ClassicCar

You forgot to mention the Unions- they are a big piece of your puzzle.

They really didn't get it. You could see in the interviews these guys were far removed from reality. When asked would they consider working through this crisis with zero pay only the CEO from Chrysler said he would. Of course he has to live up to the example set by Iacocca. The GM and Ford CEO's said they were fine where they were. What kind of use of language is that? "fine where we are"?. They do not want to address the fact they get 24 million per year plus bonuses to run their companies into the ground. GM carries a legacy of union contracts that have sunken the bottom line. Paying full health care to retired workers is nice but the average worker is living a long time and thats billions of dollars.



I like Warren Buffetts idea that the CEO's are asked to invest their own money in the bailout then tie their pay into company performance. If the company does well they do well if it does not they lose their own money. I am sure that will be met with disdain. Its amazes me they want a public handout and are not willing to suck it up. Obviously they do not believe in the companies they are supposed to run.



These companies employ a lot of people and saving them is important but giving them access to funding when their business models are not sound seems like a recipe for disaster. During this whole investigation the example of the British government paying billions to a auto industry that was managed terribly proves that giving out money will not solve anything only prolong the inevitable demise of the industry.



Making them prove their business model and submit a streamlining plan with performance metrics would be a much better use of the tax payers dollars. For once those at the top need to held accountable for the performance of their business.



Put up your hands how many small business owners would like a little help through these rough times no strings attached. Yes I know it isn't going to happen and none of us would ever think it should so why should these guys.

You can't pay someone $70,000 a year to build a car and expect someone who makes $30,000 a year to buy it.

You know "The market" system says those who take the risks should reap the reward. By such free market logic if the CEO's company crashes into the ground the CEO and BOD should get ZERO. But that's not what happens, they got their golden parachute and walk away rich. If our free market people really believed in the free market then when someone couldn't make money building cars, or flying planes, then they don't get to do it. (Sorry thanks for playing). No mom and pop business is going to get a bailout they make or break on their own. CEO's believe in the free market when they're winning and want the rules changed in their favor when they're not. You could maybe justify such salaries if they were actually taking risks.

As far as the unions, I agree they made mistakes, the union is suppose to represent the workers rather than try and run operations or the company, but I'm hesitant to say they're the cause. GM's been laying off people in clumps for more than a decade and they've given wage concesions to management (who is making many times what line employees do). Also most strong democracies have strong trade-union movements. The market alone without and underlying values has no motivation to take care of people. The question is who does our economy exist for? (my .02)

I think the reason the CEO's felt safe flying to Washington in their private jets, is that they see the U.S.Goverment who is 400 trillion in debt, fly the President around in a Boeing 747!

Works for them!

What's to stop you from asking for your own bailout? I think everybody should, just to show how patently absurd this whole thing has become...



Wait, we're "too small" to succeed, instead of "too big to fail"!

The bailout of the banks and the bailout of the Auto industry are two separate cases that have two different outcomes. Since the US debt is held by so many foreign countries if you do not bail out the banks to shore up the credit situation you won't get a correction as stated above you will get a complete and total failure of your monetary system. When bailing out this industry it just highlights the problems with it. The AIG execs get a 135 Billion bailout they then celebrate by flying to a spar for the weekend. Its this type of disconnect from the reality of life that is disturbing. As part of this package they need to completely revamp the compensation system of these CEO's one suggestion is to link the pay to a 5 year period you get a base pay and you get your bonus after 5 years so if the company is still profitable you get paid.



The very sad thing is the mortgage instruments these idiots used have meant without a bailout a lot of people will cease to own their houses. As part of this bailout they need to put money so the normal Joe on the street can keep his house. For about 55% of the people even with help they will lose their homes.



Now if the Auto industry goes under they will chapter 11 realign have to break the union contracts and rebuild as a complete different version of themselves. Maybe as one company made up of Ford, GM and Chrysler. But at least there will still be a country to it in.

OK….

Let see if this makes a bit of sense….

• Fiscal policy of the US is determined by whom?

Answer – The US Congress Who controls the Federal Reserve, and all give away programs.

• How does Congress control the fiscal policies?

Answer – Sets the interest rates, establishes from whom and how much funding the US borrows to off set debt?

• How does Congress get to make these decisions?

Answer – Being elected by Popular Vote.

• Who are the voters?

Answer – American citizens

Sorry folks, look in the mirror and you will see who allows the fiscal policies to continue. The economy of the US is like a set of dominos. Knock over one and the other is affected. Look the other way while the Congress creates give away lending programs which are backed by the guarantee of your tax dollars and what do you expect the result will be. All the while the news most will listen to is the PRESIDENT DONE IT. Wake up! The truth of this fiscal meltdown can be found in the lack of Congressional oversight.

A friend of mine runs the largest GM dealership franchise in TEXAS. When asked if he favored giving GM another $25B bailout, His answer was a resounding NO. He added, if he ran his business like GM does he would be out of business in a year.

If we are angry… start using that energy to find out how your government is operating. Who is making the decisions that have lead to this out come?

If I went to a car dealer and said I want a new car but I have No collateral, no down payment and my income is barely sufficient to make rent each month, should I get a new car loan? Well the same analogy can be applied to all the mortgage loans that are at the root of this debacle. All those folks’ loans were approved! Check it out… you elected crooks and they are still there.

Good Luck with sorting out who gets what … I for one have a seat high in the bleachers and don’t care who wins the game… as it is rigged anyway.

POTUS? Mercy! Reminds me of DINKS (Double Income No Kids) which creates PODWOGS (Parents Of Dinks With Out Grandkids).



Then my son who works for IBM, tells me about the twist on

WYSIWYG (What You See Is What You Get). Since IBM is now running your system, it's WYGIWIGY (What You Get Is What IBM Gives You)

tombia wrote:

I got a good one for you. I received a letter from CitiBank today advising me that the interest rate on my Visa card was going from 11.9% to 18.9%. WHAT?. I called their customer service number and was told because of the economy they were raising their rates. Lucky I have less than $500.00 on the card, !!BUT!! . I had my bank double check my credit report, as expected it was perfect, nothing on it. CitiBank wants me to pay for their dumb investment mistakes.

Sent to me recently:.....



Once upon a time, in a place overrun with monkeys, a man

appeared and announced to the villagers that he would buy

monkeys for $10 each.



The villagers, seeing that there were many monkeys around,

went out to the forest, and started catching them. The man

bought thousands at $10 and as supply started to diminish,

they became harder to catch, so the villagers stopped their

effort.



The man then announced that he would now pay $20 for each

one. This renewed the efforts of the villagers and they

started catching monkeys again. But soon the supply

diminished even further and they were ever harder to catch,

so people started going back to their farms and forgot about

monkey catching. The man increased his price to $25 each and

the supply of monkeys became so scarce that it was an effort

to even see a monkey, much less catch one.



The man now announced that he would buy monkeys for $50!

However, Since he had to go to the city on some business,

his assistant would now buy on his behalf.



While the man was away the assistant told the villagers.

'Look at All these monkeys in the big cage that the man has

bought. I will sell them to you at $35 each and when the man

returns from the city, you can sell them to him for $50

each.'



The villagers rounded up all their savings and bought all

the monkeys. They never saw the man nor his assistant again

and once more there were monkeys everywhere.



Now do you understand why and how the stock market works?

.

.

51hornetA wrote:

Here is a reprint of a Financial Times article on the big three. Read the revenue decline over time. Makes you wonder how they kept going for so long.



http://www.canada.com/vancouversun/news/business/story.html?id=c0f1f978-220f-4b2c-9b7e-3d2e770a5655



Pretty obvious these guys need a swift kick up the backside and a revamp of the way they do business.

Just saw an interview of Carlos Ghosn, CEO of Nissan. He presented a graph that showed Nissan sales will be down 85% by year's end. Toyota expects sales to be down by 70% by year's end. So, is the logic that they need to get a swift kick too. :rolleyes:

51hornetA wrote:

I think with Nissan and Toyota they will weather the storm as sales of cars are down in general due to recession. The big 3 will not weather the storm they will go under with out help.



As a generalization Nissan and Toyota are run more efficiently and are not bleeding money so while sales are down for them they will probably not need a bailout.

Following your line of thought, are you implying that Nissan and Toyota can sustain a 70, 85 or 100% drop in sales and still surive? In today's world economy, even efficient, well run companies risk an uncertain future. Today, it matters little how well a company is run if potential customers don't have jobs, cash or credit available to purchase the products or services.



GM and Chryslercerberus would certainly go down without help financial assistance. They're so desperate, they've begun selling off tons of mortgages and other loans they hold through GMAC. However, Ford would survive if the vacuum created by the demise of the other two didn't suck them in. The management of Ford was smart enough to leverage their assets and secure loans before the credit market imploded. Unfortunately, GM and the three headed dog did not.

ESSX28-1 wrote:

Sent to me recently:.....



Once upon a time, in a place overrun with monkeys, a man

appeared and announced to the villagers that he would buy

monkeys for $10 each.



The villagers, seeing that there were many monkeys around,

went out to the forest, and started catching them. The man

bought thousands at $10 and as supply started to diminish,

they became harder to catch, so the villagers stopped their

effort.



The man then announced that he would now pay $20 for each

one. This renewed the efforts of the villagers and they

started catching monkeys again. But soon the supply

diminished even further and they were ever harder to catch,

so people started going back to their farms and forgot about

monkey catching. The man increased his price to $25 each and

the supply of monkeys became so scarce that it was an effort

to even see a monkey, much less catch one.



The man now announced that he would buy monkeys for $50!

However, Since he had to go to the city on some business,

his assistant would now buy on his behalf.



While the man was away the assistant told the villagers.

'Look at All these monkeys in the big cage that the man has

bought. I will sell them to you at $35 each and when the man

returns from the city, you can sell them to him for $50

each.'



The villagers rounded up all their savings and bought all

the monkeys. They never saw the man nor his assistant again

and once more there were monkeys everywhere.



Now do you understand why and how the stock market works?

.

.

---

Anybody wanna guess who the monkeys and villagers are in our ecomomy ??

rambos_ride wrote:

Of course with GM trading @ a 62 year low $3.00 +-



I'm tempted to buy some stock on a gamble....GM was trading @ 40.00 a year ago, I can't see that its worth 97% less than it was a year ago no matter what trouble they're in.

I am kinda thinking along the same lines with Dan here. Even if they decide to go bankrupt (which the GM board might be open to...according to a news story I read yesterday), the stock can't get much cheaper than it is now. And Ford is sitting around $1-$1.20 right now.



What's good for the company is good for the stock. If BK is good for the company, so be it. It'll give them a chance to reinvent themselves. Subtract dead marquees (Buick, Mercury) and redundancys (GMC). Do an emergency rewrite of the union contract. Etc, etc, etc...



I also read somewhere that Cerberus is interested in trading Chrysler for the remaining 49% of GMAC the GM still holds.

That report was supposedly an Internet hoax.

http://money.cnn.com/2008/11/24/news/companies/taylor_gm.fortune/?postversion=2008112410

And the gub'mint is currently pledging ANOTHER $800B to the credit card companies to "keep money flowing to get people spending again!" Wait...in a money crisis, you STOP SPENDING FRIGGIN' MONEY!!! You surely stop BORROWING money, if it is absolutely not necessary to do so! The gub'mint WANTS people to stay in indentured servitude, through taxes and debt! People are not spending money for a reason! People are not traveling for Thanksgiving. People are NOT out using up more fuel, even though the pump price today is less than half what it was in July! I'm sure as hell not spending more money or using more fuel now, that is for damn sure.



Right now, we are in a much greater danger of deflation versus inflation. We were in a huge inflationary spike since about March '08 or so. The "official" gov't inflation numbers do NOT count food or fuel anymore (haven't since 1996!), so they were able to "keep" the inflation rate at roughly three percent. WITH oil and food included, the true inflation rate was closer to ten percent annually! But, since the free-fall of fuel prices (funny how the increases were for "Bush and his "oil buddies""...interesting how no one seems to worry about the consequences of a free-fall), prices overall have gone down, as has oil. The low oil prices may be good for the weak economy in the short term, but those pressures to keep it down by artificial means will result in problems very soon. Isn't supply and demand wonderful? It really DOES work! Plus, with the new Administration promising the Moon to everyone, they are going to be under pressure to deliver those (purposefully empty) promises.



We live in crazy times, boys and girls. Keep the powder dry.