I think there are two separate issues here. The foreign companies were profitable when the market was healthy - GM and Chrysler, on the other hand, were not (I think Ford was). Those two were losing money even during the good times. So the question for the bailout is whether giving them money is really a bridge during a tough time, or just a bridge to losing money in 2010 or 2011 and delaying an inevitable failure. At this point, I think it's hard to know. GM and company definitely have to do a lot of restructuring and the like to be more like the profitable foreign companies - whether they can or not is up in the air.
When people are talking about the decline of car companies, they are talking about profitablity. Sales are lower at all companies. GM's decline is lack of profitablility. Labor costs is a major part of that. Honda and Toyota were profitable in the last reporting quarter. GM and Chrysler weren't.
It's probably the right thing to do from a business perspective, but I can't imagine it going over well. http://www.examiner.com/x-2888-Worl...m2d9-GM-to-invest-US-taxpayer-money-in-Brazil
I can't believe GM would waste a brazilian dollars in São José -- that's quite a slap in the face of Americans.
HOLY HELL!!! The stimulus package the U.S. Congress is completing would raise the government’s commitment to solving the financial crisis to $9.7 trillion, enough to pay off more than 90 percent of the nation’s home mortgages. http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aGq2B3XeGKok
From the article it looks like they include the FDIC which guarantees all our bank deposits and has been around for a long time. I imagine that would be most of that 9.7 trillion dollars.
Commitment is different from actual costs. For example, the government insured hundreds of billions of dollars of money market funds - so that's counted as hundreds of billions. But the real cost to that is basically zero unless the financial system collapses entirely, in which case it doesn't matter anyway. They did similar things with commercial paper and other stuff.
They need to do a better job of communicating this. I know it to be true, as well....but the media runs like crazy with these headlines that interest people on half-truths. Politicians in support of this need to be saying this every time a microphone is in front of them.
I totally agree. The entire communication process the government has used for the past 4 or 5 months since all this crisis stuff started has been a total disaster. So much misinformation and confusion running rampant, and no one seems to bother correcting it. It's like measuring a medical insurance companies liabilities as though everyone maxed out their $5 million lifetime limit or whatever it is - it's just totally unrealistic. It was amusing last week when the Obama $500,000 compensation thing came out. CNBC would interview person after person - CEOs, economists, etc - and none of them actually knew the facts of it. They kept blabbing about things that were simply factually incorrect. No one ever stepped in to correct any of it.
GM considering Chapter 11 filing, new company: report CHICAGO (Reuters) – General Motors Corp, nearing a Tuesday deadline to present a viability plan to the U.S. government, is considering as one option a Chapter 11 bankruptcy filing that would create a new company, the Wall Street Journal said in its Saturday edition. "One plan includes a Chapter 11 filing that would assemble all of GM's viable assets, including some U.S. brands and international operations, into a new company," the newspaper said. "The undesirable assets would be liquidated or sold under protection of a bankruptcy court. Contracts with bondholders, unions, dealers and suppliers would also be reworked." Citing "people familiar with the matter," the story said that GM could also ask for additional government funds to stave off a bankruptcy filing. GM declined to comment, the story said. General Motors and Chrysler LLC face a Tuesday deadline to file restructuring plans to the government in exchange for receiving $17.4 billion in federal loans. Automakers have struggled as U.S. auto sales have tumbled amid a recessionary economy. U.S. auto sales in January tumbled to a 27-year low. GM has been in talks with bondholders and the United Auto Workers union to get an agreement on a restructuring that would wipe out about $28 billion in debt for the auto maker, sources have told Reuters. However, it appears unlikely a deal could be reached by the Tuesday deadline, they said. GM has already announced plans to cut 10,000 salaried workers worldwide, or 14 percent of its staff, impose pay cuts for most remaining white-collar U.S. workers and has offered buyouts to its 62,000 U.S. workers represented by the UAW. In addition, it is trying to sell its Hummer SUV and Swedish Saab brands and is reviewing the status of its Saturn brand.
They GOP may finally get it's wish to bankrupt the automakers and kill the auto unions. Hopefully, Obama's stimulus plan can prevent the destruction of our auto industry.
It's already destroyed. The question is whether it reorganizes through Chapter 11 or just keeps up sucking resources and makin crappy cars.
The new Ford Fusion Hybrid is rated higher than Camry and Prius. It won't sell enough in the first year to help Ford. At least, Ford is putting up a good fight in the hybrid market with a sedan that can beat the Prius. http://autos.yahoo.com/articles/aut...fusion-hybrid-tops-camry-prius-in-comparisons Ford Fusion Hybrid If you're in the market for an ultra fuel-efficient hybrid that makes a convincing family sedan, your best choice has always been a Toyota -- until now. Toyota's Camry Hybrid and Prius have been the only realistic alternatives for many. Most American-built hybrids simply haven't matched their fuel economy, and the Nissan Altima Hybrid remains rare and hard to find. A new entrant in the contest, however, may have knocked the Toyotas from their lofty perch. The automotive press has begun testing the all-new 2010 Ford Fusion Hybrid in recent weeks. Two prominent publications have now published comparisons pitting the Fusion Hybrid against its Toyota competition, and the Ford has won both. USA Today writes: "OK, let's just get it out there: The 2010 Ford Fusion hybrid is the best gasoline-electric hybrid yet. What makes it best is a top-drawer blend of an already very good midsize sedan with the industry's smoothest, best-integrated gas-electric power system. It's so well-done that you have to look to the $107,000 Lexus LS 600h hybrid to come close." "The Toyota Prius crowd will protest," they note, but USA Today says Ford's car simply drives better. "A car is, after all, a driving machine. Brownie points for saving somewhat more fuel or offering a cargo-friendly hatchback, but driving feel is most important. And there, Fusion is without equal among hybrids." Car and Driver set the Fusion against the Camry Hybrid, Chevy Malibu Hybrid and Altima Hybrid, but the result was the same. "Ford has pulled off a game changer with this 2010 model, creating a high-mpg family hauler that's fun to drive," they write. "Nothing about the leather-lined test car, optioned up from its $27,995 base price to $32,555, seemed economy minded except for the mileage readings. On that score, the Fusion topped the others, turning in a 34-mpg score card for the overall 300-mile test run." In our time behind the wheel of the Fusion Hybrid, we quickly came to a similar verdict. The Fusion Hybrid corners with as much agility as its conventionally-powered cousin - one of the best-handling cars in the midsize class. With standard SYNC technology, it allows the driver to control Bluetooth-enabled phones and music players through the car's speakers with voice commands. And its standard leather and high-quality stereo give it an upscale feel for an affordable price. Ford has a hit on its hands. We had one minor complaint. Ford's SmartGuage instrument cluster does a great job coaching the driver to drive more efficiently with information-rich displays, but the cutesy display that grows leaves as the driver reaches peak efficiency is distracting and can draw your eyes from the road. Still, following the device's prompts, we hit 37.7 mpg in city driving on the first try. The Fusion Hybrid qualifies for a federal tax credit of $3,400 until the end of March, but few of the cars will reach dealerships by then - if you're in the market, you might want to consider ordering yours before the credit disappears.
