OK, so GM automakers need $12 billion

[gsdx]

When the wonderful import companies were building armament and ripping apart Pearl Harbor and Southeast/west Asia The Car companies retooled overnight to meet that demand.
Aren't YOU thankful for it? You could be speaking Japanese now.
But that's another discussion.

I'm Canadian. They didn't attack us.

The big problem is that the US has always considered itself a leader. It has always felt safe inside the confines of its borders and has rarely looked beyond those borders. There is a falsely-secure notion that "it can't happen here."

But it did, and now they are in serious trouble. They didn't even consider a 'what if' scenario and there was no preparation whatsoever for the thing that everyone else could see happening.

Sure, everyone else was caught off guard as well, but at least everyone else was at least somewhat prepared for it.

But you made them what they are today, and they have squandered your generosity to the point of teetering on the edge of bankruptcy. And now they want you to fix it. So you fix it by giving them $12 billion of your hard-earned money. Do you seriously think they will stop squandering it? It's like getting an inheritance from a rich uncle. Party time!

Seriously, the only way they can be fixed is to wipe the slates clean and start all over again from scratch and stop paying their janitors who mop up piss and shit in the bathrooms more money than you pay your police officers and teachers.

 

[looseliam]

Oh and the quality argument gets thrown around - how shocking.

I've been in the auto industry for over a decade. I've driven just about make and model out there.

Show me a 10 year-old, 100,000 mile Chevy Impala that ages like a 10 year-old 100,000 mile BMW. It won't happen.

The cars that people trade every 3 years are designed to last forever. The ones people need to last forever give-up after 100k-150k. I've had a couple BMW's, Saab's, and Mercedes that I sold with over 200K on the clock. FUck, one Mercedes diesel had 350K and still ran like a champ.

The fact of the matter is the US auto makers took advantage of "by American" with sub-par vehicles. Yes, now they may be greatly improved, but not after many have been put-off by the lack of quality and features.

 

[CoolguyAT]

Someone I really care about is a general manager of an auto dealership and from what I understand if the big three collapse it will cause shockwaves throughout the entire industry. While cares like Toyota, Honda, Hyundai, Mercedes, etc. are foreign owned don't they get a lot of parts from GM, Ford, and Chrysler here in the USA? That's been my understanding lately. If anything, seeing what this whole mess is doing to my friend is making me supportive of the bailout.

 

[Huskerboy]

Ya know, I've been giving this a lot of thought, and we can't sit here and honestly point our fingers at the Big 3 without taking some of the blame ourselves... They were building the autos that Americans wanted - the fullsize pickups, SUVs, etc. Until gas hit $5 a gallon those were the big sellers! Drive by ANY domestic dealer and you'll see far more fullsize vehicles than anything else! If these things weren't selling, do you honestly think they'd continue building them???? Gimme a break! You build what the consumer wants, or you go down the road kicking horse turds while talking to yourself!

Another example is Toyota. Up until a few years ago they didn't build a fullsize pickup. They had a light-duty commercial truck line, but until the demand for a fullsize pickup came into play, their entire line was that of smaller cars and trucks. They were building what the consumer wanted!!!

Then along came the $5 gasoline. People suddenly decided they didn't want a chunk of steel that only got 18 mpg... they wanted something more economical, and Detroit is going "WTF???" It's not their fault... I doubt they saw $5 gas coming at them... did YOU???? No. None of us did... but now we're running around scared to death that it's going to happen again (and it will) and we've left Detroit standing there with an entire system geared up to build those fullsize vehicles and a huge inventory of them as well. Sure, they've got smaller models, but those aren't their bread and butter. They need time to make the changes to their products - while trying to keep everyone employed, and while trying to maintain a cash-flow that will allow them to keep paying their taxes.

Since Americans have had a hand in how Detroit has been doing business, I think it's only fair we have a hand in helping them keep themselves in business. Think of the job loss, and the economic impact them going belly-up will have on our country! It's going to take some time, but they'll soon have your higher mpg models available, not to mention the additional hybrids and electrics. In my opinion, I think we need to help Detroit impliment those changes and give them a bailout... I'd MUCH rather bail them out, than a bunch of greedy, fat-ass corrupt bankers that got in way over their heads!!!

 

[Yngbldhwk]

A bailout of the big three is probably going to happen in some shape or form. Keep in mind that what the companies are asking for are bridge loans and not gifts. It's possible that they could return to profitability in the future and pay off the loan -- but only if they change their business model, and radically at that.

The automakers, at least, came and answered questions and put forth some strategic plans as well as offered some concessions. Contrast that to Citigroup or AIG, that offered nothing other than holding out their hands. Yet AIG alone received ~$150 billion, most of which has already been spent, and still no word as to what they're actually going to change in their operations (e.g., selling assets) in order to become profitable.

The larger issue is that, based on their balance sheet, GM, Ford, and Chrysler have been functionally bankrupt for years. GM's current net worth is -$58 billion. Minus. Even if they obtain the full amount of their request ($18 billion), they could spend that down in approximately four months, and still be $40 billion in the red.