GM being out of bankrupcy is a very big story... yet no discussion here?

[scheming daemons]

4000 white-collar employees, including 450 top executives will be laid off. But they were way too top-heavy to begin with.


This is big news. And Obama is keeping his promise. The right has been calling it "Government Motors" for the past few months, and deriding Obama for taking over GM.

But now, as promised, Obama is delivering GM out of the ICU and back into the public. With new owners, new management, and a new focus.


This is a GOOD day. The rebirth of GM will be tough for a while, but it is back on the right track.

http://www.cnbc.com/id/31847093

[Curtland1015]

1. It's a step in the right direction.

Hopefully people don't ignore it.

[Rosa Luxemburg]

64. I think it is fabulous! We are moving!

The GOP wanted it to fail in fact they wanted the USA to fail.

[MercutioATC]

2. I consider it minor news.

It's still a failed company that exists solely because of government bailouts. I've seen nothing that indicates it will actually be a viable company.

[scheming daemons]

5. Wow.

It *WAS* a failed company... but now it has a new lease on life and new leadership.


Tens of thousands of Americans are still working because GM was "bailed out". Unreal how callous you are about that.

[MercutioATC]

11. They'd still be working if it was broken up and sold off.

Demand for cars is down because of the economy, but there is still demand.

Allowing GM to fail would have resulted in other, more successful, auto companies buying their assets to fill that demand. People would still be employed and they'd be directed by a company that has proved that they have a viable business model.

What we got instead is a huge taxpayer investment in an unproven company built on the ashes of a company that couldn't make a profit even with huge taxpayer support.

I'm not getting excited unless it proves itself viable.

[scheming daemons]

12. That wouldn't have happened... their assets would've been liquidated in a Chapter 7

Chapter 11 saved those jobs.

[MercutioATC]

13. What do you think happens to assets that are liquidated?

They're sold off.

...in this case, the likely buyers would have been other auto companies.


"Liquidation" doesn't mean that they set them on fire...they SELL them.

[boomerbust]

34. Just imagine

A Chinese made Corvette, probably produced in China.

[MercutioATC]

36. As unimagineable as a Chinese-made Hummer...

...oh...erm...nevermind...

[Statistical]

52. +1

[blue_onyx]

15. The loss of GM

would have been devastating to the country's economy. The idea that new companies would've just sprang up from nowhere is wrong. The troubles the US auto companies are going through have already hurt our economy:

"The automakers have historically played a big part in ending recessions. Car companies, in the past, would increase production and add workers to satisfy pent-up consumer demand after a downturn. But now, the industry’s troubles may be prolonging the misery.

“If not for the problems in the auto industry, this recession would have been much milder,” said Ben Herzon, an economist at Macroeconomic Advisors, in St. Louis."

http://www.nytimes.com/2009/06/10/business/economy/10michigan.html?_r=1&hpw


The loss of GM would've made the economic recovery even longer and some states, like Michigan, may have never recovered. Thankful Obama is making the decisions and not you (and McCain)

[MercutioATC]

26. I disagree, in part.

I agree that the pain would have come in one fell swoop rather than over a period of months or years, but I think it would have created a stronger economic foundation to build on...and I believe that the economic impact WILL be the same if this "new GM" fails (which I think probable, but I'm willing to wait and see).

It's important to figure in the huge financial cost this reorganization has had to taxpayers. This has been a very large gamble with a very large chunk of our money. If it fails, we'll be worse off than if we had just let the original GM fail.

[blue_onyx]

30. It seems you've already decided that the "New GM" will fail

The pain would've been far worse if GM had been liquidated. As far as the cost, Obama has said that he thinks there's a reasonable chance that we'll get the money back. Also, you are only looking at the cost of the bailout, not the cost of a liquidated GM. If GM had gone under, there's a lot of tax revenue that would've been lost and the government would have had to provide unemployment benefits for hundreds of thousands of more people.

There would have been a significant cost to the taxpayers either way. The bailout, however, has saved a significant amount of jobs and has allowed for the possibility of taxpayers getting paid back.

[MercutioATC]

33. Not at all. I think it's likely, but I clearly stated that I haven't decided.

...and there's a larger issue here.

The new GM hasn't made any commitments to change the offshoring practices of the old GM. In fact, the increased focus on cost savings may well accelerate them. So, in effect, we're "saving" American jobs by giving a lot of money to a company that's increasingly moving U.S. jobs overseas...and that's something that will only be addressed through trade and tax legislation, not bailing out auto manufacturers.


I simply don't see a long-term upside, but I do see a big short-term downside.

Time will tell.

[blue_onyx]

37. Yes, trade policies need to be addressed

which I don't see happening.


"The new GM hasn't made any commitments to change the offshoring practices of the old GM"

I just made some points regarding this in post #35. Actually, GM recently agreed to build their new subcompact, the Chevy Spark, in Michigan rather than in China like they originally planned. They made this concession during negotiations with the union. This will be the only subcompact from any company built in the US since it isn't cost-effective to build these vehicle in the US.

[MercutioATC]

39. Good news that I wasn't aware of.

Thanks :)

[Statistical]

59. If it isn't cost effective for any other company to build a subcompact here how is GM different?

Or is this more of selling lots of vehicles a loss business model.

[blue_onyx]

60. GM is only doing it as a concession to the unions

not necessarily because it's the best economic decision. I'm sure the unions and Michigan gave quite a bit in concessions (pay/benefit cuts, tax incentives) to GM to get them to build the car here. The concessions GM has received probably help off-set the higher cost of building the vehicle in the US.

[JVS]

54. A new lease on life. And all it had to do was fuck over some workers! It's the American Dream!

[bluestateguy]

3. Obama's auto task force is vindicated

People said GM would be mired in bankruptcy for months or years. They were wrong. People said that an auto company could not go into bankruptcy and survive. They were wrong.

There is obviously more work to be done, and yes I'm aware that there will be thousands of job losses, but in a McCain Administration GM and Chrysler would have simply been told to liquidate and it would have been lights out. Everybody, and a good many suppliers too, would have lost their jobs.

[yodoobo]

49. The liquidation WILL continue for years

The good GM parts are being sold to a mostly government owned entity which will operate under the GM name.

The original GM is being liquidated over the course of a couple years.

Its rather unique for a CH. 11 filing. Its similar to what an individual who files ch 7 and then immediately files ch 13 after the 7 closes.


Without the work that Obama did, the result would been similar but taken much longer.

What would have happened is that the good parts of GM would have been sold to other buyers, and the rest liquidated. That process however is not as certain and would have kept the case open for years.

[KharmaTrain]

4. Shhhhh...This has nothing to do with unrecommend or MJ...

Yes, it's very good news to see GM restructured, yet it's still too soon to tell how things will play out. The important thing is there are thousands of people still with jobs today that would have lost them had GM been allowed to go under.

[jakefrep]

6. There are some here who would be happier if GM stayed bankrupt.

Whether you like their products or not, GM going out of business is a very bad thing.

[MineralMan]

7. I'm not going to know what to say about this until

some time has passed and I can see its effect. Right now, I have no idea what will happen, so I'm going to reserve judgment until I can see whether the move was successful or a disaster.

Anyone who pretends to know that is just guessing.

[scheming daemons]

8. True.... but it is STILL a very big story

No matter how it ultimately turns out.

[Nicholas D Wolfwood]

9. This is a great story!

Thank you very much for bringing it to my attention!

[blue_onyx]

10. I'm very happy the bankruptcy went smoothly

There's still more pain and job losses coming (particularly for MI) but the new GM will be strong and success for many years to come.

[GodlessBiker]

14. 4,000 people being laid off isn't particularly good.

[scheming daemons]

18. No... but the ratio of white to blue-collar workers was too high....

Too many suit-and-ties. GM was way too top heavy.

Reducing the white-collar (non-union) force is a good idea.

[GodlessBiker]

20. It's still people out of work, losing houses, families on the edge, less tax revenue.

The thousands who lost their jobs were just regular people, trying to keep their heads above water, not multi-millionaire chief executives.

This is nothing to be happy about.

[scheming daemons]

22. Not happy about it... but it was a necessary move....

They spent the past year cutting blue-collar jobs and no white-collar jobs.

To be a lean and successful company, they needed to trim some off the top too.


Replacing the old management (and their thinking) is a painful, yet necessary, move.

[GodlessBiker]

25. I guess this shows how it is impossible to have "objective" reporting...

The same facts lead to different stories. You see it as a "good day" and I see it as a sad day.

But that's okay.

[Yupster]

66. Sad day to me too

because the bankruptcy wasn't done legally in my opinion.

To me the Rule of Law is more important than the fate of any one company, even one as large as GM.

Someday we'll read the story of how the bondholders voted 96 % to 4 % to not accept the company's offer and then when some large investment banks met privately with the administration, the result was announced that 51 % of the bondholders had changed their minds, even while the overwhelming number of those bondholders never even ever received a second ballot. I can't wait to read what went on in that meeting. I have a feeling the word TARP came up a lot in that, you've accepted our billions, you will change your vote or we'll destroy you.

Just at that moment, hundreds of years of bankruptcy law was overturned without congress acting.

It was a sad day for the Rule of Law in America, but to most I bet the ends justify the means.

[izzybeans]

16. The government still has a controlling interest in the new company so

the criticism won't stop from the right.

Canada's government has an 11% stake in the company as well.

It being out of bankruptcy is a big deal, though.

[michreject]

17. Well......there are lots of people on this forum

that will do they're damndest to close em down for good. They sing high praise for non-union Asian imports. The hell with union made vehicles.

[scheming daemons]

19. I like Toyotas, personally... but that doesn't mean I don't want GM to succeed.

Just because I prefer Pepsi doesn't mean I want Coke to go out of business.

[FarCenter]

21. We'll see. Looks like more of the same from GM

From Bloomberg's story

"Bob Lutz, GM’s former vehicle czar, returns as vice chairman, responsible for “all creative elements of products and customer relationships,” the company said. Lutz, 77, will report to Henderson and be part of a new executive committee. He had been scheduled to retire at the end of this year. New Chairman Ed Whitacre, the retired CEO of AT&T Inc., took over today. He will preside over a board that is being reconstituted at the direction of President Barack Obama’s auto task force. “We all want to win, we are going to win,” Whitacre, 67, said at a press conference in Detroit."

Wasn't Lutz the champion of SUVs? The opponent of electric vehicles? They will probably continue to have terrible design as well.

Also, I heard that Wagoner is still a $1 / year consultant, and is waiting for his $20 M retirement package.

[ContinentalOp]

28. Jeez, they kept LUTZ!? -nt-

[Uzybone]

23. Great news, alas it often sinks

thanks for bringing it up.

[Warren Stupidity]

24. So this OP sort of puts off discussion of GM and bankruptcy

in favor of why DU sucks.

[scheming daemons]

27. ?

I don't understand your post.

[Deja Q]

29. We'll wait and see; I am hopeful and optimistic, but - and I've posted on other GM threads recently

- why bailing out GM might have been wrong -- they've been offshoring for years, product quality has gone down, they sell more SUV twaddle, and want us to thank them by bailing them.

Especially when managers make all the decisions, it's the "do as we say and not as we do" garbage.

I may as well say "Marriage or abstinence only" and then boink around. And since lots of people tell me I need to get laid, it's high time they step up and do their civic duty and boink my brains out.

:popcorn:

[blue_onyx]

35. Wrong, Wrong, Wrong

"they've been offshoring for years,"

Gm does build some vehicles in other countries. We should changed our trade policies to give ALL companies, including GM, the incentive to build here. Overall, however, the US companies still use more domestic parts. For example, in 2007 (the latest numbers I could find) US companies used 77% domestic parts and Honda used 59% domestic parts (highest for a foreign brand). Additionally, some cars produced in the US have less domestic content than foreign built vehicles. For example, the Hyundai Sonata (build in Alabama) has 37% domestic content and the Ford Fusion (build in Mexico) has 40% domestic content.

http://www.usatoday.com/money/autos/2007-03-22-american-usat_N.htm

http://www.nhtsa.dot.gov/staticfiles/DOT/NHTSA/Traffic%20Injury%20Control/Articles/Associated%20Files/AALA/AALA2008a.pdf



"product quality has gone down"

Nope. Quality has gone up:

"The initial quality of 2009 model year vehicles sold by the Detroit Three improved by an average of 10 percent from last year, the marketing and consulting company said. Industry wide, scores improved an average of 8 percent. "

http://www.cbsnews.com/stories/2009/06/22/business/main5103754.shtml


"they sell more SUV twaddle"

Toyota sells the Tacoma, Tundra, Highlander, FJ Cruiser, 4Runner, Sequoia, Land Cruiser, and Sienna.

Yep, GM is the only company that sell gas guzzling SUVs :eyes:

[Deja Q]

38. Thank you for responding!

And, yes, it'd be great if more incentive was to build here...

http://www.economicpopulist.org/content/gm-offshore-outsourcing-us-jobs

Sounds like it won't be happening...

[Romulox]

42. Thank you for correcting this poster. I've tried myself several times...

and the poster in question will not address the points upon which she is mistaken (see her most recent response to you.) Nor will she provide links to any of her assertions.

Then, a couple days later, she'll repeat the same stuff in a different thread. :wtf:

[asjr]

31. There are 8 million stories in the big city--this

is but one of them.

[blackbooks]

32. This thread isn't about Unreccommend...

or Michael Jackson. I have, of course, reported it to the mods. :)

[taught_me_patience]

40. Where are the DUer's who said we'd lose 3 million jobs?

If GM went bankrupt in Oct? Common people... where are you? Obviously, they didn't understand the difference between Ch. 11 and Ch. 7 bankruptcy.

[Romulox]

41. You're confusing two dissimilar things...

I.e.:

1) a "thrown to the wolves" bankruptcy under the Bush admin, which would almost undoubtedly have been a liquidation; and
2) a "pre-packaged" bankruptcy under the Obama administration in which (and this is the important part) the debtor in possession (DIP) financing was guaranteed ahead of time by the US taxpayer.

Do you see the difference between the two scenarios? While they both contain the words "bankruptcy", they are not equivalent in the least.

[Statistical]

46. Nobody was talking about liquidation

Bush (not Obama) gave the bridge loan to nowhere. GM promised the bridge loan would keep it out of Bankruptcy. Everyone cried BK would kill GM.

In hindsight rather than giving a bridge loan when there was no chance in hell of GM surviving without BK protection a prepackaged bankruptcy could have been done in Oct which would have saved taxpayers billions and GM would be that much closer to reaching profitability again.

The bridge loan money was lost. It was wiped out in Bankruptcy and taxpayers will never get it back. $11 billion dollars wasted and the only thing it changed was GM going into bankruptcy May 2009 instead of Oct 2008.

[Romulox]

50. The people who were talking about 3 million jobs lost were most assuredly talking about liquidation.

"Bush (not Obama) gave the bridge loan to nowhere."

Right. A "bridge loan" outside of bankruptcy and DIP financing (for a considerably larger sum) inside a "prepackaged" bankruptcy simply are not the same thing.

"In hindsight rather than giving a bridge loan when there was no chance in hell of GM surviving without BK protection a prepackaged bankruptcy could have been done in Oct which would have saved taxpayers billions and GM would be that much closer to reaching profitability again."

It was not politically feasible for George Bush to force GM into bankruptcy, and so he did not. That is the reality. Your balance sheet speculation about what George Bush "should" have done misses the mark, and is, quite frankly, not productive at this point.

"The bridge loan money was lost. It was wiped out in Bankruptcy and taxpayers will never get it back. $11 billion dollars wasted and the only thing it changed was GM going into bankruptcy May 2009 instead of Oct 2008."

Sorry, but "fiscal conservatives"/ "free marketeers" have no credibility at this point. The "free market" is thoroughly discredited, and your $11 billion is a pittance compared to the outlays to AIG, Citi, et al. :hi:

[Statistical]

51. Still a bankrtupcy in Oct vs May would have saved $11B.

Any way you shake it $11B to keep GM out of bankruptcy (which was inevitable) for 6 months is pretty expensive.

$60 million each day was spent delaying GM bankruptcy for 6 months.

[Romulox]

55. Nonsense. There is no evidence for that whatever.

Moreover, you misunderstand where the bridge loan money went: namely, to GM's creditors, many of whom are far flung across the USA. Many of whom were also banks and large financial institutions already being bailed out under the TARP.

Their losses would've been absorbed by the US economy, by hook or by crook. There is no evidence whatever that any money would've been "saved" by forcing GM into bankruptcy earlier--bankruptcy apportions loss, it doesn't make it magically go away.

And there is every evidence in the world to suggest that whatever portion of that $11 billion that represented a loss to any large financial institution that would have occurred but for the bridge loan would've simply been paid out of the TARP anyhow.

[JVS]

56. Have we lost 3,000,000 jobs since October?

They might have been right anyway.

[Romulox]

43. When you say, "Obama is delivering GM...back into the public" I'm not sure what you mean

Tim Geithner is still running GM. And "Old GM" (you know, the one with all the liabilities) continues to exist as a bankrupt company under the supervision of the courts, and will do so for some time. :hi:

http://online.wsj.com/article/SB124382030769070939.html

[Javaman]

44. all t he air has been sucked out of the room by the inane

rec/unrec threads.

[Statistical]

45. Good news but technically the govt is the owner

The govt swapped debt (from the bridge loan to nowhere) for stock.

The US govt owns the overwhelming majority of GM.

I look forward to the day when GM is competitive, financially stable and the govt can sell its stake slowly (to avoid stock price disruptions) over a 10 year period.

US govt owning GM puts the survivability of GM at risk.

[LoZoccolo]

47. Of course not, and I'm unrecommending this post. n/t

[yodoobo]

48. 450 Top executives?

gheesh.

And that is just the number being cut. How many did they start with?


How does a company even have room for that many -TOP- executives?

Talk about massive bloat.

[Ron Green]

53. The only good GM ...

is a GM building fewer cars and more trains. If we don't look to the future, the sustainable future, we're screwed.

[tomreedtoon]

57. No importance, until they stop making crappy cars.

If they can produce anything that's worth buying...and if there's anyone left who can buy them...that will be news. This was something planned long ago, and it doesn't matter much.

[blue_onyx]

61. GM makes plenty of great cars

but you GM haters are too blinded by your worship of Toyota and Honda to realize it.

[tomreedtoon]

62. GM makes NO great cars, except to its corporate shills.

And yes, I'm forced to conclude that any UAW members that post this stuff are also corporate shills, as bought as any Congressman.

Keep up with your belief that it's just foreign carmakers that are spreading anti-Small Three propaganda. People are voting with their wallets...those few people who have wallets...and not all the paid advertising or paid blog posts will convince the car-buying public otherwise.

[blue_onyx]

65. You are so clueless

First, I'm not a UAW member and neither is anyone in my family.


"People are voting with their wallets"

Well, then GM must be great, right? June 2009 market share for GM is 21.1%, Ford is 16.6% Toyota is 15.5%, and Honda is 11.2%.

http://www.edmunds.com/help/about/press/151386/article.html

[sfpcjock]

58. I know it's expensive to keep unions

but so did Republicans and some Dems when they did ABSOLUTELY NOTHING but bleed GM $1500/car for health car X 8 years = very expensive recovery. I still think it essential to retain the framework of a manufacturing economy and of unions. So I agree.

[SoCalDem]

63. 4,000 more "middlers" soon to be without "affordable" health care

These are the types of people who will finally make a difference to the passage of real reform.. People who are comfy & have the bennies, are not that eager to push for coverage for people who don't have any..people they will never meet.

People "take to the streets" when they fear losing what they have...or when they have lost something they once had.