okay ignore the execs that's not the point. The bailout in principle just seems wrong and if detroit was failing throwing money at them is not going to fix the problem. So unless something has changed they will eventually fail again and require another bailout? It just seems to me to be artificially proping up a industry that is going to fail. It just seems like a temporary solution and a temporary fix to a problem so a few jobs can be saved in the short term.
But, they're showing strong profits at the moment. It's not like those earnings are subsidized. Maybe they go down in flames again later, but I don't think they're doomed from the start.
But that's exactly the point. They WERE required to make major changes, both to their capital structures and to their operations. And all evidence thus far is that GM is healthier than anyone imagined they could be, and more quickly than anyone thought they could be. I understand the opposition in principle to bailouts. But the auto bailouts - so far - are proving wildly more successful than anyone had hoped. The worst case was that they couldn't really be saved and would burn through the cash and fail again. The best case was that it would take years to fix and the government probably wouldn't recoup much if anything. In reality, it took about a year to get them back on track and generating cash despite a still extremely weak economy. And while the government won't make all their money back, they'll make a whole lot more than was ever anticipated (unlike the bank bailouts, which were expected to have a low net cost, the auto bailout was not expected to recoup much of anything).
So what exactly have you brought to the table? Besides trying to put words in my mouth? Where did I say its the rich getting richer rhetoric or the Obama is a socialist rhetoric. Please leave your partisan political views out of this discussion. Now back to the topic. I have done my research on the topic and I can honestly say I dont think anyone can claim they know if we are for certain better off or worse off for the bailout. I am not making that judgement either. I was just saying in priciple it does not seem like the right thing and shouldn't be the role of the Federal Govt to bail out any private company with tax payer dollars. I've read both sides and both sides make their valid points. If the govt. stayed out of GM and chrysler maybe they could have gotten out from under their union obligations which is why those companies were struggling. (of course they were making inferior cars that no one wanted to buy) They can’t make good cars because they have to shell out too much in wages, pensions, and healthcare. In Alabama a non-unionized worker at Hyundai makes $20 an hour and carries full benefits. A unionized guy up in Detroit is pulling in $45 an hour for the same job. And the cars still dont sell. So unless these issues are addressed (which they wont since the union is too powerful) throwing more money at them doesn't seem to be the solution. Well that is just my two cents and my thoughts. Not saying the outcome of the bailout will eventually be bad or good and I honestly can say I don't know.
Well I am always skeptical when I read reports like that. How many people do you know actually go out and buy an American made car? Of course this is a very inaccurate and non-scientific way of sampling but where i live (So Cal) you rarely ever hear or see anyone drive a GM or Chrysler car on the road. The only GM cars you see are ones that belong to large fleets, rental companies, or Govt vehicles. Maybe a lot of the earnings are from Govt contracts. Ford is the only American made car where I hear people actually want to buy (Ford Mustang). When have you heard someone say they want to buy a brand new car and consider a GM/Chrysler car? Well anyways for the sake of our economy I really hope you are right and GM can somehow come out of this as a strong viable company since that is what will benifit us all but till that happens I will remain very skeptical.
I haven't heard much about Chrysler, but people are viewing GM cars more positively in my experience. Location also plays a role - the west coast has always been much more of a Honda/Toyota market than the midwest, for example. It may not be entirely their doing - the Toyota braking fiasco certainly helped - but over the last year, Ford & GM (along with Nissan, oddly), have done well while the powerhouses of Honda and Toyota have struggled (relatively speaking) with their sales. It's hard to say why, exactly. But quality in Detroit has gone up immensely; costs have gone way down to be more similar to the Japanese manufacturers, and Toyota has had major credibility issues. How each of these have played into the market, I'm not sure - but sales have surged at GM/Ford while not moving up for Honda and Toyota. It's still early so it's hard to say where exactly this goes from here, but at the very least, the Detroit companies got their cost structures under control - that was their biggest problem in the past. Now it's up to them to make cars that appeal to be people (their other big problem in the past). Ford has taken leaps and bounds forward in that respect; GM probably still has work to do there.
It's obvious you have an axe to grind with the unions--not sure where you got your figures but they sound wildly exaggerated based on what I've read before. Regardless, I'm not trying to get into a pissing contest on sources but what you are saying in patently untrue--GM is making great cars that people want--maybe they aren't Toyota or Honda but who is?
It may saved a lot of jobs. But UAW (still inefficient) also gave a lot of ground to make GM profitable.
I agree and I am happy GM cars have been improving. It's going to take a lot to win back consumers though. Especially with Hyundai offering the best values. That is how GM ultimately needs to win customers back by offering the best value and they will have their hands full trying to battle Hyundai. Another random non-scientific sample. Looking out my corner office window I see 2 Hyundai's 1 Suzuki 4 Toyota's 2 Nissan's 2 Honda's 3 BMW's 2 Mercedes 2 VW's 1 GMC SUV I definitely live in a area where Foreign cars dominate the roads. But I do agree if I wanted a nice sporty car at a great value I would look at the Mustang and Camaro. I would have never considered a American car a few years ago so I do agree they are making improvements and hopefully they can continue.
When you said: I didn't bring anything to the table because I'm going to wait until it all plays out before I pass judgement. I don't like bailing out companies any more than you do, but if it's what has to be done to avoid the next great depression, well..that's kind of a no-brainer. The conservatives (of which I am one) can scream "LET 'EM FAIL!" all they want but few of them think about the fact that consequences will never be the same! if they do. Look at what has quietly happened at AIG just this week: Having said all that, reading the rest of your posts in this thread, it seems like you pretty much feel the same way about letting it play out, so there you go.
well when I said that it is indeed a fact right? The high paying execs got to keep their jobs and their hefty bonuses. I'm not saying is a reason why we shouldnt them out but it was a outcome. I don't think anyone can really say for certain what might have happened if they were not bailed out. Maybe the company comes out of bankruptcy stronger than they are now or maybe we do face some sort of Great Depression. I have no clue and we will never know. I was just saying based on principle alone it doesn't seem right to me. But I agree what has happened has happened so the best thing to do now is hope GM manages to turn things around and it becomes a win for everyone.
Raise your hand if you ever believed any of these bailed out companies were going to payback in full the bailout money they were given. I am sure some company out there is gonna spin their tax payments at X amount over [/i]Y[/i] years as evidence of having payed back the government back. Who benefited from this bailout? I will tell you: the poor. Why? Because they own stock in companies like AIG and the like. So it makes sense when the wealthiest 1% (or 5% or 15% or whatever) complain that our president is going to tax them, the wealthiest, in order to help pay for bailing out these companies. Obviously the wealthiest 1% don't own squat and can't afford stocks or investments in hedgefunds because they are too damn busy creating jobs. Also as obvious, they will never benefit from anything like government spending or tax breaks or lobying and the like. Let me put it this way. The USA government gave AIG $180,000,000,000. AIG as of 2010 had $870,000,000,000 worth of assets. Good for #3 on the list of biggest insurance companies by asset value.
Which companies are you referring to? Most of the banks have already fully paid back the TARP bailouts with interest. GM and Chrysler are likely to pay back the majority of what they were given (far more than Treasury thought they would). AIG now appears likely to fully pay back their big bailout as well - that was completely unexpected. Every single company that was bailed out has paid back at least what was expected, and in the case of the auto companies and AIG, more so.
Oh great, the government's been paid back in full, whatever that mans. It's no wonder the government would ever bother to tax anyone in the first place. So AIG went from we need $180 billion to $180 billion paid back 3 years later. Gee, why don't I believe anyone of this?
It's a pretty simple concept to understand. They got $x. They paid back $x + interest. Probably because you don't understand finance, why they needed the money, or how they generated the money to pay it back.
the government owns 500 million GM shares they bought at $52/share today the share price is $20 what a steal.... I still can't believe the government is buying private companies. How the hell did we get to this point?
Yes, you are correct. Many of these companies have payed off their loans in full. But I still have reservations. These people needed money because they didn't know what they were doing, or maybe they did and didn't care enough to do anything about it. In 1998 oil was selling as low as $11 per barrel. 10 years later it was selling as high as $140 per barrel. So all that point in time (late 1990's) these American automakers went out and decided to make these huge SUVs, and they put their company's reputation behind that idea. Surprise, surprise nobody wanted GM's SUV's (or Ford) when gas was $4 per gallon. What in the heck did they do in 3 years that allowed them to pay back their loan in full? AIG and others was investing money into investments which included subprime mortgage derivitives. Yeah, the people who couldn't afford prime mortgages let alone regular mortgages caused a global economic recession. The recession happened because these people with their subprime mortgages were hit hard by rising gas prices. They had to decide between getting to work and back and paying off their debt/mortgage. And people who invested in their default swaps or whatever they were, lost out big time. Now where are we at? 3 years later everybody has payed off their loans in full and we never ever have to mention what happened again? I just don't believe that anybody learned. I think AIG and a lot of these companies benefited more than with just the money they recieved. End of my rant for the night.
