GM's Market Cap is < $3 Billion. Lots of companies/people have the money to buy them. It's whether they could keep them running or not.
If you took out the bonuses, or made them DIRECTLY tied to the well being of the company, I'd be a lot more OK with statements like "I'm working for $1." $1 base salary. Bonus tied directly to company performance. Stock options This package would basically make all money the CEO made tied directly to the survival and performance of the company they run. No bonus if the company doesn't make money, and stock options are worthless if the stock drops below the option price.
I saw Michael Moore on TV saying that GM which has a market value of $3 billion wants $18 billion for a bailout. For this it is planning to lay off 30,000 more workers and close 1700 distributorships. He says why not have the government buy them out for $3 billion and then have them build electric/ hybrids and mass transit systems. During WW II they were ordered to switch to military production and did so, why not order them to switch to fuel efficient cars while we bail them out. Moore said that we bought out some of the railroads (Amtrack?) and later resold them at a profit after getting them up and running again? I know we have the old saw that the government can do nothing right, but will they really do a worse job than GM? Alternatively maybe we should buy GM out and then turn it over to the workers so that they can run it. They could then make the sacrifices needed to keep going. If we bail them out then we should make it so that they can't pay dividends till they pay the taxpayers back. No executive can make over $250k total compensation till they pay the taxpayers back etc. Lots of regulations on them. We have essentially already bailed the stockholders out as GM was down to $2 before it looked like there would be a bailout. It seems crazy to bail them out and then have them keep trying to hook people on SUV's now that gas prices have lowered.
Major, thanks for taking a stab at some answers. I suppose my overarching point is that it is a very complicated subject on which I've heard a lot of oversimplifying predictions. I think the credibility of the Big 3 doomsday heralds is damaged when they give a simple answer to a complicated question. And, I don't think we should simply accept that (1) none of the Big 3 could survive a bankruptcy, (2) none of their suppliers could survive their bankruptcy, (3) a million people will be laid off, or (4) (my favorite, not touched on here) the US won't be able to domestically produce tanks in the case of a big war.
I wonder what the publicity towards GM and Ford and Chrysler will be after this fiasco. What I do find funny is how Paulson and the Government were so eager and willing to give the financial sector 700 Billion dollars....and can't find a way to give a major part of our engineering sector 30 billion. How the hell does the US lead the way in this "green" movement filled with low ecological foot prints and electric energy....with no cars coming out of it? They got on the CEO's of these companies for taking corporate jets to Capitol Hill if I'm not mistaken...what the hell do they think the heads of AIG/Fannie/Freddie/WaMU etc took? Did they take hybrid, ethanol chugging econoboxes? This country doesn't want to give itself a chance.
Everyone and their drinking buddy has turned libertarian even as the government continues to bail out financial institutions and corporations with giant financial arms.
Nobody will touch GM until they go bankrupt and the union contracts and pension obligations are thrown in the trash. GM has negative value right now. They don't even have any cool technology that anyone wants.
I got to admit, I'm confused. Originally the car companies wanted $25 billion. Congress sent them home and they came back wanting $34 billion. What gives? Restart production on the El Camino, that will bring them back.
its only chrsyler worth a shiat and its not really a chrysler (hint: its frame is mostly borrowed from mercedes)
Why is Chrysler even in the discussion ? If they need cash then Cerberus should bail them out -- they have plenty of cash.
We need the Big Three and their assembly lines. Forget about the typical short sightedness of next quarter capitalism. We don't need to let these plants get all rusty. We need to build 100 to 200 million new fuel efficient vehicles asap. Preferably plug in hybrids. The money we save on oil and health care and global warming expenses will largely pay for this.
This part is way off the mark. Moore wants the US to force automakers to build cars based on what we wish people were buying, and not based on what people actually buy. This is supposed to be a plan to make the Big 3 profitable again? In WWII, the government was buying the military vehicles. Under Moore's scenario, we'll have a lot of fuel-efficient cars either sitting in warehouses or being sold below cost because the government is making more than would normally be made. If you want the companies to be profitable and to make efficient cars, leave them in private hands and raise the federal tax on gasoline.
I agree with you. Many here want the government to force these companies to make more fuel-efficient cars or eliminate brands, or whatever. But, if you impose restrictions on GM, Chrysler, and Ford without also imposing them on Toyota, Honda, etc., they will drink our milkshake. If we want more fuel efficiency, just pass tougher fuel efficiency laws that will apply to all car manufacturers.
