Should we bail out Ford,GM or AMEX ?
NotaSuv
Posts: 3,847
Thoughts on if the government should bail out Ford,GM or American Express
Maybe only if upper mgmt had a salary cap of ??????? I can not see keeping afloat companies where the top mgmt is still pulling in millions while at the same time they are sending thousands to the unemployment office.....
Maybe only if upper mgmt had a salary cap of ??????? I can not see keeping afloat companies where the top mgmt is still pulling in millions while at the same time they are sending thousands to the unemployment office.....
Post edited by NotaSuv on
Comments
-
One word, NO.
-
If you will it, dude, it is no dream.
-
No. They need to bankrupt, purge crazy benefit packages, and change management. Then, we'll see consolidation and, hopefully, a return to profitability.
Think airline industry.
Where is Lee Iococca when we need him? Is Steve Jobs available? -
What are you talking about? Lee Iacocca took a massive bailout in the 80's to rebuild Chrysler which was on the verge of bankruptcy. Hence the birth of the K platform which has underpinned at least one Chrysler product in every model since it's inception. Even the current Neon is a revised K platform and the original Dodge Caravan was built on it too.Expert Moron Extraordinaire
You're just jealous 'cause the voices don't talk to you! -
Easy to say NO I guess.. but dont we have to think of the overall effect this will have? Especially to the 10's of thousands of families that will see their wage earners on the UE line.....also the effect it will have on the thousands of support companies that service these companies.......
-
What are you talking about? Lee Iacocca took a massive bailout in the 80's to rebuild Chrysler which was on the verge of bankruptcy. Hence the birth of the K platform which has underpinned at one Chrysler product every model since it's inception. Even the current Neon is a revised K platform and the original Dodge Caravan was built on it.
every word true (I might fact check the use of a modified K on the Neon as I am unsure of it, but thats just semantics and not improtant to the topic of the thread)
although it should be noted that Lee paid back that loan early.....and did it through great leadership of a corporation. this is what Dave might have meant by "where is Lee Iacocca". With competant leadership, I would have no problems with a bailout loan, espescially useing Chrysler of the 80's as a model of what a bailout should be used for.
The government helping GM and Chrysler merge might be the right direction but who knows man. it's dizzying. I do know letting all three fold would be bad, but money sent to them unchecked is bad as well. there is an out of the box answer here, but no one has stepped up to come up with it.Living Room 2 Channel -
Schiit SYS Passive Pre. Jolida CD player. Songbird streamer. California Audio Labs Sigma II DAC, DIY 300as1/a1 Ice modules Class D amp. LSi15 with MM842 woofer upgrade, Nordost Blue Heaven and Unity interconnects.
Upstairs 2 Channel Rig -
Prometheus Ref. TVC passive pre, SAE A-205 Amp, Wiim pro streamer and Topping E50 DAC, California Audio Labs DX1 CD player, Von Schweikert VR3.5 speakers.
Studio Rig - Scarlett 18i20(Gen3) DAW, Mac Mini, Aiyma A07 Max (BridgedX2), Totem Mites -
Bailout the auto industry? Yes.
Bailout American Express? I didn't know they were in that kind of a position. I don't think they need it.
Why? Well, for one thing, a company as large as GM or Ford has a major economic impact on the country. More so than a good chunk of the people in this country don't realize. Ford and GM are at the top of the supply chain. Everybody supplies them. If you let them go bankrupt and shutter up factories, you will kill more than just GM and Ford. The parts companies that they have will fold also because there will be no one to supply parts to. Add to that the fact that smaller suppliers make their living supplying the bigger suppliers and a good percentage (probably close to 60%) of them will have to fold up shop too.
Add to all of that the idea of unemployment. If GM and Ford fold and all those people lose jobs, not just Ford and GM but the contracted and sub-contracted suppliers, engineers and designers and such and you will see unemployment levels double what was seen in The Great Depression. That's between 20 and 30%.
And large CEO salaries of a couple million a year are not going to make any difference at all when your monthly expenditure is 3 billion plus.Expert Moron Extraordinaire
You're just jealous 'cause the voices don't talk to you! -
The loan gaurantees to Chrysler were nothing in comparison to this.
He restructured management, re-vamped entire product offerings, assembly lines, and distribution channels (dealerships). We need visionary management like Iococca had, we can't just throw money at the problem without a plan to fix it. -
Bailout the auto industry? Yes.
Bailout American Express? I didn't know they were in that kind of a position. I don't think they need it.
Why? Well, for one thing, a company as large as GM or Ford has a major economic impact on the country. More so than a good chunk of the people in this country don't realize. Ford and GM are at the top of the supply chain. Everybody supplies them. If you let them go bankrupt and shutter up factories, you will kill more than just GM and Ford. The parts companies that they have will fold also because there will be no one to supply parts to. Add to that the fact that smaller suppliers make their living supplying the bigger suppliers and a good percentage (probably close to 60%) of them will have to fold up shop too.
Add to all of that the idea of unemployment. If GM and Ford fold and all those people lose jobs, not just Ford and GM but the contracted and sub-contracted suppliers, engineers and designers and such and you will see unemployment levels double what was seen in The Great Depression. That's between 20 and 30%.
And large CEO salaries of a couple million a year are not going to make any difference at all when your monthly expenditure is 3 billion plus.
I work for a Tier 1 automotive supplier (mainly Toyota) and would have to agree unfortunately. The chain reaction of one of these major automakers going under is scary to say the least. Someone/somehow does need to get their hands around these insane salaries and other perks upper management gets no matter what the company profitability is. -
GM and Chrysler are not merging because GM was essentially going to kill off Chrysler and eliminate jobs and teh government said "No, we ain't givin' you tax payer money just to put tax payers out of work." The only reason GM wanted to buy Chrysler was because Chrysler has a pile of cash right now and GM needs it bad.
Ford on the other hand only posted a $129 million loss last month and it looks like the measures they took in June/July/August are going to pay off. Add to that the fact that Ford was able to move a substantially higher amount of inventory from 08 than they planned. They have already adjusted factory output to current levels of demand and with gas prices dropping and the delay of the 09 F-series release, they are well positioned and may have to ramp up capacity to meet demand. Ford just rehired 1100 employees to build vehicles to help meet the demand that they are seeing. I don't think Ford is in as much trouble as it was previously. They are from out of the woods but they might be able to see a teensy bit of light.Expert Moron Extraordinaire
You're just jealous 'cause the voices don't talk to you! -
The problem is, as we're ALREADY seeing from the first bailout, none of this money gets used like it should, executives just take giant payouts and it doesn't really help anything.
Like most programs that the government tries to do, in theory it's awesome, but in practice never works. If there's some real stipulations that HAVE to be followed in this bailout that forces it to be a net positive for the country, sure. If it's just throwing money at a problem, **** no.If you will it, dude, it is no dream. -
The loan gaurantees to Chrysler were nothing in comparison to this.
He restructured management, re-vamped entire product offerings, assembly lines, and distribution channels (dealerships). We need visionary management like Iococca had, we can't just throw money at the problem without a plan to fix it.
Wake up, dude. The ENTIRE auto industry has been being run the way Iacocca ran Chrysler after the bailout he took. And yes it was on the same level. It was also 30 years ago. The money situation was different then. Besides, Iacocca wasn't a "visionary" and even he will tell you that. He cut waste out of supply chains and implemented production processes and policies that everyone thinks that Toyota and the Japanese invented but, honestly, they didn't. It was developed by American statistical control experts brought in after WW2 in which we sent Japan back to the stone age.
The reason the Big 3 have failed is because they have gotten too big for their britches. They got too big to adapt quickly to the market and now they have to get small again. It doesn't take a visionary to do that and honestly, the venerable Toyota is starting to see the same effects.Expert Moron Extraordinaire
You're just jealous 'cause the voices don't talk to you! -
I would say no to bailout. I'd like to see GM divided into smaller companies that still somehow shared R&D results, maybe with a R&D exchange or purchase plan.
On the car side the GM products are simply not competitive, the only reason to buy one is they are on sale all the time for huge cash backs or slashed prices. Can't really make a profit when your labour isn't very competitive either on the salary scale, can you? If nothing else works, they should at least try to save the tech jobs and move production elsewhere. -
Not competitive? What are you talking about?Expert Moron Extraordinaire
You're just jealous 'cause the voices don't talk to you! -
I just don't see how a bailout now doesn't turn into another needed bailout 5-10 years from now.
-
I just don't see how a bailout now doesn't turn into another needed bailout 5-10 years from now.
No kidding... Isn't GM releasing a NEW Hummer soon, they can't be serious? Gotta love GM's upper echelon and business practices.:rolleyes: -
Not competitive? What are you talking about?
Every single GM car I have driven at the rentals looks ok when you sit in there, but when you start to drive it...yikes. They have become better though, I'd rather get a Pontiac G6 if I have an option than a freaking Impala. -
This pretty much sums it up for me.
It appears that President-elect Barack Obama is intent on creating a plan to aid the ailing automakers.
It's inarguable that the automakers are in deep trouble. For instance, General Motors has roughly $40 billion of debt and is losing more than $1 billion every month, according to Yahoo! Finance.
However, we must ask ourselves if these failed companies are worth saving with our taxpayer dollars.
Let's look at Ford more closely. Ford's debt load, $166 billion, is astronomical. $166 billion is roughly eight times the annual budget of the State of Colorado; Ford doesn't have a prayer of paying this much debt off.
Ford is, like General Motors, losing roughly $1 billion a month. They have a negative profit margin, meaning that their average car sells at a loss. Add it all up, and you see their present situation is hopeless.
The simple truth is that our auto companies have made inferior products that people don't want.
They've made gigantic gas-guzzling vehicles while their foreign competitors have made small efficient cars that made far more sense in our resource-constrained world.
The American auto companies completely and utterly failed to predict the wave of hybrid vehicles, once again getting left in the dust by foreign manufacturers.
Aside from making the wrong cars at the wrong time, our automakers are also constrained by unions.
Our companies are forced to vastly overpay workers to make substandard cars. Even though Ford employees make far more money than a Toyota employee, our cars are shoddy and don't have nearly the reliability of the import autos.
In this environment, simply granting these companies another bailout solves nothing. It would cost us $10 to $20 billion a year to keep our automakers afloat. Those billions of dollars per year wouldn't fix the companies; it would merely keep their pulse faintly beating.
What's needed is to allow these companies to go into Chapter 11 bankruptcy. Unlike a complete liquidation, a Chapter 11 bankruptcy allows a company to reorganize, be freed of some debt, break onerous union contracts, freely fire employees and other such things that allow a company to rebuild itself.
The only way a company like Ford survives is by greatly cutting costs, shutting down unproductive model lines, firing thousands of employees, breaking the unions and axing all of the upper level management.
A government bailout Band-aid accomplishes nothing; these companies are in need of open-heart surgery.
Of course, the myopic management of these companies insists on robbing us, the taxpayer, rather than taking the lumps for their own terrible business decisions.
General Motors CEO Rick Wagoner claims that going into bankruptcy is impossible and told Seeking Alpha, an online stock market analysis Web site, "we're convinced the consequences of bankruptcy would be dire."
He argues that no one would be willing to buy products from a bankrupt company.
However, he ignores companies such as K-Mart and virtually the entire airline industry, including Frontier Airlines presently, which have gone through Chapter 11 bankruptcy before emerging as stronger companies.
Instead, it appears that Wagoner is just trying to save face.
Doug McIntyre of the 24/7 Wall Street analysis Web site argues a bailout would be pointless, saying, "The U.S. government could hand GM a tremendous sum of money and watch it be burned up in the fire of management's stupidity."
It would be a grave mistake to give incompetent management more time and money to make defective cars. Bankruptcy will, in the short-run, cause many job losses. However, the companies will emerge stronger and be able to take on the likes of Toyota and Honda.
If we bail the automakers out, they'll remain fiscal basket cases for the foreseeable future -- an outcome no one should want. -
If the car companies go under, we're ALL ****.
That said, the UAW MUST/HAS TO make consessions or it won't matter."SOME PEOPLE CALL ME MAURICE,
CAUSE I SPEAK OF THE POMPITIOUS OF LOVE" -
Bail them out and increase tariffs on purchasing anything not made in the USA. I know that I am not the only one who can see this, but 90% plus of everything we buy is made by other countries. Where are our jobs going? EFing stupid Americans. It's not just the bad loans. It started with NAFTA. If you are too stupid to see that we are killing our own country please slap and sterilize yourself. If you think that the employees can just go get another job... what job? Where? Jobs are drying up guys. Take off the Ruby lensed glasses its bad. The politicians are not going to make it better(unless they create a tariff), we have to, but we are stupid, and we will continue to screw ourselves to "save" a buck. Good job America. We are all guilty of aiding this collapse. Now we someone else to fix what we broke. We blame the banks for lending out the money? Nobody forced anyone to take it. Idiots spending beyond their means. I was approved for $350,000 to buy a house with crap for income
I was going to do it figuring that the value would increase, and I would just sell it. Yep I am stupid too. Too many get to happy about spending. Please. Please contact me a ben62670 @ yahoo.com. Make sure to include who you are, and you are from Polk so I don't delete your email. Also I am now physically unable to work on any projects. If you need help let these guys know. There are many people who will help if you let them know where you are.
Thanks
Ben -
I don't think a bailout would work unless the senior management is booted out the door. I think to many friends made it to high places in many of today's top companies during "easy" times and now that things are going down they just don't know what the hell to do.
Any bailout should stipulate NO bonuses to ANYONE in the company until a certain profit target for 4 consecutive quarters is reached. And when bonuses start back up, they need to be maxed at a certain percentage of the total after tax profits. This should remain in effect until all of the bailout money is repaid. I also think the UAW needs to lose its top brass, right now they are a major part of the problem. The labor costs are ridicules. If the this situation doesn't change, I don't see how they can stay in business. Notice how none of the Japanese companies will even consider a UAW plant, they know they can't afford UAW workers.
Also, there is a ton of waste in these companies still. If they would focus on designing a car, building a car, selling a car instead of constantly changing the car they would cut 30% off their R&D money. And they are always late on sourcing components and rarely source anything with full requirements.
Of course this is only my opinion based on what I know/hear from being in the business for the last 8 years. Could be totally off.
Howie -
move the UAW workers to China
pass a 1 billion billionare tax on 700 billionare's
forclosed homeowners get forgiveness of the debt
the government gets the house
the 700 billion from the billionare tax goes to middle class folks who paid their bills who buy a car
the government then sells the houses and splits the money amongst the 700 billionares, too bad they lose some dough, who cares there are only 700 of them anyway.
crises solved.
return to long term investment strategy.
vote for RT1 in 2012, free audio speakers for everyone!!!! -
If the home owner wasn't some idiot buying beyond his means. Someone who had good credit. Someone who deserved their home. Not some fool who got a stated income loan. People need to learn. Don't give money away. Make people work for it. People need to learn that buying foreign crap is what has killed our country. I don't really care if some idiot loses his house because he made a bad decision. I feel for the people losing their houses because they lost their jobs, and can't find another one.foreclosed homeowners get forgiveness of the debtPlease. Please contact me a ben62670 @ yahoo.com. Make sure to include who you are, and you are from Polk so I don't delete your email. Also I am now physically unable to work on any projects. If you need help let these guys know. There are many people who will help if you let them know where you are.
Thanks
Ben -
my platform is not for argument it is "this" because of "that". cause/effect
how do you know they are idiots, personal experience
if you called them morons might make more sense.
RT1--ok free speakers and interconnects in 2012 -
Example
You make $40,000 a year, and you buy a $350,000 home your credit sucks... Just because someone is willing to give you money doesn't mean you should take it if you can't pay it back. Tons of people with bad credit, and job history went out and bought nice homes beyond their means. Do you really think they should be bailed out?Please. Please contact me a ben62670 @ yahoo.com. Make sure to include who you are, and you are from Polk so I don't delete your email. Also I am now physically unable to work on any projects. If you need help let these guys know. There are many people who will help if you let them know where you are.
Thanks
Ben -
Well, Here is another scenario. You bought a home in 2006 with 300K that used to worth around 150K around 2000-2001. And you have a OK credit with average score, and you paid about 1/3 down, and the prices fell back to the original value of around 150K, is the owners worth the rescue or not?
No. don't think it's me. But it's just another example of how many good guys got stuck in this crisis. But yeah, to hell with the guys who paid 0 down on the 400K housing and paid for 3 months so he can flip for some profits but got stuck in this, they are sole losers and not worth the rescue. In almost all cases, they have already defaulted and started this Domino effects in the economy.Trying out Different Audio Cables is a Religious Affair. You don't discuss it with anyone. :redface::biggrin: -
Well, Here is another scenario. You bought a home in 2006 with 300K that used to worth around 150K around 2000-2001. And you have a OK credit with average score, and you paid about 1/3 down, and the prices fell back to the original value of around 150K, is the owners worth the rescue or not?
Rescue? Why is that even a question? When did a house become a government backed bank account guaranteed not to lose value? -
GM, Ford and Chrysler deserves a bailout if they let someone else manages their books or agrees to 24% interest rates and to pay back within 5-10 years.
Amex? No, this one is not in the same boat as GM at this time. Besides, I just paid back my Amex card in full so they have all the money they need for about 1 second of their budget.
Trying out Different Audio Cables is a Religious Affair. You don't discuss it with anyone. :redface::biggrin: -
C'mon, I already said that, go back and read my platform, its not for debate, they get forgiveness of the debt, everybody gets something, they get forgiveness, not redemption, just forgiveness. The billionares get redemption because they give the forgiveness, this is really so simple.
OK--Free Speakers, Free Connects and a Free Rack
all the way in 2012. RT1--Building a Bridge to the Audio Future. -
Rescue? Why is that even a question? When did a house become a government backed bank account guaranteed not to lose value?
Yes, a house can lose value and it's not the point of the rescue. The point is the good people who needs rescue because this housing market crash and lost their jobs and all the woes of the economic downturns.
But if you consider, a Government is a governing body who cares the social welfare of it's citizen including the living conditions such as housing and job security and health care. There are some good people who are in need of rescue and don't forget all of this housing boom started because of some bunch of a greedy investors put their money in real estates from stocks after 9/11. Let's don't forget that. That's absolutely abnormal and never hand happened in the housing market during my lifetime. The housing boom and slumps are the last thing a Government would want to see. It went out of control and most are not suffering the backlashes.Trying out Different Audio Cables is a Religious Affair. You don't discuss it with anyone. :redface::biggrin:
This discussion has been closed.