29 Votes

AUTO MAKERS GET THEIR DOUGH: If YOU Were A Betting Man, Does This Work Or Will They Die Anyway In 09?

Agent001 submitted on 12/19/2008 Official Bell & Ross Timestamp: 1:14:30 PM

45 user comments | Category: Spy News | Source: www.autospies.com

Tag Links: Detroit Rescue Plan, Bailout

You'd have to be dead to not have seen or heard that the government has approved the funds to bailout the American auto industry.

But the BIG question is:

The loan has to paid back by 3/31/09, so what are the chances that they WILL pay it back and will this finally put them on the road to permanent recovery?

If you were a betting man or woman, is the problem solved or will the Ghost of future Christmas show them the grave in 2009?

Who will place the first bet?

AUTO MAKERS GET THEIR DOUGH: If YOU Were A Betting Man, Does This Work Or Will They Die Anyway In 09?

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FWD Torque Steer. Absolute proof the Devil exists.
— Agent001 (View Profile)

User Comments

For now, they're dead.
And the executives are to blame, not the employees.
Same on those executives -- their egos, and their greed.
— randy33 (View Profile)

Posted on 12/19/2008 1:22:51 PM | reply to this comment | Votes: 1

Now that the CEO's have turned in their jets and paychecks you're sayin' the trouble is over for the Big 3?
— EL34 (View Profile)

Posted on 12/19/2008 1:25:02 PM | | Votes: 2

Wow, let's be absolutely clear here... They did not get THEIR dough, they got OUR dough.

We owed them nothing.
— Agent004 (View Profile)

Posted on 12/19/2008 5:13:33 PM | | Votes: 4

So EL, if the workers got paid 50 cents an hour, Detroit would be doing awesome?
— DinamoR (View Profile)

Posted on 12/19/2008 10:42:44 PM | | Votes: 1

Kill off the cotton picken UAW and I will buy a Cadillac CTS-V.
— EL34 (View Profile)

Posted on 12/19/2008 1:23:36 PM | reply to this comment | Votes: 8

SHame on those executives, and SHame on the UAW, for taking more than their fair share, BANKRUPTING their own livelihood.
— randy33 (View Profile)

Posted on 12/19/2008 1:24:30 PM | reply to this comment | Votes: 4

The costs to maintain 10 private jets and pay 10 auto execs multiple millions each year is pennies in comparison to the multiple billions their respective corporations have been losing each fiscal quarter. GM alone is losing $10-15B each year. Paying $50M to maintain jets and pay execs and high-level bonuses is relatively nothing.

I doubt the automakers will be profitable enough to repay the loans back in March 09, so they should either discuss mergers or get used to partial govt ownership.
— dumpsty (View Profile)

Posted on 12/19/2008 2:03:06 PM | | Votes: 1

THe whole private jets thing is so blown out of proportions... i don't even want to get started.

As for executive compensation, the Big3 execs make peanuts compared with the financial institutions that got 700billion (850 billion if you count the add-on pork). I agree though, the CEOs should take $1 as a sign of confidence and class.

As for profitability, I have to laugh when every moronic bobblehead media commentator and politician talk about being profitable right now... in the worst economic situation the country has seen since the great depression. Toyota announced they're predicting a loss, Honda said its 2nd fiscal half was at a loss, I mean... come on now.

Hopefully, the UAW's VEBA program can get straightened out (I still can't believe the industry was actively paying retirees with current revenues instead of some sort of retirement fund), the massive debts can get cut (maybe like Sen. Corker's 2/3 proposal....itd be nice) and the cash outflows can be cut to a small percentage of what they are right now.

Either way, there are going to be short term job losses, people aren't buying cars which means workers have to go home. As for their layoff compensation... I think there's more there than meets the eye. 95% is a lot of money to sit home and not work, but at the same time, I've heard that 50% is from the company, the other 45% is from a fund. I could find it reasonable that any amount comes from a fund.
— neutral (View Profile)

Posted on 12/19/2008 4:25:23 PM | | Votes: 1

it's a band aid on a sucking chest wound, it's not going to mean long term survival. But I do think at least two of them will make it through long term, the government won't let them all fold.
— JRobUSC (View Profile)

Posted on 12/19/2008 1:25:25 PM | reply to this comment | Votes: 4

I'm no expert on this subject, but from what I can understand, the UAW should be severly limited, it seems like they're biting the hand that feeds them or "cutting off their nose to spite their face" in that they could still be the reason the big 3 could still fail in the not to distant future mainly because the UAW refuses to give any meaningful concessions.
— BlakuraTLS (View Profile)

Posted on 12/19/2008 1:31:50 PM | reply to this comment | Votes: 3

...so they may all end up unemployed rather than just taking a pay cut.
— BlakuraTLS (View Profile)

Posted on 12/19/2008 1:33:07 PM | reply to this comment | Votes: 4

If i were to bet on this, I'd bet it to fail. I would hope that they wouldnt but you bet with your head and not with your feelings.
— AudiA6Drvr (View Profile)

Posted on 12/19/2008 1:48:46 PM | reply to this comment | Votes: 2

If the Big Three do indeed fail, then everyone will have to duck and cover. The U.S. (and global) economy will go further into a very deep, dark hole. Not good. The bailout delays what may be inevitable. Possibly Ford will survive; they have the best overall product range right now.
— 204E60 (View Profile)

Posted on 12/19/2008 2:05:18 PM | reply to this comment | Votes: 1

Only Ford deserves to live!
— OBSERVER1984 (View Profile)

Posted on 12/19/2008 2:18:25 PM | reply to this comment | Votes: -1

The rumors of the death of the US auto makers is more over-hyping in the age of endless media. Times is tough all over fellas. Toyota is taking a hit. Its the economy and when it starts to turn so will the US auto market. Until then its just buckle down time for manufacturers and a bonanza for consumers smart enough to go buy a car while the buying is good.
— BradYourCarGuy (View Profile)

Posted on 12/19/2008 2:21:24 PM | reply to this comment | Votes: 1

Ya got that right... now with gov backing... the deals are awesome.
— neutral (View Profile)

Posted on 12/19/2008 4:36:14 PM | | Votes: 1

Dead, dead, dead, I tell ya!
— formula666 (View Profile)

Posted on 12/19/2008 2:47:44 PM | reply to this comment | Votes: -2

If I were a betting man, I'd bet the next administration drafts a more lasting bailout for the big 3 which ensures that the UAW is strengthened in the process. The bridge loans will be enough to keep them alive until Obama can pay them off proper.
— sigmabody (View Profile)

Posted on 12/19/2008 3:11:50 PM | reply to this comment | Votes: 2

Inside Line says

"The government can call in the loans on March 31 if the firms cannot prove they are viable at that point. The details of the plan say "a firm will only be deemed viable if it has a positive net present value and can fully repay the government loan."

The Big 3 well being in 09 depends on the general economy. If it starts to improve then they will do better.

Chrysler said its sales were down so much because of no consumer credit. I think their product has a lot to do with them being in the worst shape out of all automoakers.
— chewy (View Profile)

Posted on 12/19/2008 3:42:27 PM | reply to this comment | Votes: 3

DEAD!...can't see any of these companies REALLY doing anything radical enough to improve their health (cut salaries, cut the UAW, drop models, ramp up introduction of more fuel-saving hybrids, electric models, etc., improve dealership service, stand behind warranties, better customer relations, etc.)....those at the top will ensure they do what they need to do to help themselves........no matter how much money they are given....THE REAL QUESTION IS; WHOSE GOING TO BUY THEIR VEHICLES?
— doctorproctor (View Profile)

Posted on 12/19/2008 4:10:32 PM | reply to this comment | Votes: 1

doctorproctor,

"ramp up introduction of more fuel-saving hybrids, electric models"

Sorry but I have to lump you in the category of people who don't have a clue about the auto industry. As important as electrics/hybrids are, they are massive loss making ventures in the current environment. Many predict is could be 10-20 years before these things become profitable.

Just because some green-whiny moron from California TELLS americans that the cars they "want" to buy are hybrids and expensive toys, that doesn't make it right.

"improve dealership service, stand behind warranties, better customer relations"

While there are complaints about poor dealership service, I've personally been treated great at Ford and GMC/Pontiac/Buick dealeships. The Ford guys just threw me keys for a test drive and were really cool about everything.

My experience at the Hyundai dealership..... awful. They wouldn't even come up to talk to me. They figured "here's some kid screwing around" (I look a few years younger than I am). Honda's warranty department screwed a cousin over COMPLETELY with that whole transmission problem they had in their 5spd autos (back in 99-02 i believe). They wouldn't pay for the repairs because "the car was made in Canada".

At the same time, a close friend went (with a large downpayment) to a chevy dealer a couple weeks back for a new truck and they werent friendly. A different dealer was great to him.

As for who is going to buy their vehicles.... the numbers speak for themselves (in an odd way). In the current auto-market meltdown, Ford Fusion and Chevy Malibu have made impressive gains YTD. Accord and Camry have posted sales losses (small losses, but still). Big3 got the right products (mostly.... Dodge needs to redo a few cars), good build quality, good milage, etc. The economy needs to turn around and people need to seriously give the Big3 and honest chance.
— neutral (View Profile)

Posted on 12/19/2008 4:35:17 PM | | Votes: 4

TYPO..

"to seriously give the Big3 and honest chance."

--AN honest chance

sorry.
— neutral (View Profile)

Posted on 12/19/2008 4:38:17 PM | | Votes: 2

We should invest whatever it takes in electric cars and make Detroit build electric cars. We're sending 700 billion dollars to the middle east for oil every single year. So even if it would cost 2.1 trillion to develop and build cars that would make us energy independent, we would still get that money back in only 3 years.
— DinamoR (View Profile)

Posted on 12/19/2008 4:50:51 PM | reply to this comment | Votes: 3

ps. government needs to give us a cheaper and nationalized health care system. we should copy the one france has- it costs $3500 per capita (compared to $6100 for us) and is ranked #1 in the world (compared to #37 for USA). nationalized health care is what detroit needs to compete with Japan and Germany.
— DinamoR (View Profile)

Posted on 12/19/2008 4:52:39 PM | | Votes: 2

I agree, we have to get off of foreign oil, however I wholly disagree with your ideas of getting there.

Gasoline/Diesel are the best fuels for transportation so far (its not PC, i know.. but find me a better fuel right here, right now).

You want people to buy fuel efficient cars and be fair to automakers? TAX GASOLINE. Yes, that evil word.... TAX. Lets say theres a $1/gallon tax on gasoline. Thats $148 billion dollars which can be used towards reserach, renewables, high-speed rail, etc.

CAFE rules and forcing automakers to make certain vehicles are a sure way to piss people off and get them not to buy Big3 cars.

The switch from petroleum based cars to something else is going to be gradual, people have to get used to it. Rome wasn't built in a day.
— neutral (View Profile)

Posted on 12/19/2008 6:53:21 PM | | Votes: 2

gas tax, force them to build electric, whatever works.

the only problem I have with gas tax is that it raises price of fuel for all the rigs who ship food and everything else around.

we have the technology. we need to mass produce it to make it more affordable. lithium titanate batteries can be charged up in 10 minutes only (compared to ~4 hours for lithium ion)
— DinamoR (View Profile)

Posted on 12/19/2008 10:46:16 PM | | Votes: 1

Government can't dictate what the automakers should build... thats a definate way of making the big3 go under. CAFE rules are another mess.... they need to be a baseline fuel economy reg, like 30mpg cars, 20mpg for trucks.

A Gas tax would only apply to gasoline, not any new taxes on diesel.
— neutral (View Profile)

Posted on 12/20/2008 12:58:14 AM | | Votes: 2

that would make diesel cars popular, which would solve our oil dependence how?

government has to step in. nothing wrong with that. the reason we have seat belts and air bags among other things is none other than the Gov. stepping in
— DinamoR (View Profile)

Posted on 12/20/2008 3:35:07 AM | | Votes: 1

It might make diesel more popular, which are more efficient and renewable diesel is much easier to come by than renewable gasoline.

Also, it would just make people think twice about buying a big SUV when they really dont need one.

WIth respect to seatbelts, etc.... theres a huge difference between mandating seatbelts and other safety devices vs. forcing carmakers to build cars that in the end, people dont want. It's going to cost the government tens (if not hundreds) of billions of dollars and who the hell really wants it right now.

Enough regulating the auto industry, they've been regulated to death. No new regulations on auto, just a simple tax on gasoline. Phase in a tax so that in a few year, our demand is diminished, our environmental impact is diminished, and instead of high gasoline prices meaning we're shipping money overseas, we're just funding other energy projects here at home.
— neutral (View Profile)

Posted on 12/20/2008 12:03:44 PM | | Votes: 2

This has to be one of the biggest scams the corporate America has ever done, public and wide open scam and YET, stamped by the President's seal.

God have mercy on America, as its own people are ripping it apart as if its an invaded land.

Shame on President Bush first and his gang, then on the garbage 3 gangsters. They took the American pride away by producing absolute garbage, and now took the Americans' money too and they're sitting and laughing at all of us.

This is disgusting, although being a republican, but this presidency has proven itself nothing but a true gang. This is a favor Bush did to the garbage 3 so they would return him the favor later on in his days.

Ask yourselves Americans, have you heard the government saving any home owner so far? But it rushed into giving billions of dollars to thieves and crooks. If this is not a shameful act, please someone tell me what is?
— Designer1 (View Profile)

Posted on 12/19/2008 6:33:32 PM | reply to this comment | Votes: 0

they have to pay the money back if it is determined that the recieving companies dont make the necessary moves to be considered "viable".

This money was already kissed goodbye a while ago, only difference being now, the wall st guys are going to get 2.5% less money for free. Provided everything goes the way it should (which means people give GM/Ford/Chrysler cars a fair look), the government will get a return on their money. The country will keep its only vestage of domesticly owned technological/industrial power (besides aerospace & defense). GM & Ford are some of the few instances of American products being sold overseas and revenue streams coming INTO america.

Big3 gangsters!!!!??????!!! You make me laugh.... thats right, I forgot. I remember I saw Tony Soprano in the crowd at Rick Wagoner's press conference.

— neutral (View Profile)

Posted on 12/19/2008 6:47:55 PM | | Votes: 2

Oh by the way..

By giving the big3 some breathing room, they ARE helping homeowners. Otherwise, big3 collapse, so do their suppliers, so do all the small businesses that rely on them. Then we can talk about foreclosures and helping homeowners.

Think about what you are saying. In the short and long term, Bush made the right decision. It is the least costly to the taxpayer (hell if all goes well, this makes us money back), and will help ensure a stronger america for tomorrow.
— neutral (View Profile)

Posted on 12/20/2008 12:07:02 PM | | Votes: 2

there is 0% chance for them to recover. its an abomination that i just got robbed yet again for these corporate criminals.
— bthuss (View Profile)

Posted on 12/19/2008 8:00:45 PM | reply to this comment | Votes: 2

Yes, and the trillion or so that went to Iraq was fine, the hundreds of billions going to wall st is fine, the hundreds of billions in government waste is fine.

Yeap, its a loan to automakers that's the abomination....yeap.
— neutral (View Profile)

Posted on 12/19/2008 8:18:30 PM | | Votes: 0

Good point. The money has already been spent.So don't blame Detroit.We are not bailing them out with any extra money. It just means that Wall Street(who has yet to explain how the 353 Billion that we have already given them is being used.So far we haven't a clue)is getting slightly less.At list out of the total 700 Billion the tax payer is funding we know that 17.4 billion is being asked to be accounted for and is being asked to get paid back. The question then is how is the remaing 686.6 billion going to be handled?What's Wallstreet's plan? When are the banks going to start loosening credit again and start lending money?Are their CEO's going to take a reduction in pay?Why are we so worried about Detroit here?The money they got is a pittance compared to what we've already given and what we still plan on giving to Wallstreet companies and banks.Is it such a crime to have American Manufactoring in this country? If there wasn't this credit crunch would Detroit have been in this mess in the first place? Don't we need to look at this from a different perspective. Further what do you think is going to happen to Toyota,Honda,Hyundai,Kia,BMW,Mercedes etc if Detroit were to go belly up.Shall we play 20 questions or don't you all get it!!!!
— mini22 (View Profile)

Posted on 12/19/2008 8:17:29 PM | reply to this comment | Votes: 2

mini22,

Stop with your nonsense... your use of logic and reasoning is not welcome here on autospies....

Just kidding, good post.
— neutral (View Profile)

Posted on 12/19/2008 8:21:34 PM | | Votes: 3

The sooner that GM goes under, the sooner a buyer with $$$ will pick up the pieces and run with it! There are more millionaires in China than there are employees in the US auto-industry period. Simple facts.
Let capitalism work.
Tell the gov't to get the f*** out of the way ... they are slowing the future recovery of the US auto industry!
GM is dead -- long live GM!
(and if you don't understand that last line, then you're too much of a moron to deserve to post a response)
— DieselRules (View Profile)

Posted on 12/20/2008 2:17:08 AM | reply to this comment | Votes: 0

You seriously want the Chinese to own GM? Do you seriously think anyone would ever buy a GM vehicle after a disasterous bankruptcy proceeding from CH11 to Ch7?

GM would loose all of its engineers & designers in the process... then who would the chinese use to get the company running???

Let GM do what it needs to do and let it own Chinese companies instead of the other way around. Im sick of this idea that we should be giving up everything that is ours.... have a little national pride.
— neutral (View Profile)

Posted on 12/20/2008 11:57:00 AM | | Votes: 2

Neutral.
GM is not broke. They are beyond broke.

But imagine 3 investors taking the company and dividing up dealerships, production lines, etc. and EACH investing 50 BILLION in the company.

Sure, it would have a lot of foreign ownership, but try to imagine what an investment of 150 Billion would do for the US economy!
Nobody on this side of the Pacific (including the gov't) is going to put up anything near that.
But a Chinese consortium could.

Would you rather see GM foreign owned, but operating and employing people, or just gone all together and assets liquidated?
— DieselRules (View Profile)

Posted on 12/20/2008 8:33:32 PM | | Votes: 0

Chrysler looks like AMC now. They will likely sell off to the Chineese who are after the US dealer network like a tiger.

Chrysler wants to be an Automotive Finance Company anyways. they want to make money by being Loan sharks to high risk people and sell teaser loans in predatory ways to people down on thier luck.

Selling cars is not the most profitable way to get people to spend anymore.

Looks like the American Dream has truely become the American Gimmick.

Chrysler gives up on the Imperial, gives away the keys to the Large Sedan Market to the Asian Autos, and decides to take the low road to finance.

Chrysler is like AIG, Leeman, Enron, Michael Milken, The Flim Flam Man, the snake oil salesman.

Selling Perception is better than selling real goods.
— mercuryguy (View Profile)

Posted on 12/20/2008 12:22:50 PM | reply to this comment | Votes: 1

This is actually good new, as this will eventually spur developments of powertrains that can compete with the foreged-by-God VQ engine. OMGWTFBBQ!!11!
— ChuckG20 (View Profile)

Posted on 12/20/2008 1:51:35 PM | reply to this comment | Votes: -2

http://www.msnbc.msn.com/id/28337800/ Wonder if we can get some of that back to help! And that was an out and out giveaway... nobody even pretended it would be a loan. I agree with neutral. We should try to maintain our last vestige of large scale manufacturing. Sure it could go to China or elsewhere ... and they could send machines over here to manufacture cars... and we could have the 15hr jobs screwing them together. To bad 90% of the engineering to produce the complex machinery to build the cars would leave, to bad the profits will flow to another country etc... Hey now that I think about it I agree with the Dieselrules and Designer1... Vote Republican - Screw America - Support China! After all they are the future ... so just let it happen and be happy.
— valhallakey (View Profile)

Posted on 12/21/2008 8:02:36 PM | reply to this comment | Votes: 1

In the end nobody is freaking buying cars... and if this downturn lasts years and years (which some of the economists who actually saw this coming are saying... although not the cheerleaders who did not see it coming) it could spell doom to US (and a number of other) automakers no matter what they do.
— valhallakey (View Profile)

Posted on 12/21/2008 8:04:40 PM | reply to this comment | Votes: 1

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AUTO MAKERS GET THEIR DOUGH: If YOU Were A Betting Man, Does This Work Or Will They Die Anyway In 09?

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