Even today, the company's GMT360 mid-sized light truck platform has spawned the basic Chevrolet TrailBlazer, Oldsmobile Bravada, GMC Envoy, Isuzu Ascender, Buick Rainier, and Saab 9-7X. Though each model had a more or less distinct mission, the trucks can hardly be discerned from one another.

They already croaked Olds. How about another brand or two? And, does every little town really need a Chevy and a Buick and a Caddy dealer?