Auto Makers Get 13.4 Billion even with Bankrupsy talks.

M. Pearce

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Hello,

Just a darn rant here.

I'm so darn pissed that our Government just Ok'd the 13.4 Billion for the failing auto Makers.

We done bailed out Chrysler once and all we got in return was the junk K cars out of it.

Now here we are bailing them all out by lending them 13.4 B.

If I walked into a bank and said, I am in trouble and I'm fixin to file bankrupsy, will yah lend me some money.

How far would I get before the laughing would start?

My guess is not very far at all.

Now we get to pay auto workers to sit home and draw what 95% of their salary just to be a standby workforce.

So we take tax dollars from Southern States and bail out people in Northern States.

I heard recently that someone in the media was saying it was un-constitutional.

I say if they were in that bad a shape just best to let em go and start from the ground up.

ChryForGm or something like that comes to mind.

For the price they sell the cars they should be a lot better.

They(the cars) loose ten grand a year in value for the first three years and the fourth year they are junk.
 
Mark, the first Chrysler bailout worked out pretty well. Lee Iacocca took an annual salary of $1 until the loan was paid off; he recruited a celebrity board, including Frank Sinatra, to make the company's image hipper; and say what you will about the K-cars and the minivans, but they sold well, and Chrysler paid back the federal loan well ahead of schedule.

This time will be very different, I'm afraid. The major difference: Iacocca had a plan.

This circumstance is exactly what bankruptcy laws are for. Let the companies reorganize, liquidate the weak product lines and strengthen the good ones, downsize their operations and dealer networks to fit the number of cars they can sell, and get a fresh start.

As for people in one region paying taxes to provide welfare for people in other regions, sadly, the prevailing public opinion now considers that the purpose of the federal government.
 
This makes me so mad. I spent 40 years working for GM. We never got anywhere near 95% of our pay when we were laid off.

What we got was unemployment + a supplement that was to bring your gorse pay up to 95% of your normal net pay – work expenses, about $25. At the end of the year you still had to pay taxes on the supplement.

What you wound up with is about 50% of your pay.

I will admit that that is a lot better than unemployment alone, but nowhere near 95% of your wages.
 
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$13.4 Billion is a drop in the bucket compared to what Wall Street got.
 
If the cars Chrysler ship over to us are representative of the rest of the model lineup the kindest thing would be to put the company out of it's misery now.
 
David, The 95% of your pay for sitting around is only the latest in a long line of bull**** stories to inflame people and make headlines. It is exactly as you remember, a supplement to unemployment that was taxed later when you filed your income tax. Like you remember it was actually about 50% Yes it was a good benefit, it was restricted to 2 years and had other conditions placed on it in the 2006 contract. It has since been suspended. It no longer applies, it has stopped. Workers were supposed to do non-traditional work when getting it, but management more often than not never tried to utilize people. Some would do volunteer work, some worked as porters at dealerships and washed cars, I know a few who pushed cars around and did set up work at the Detroit Auto show.

The Chrysler LOAN was paid back early with interest so it cost the taxpayers Nothing, They Made money. How often does this actually happen with government? How much will the government get back from AIG? From any of the financial companies?

Cars cost less now than they did in the 1980's based on how many weeks of work at median wage it takes to buy a one.

As far as the south bailing out the north it is exactly the opposite. Michigan gets back about 75%-80% of the taxes it sends to Washington. Louisiana gets about $1.30 back from Washington for every dollar it sent them from 1981-2005 Utah got back about $1.25 during that period. In 2005 it got back $1.78 for every dollar it sent. In 2005 Michigan got back $.92 while Alaska sucked out $1.84 for every dollar it sent. From 2000-2005 Michigan has sent $88,964,000,000.00 more than we've gotten back. I'm starting to like this idea about not redistributing wealth. I'd like my money back now please.

You can check it out here:

http://www.taxfoundation.org/research/show/22685.html

This time will be very different, I'm afraid. The major difference: Iacocca had a plan.

This circumstance is exactly what bankruptcy laws are for. Let the companies reorganize, liquidate the weak product lines and strengthen the good ones, downsize their operations and dealer networks to fit the number of cars they can sell, and get a fresh start.

This is the consensus opinion from people outside the industry who have done a quick topical study of the industry. There are no knowledgeable industry experts that hold these views.
 
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Default
If the cars Chrysler ship over to us are representative of the rest of the model lineup the kindest thing would be to put the company out of it's misery now.

Chrysler was owned by Daimler, and when they decided to sell it I expect they began neglecting future product. Cerberus bought it under the mistaken assumption they understood the car industry. They were the Wall Street Best but they don't have a clue. They put in an idiot Nardelli who knows absolutely nothing about cars and now they are desperate to get out. They also have neglected to invest in future product so the company is little more than a shell now. They are trying to force GM to buy Chrysler from them by cutting off funding from GMAC which they have a controlling interest in. I don't think Chrysler will be here in 3 years as it is now. I expect they'll try to sell pieces of it to an Indian company, a Chinese company, Nissan, and possibly 1 division to GM (minivans?) We'll see.
 
Average federal taxes per person by state.
  • West Virginia 3,600.00
  • Mississippi 3,700.00
  • South Carolina 4,600.00
  • Alabama 5,200.00
  • Kentucky 5,500.00
  • Florida 7,500.00
  • Georgia 7,800.00
  • Tennessee 7,800.00
  • Louisiana 7,800.00
  • US Average 8,500.00
  • Wasington DC 34,700.00
  • Delaware 19,500.00
  • Connecticut 15,500.00
  • Minnesota 15,200.00
  • New Jersey 14,000.00
  • New York 12,700.00
  • Massachusetts 11,600.00
  • Rhode Island 11,300.00
  • Illinois 10,500.00
 
Mark,
It looks to me like the North is subsidizing the South.
 
They also have neglected to invest in future product so the company is little more than a shell now.


Because Cerberus is privately held, we have no idea what kind of shape they're in. I'd like to point out that they have several good products:

C-series (300, Charger)
Challenger
Viper
Ram truck
Minivans
Jeep Wrangler

And they have some rotten products
Nitro
Caliber
Sebring/Avenger
Durango

And they had some products they dropped already:

Magnum -- good
Pacifica -- lousy
Crossfire -- not a bad car, but never had a market

I've driven most of these models (I like trying out cars, and I also rent a lot when I travel, and the dreadful Chryslers wind up as rentals). The Sebring was incredibly damaging to the company. It followed the successful (mechanically and commercially) 300 family and was meant to be their bread and butter car to compete with Accord and Camry (and Altima and Taurus). In fact, Chrysler has done some niche vehicles well but flubbed the basic family sedan.

It's hard to be a Camry or Accord when your car is saddled with another $2.5-$3k in costs for retiree pensions and health care. The Japanese transplants in the southern USA do not have this problem; except for a few people on disability, none of their workers has retired, and when they do, they'll have a common 401k plan (defined-contribution, individually managed), not a defined-benefit plan. No one has those any more except government workers and the UAW. But now, I repeat myself.

I'll keep my Mustang (1965). But I have two regular vehicles to replace, a Corvette (recently sold) and a Ford Ranger (getting up there at 105k miles, and a bit crooked after saving my bones in a tangle with an 18-wheeler). My first choices for replacements would be a Corvette and another Ranger work truck actually -- both were great and the new ones are definitely better made (the Ranger gets 24-26 mpg which is as good as you'll get in a pickup). But since I already will be doing my bit to support the UAW's "job bank" welfare queens when I write a very large check to the IRS for my 12/31 quarterlies, I'm thinking it's time to look at what Japan is building. And maybe scale back the sports car to something more practical -- I go faster in the air after all.

Hmm, a Subaru WRX doesn't have the style of a Corvette, but it'll still be under warranty a couple years from now, and it's hella fun to drive. And I know that Toyota makes great trucks, maybe one of those Tacomas. I wish the Hilux was available in the US, that is a great little truck.

I don't think Chrysler will be here in 3 years as it is now.

You're probably right John. Including the idea that parts of it might go overseas, to Japan and Tata or Mahindra in India, and part to GM. The most attractive products to any buyer are probably Jeep (the base Jeeps, not the lousy SUVs -- they're dead) and the minivans. GMs minivans are incredibly lousy, the government has a bunch of them in the interagency motor pool and they're shoddy, badly-built bad designs.

I don't think any maker will want the big cars; pity as the big sedans and sport/sporty cars are quite good products.

cheers

-=K=-
 
My first choices for replacements would be a Corvette and another Ranger work truck actually -- both were great and the new ones are definitely better made (the Ranger gets 24-26 mpg which is as good as you'll get in a pickup). But since I already will be doing my bit to support the UAW's "job bank" welfare queens when I write a very large check to the IRS for my 12/31 quarterlies, I'm thinking it's time to look at what Japan is building
.

First, might I point out that the jobs bank has ended. I agree that it needed to go, I've said that for years.

Second, Ford is not seeking any loan money from the government, so your tax dollars are safe, from Ford anyway.

You can replace your Ranger with a clear conscience. :)
 
Kevin,
I have to disagree with your statement about defined-benefit retirerment accounts, most of the construction trade union contracts are defined -benefit accounts.
 
Kevin,

First off, I don't know how you get in and out of that darn Corvette every day and don't have back problems.

The Ford Ranger is a really great truck and yesterday I looked at one on the used car lot and fell in love.

I mainly drive two vehicles right now, a 2000 Caravan and a 2005 Durango.

I also own a 1992 Geo Tracker that I just can not part with for anything and two Volkwagons, a 1991 GTI Golf(race car) and a 1982 Rabbit(also Race car).

Oh and I forgot, Maw Maw's 1982 Buick Lesabre with 49,000 original miles on it.

My next new vehicle I buy will most probably be anuther new Caravan if they are still around and a second hand Ford Ranger.

Before I got the 1992 Geo Tracker I had a Mazda pickup that I drove for over ten years and worked out of it every day.

Most of those ten years I had no A/C, no Heat, and no radio.

Only thing I ever done to the Mazda was change the oil regularly and once changed a fuel pump and once the back tail light bulbs.

I now work out of my Van and keep most of my tools in the back behind the second row seat.

After having the van for two years now it's gonna be very hard to go back to a pickup.

I was just telling my Mother tonight how easy it was to work out of a van and just lock the doors in the afternoon.

All my tools stay out of the weather and the hastles of moving my tools back and forth are almost non-existent now.

But like you, I really like the Ranger for all it's looks and practicallity.

Maybe a Ranger with a camper top is in my future.

Ford looks like the only company that doesn't want to go the way of the Yugo anyway.

And for your WRX well that's a fun fun car for sure.
 
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Not Yet,


Well you worded it right, 40 years working for the company.

You were one of the ones working and not one of the ones sitting home am I right?

Unemployment is fine and a lot of my friends have drawn it.

I have seen a lot of my friends "work" unemployment as well.

I just can't imagine loaning anything, one cent, to a company thats comes to the table saying "we are contimplating filing for bankrupsy".

It is like we are in a communist society now and no one sees the big picture.

It is not a loan you guys, they say it is a loan but this is about as (((sub-prime))) as we can get here!!!!!

Anyone remember those words in recent news, (((Sub-prime)))????

It's what got the banks in trouble to begin with.

The cycle continues!!!!

America is now Communist!!!!

And Americans have once again bought it lock stock and barrel!!!!
 
Mark,Mark,Mark, your so off base, communism is a system of government in which ONE party controls state-owned means of production.
This is a capitalistic system, nothing like communism.
 
I am worried about the American Icons going down or sold to foreigners.
Long ago I was camping down here and had an american couple as tent neighbors, they told me they drove a Honda . . .say what?? To me Honda was only motorcycles, never heard of a car . . .
I though: this guy must be nuts . . .he is an american and they have the best cars . . .
After that they sold Peeble Beach . . .lots of talk and anger over that icon gone . . .
Now after the Towers gone, the auto industry seem to have taken a couple of airplanes in their structure . . .
Budwiser is now Bahma . . .
Both candidates talked about Brazil a lot . . .
Christmass in New York still the image of the Season all over the worl and I feel good about it.
Maybe they will trade apples for bananas on the pie.
Is the White House now become Mulato House?
The Plantation´s Revenge is on . . .
Meanwhile dow here lots of commercials with American musice from the 50´s, all very cute and bringing that warm feeling of good days gone . . .I miss the US I never met!
There is no One Party system, there always gonna be oposition, and therefor two parties, like in the US . . .not easy to draw the line.
The redneck´s enclaves are the last bastians of Old USA.
Sorry
Heron
 
I am confused. What if nobody decides to buy a new car from these three automakers again because of this 13.4 billion? My wife and I have bought her two new car's over time. They were both chevy and I own a couple used chevy truck's. Three of them automobles were bought from a local dealer. I am not a die hard chevy guy that is just what we got. My point is I support once and that was my choice. I gave them money so they could make a profit and they took that money I gave them buy my choice and blew it. Know I am giving them money against my will and not getting anything in return this time. Is their something wrong with this picture or am I just confused. I know this my next new car is not going to be from one of these big three automakers. Besides we should not be buying new car's. We should be buying FLYING MACHINES!!!!:humble: Have a nice day now.
 
This makes me so mad. I spent 40 years working for GM. We never got anywhere near 95% of our pay when we were laid off.

What we got was unemployment + a supplement that was to bring your gorse pay up to 95% of your normal net pay ? work expenses, about $25. At the end of the year you still had to pay taxes on the supplement.

What you wound up with is about 50% of your pay.

I will admit that that is a lot better than unemployment alone, but nowhere near 95% of your wages.



Regardless of how you crunch the numbers; it's ridiculous.


Cheers
 
Consider buying a Ford then Matt, We're not taking any money and I can get you or anyone else on the Rotaryforum a pin number for a better price. Right now they are selling at employee prices to anyone.
We've cut 12,000 salaried employees, 45,000 hourly employees, and closed 18 plants in the last 3 years. We have essentially restructured without cheating shareholders or bondholders, pension plans or mutual funds, people who could have lost everything in a bankruptcy. We're not asking for any handouts. We got the loans necessary to restructure and weather the downturn in 2006. I know I'm biased, but I really like Mullaly and think he's the reason we're in a better position than the others.
 
The most attractive products to any buyer are probably Jeep...

Interesting to watch the historical cycles. Jeep was all Chrysler really wanted when it bought American Motors, unless you count some designers who pioneered platform-sharing and knew how to really stretch development dollars.
 
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