GM in trouble

[AG4]

the big 3 automakers are just 3 of thousands and thousands of US companies on the edge of the cliff

it just so happens they get more media coverage than others

They got more media coverage because in the US alone, the domestic auto industry employs millions of people (plus millions more outside in regional plants around the world).

[uls]

well, the one thing that was responsible for the housing boom was also responsible for the expansion of the global auto industry in the past years --- LOOSE CREDIT.

The new world order now is tighter govt control over banks, stricter lending standards

so any industry that was relying on its customers being able to access easy credit will have to get used to the new environment.

they just have to accept that things will not be the same as before.

[tidus1203]

Fiery debate regarding the bailout. Peter Schiff (against the bailout) VS Virg Bernero (mayor of Lansing, Michigan and for the bailout). You decide? I believe more on the points raised by Peter Schiff.

[ame="http://www.youtube.com/watch?v=-BmqthF1LVM"]YouTube - Peter Schiff on CNN Auto Bailout Intense Debate! 12/4/08 part 1/2[/ame]
[ame="http://www.youtube.com/watch?v=_GlBwq-7rIs&NR=1"]YouTube - Peter Schiff Dec 4 CNN Headline News - Part 2[/ame]

[uls]

FT:

December 7, 2008 - Company crashes set to hit record next year

Record numbers of companies will go bankrupt next year with 200,000 insolvencies in Europe alone and "an explosion" of failed businesses in the US, according to the world's largest credit insurer.

The US will see 62,000 companies go bust next year, compared with 42,000 this year and 28,000 last year, says a report by Euler Hermes, part of German insurer Allianz.

The absolute numbers, however, pale in comparison with the figures from western Europe, where the larger number of small companies mean insolvencies are expected to rise by a third from 149,000 last year to 197,000 next.

No bailout for most

[Monseratto]

Fiery debate regarding the bailout. Peter Schiff (against the bailout) VS Virg Bernero (mayor of Lansing, Michigan and for the bailout). You decide? I believe more on the points raised by Peter Schiff.

LOL! That's what you get when you pit Peter Schiff with a small time politician. Biglang pumutok si Mr. Mayor at nag wala. Patriotism my AS*!

One point Peter raised was why Cerebrus Capital, 80% percent owner of Chrysler, didn't want to put in additional capital to Chrysler. Why aren't the Big Three asking for loans from private investment groups? Obviously they know that whatever money they may put in will never be seen again..

[tidus1203]

OT: Yep Peter is all cool and collected and si Mayor napikon na. Shows who the loser is, come on its just a debate...

On topic, Peter made a good point regarding the previous Chrysler bailout in the late 70's. Many pro bailout people point to the bailout of Chrysler 25 years ago as a success since the government made money... Well he did suggest that if Chrysler was allowed to go under back then, then we don't have to bailout them out now and might have a cleaner auto industry to begin with. So we really don't know if the American people really did make money on the 1st Chrysler bailout since with the present bailout they might have to pay more and erase all the gains on the 1st bailout...

[AG4]

OT: Yep Peter is all cool and collected and si Mayor napikon na. Shows who the loser is, come on its just a debate...

Peter might have a point, but its obvious he was trying to piss of the mayor and he was successful. :evillaugh
What the mayor was about to say about the Japanese government protecting their local industry is also true.
In Japan imported vehicles are usually heavily taxed.

[Monseratto]

If Chrysler did well after it's 80's bailout, why did it merge then quickly dumped at a loss by Daimler Benz?

Speaking of the Japanese protectionist market, will the japanese auto companies suceed by marketing in their homeland alone? They rely heavily on exporting their products overseas. But not all of them suceeded. Nissan nearly went bankrupt, it was rescued by Renault. Mazda also almost went under before it was rescued by Ford. Note: no japanese goverment intervention here.

[tidus1203]

Also here is another thing, the private equity firm who owns Chrysler right now Cerberus does not even want to put more money into the company. If Chrysler has a viable plan (they did make a plan and present one to the Senate) and I am sure Cerberus knows of its plan (being the owner) then why isn't Cerberus bailing them out using private money? The answer. Cerberus is not confident of investing even more money, they have already lost a lot of money as it is. Only government money is stupid enough to invest in failing companies private money won't even touch it.

[Monseratto]

Also here is another thing, the private equity firm who owns Chrysler right now Cerberus does not even want to put more money into the company. If Chrysler has a viable plan (they did make a plan and present one to the Senate) and I am sure Cerberus knows of its plan (being the owner) then why isn't Cerberus bailing them out using private money? The answer. Cerberus is not confident of investing even more money, they have already lost a lot of money as it is. Only government money is stupid enough to invest in failing companies private money won't even touch it.

Hehe...I mentioned it earlier 4 replies ago. Lucky for Daimler Benz that they dumped Chrysler when they did. Na affect ung bottomline nila because of the bottomless Chrysler pit. Also the Mercedes badge was being affected, being associated with Chrysler.

If they were still stuck with Chrysler now, no way they can sell it...

[AG4]

Nissan nearly went bankrupt, it was rescued by Renault. Mazda also almost went under before it was rescued by Ford. Note: no japanese goverment intervention here.

I don't think any company has extra cash to rescue another company now.
Even Toyota had to layoff 3,000 workers in Japan and suspended production in some of their plants.

[AG4]

Also here is another thing, the private equity firm who owns Chrysler right now Cerberus does not even want to put more money into the company.

Cerberus is even blaming Daimler for not telling them about the real condition of Chrysler when they bought it from them. Huh?

Cerberus is stupid for not doing any research when they bought Chrysler from Daimler.

Maybe a chinese automaker should by them, like Chery?
wasn't Chrysler supposed to be working on a new sub-compact car with Chery? hmmm....

[tidus1203]

Well the Daimler story is another story and is irrelevant to this bailout. Whether Daimler committed fraud is irrelevant if Chrylser should get a bailout or not. The fact is as it stands Cerberus knows its a sinking ship so they don't want to commit their own money and ask the taxpayers to commit theirs.

[Gerbo]

The US auto bailout is simple to explain...

....the government has to step in because mass layoffs arising from the downfall would not be politically expedient as people lose their jobs, life savings, etc. and will add further to the crisis bracing for a full blown recession. This might result to chaos, increase crime rate, etc.... quite grim really.

....the auto managers, knowing the government will extend a helping, are not helping any by having a viable plan....they are now like beggars na lumalaki ulo.

Puede naman compromise....but it would be like "nationalizing" the US auto industry.

[Monseratto]

[ame=http://www.youtube.com/watch?v=xAs1yTLuv00]Inside Look: Opposing the Auto Industry Bailout[/ame]

[tidus1203]

You bail them out, people have no money to buy cars. Wala pa rin. In order for them to survive they have to sell cars and really now even in the good times they were already losing money... So talagang flawed ang business model ng GM and Chrysler.

And I think the BIG 3 bosses are exaggerating so much the job losses. While even the most hardcore anti-bailout will admit that there will be a lot of job losses and it will be very painful, going through bankruptcy does not mean job losses. Yes as part of bankruptcy some jobs will have to be axed to make the company leaner no question about that, but if they go through liquidation someone will buy their assets. Maraming potential buyers dyan for sure (at the right price that is, bankruptcy prices that is) from the likes of India's Tata to China's Shanghai Automotive, to South Korea's Hyundai. That is a chance for those survivors to steal market share. So the free markets if allowed to function rewards the survivors who managed their business well and punishes the incompetents through bankruptcy.

[Horsepower]

Hyundai was offered to buy Chrysler but they declined. LOL.

Good thing Daimler got rid of Chrysler early on (though they've lost several Billions in the process). In a way, there's nothing wrong in NOT telling that Chrysler is a money pit, it's the responsibility of the buyer to know that. hehehe

[Burai]

to add more on sir tidus' previous comment, there's just no chance of surviving kahit tulungan sila ng pera saglit kung di naman bebenta mga cars nila. kahit may pera man mga tao, would they still buy one? lalo na't ngayon hindi na stable status ng chrysler and the others?

if they're back on track naman, wala naman pera mga tao pambili or pang maintain due to financial crisis

might as well bumaba build quality ng cars nila kung magresume man sila ng job nila


anyway, i love the debate. pumitik yung mayor
what that shelby said could be quoted too

[tidus1203]

Well, it looks like they will get a bailout afterall something in the region of $15B just to get past March 2009 Imagine they need that much just to get past March? What about beyond that. GM stock, and Ford stock rose sharply in response. Kudos to Ford though they don't need the short term bailout but still insist bailing out their competitors.

http://www.bloomberg.com/apps/news?p...d=aB8rxxGEpWAk

[uls]

GM burns 2 billion a month

grabe no?