patrick.net

Reality says

Designing and making better cars that people want to buy without huge price
discounts.

So the same workers (except the designers apparently), suppliers, and dealers are suddenly going to add more value to the end product simply because of new ownership?

control point says

Reality says

Designing and making better cars that people want to buy without huge price

discounts.

So the same workers (except the designers apparently), suppliers, and dealers are suddenly going to add more value to the end product simply because of new ownership?

That's what better run businesses do. If that's not the case, how would you allow any bad business go bankrupt?

BTW, Even the designers would come up with better designs when not ensnared in the GM bean counter culture and corporate-labor union trap in the rustbelt.
GM divisions overseas are quite successful at innovations and coming up with good products.

GM recorded a profit of $4.3 billion for the first nine months of this year.

The answer is to tax the profits and the executive compensations until the entire amount, in real dollars, is paid back. Tax the executive compensation at 100% no matter where the execs work until this is paid back in full.

Reality says

What if there is a 5% chance the sun won't rise if we don't sacrifice your first-born? Asking such question is committing fraud of the hypothetical. Banking will not cease to exist, so long as it is a necessary service. Some of the big banks would indeed cease to exist . . . turns out even one as big as Lehman getting liquidated did not result in much impact on the financial system. Swaps and derivatives are by definition zero-sum games. For every loser on a trade, there is a winner as his counter-party.

Exactly. It was clear cut fraud, and they sacrificed the taxpayers children's future.

control point says

Reality says

Designing and making better cars that people want to buy without huge price

discounts.

So the same workers (except the designers apparently), suppliers, and dealers are suddenly going to add more value to the end product simply because of new ownership?

Yes.

Reality says

So you think taxpayers should subsidize big corporations that leverage on their payroll money

No, I don't.

Reality says

Companies that can not meet payroll should be bankrupted because they leverage too much and take too much risk with their worker's well being. The corporate officers engaged in such behavior should be arrested if any dereliction of duty is found.

That's fine. Like I said--don't cry when you're in the unemployment line or eating at the soup kitchen when your benefits run out.

Reality says

It's called a storage fee

lol--are you familar with the concept of "time value of money?"

Reality says

No it is not. Food and water is far more immediately critical to human existence than even money. It takes more time and labor to set up a new supermarket with all the variety of foods than to open a new bank. In fact, if not for government restriction, there would be banks all over the town in every town. The stocking of money and taking a percentage is far simpler than the stocking of foods; unlike the vast varieties of food, money does not perish and is fungible.

I'm not talking about the back down the streeet folding. I'm talking about the entire financial system failing. There's a difference there. A better analogy would be if the entire transportation system failed. No trucking. No trains. No flights. Do you think that would have an effect on people?

It wasn't just GM at risk, it was all the part suppliers, dealerships, financial
Institutions, and their supporting companies that stood to also fall. The cost in jobs would have been catastrophic at a time when America was really hurting for jobs. I think saving American industry is worth doing, also bringing industry back. Let's say the job cost would have been a million, so think of the billions that went unspent on unemployment and welfare for the jobless, as well as the taxes reaped off the backs of the companies and the employed workers. It was a net gain for the government when all that is considered, and more importantly it was a benefit to America. Or we could have bought twenty new fighter jets to give the chickenhawk neocons big boners and scrambling for an excuse to use them. What is more worthy?

edvard2 says

The better question to ask in this situation would be how much BIGGER would the costs have been to future generations if GM and Chrysler had not been bailed out?

Just the proceedings of bankruptcy. The auto-industry had been moving out of the US for quite a while, and now suddenly GM is the one that has to be rescued? The costs would have been far lower for everybody, rewarding and supporting failure is always the highest cost and hurts more people for the benefit of a few.

The main purpose of the bailouts was to keep the aristocracy in power, protect them from any "losses", and to keep the whole 20th century american scam of "retirement" in tact.

Think of all the different layered insurances that exist in the "private markets". Private in so far that they pretend to minimize risk in the name of gauranteed profits,,,until all their risk minimzation ends up being so risky that the only way to prevent catastrophe is for the government to stick the gun in the back of the working man, and yell "hi ya! Giddy up" flog him with a whip so the privileged can maintain their privileges and the young and the powerless can be bound, gagged, and dry fucked until they can take no more

Reality says

What you are not seeing is that: the workers, parts suppliers and dealers would have been absorbed by other carmakers that turn out cars more profitably (to the extent that consumers need cars; the rest will find more profitable employment in other fields in the absence of government disincentive to work).

Because you say so. Right?

Reality says

Suppose these companies had tied up hundreds of thousands of workers making horse saddles and whips, your argument would have run just the same, and equally invalid.

What you are not seeing is that: the workers, parts suppliers and dealers would have been absorbed by other carmakers that turn out cars more profitably (to the extent that consumers need cars; the rest will find more profitable employment in other fields in the absence of government disincentive to work).

You are making a lot of really simple assumptions. First of all, if you are a supplier of car parts to a particular company, then that means you as a supplier have invested what likely amounts to many millions of dollars in research, tooling, stamping, equipment, CNC machinery, facilities, employees and training that were all geared specifically to making said parts for that particular company. The loss of the company that those companies were supplying would have easily bankrupted many, many of those suppliers.

The problem with your assertion is that your "solution" is tied to gross assumptions and guesses. When it comes down to investments, risk, and financial planning, basing said investment on assumption is an almost assured means to LOSE a lot of money. Investments are made on the basis of more predictable outcomes. Simply put, saving two companies with large intact chains of suppliers, trained workers, and the entire network of inter-related enterprises tied to them and leaving this system intact has way LESS risk then doing what you were suggesting, which was to let em' fail and "Assume" that somehow other auto manufactures would have picked up the slack. Had something like what were suggesting been done the net loss would have almost assuredly been many, many times greater in overall cost then what it wound up being.

errc says

The main purpose of the bailouts was to keep the aristocracy in power

How does keeping blue collar union workers employed help keep the aristocracy in power?

Quigley says

Or we could have bought twenty new fighter jets to give the chickenhawk neocons big boners and scrambling for an excuse to use them. What is more worthy?

First of all it would have been much fairer to send everybody a check from that money, probably also with better outcome since they would not have focused on failing businesses and distributed the risk evenly, instead of throwing good money after bad. Second if that would be working in any way with any positive outcome, the US would be allowing everybody to print their own money to get themselves out of "ruts" and jump-start their businesses. But it's not, and therefore it's illegal for most and only legal for a few, benefitting the first-in-line cronies.

mell says

Just the proceedings of bankruptcy. The auto-industry had been moving out of the US for quite a while, and now suddenly GM is the one that has to be rescued? The costs would have been far lower for everybody, rewarding and supporting failure is always the highest cost and hurts more people for the benefit of a few.

As we speak, many millions of US workers are employed either directly, or indirectly to the US auto industry. So even is some of that work had been moving overseas, that doesn't mean that nobody works for them in the US anymore. Quite the opposite actually. So you are wrong. The costs would have been far greater had they been allowed to fail if we only base this on the sheer costs of supporting millions of US workers on unemployment insurance.

Dan8267 says

GM recorded a profit of $4.3 billion for the first nine months of this year.

The answer is to tax the profits and the executive compensations until the entire amount, in real dollars, is paid back. Tax the executive compensation at 100% no matter where the execs work until this is paid back in full.

After the fact (since I could not prevent the bailouts), I agree with you on this.

mell says

Yes.

Reality says

That's what better run businesses do. If that's not the case, how would you
allow any bad business go bankrupt?

LOL. I want to go into M&A with these two. All it takes to add value to the end product is better ownership.

Dan8267 says

GM recorded a profit of $4.3 billion for the first nine months of this year.

The answer is to tax the profits and the executive compensations until the entire amount, in real dollars, is paid back. Tax the executive compensation at 100% no matter where the execs work until this is paid back in full.

You will never hear those who benefit from ill gotten gains, suggesting claw backs. Take those on this board who applaud the fraud and waste in government (its the republicans fault) while reveling in the shlop like pigs in shit.

The american way dies everytime someone says "if its within the rules, its kosher to me!" And "if you can't beat um, join um". No good has ever come from that type of attitude. Pioneers that forge a better way of life, don't bother to read someone elses rules book. they decide for themselves what is right and what is wrong, regardless of what the government says.

tatupu70 says

Reality says

What you are not seeing is that: the workers, parts suppliers and dealers would have been absorbed by other carmakers that turn out cars more profitably (to the extent that consumers need cars; the rest will find more profitable employment in other fields in the absence of government disincentive to work).

Because you say so. Right?

How big of a bailout did ford need?

errc says

tatupu70 says

Reality says

What you are not seeing is that: the workers, parts suppliers and dealers would have been absorbed by other carmakers that turn out cars more profitably (to the extent that consumers need cars; the rest will find more profitable employment in other fields in the absence of government disincentive to work).

Because you say so. Right?

How big of a bailout did ford need?

$6 Billion.

control point says

mell says

Yes.

Reality says

That's what better run businesses do. If that's not the case, how would you

allow any bad business go bankrupt?

LOL. I want to go into M&A with these two. All it takes to add value to the end product is better ownership.

That's literally what corporations are supposed to do: turning less valuable natural resoruces, intermediate inputs and labor into end products that are more valuable.

GM as a corporation was actually built on the principle of slapping different brands on the same underlying platform to achieve different end product values for cars.

errc says

You will never hear those who benefit from ill gotten gains, suggesting claw backs. Take those on this board who applaud the fraud and waste in government (its the republicans fault) while reveling in the shlop like pigs in shit.

It pays to remember that it wasn't just the Obama administration that supported the bailout, but Bush as well. People need to put the politics aside for a moment and look at this as a purely economic exercise. At the time, neither side felt "good" about the decision and you can also bet that I wasn't totally thrilled either. Sure- it stank. But it had to be done because otherwise the costs would have been enormous otherwise. This all boiled down to economics.

Lastly, there is hardly an auto manufacture on earth that has not at one time gotten some sort of government bailout. Auto companies are important because they have an enormous economic impact on the countries the exist in and in each instance of those bailouts the decision was made not because of political ideology, but because of picking the better financial outcome of a bad financial situation.

tatupu70 says

errc says

tatupu70 says

Reality says

What you are not seeing is that: the workers, parts suppliers and dealers would have been absorbed by other carmakers that turn out cars more profitably (to the extent that consumers need cars; the rest will find more profitable employment in other fields in the absence of government disincentive to work).

Because you say so. Right?

How big of a bailout did ford need?

$6 Billion.

No, that's not what Ford needed to survive when GM was bailed out. That was the pay-off money (and similarly to every other major carmakers in the world) for not letting the other carmakers take a dib on carving up GM. In other words, those payouts should also be added to the cost of bailing out the union members at GM.

Reality says

That's literally what corporations are supposed to do: turning less valuable
natural resoruces, intermediate inputs and labor into end products that are more
valuable.

Yes, but you are saying taking the same all of the above, only changing the ownership, and the ownership change alone will add value.

edvard2 says

You are making a lot of really simple assumptions. First of all, if you are a supplier of car parts to a particular company, then that means you as a supplier have invested what likely amounts to many millions of dollars in research, tooling, stamping, equipment, CNC machinery, facilities, employees and training that were all geared specifically to making said parts for that particular company. The loss of the company that those companies were supplying would have easily bankrupted many, many of those suppliers.

What are you saying? That no car model should ever go out of production? You should feel right at home in the 1980's USSR, when their factories were still churning out copies of American cars made in the 1950's . . . because when the bureaucrats are the sole decision maker on capital obsolescence, nothing is ever allowed to be obsolete!

edvard2 says

The problem with your assertion is that your "solution" is tied to gross assumptions and guesses. When it comes down to investments, risk, and financial planning, basing said investment on assumption is an almost assured means to LOSE a lot of money. Investments are made on the basis of more predictable outcomes. Simply put, saving two companies with large intact chains of suppliers, trained workers, and the entire network of inter-related enterprises tied to them and leaving this system intact has way LESS risk then doing what you were suggesting, which was to let em' fail and "Assume" that somehow other auto manufactures would have picked up the slack. Had something like what were suggesting been done the net loss would have almost assuredly been many, many times greater in overall cost then what it wound up being.

No, you are the one making unfounded and counter-factual guesses. Overhauling automakers, and even entire auto industries, have been taking place in many parts of the world many times over. The result is always leaner operation, higher productivity, and better products for consumers.

control point says

Reality says

That's literally what corporations are supposed to do: turning less valuable

natural resoruces, intermediate inputs and labor into end products that are more

valuable.

Yes, but you are saying taking the same all of the above, only changing the ownership, and the ownership change alone will add value.

Ownership takeover by another car maker means management decisions to be made by people who have track record of actually making good management decisions! in capital structure and labor-relationships that have a track record of turning out cars that consumers want to buy!

Reality says

No, that's not what Ford needed to survive when GM was bailed out. That was the pay-off money (and similarly to every other major carmakers in the world) for not letting the other carmakers take a dib on carving up GM. In other words, those payouts should also be added to the cost of bailing out the union members at GM.

lol--was the $16B that the Fed gave them also a payoff?

http://jalopnik.com/5704575/ford-bmw-toyota-took-secret-government-money

Sometimes I wonder how/where you come up with this BS.

tatupu70 says

Reality says

No, that's not what Ford needed to survive when GM was bailed out. That was the pay-off money (and similarly to every other major carmakers in the world) for not letting the other carmakers take a dib on carving up GM. In other words, those payouts should also be added to the cost of bailing out the union members at GM.

lol--was the $16B that the Fed gave them also a payoff?

http://jalopnik.com/5704575/ford-bmw-toyota-took-secret-government-money

Of course it was. That was what I was referring to as "similar handouts to almost every other major caramaker in the world." That was hush money paid out at the big boys table to make it "fair to everyone," everyone at the big boys table, that is. Of course all at the expense of people who were not at the table!

Considering the average new car cost more than $30k nowadays, who do you think benefit the most from those handouts to the financing arms? Besides the executives and finance guys, those who can afford to buy/lease new cars frequently benefit at the expense of those who buy used cars and/or keep cars for a long time. In other words, another instance of ripping off the poor and the middle class to enrich the already wealthy.

Reality says

What are you saying? That no car model should ever go out of production? You should feel right at home in the 1980's USSR, when their factories were still churning out copies of American cars made in the 1950's . . . because when the bureaucrats are the sole decision maker on capital obsolescence, nothing is ever allowed to be obsolete!

Again- some simple assumptions. Every time a new redesign of a model comes out its not like the entire car is actually new. All automakers have what are known as "platforms", which is to say a basic chassis or vehicular configuration that is used for the underlying structure of sometimes multiple models. On top of that those models might undergo several model redesigns but still use the same generation of platform. Some platforms are used for decades. For example, Chrysler was using some platforms that had been developed by AMC ( American Motor Corporation) in the 70's and early 80's right up until not too long ago.

So in that case, many suppliers will make what amounts to the exact same part for decades. Perhaps the sheetmetal, engine, and interiors might change, but things like body panel clips, swing arms, steering wheel hubs, spindles, brake calipers, and power steering pumps can be in production for a very long time. Its also not just platforms but engines, transmissions, and suspension components.

So you see, its not like with every model change those suppliers suddenly all re-tool. They are often setup creating the same parts for decades and to assume they would suddenly totally change overnight is a simplistic assumption.Reality says

No, you are the one making unfounded and counter-factual guesses. Overhauling automakers, and even entire auto industries, have been taking place in many parts of the world many times over. The result is always leaner operation, higher productivity, and better products for consumers.

How was I making a "guess"? If you had made the choice then millions of people would have immediately been out of work and what would have definitely happened would be a huge cost in the form of unemployment insurance.

As far as leaner operations, higher productivity, and better products, both GM and Ford had been doing exactly that leading up to the recession. Most of the products GM currently sells- of which many are selling very well- were developed well before the recession. That the recession came along was poor timing on a well-orchestrated turnaround in the works.

Call it Crazy says

No, that is what has happened in every other industry where a company goes bankrupt... All the workers, suppliers, dealers switch over to a different company...

I see. That's why unemployment is still stubbornly high and worker participation is low. Because the workers seemly moved to a different company. Do you live in the real world??

Call it Crazy says

Exactly.... Just look at the auto industry, how many other car makers or start-ups have moved into buildings formerly run by a competitor?

Of course. Nobody is arguing that companies should never go bankrupt. Implying otherwise is typical for you and Reality though.

tatupu70 says

Reality says

Companies that can not meet payroll should be bankrupted because they leverage too much and take too much risk with their worker's well being. The corporate officers engaged in such behavior should be arrested if any dereliction of duty is found.

That's fine. Like I said--don't cry when you're in the unemployment line or eating at the soup kitchen when your benefits run out.

LOL. You think I pay myself "benefits"? Why go to an "unemployment line"? What is an "unemployment line"? Sounds like a waste of time to gravitate towards where there is already a surplus of people looking for jobs. Go find something you can do for your neighbors and get paid for it! Hopefully get paid handsomely for it because nobody else has yet thought of offering such a service at such a "great price" that is appealing to your customers yet highly profitable for yourself! That's how new jobs are created, not filing paper wasting time at the unemployment line waiting for a government pacifier to suck on.

Why do we allow some businesses to fail? Put the politics aside? Just end the discussion, its purely political

Reality says

Go find something you can do for your neighbors and get paid for it!

Good luck with that. All your neighbors are in the unemployement line that you are unfamilar with. None of them have any money to pay you, despite your admirable attitude.

Let me know how Says "Law" works when everyone is broke.

RentingForHalfTheCost says

10B is nothing! We burn though that in 10/85th of a month (or less than 4 days). What the hell is everyone complaining about. The Fed could buy GM every 3 weeks (market cap of 56B). Geez

Good point. But the fed and their actions are just the boogeyman. No effect on anything, whatsoever

Call it Crazy says

How long have you been living under that rock?? Workers don't move to another company when their current company closes?? Really??

Clearly not. You're the one who talks about the worker participation rate. Do you disagree that there are lots of people out there looking for jobs right now?

Do you think if GM went bankrupt, that number would be larger?

Call it Crazy says

Well, who gets to "cherry pick" which one lives or dies through bankruptcy... The government??

Well, really we do. We elect our representatives.

errc says

Why do we allow some businesses to fail? Put the politics aside? Just end the discussion, its purely political

Because this was all about money. LOTS and lots of money. The simple question is:

Would you rather have paid more or less?

Its really that simple. Sure- had GM and Chrysler been allowed to fail maybe some right-wingers would have felt all warm and fuzzy inside... until the costs of having allowed that to happen would have been recognized.

edvard2 says

All automakers have what are known as "platforms", which is to say a basic chassis or vehicular configuration that is used for the underlying structure of sometimes multiple models. On top of that those models might undergo several model redesigns but still use the same generation of platform. Some platforms are used for decades. For example, Chrysler was using some platforms that had been developed by AMC ( American Motor Corporation) in the 70's and early 80's right up until not too long ago.

Thank you for the gratuitous lecture on car platforms. I have no idea what you mean by "not too long ago." The change over was in the mid-1990's. How long have you been hiding under a rock? two decades? Platforms updates are becoming more frequent in the last decade and half. Platform engineering is gradually giving way to modular engineering that can be updated much quicker. Including for engines, even each cylinder as a module. If a supplier is still stuck in the platform business model, it is indeed a good time to go bankrupt, as the tooling would be quite obsolete already.

edvard2 says

How was I making a "guess"? If you had made the choice then millions of people would have immediately been out of work and what would have definitely happened would be a huge cost in the form of unemployment insurance.

Or get rid of "unemployment insurance" altogether. It's just a system that attract people gaming the system and take 6mo to a year vacations.

edvard2 says

As far as leaner operations, higher productivity, and better products, both GM and Ford had been doing exactly that leading up to the recession. Most of the products GM currently sells- of which many are selling very well- were developed well before the recession. That the recession came along was poor timing on a well-orchestrated turnaround in the works.

LOL, I suppose you would consider farmers who failed to harvest quickly enough and lost crop to the arrival of winter just a case of bad timing for the earth's tilted axis.

errc says

RentingForHalfTheCost says

10B is nothing! We burn though that in 10/85th of a month (or less than 4 days). What the hell is everyone complaining about. The Fed could buy GM every 3 weeks (market cap of 56B). Geez

Good point. But the fed and their actions are just the boogeyman. No effect on anything, whatsoever

Hehehe.

Reality says

LOL, I suppose you would consider farmers who failed to harvest quickly enough and lost crop to the arrival of winter just a case of bad timing for the earth's tilted axis.

Yes, because the timing of recessions is just as well known as the seasons.

I'll give you this--at least you are consistent with your poor analogies.

edvard2 says

errc says

Why do we allow some businesses to fail? Put the politics aside? Just end the discussion, its purely political

Because this was all about money. LOTS and lots of money. The simple question is:

Would you rather have paid more or less?

Its really that simple. Sure- had GM and Chrysler been allowed to fail maybe some right-wingers would have felt all warm and fuzzy inside... until the costs of having allowed that to happen would have been recognized.

Addressed this issue already: the bailout was merely a kick of the can down the road. It will come up soon enough again, given the industrial over-capacity and channel stuffing.

tatupu70 says

Reality says

LOL, I suppose you would consider farmers who failed to harvest quickly enough and lost crop to the arrival of winter just a case of bad timing for the earth's tilted axis.

Yes, because the timing of recessions is just as well know as the seasons.

Longer seasonal cycles. GM financing arm was on the frontline of making car loans and home loans to uncreditworthy borrowers. What do you think would come next? If the practitioner could not expect what was bound to come next as consequence of those uncreditworthy loans, they deserved to go bankrupt.