This is purely emotional, but I am ***pissed*** about GM being forced into bankruptcy

[Stinky The Clown]

We bail out the fucking banks that CAUSED this shit and then we squash one of the last American manufacturing businesses and just plain FUCK the retirees.

Yeah ..... what the fuck ever. I don't even wanna fucking hear defense of this action.

I am PISSED.

[Captain Hilts]

1. I agree. Two diff standards for banks and GM. Ooooh, GM's got unionized employees. Nooow I get it

[sandnsea]

2. It was the bondholders who wouldn't negotiate

The workers would have been fucked either way, they sacrificed and the White House said so. If the White House had let a GM bail-out go through, it would have been another gift to the wealthy, not the workers.

[Yupster]

30. The bondholders would have happily taken a deal

if a reasonable deal was offered to them.

They would have gladly taken 50 cents on the dollar in cash for instance.

The deal the were offered was worse than unreasonable, it was insulting. Every one I spoke to just laughed when they read the proposal.

[sandnsea]

33. There you go

How dare they lose money for nothing when workers are losing everything. hahahahaha.

That's what is wrong with this country. And it's really pathetic when the people who should be supporting Obama's fight for workers are attacking him too because they don't find out what's going on for themselves.

[Yupster]

55. Bondholders have no say in how a company is run

They loaned money to the company and expected to get their money back.

They loaned the money with the knowledge that there was risk and if the company went bust, they were legally first in line to get whatever value was left in the company should there be a bankruptcy.

By the government getting involved, they are having their legal rights trampled on. GM bondholders are pension funds, mutual funds, and 100,000 individual investors.

They could have been offered $ 15 billion to give up rights to their $ 27 billion owed and they would have taken it. Instead they were offered to give up their $ 27 billion for no cash at all and 10 % of the stock in the new company.

Besides the basic unfairness that the UAW was being asked to forgive $ 10 billion for 39 % of the stock and the US government was being asked to give up $ 10 billion for a 50 % stake in the company, the other prblem was that if the new company went bankrupt anyway six months from now, the bondholders would go into the new bankruptcy as stockholders, not bondholders which would mean getting nothing of the remaining assets instead of being first in line.

The bondholders had legal rights and they were trampled on, and that's not right.

[sandnsea]

58. Risk. Wha. They lose.

Workers worked their entire lives and in any sane country - would ALWAYS come first and people who only risked money, not their entire livelihood, would understand that.

For years all I heard was workers don't deserve any of the perks because business owners and investors take all the risk. Well, now that it's time for them to take the loss from that risk, they don't want to do that either, and still want to blame the worker. How did I always know that's what would happen?

[Yupster]

60. Famous Robert Kennedy quote

is "some people see the world the way it is and say why? I see the world the way it should be and say why not?"

Sounds like you're a Robert Kennedy guy.

I encourage you to work to change our laws. Perhaps your bankruptcy suggestion might be a better law than the one that has been there for the last 400 years.

Your way might or might not prove to be better.

In the meantime though, don't you think we should follow the law the way it is?

[sandnsea]

61. If the law were equal

for corporations and humans, then following the law would not leave people unable to negotiate their homes down to 25 cents on the dollar, while allow corporations to do that, and then change their name, be bought by another corporation and move on as if nothing happened.

And I don't think the government owning 70% of GM is following the law as it is either.

[Yupster]

62. Bondholders are humans - not corporations

GM has 100,000 individual bondholders.

Most of them are retired people who bought a $ 5,000 or $ 25,000 bond. THey did it knowing their risks and their rights. The rules are now being changed on them.

Incidently about a month ago each of those individual bondholders got a packet of info asking them to vote on this proposal. The vote ended on the 26th of May. The proposal was voted down by about 9 to 1. Yesterday the company announced that another proposal, very slightly better was being offered but the bondholders had to accept it by today at noon. This evening the company announced that the majority of bondholders had not agreed.

How could they? They didn't get a packet explaining what the proposal was or a ballot to vote on it. This has become a complete sham and hopefully a bankrutcy judge will slow it down and make sure everyone has their legal rights paid attention to.

The government taking over the company is certainly not following the law.

The government sent huge loans to the company at the last minute. That made them the largest debtholder which gave them weight over the long time debtholders. So they used our taxpayer money to move to the front of the line.

Then the government was able to dictate its proposal.

The government would forgive $ 10 billion for 50 % of the company.
The UAW would forgive $ 10 billion for 39 % of the company.
The bondholders would forgive $ 27 billion for 10 % of the company.

The government action is cynical, and in my opinion is a conspiracy to go around the law. The victims are the 100,000 people who the law says are entitled to whatever assets GM has should they go bankrupt.

I don't like this going around the law because people are in the way of what the government wants to do.

It's that old Friedrich Banhoeffer quote about not complaining when the Nazis came for the Jews because I wasn't a Jew, and not complaining when they came for the communists because I wasn't a communist. The story ends with, and then they came for me.

[sandnsea]

66. A Nazi analogy? Really??

I guess that's good for any damn thing.

The bondholders have agreed to exchange their debt for 25% of the company.

And, "Under the restructuring plan, the United Automobile Workers union, through its retiree health care fund, would receive a 17.5 percent stake in the new G.M. and warrants to buy an additional 2.5 percent."

The government is not being cynical, it is loaning money so that these people don't end up with a complete loss. Do you know GM shares are at $1.00? Those shares could easily be back at $30 or more within 5 years. Don't tell me these bondholders are getting a raw deal. "Among the backers was a committee of large investors holding about 20 percent of G.M.’s outstanding bonds."


http://www.nytimes.com/2009/05/31/business/31gm.html?hp

[Yupster]

70. The bondholders didn't vote to accept anything

They voted down the proposal they were offered.

Then the government got together mutual funds and pension funds and got them to agree to a new proposal.

The individual bondholders never saw the proposal, never agreed to it, never voted for or against it or even knew it existed other than reading about it in the paper. How they can be legally made to give up their bonds is beyond me since they have not given any authorization to do so.

If me and you each have a $ 5,000 bond with GM and you decide to trade yours for an ice cream cone, I don't see how that decision can be binding on me. If 90 % of bondholders agree I don't see how that's binding on me. Bondholders are not a class. They each buy individual bonds.

For the Union you say they are getting 17.5 % with a warrant to buy 2.5 % more. Yet you say the bondholders are getting 25 %.

Don't you mean the bondholders are getting 10 % with a warrant to buy 15 % more?

The warrants have dates but no exercise prices. Are they a good deal or not? Who knows? Doesn't matter since the bondholders weren't asked to vote yes or no anyway. It was just done to them.

I'm not as confident of GM shares being worth $ 30 again soon. In the original packet sent out by GM it said there would be a reverse split of 100 to 1 after the bonds were exchanged for stocks. That would pretty much wipe out any value the shares have. I don't know if the reverse split is still part of the plan or not. Who does? It just appeared and was agreed to in one day without a vote or informational packet.

How would the bondholders get a complete loss without this agreement? If GM were liquidated they would get whatever the sale brings. Those factories and all would certainly go for something, so there's no way the bondholders would get a complete loss.

As more info comes out about this I will not be at all surprised if the large institutional bondholders that agreed to this will turn out to be banks and investment companies that have taken TARP money.

This is all part of getting GM going again, and I know no one cares about 100,000 bondholders with $ 5,000 or $ 25,000 invested in GM bonds, but this is very scary to me. Basically the government has found a way to take these people's property away from them because they were in the way. This will go to court no doubt in some fashion, but a guy with $ 5,000 isn't going to fight the government for five years. If the government can do this to these people, they can do it to any of us though.

[sandnsea]

72. I'm quoting a newspaper article

If you don't like what it says, take it up with them.

If you've lost money, that's unfortunate. But that's what happens when you take a risk. That's what the investor class has told me for decades. They deserve more because they take the bigger risks. Well, now it's time to pay.

[Yupster]

73. The newspaper article a few paragraphs in

explains that the bondholders are getting 10 % and warrants to buy 15 % more at later dates. You oversimplified it saying they are getting 25 %. At least you could have been consistent and said the union was getting 20 % then.

That would be very inaccurate though because since there are no exercise prices on the warrants no one has a clue whether they will ever be worth a tinker's dam or whether they will expire worthless. At some point prices will be put on them and we'll see if they are potentially valuable or a joke.

When you talk about risk I'm getting the idea that you are not differentiating between stockholders and bondholders. The two things are apples and oranges.

When you buy a stock you are buying ownership in the company. You vote for who site on the board, can bring up proposals for shareholders to vote on and have a say in how the company is run. You also know that if the company goes bust you will get nothing as you are last in line. If the company does great you share in the profits though through rising dividends and share prices going up.

A bondholder is very different. He has no ownership or say in the company. He just loans the company money and gets a set interest rate and a set date when he gets his money back. If the company goes bust he is first in line to get whatever value is left in the company after it is liquidated.

Those are the rules and the risks that stockholders and bondholders take when they invest.

The company has gone bust and yet the bondholders are not getting the remaining value in the company.

They are being taken advantage of, and their screwing is being orchestrated by the government and that should worry all of us.

[sandnsea]

75. A loan is risk too

And somebody with $5,000 in stock has no more say in how a company is run than someone with $5,000 in bonds. They're all investments and all investors know there is risk involved. I really don't know what it is that you're trying to justify in pretending otherwise. Are you suggesting there be no bail-out so the bondholders can scour through what's left?

And you're quibbling between 17% and 20% on the union share? That's half what you said it was.

[BzaDem]

79. The risk taken by a bondholder and the risk taken by a stockholder are completely different.

You are massively oversimplifying this. Buying a bond, by law, is MUCH less risky than buying stock. You are making it sound like, with clever rhetoric, that buying a bond is equally risky as buying stock. That is patently false. The bondholders absolutely knew the risk involved -- that the risk was LESS than buying common stock (in that bondholders would be first in line and would have to be compensated before unsecured debtholders and stockholders). Or at least they thought they did.

It's really amazong how people on this board go on and on about the rule of law when calling for prosecutions of the Bush administration, but couldn't care less about the law when it comes to people they don't like as much.

[sandnsea]

97. Bondholders often take pennies on the dollar

in a bankruptcy. To say the government is colluding to cheat the bondholders is ridiculous.

[BzaDem]

103. Yes, but they take more pennies on the dollar than unsecured creditors.

[Yupster]

84. Stockholders and bondholders are different

They have different rights, different protections and different legal rights. That really isn't anything that can be argued though you may try to change the law if you wish. Buy $ 1,000 of stock and show up at the annual meeting and push a proposal for shareholder vote that you made. Then buy $ 1,000 of a bond and show up at the annual meeting and see if you even get in. The stockholder can even push for the ouster of the CEO of the company, and shareholder revolts have erupted at shareholder meetings causing major changes in the company. Bondholders have no right to speak or vote. Geeze - don't you get proxy notices for your stocks. There's usually things to vote on that were proposals made by shareholders about compensation, pollution, trading with Israel. THis isn't something to learn. You see it in your own stocks don't you?

The 39 % and 20 % going to the union fund is not half what I said. It is the difference between the first offer and the second. I'm reading the second offer from the newspaper. The first offer I have in front of me.

The quibbling between the 17 % and 20 % is just pointing out the inconsistency of how you write the union's share versus how you write the bondholders' share. For the bondholders you say 25 % when you mean 10 % and maybe up to 25 %. For the union yousay 17 % and maybe up to 20 %. You should be consistent one way or the other.

[sandnsea]

95. Argh what bullshit, no $1,000 shareholder

has any more influence on a corporation than a $1,000 bondholder in practical application. It's living in delusion to say so.

Just as I thought, you're ticked because YOU are going to lose money. Just another selfish greedy duck.

[Yupster]

112. There are many cases of small time stockholders

starting shareholder revolts at annual meetings that lead to major changes in companies.

There are no similar cases of bondholders since they are not shareholders and don't have a voice or vote.

I just want the bankruptcy law applied to my property, not government pressure changing the rules to take my property.

Why is a Democratic voter arguing with me about this? Democratic voters and supporters are supposed to support the rights of the little guy against large corporations and the government.

[Yupster]

74. Before going to bed I have to tell this story

This is a completely true story.

Last week I was at the chess club and a group of us were going to a diner after which is pretty common.

In the parking lot there were eight ducks who had come out of a pond a couple hundred yards away and were walking toward a highway just 20 feet or so away. I started shooing them back toward the pond and another chess player who honestly is a pretty idiosynchratic person (not uncommon for chess players)was getting out of his car. I asked him if he could help me shoo them back away from the highway.

He turned to look, didn't miss a beat and said "screw them. They're ducks." Somehow it really made me mad, but also it seemed funny to me and I really don't know why.

I'm getting that same idea here. Basically does your view just come down to "screw them. They're just rich guys" or something like that?

It's hard for me to understand an informed Democratic Party supporter seem fine with the government changing the rules and trampling on the rights of individuals.

Is it just that these individuals are faceless or not sympathetic.

It worries me greatly because if a government gets away with this kind of stuff it's not going to stop and someday you'll be part of the group that everyone else is saying "screw them," about. That's where the Bonhoeffer quote came from.

[sandnsea]

76. They're not ducks. They're intelligent investors.

Who have justified excessive returns because of risk. Well this is the downside of the risk.

Workers are not taking a risk. They earned their income and their benefits.

I guess this goes to that empathy that we're discussing in the application of law. I suppose I could spend a week going through case law and justifying my opinion that way. But I don't give a shit. Not because "they're ducks". But because THEY took the attitude that the workers were ducks for decades and said "fuck 'em". Well no, not "fuck 'em", they need to get what they earned so yes, I stand with them first and do not expect them to take a bigger hit than the bondholders just because some arbitrary law that isn't designed to protect ducks, says so.

[BzaDem]

80. Cheney: I don't give a shit. I am not going to avoid torturing because some arbitrary law says so.

Fine with you, right?

Or not. Because you like the law that says so with respect to Cheney. But you don't like the law that says so with respect to bondholders. After all, the only laws should stand are laws that you have a favorable opinion of, right?

The truth is, you could spend a year going through case law and you would not be able to justify your opinion at all. Because the law is very clear. Just like Cheney could spend years going through case law and still not justify torture, because it was plainly illegal.

If this bankruptcy case somehow got to the Supreme Court, there would be a 9-0 ruling against your opinion. One of the nine would be Justice Sonia Sotomayor, chosen by a President who was looking for a justice who would have empathy. Why? Because as Obama said numerous times, the law in 95% of cases is pretty straightforward. A justice's empthay comes in when the law is not straightforward and is open to many interpretations. No current justice on the Supreme Court (nor any of the judges he was picking from) would say otherwise, and you can look at all the unanimous cases they were part of (that were in favor of the rich) as evidence of this.

[sandnsea]

98. That the government was colluding to cheat bondholders?

I doubt it, because they aren't. It's absurd. The bondholders voted, perfectly legal.

[Yupster]

110. Why do you keep saying the bondholders voted

when you've been told that they didn't.

For the first offer, each GM bondholder was sent a large packet of info explaining what the company was offering and instructions on how to vote yes or no. The deadline to vote was May 26.

The bondholders voted no by about 9 to 1.

There were rumors of a second bond offer on Thursday night, May 28. It was confirmed Friday morning. The deadline was Saturday, May 30.

Of course there was no vote on that second offer. How could there be? No information packets or offers were ever printed, none was ever sent out. There wasn't time for people to vote if they even knew what they were supposed to vote on.

The government went to the institutional investors (pension funds and mutual funds and banks) and found 51 % of the total bonds. I guess they somehow got them to agree. It's all very fishy since those same institutions were issuing long advice pieces to their small investors just three days earlier on how unfair the first offer was, which is not a whole lot different from the second offer.

[Yupster]

85. I hope we remain a nation of laws

and we all fight when the government breaks laws.

I hope I never say fuck it when the government is breaking laws and squashing its citizens. That's a place I never want to be caught defending.

[DatManFromNawlins]

63. Right.

The government is trying to have one set of rules for the employees and another for the bondholders. Why should the employees' money be worth more than the bondholders'? If the government would have given the bondholders the same deal as the employees, they probably would have taken it.

The bondholders are not at fault here. They are protecting their interests, and they absolutely should. And nobody can say that the bondholders simply took a gamble and lost without admitting that the employees did too.

The Obama administration, however, IS at fault here for orchestrating an unfair deal. I get the feeling that one of two things is taking place here. Either (A) the Obama administration felt that the bondholders would panic and take the deal, making themselves out to be the champions of unions by effectively giving GM to the employees, or (B) they are trying to break the UAW's back while maintaining support from the unions because they offered the union a better deal "if it weren't for those meddling bondholders."

I can feel for the plight of the workers AND respect the rights of the bondholders.

[Yupster]

71. The deal offered to the bondholders was designed to fail

There's no way they expected to get 90 % agreement.

You can't even get 90 % to vote. They knew that.

When the GM guy was asked why the 10 % percentage to the bondholders he said that's all the government would allow him to offer.

That was certainly a WTF moment to me.

[quiller4]

96. Bondholders should have known they would fare no better

in bankruptcy than Chrysler bondholders did. They will be lucky to get $.10 on the dollar. They should not have held out. The deal they were offered was certainly better than the one forced upon retirees. I have no sympathy for them at all.

[deaniac21]

107. How do you feel about the rule of law?

[Yupster]

111. The Chrystler Bondholders were given cash

The GM bondholders got no cash.

[blue_onyx]

3. I'm angry too

AIG is just as "worthy" of a bankruptcy yet they keep getting funding. It's just doesn't make any sense.

[Mike 03]

4. Not sure the banks "caused" GM to fail.

But I respect your outrage. There is plenty of blame to go around.

And I do agree, the bankruptcy of GM is very, very bad news. It has to be done carefully.

[AllentownJake]

8. The banks doing what they did to the economy is certainly a factor

Wagoner's total mismanagement is the bigger one though.

[BlooInBloo]

9. Um, they WERE a bank, and that was a large part of why they're going under.

[Mike 03]

13. A portion of GM is a bank.

And that is NOT the primary reason they are going under. They are going under because nobody is able to buy the product they manufacture.

[BlooInBloo]

14. Of course I never said it was "the primary reason" they are going under...

Thanks for pretending I did, though.

[MadMaddie]

38. It's not only that consumers can't buy the product

GM and the other car manufactures failed to implement a basic business outlook plan. They assumed that they didn't have to plan for a changing economy and more efficient autos. They fought tooth and nail not to make changes. And because of this mismanagement retirees, current employees, various suppliers are paying the price. The rich at the top they will lose a little money but they will not be destitute.

I also agree with Stinky that there is a two tiered system in the country the banks that played a hand in the devastation of the economy has not been punished they have been given tax payer dollars and they continue business as usual.

[Mike 03]

45. I agree with you! Who are you arguing with? Not me. NT

[MadMaddie]

91. No argument with you my friend just adding additional thoughts

to yours.....:hi:

[blue_onyx]

11. GM had been restructuring for years

It wasn't until the credit crisis, caused by the banks, that they got pushed to the point of bankruptcy.

[Mike 03]

15. Ford has been restructuring for years. GM has done their best, but the banks have little to do

with GM's troubles right now.

Besides, once this economy turns around, GM will be profitable again.

[blue_onyx]

18. Ford isn't doing all that much better

The reason they didn't need government money was because they took out loans before the banks started collapsing. The lack of credit to fund GM's business operations and the lack of credit for consumers to purchase vehicles is a big part of GM troubles.

[Mike 03]

35. I thought they were, but I will defer to you.

I don't want to fight over the condition of the auto corporations.

I will stipulate: If you are right, then you are right.

[knitter4democracy]

51. Actually, they are.

Better product, better financial position, better plan to stay alive. At least, that's what I'm hearing from my Ford contacts.

[blue_onyx]

56. GM products are just as good

Ford has a better financial position mainly because they took out loans before the financial crisis started. Ford has also been closing dealers, selling brands, and seen their sales drop. Ford may be doing better but not dramatically better.

[knitter4democracy]

86. No, but at least they anticipated all the meltdown mess.

That puts them in a better position. They were working on their main brands and quality earlier, dealing with financial crap earlier, and were in a better position when everything hit.

Sales are down for Toyota, too, and they're really hurting. All car makers are deep in mud.

[PassingFair]

106. They have a better position because they have been more forward thinking....

Mainly thanks to Bill Ford.

Here is an article from 2004.


http://www.msnbc.msn.com/id/4843708

snip>]

Idea is to spread concept
“Should these concepts play out from an economic standpoint, and we believe they will, you’ll see us start to roll them out to other plants,” chairman and chief executive Bill Ford said in an interview. “If the Rouge is only an interesting showpiece, it will have failed. I’d like to see it run for a year before we make any judgments.”

Bill Ford announced plans five years ago to transform the complex from a landscape of slag and soot into “a model of 21st Century sustainable manufacturing.” He stuck to that goal even while the nation’s second-largest automaker went through one of its most dire periods, losing more than $5 billion in 2001 and another $980 million in 2002.

“I thought this was going to be known as Bill’s Folly or something,” Ford said. “And I think early on some of the old-line industrial guys thought it was madness. But what was interesting was to watch the metamorphosis and the naysayers not only become believers, but how quickly it became theirs.”

[Mike 03]

16. Also, Restructuring? Every corporation in trouble restructures. Worldcom restructured.

There is no magical significance to the notion of a corporation in jeopardy restructuring.

ENRON was restructuring when it realized it was insolvent.

[Yupster]

32. GM has lost tremendous amounts of money

for four years in a row now.

I'm talking $ 20 - $ 50 per share each year. That's an enormous amount of money to lose for a stock tradeing at $ 2 or $ 3 a share for the past year.

GM has looked like a dead company for three years now if you looked at its arithmetic.

[Auggie]

5. I am pissed about everything. Am I alone,

or is America about top erupt with me?

[Greyhound]

49. I'm there, but then I've been here for years and years, just waiting

for enough others to catch up. It's odd, now that I've moved back to 'red' land and the only radio available is corporate crap music, reich-wing talk, and NPR, I hear most of the local reich-wing wackos saying a lot of the same things the "dirty fucking hippies" have been saying for years. Obviously their motivation is different and they have no solutions since they can't see the causes of these problems, but the complaints are the same

From down here, Obama is blowing it big time, the reich is (as expected) super pissed, but the left is too. People have noticed that his plans seem to be along the lines of no-billionaire-left-behind and fuck the rest of you.

Disclaimer: I do not think, nor have I said that he is the same as Idiot Frat Boy. I do think he is better than McSame and Moosilini would have been. And finally, while I do have nothing but contempt for the UAW, I am enthusiastically, even violently, pro-union and pro-worker.

[AllentownJake]

6. Not a defense

However,

All these bailouts with the banks seem to do was prop up the current management. The E suites of these banks are largely untouched and the people that caused this mess have been rewarded with the ability to keep their jobs. You will see no change from the banks. These executives we bailed out are busily working on their next Ponzi scheme.

If GM had not been forced into bankruptcy I wonder if we would have done the same thing with the automotive companies. Let us be honest. The current management team would have taken the money, closed US factories and opened more factories overseas.

At least now we might be able to rebuild an American GM.

:shrug:

[BlooInBloo]

7. I'm pissed that their management made such craptacular decisions over decades as well.

[midnight armadillo]

48. It's not the banks and the feds, it's 40 years of INFERIOR PRODUCTS

If GM and Chrysler had made the best cars in the marketplace then they WOULD NOT BE BANKRUPT.

Christ, is this so hard to understand? GM & Chrysler treated their customers with utter contempt, repeatedly, until customers figured out that they could buy higher-quality, longer-lasting cars from the Japanese automakers. Sure, GM had some bright spots like the Corvette and what is probably the world's finest lineup of V8 engines...but they compounded their incompetence at product design, brand management, and customer service with ignoring the trend away from SUVs and trucks.

So they're bankrupt. And it sucks since both companies had a surplus of world-class engineers, designers, and union builders to win in the marketplace. They were utterly failed by their corporate culture and shitty management.

How about GM's first subcompact, the Vega?
Jerry L Brockstein, assistant to Henry Haga, head of the Camaro/Corvette studio where the Vega prototype was restyled, recalls finalizing the Vega bodies. "Chevrolet was trying to build this car as cheaply as possible and wanted us to take a lot of money out of it." At first the metal was so thin on the Kammback wagon that in the test facilty it kept buckling under its own weight. Fisher Body had to come back and put stiffing ribs in the roof." John DeLorean, Chevrolet general manager in 1969, recalls after his departure from GM. "The first prototype was sent to the GM proving grounds for durability testing. After only eight miles on the Belgian blocks, it broke in two."

[Hannah Bell]

64. the vega was 40 years ago.

[bvar22]

89. I own and drive GM products (Ford too).

I am satisfied.

[Mike 03]

10. Just another quick thought.

The dumbest thing they are doing is calling it a bankruptcy. Obama had been trying to call it an orderly unwinding or pre-packaged rescue or something like that. It's the word "bankruptcy" itself that is so shocking and causing half of the turbulence and despair.

[Mari333]

12. this video brings it home

http://www.wwmt.com/video/index.php?bcpid=1111405973&bclid=1137706675&bctid=24717406001

[liberalpragmatist]

17. What would you rather be done?

Simply give more loans? The company needs to restructure, downsize, pare down its brands and have its management replaced. Those things cannot easily be done without going through bankruptcy court. And while many of the workers will hurt, they're getting a far better deal this way than they would through liquidation or an unstructured bankruptcy, as the Obama Administration has essentially forced a better deal for the UAW than for many of the bondholders and secured lenders (something that is unprecedented in bankruptcy).

The real laissez-faire approach would have been to simply let GM fail. Instead, the government is still providing financing, is guaranteeing warrantees, and will ultimately spend nearly $70 billion on GM. It will emerge with equity, as will the UAW.

And, truth be told, the odds of success long-term are still no better than 50/50. A lot is banking on pent-up demand leading to a surge in new auto sales in a few years' time. If that doesn't happen, either because of permanent shifts in consumer spending, an already over-crowded auto market, or another sharp increase in gas prices, there's very little prospect of success. While I favor the bailout and think the government should try to transition GM through, I'm fairly sanguine about this - there are very good odds that GM will wind up being the American version of British Leyland.

I understand the anger at the bank bailouts, which I think have been handled fairly poorly. And yes, the disconnect is jarring. But to me, the best response to this disconnect would be for us to do the same thing to the big banks that we're doing to GM. Forcing them into a managed bankruptcy, nationalizing them, downsizing them/breaking them up and replacing their management.

(Also, to be fair, while I'm not happy about the bank bailouts, I think the verdict is still out, as they've been able to raise private capital, which is certainly cheaper for the govt. than nationalization, and the Geithner plan may never actually need to be used.)

[AllentownJake]

19. The Geithner plan was actually slightly better than what is going on right now

The banks, have decided to hold onto their toxic assets with the hope in 5-10 years they will get a better deal than what they would have got under the Geithner plan.

They are keeping these assets on their balance sheets and the Government is aiding them with bogus stress test results.

At least with the Geithner plan we would have some clue on how bad the problem is.

Like I said, slightly better. Not much better.

[yourout]

20. That is a very fair analysis.....

:thumbsup:

[BlooInBloo]

22. Um, yah, but that stuff is all useless for whining about Obama.

[depakid]

24. "the best response to this disconnect would be for us to do the same thing to the big banks "

that were' dsoing to GM

That was the most responsible way to handle matters. Be done with the zombie banks once and for all and pass legilsation to make sure that they never got too big to fail again.

I agree that the verdict is still out, but if as some suspect, we're in for a double dip- it's not going to be very popular having to deal with this again in a year to 18 months from now.

[spindrifter]

21. I'm pissed about both GM and Chrysler. It's wrong, wrong,

wrong. We will never recover from this giveaway of American manufacturing.

[Taitertots]

23. The real problem is people buying foreign cars

They fell for the ploy that foreign cars are somehow superior to American cars.

[depakid]

25. You forgot the sarcasm tag

[Taitertots]

26. No, there is no sarcasm

I used to work in vehicle testing. The vehicles made in America are clearly comparable to the cars made abroad.

[BlooInBloo]

27. hahahaha!

[Taitertots]

28. What do I know I just worked for a domestic automaker in vehicle testing

And drove the entire 2009 Ford line up and most of the 2010 line up. What do I know, I've driven Ford vehicles the equivalent of several times around the earth.

But you have a consumer report about vehicles you have never driven and maybe never seen. You must be an expert.

[BlooInBloo]

29. Please... stop. You're killing me here.

:rofl:

[Taitertots]

34. Good to know you have nothing of substance to add

[BlooInBloo]

36. Unlike the depth added by a former representative of a US car company...

telling me that their cars are "comparable" to any other.

Gee, who could have predicted *that*? :rofl:

[Taitertots]

43. A more accurate statement would be

I worked at a third party that Ford hired to do vehicle testing. My paychecks didn't come from Ford, and I have never been a "Representative" of the company. Being no longer in their employment I have no stake what so ever in Ford or GM.
During that testing I found them to be comparable if not better.


I guess someone who has no knowledge about the vehicles should be deciding whether they are comparable.

[BlooInBloo]

54. "I worked at a third party that Ford hired to do vehicle testing."...

"My paychecks didn't come from Ford"

I admit that i LOVE how you were able to say those sentences back to back, without even cracking a smile.

It's also amusing how nobody but you knows anything about cars. Especially if they disagree with you.

[Taitertots]

57. Considering you have said nothing about the subject

I have no reason to assume you know anything about it. You have put nothing of value into the conversation. You must know nothing about cars. At least nothing that shows American cars to be inferior. So either say someone of substance or continue to demonstrate how ignorant of the subject you are.

[BzaDem]

81. Sometimes, an argument is so silly that there is really no reason to waste time rebutting it.

On example of such an argument would be that your opinion (derived from whatever tests you have made) is somehow more important or correct than the opinion of millions who ignore what you have to say and instead buy foreign cars.

[spoony]

67. Hmm, I'm sure your "talents" are needed elsewhere

There's got to be a dissent thread you haven't trolled yet, why don't you go do that and stop loudly proclaiming how little you know about the automotive business?

[madrchsod]

31. ford-best car assembled in the usa

gm has the best overall mpg fleet than any auto assembler in the world.

i do`t understand why people bought more general motors vehicles than any vehicle assembler in the world...may these people were FORCED to buy gm products.....:rofl:

[frazzled]

37. We drove a rental Ford once a few years ago

We flew into Myrtle Beach to drive to Charleston, SC, and the only car they had for us to rent was a Ford Mustang. Fine. Or so we thought. We were truly shocked at what a piece of crap it was. It handled horribly and had terrible visibility. It was raining, and we were skidding all over the place. I would never, sorry, in a million years buy that car.

[Taitertots]

40. I guess that makes you an expert

You have driven one once. I've driven hundreds for thousands of miles. I worked finding the things wrong with the vehicles.

Big surprise someone doesn't know how to drive a rear wheel drive car with horsepower in the rain.


I drove a toyota numerous times for hundreds of miles. The seat had no position that didn't make my back hurt. The mirrors couldn't be adjusted to where I could see out of them. It handled like shit, had no power, and had no space.

[BzaDem]

82. Wahhhhhhhhhhhhhh.

You don't like Toyotas. Boo hoo. Too bad there are many other people who drive a Toyota "numerous times for hundreds of miles," and like them so much that they keep buying them. In fact, they like them so much that Toyota is not at risk of going insolvent, whereas 2 of the big 3 are.

[knitter4democracy]

87. Look at Toyota again.

Sales are in the toilet, they're laying off people, and they're not doing so hot themselves.

[BzaDem]

104. They are doing much better than any of the big 3. n/t

[Taitertots]

102. I'm sure that has nothing to do with the global economic meltdown

And everything to do with the cars they make.

Toyota has an almost equal market share in the US to GM. It is obvious that there is nothing special about Toyotas.

And yes, Toyota is facing multiple billion dollar loses this year.

[cherokeeprogressive]

52. I guess it doesn't rain much where you live, huh?

I've driven literally thousands of miles in the rain, in lots of different cars. I've never skidded once. I'm wondering where your driving skills fall on a scale of 1 - 10.

Now I drive on compacted snow and ice for 3-4 months out of the year. I've driven a 2008 Mustang up here in the mountains, on the ICE. It's not my normal ride though, I admit. That makes it a little harder though when you're not used to the gas and brake pedals. A light foot while using the gas and brake, and guess what? No skidding.

[spoony]

68. Maybe it was too much HP for you.

And no that's not a slam, just saying. Not everyone knows how to handle pony cars.

[frazzled]

83. My husband, who has been driving for over 40 years, was the driver

And he's driven all kinds of cars and we've never skidded in the rain before. He was the one complaining, and we both felt the car was a lunky, uncomfortable piece of crap. You may be right that it takes a special kind of driving, but there is not a great segment of the driving public that probably wants that.

If you enjoy driving it, fine. Just saying we could not be convinced to drive one.

And the experts agree. Here's a review of the 2007 Mustang (the model year we drove):

Some say the Mustang is a tribute to the great muscle cars of yore. Others say it's a throwback to the bad old days when American cars were unsophisticated lumps of iron.

The heavy steering offers little meaningful feedback. Sharp bumps reverberate through the car's structure with worrying ferocity. The Mustang has a solid (or "live") rear axle, so a bump on one side affects the wheel on the other. Mid-corner bumps can wreak havoc with live-axle cars; the Mustang isn't as jittery as most, but it doesn't keep its composure the way cars with independent rear suspensions do. And with 320 lb-ft of torque going to the rear wheels, there's the constant threat of giving it too much gas and causing the rear end to break loose (though the traction control system does a good job of not letting things get too far out of hand). The Mustang is a great cruiser, but driving it fast on curvy roads is an awful lot of work that comes under the category not of enjoyment, but of survival.

[Taitertots]

105. Just because your husband has been driving 40 years...

doesn't mean he has any idea how to drive a rear wheel drive car that has power in the rain. He is just out of his element.
What car with 320 lb-ft of torque isn't going to skid in the rain with an inexperienced driver.

I got to ride along in a 2007 stock Mustang being driven by a drift racing student on a closed track inside MIS. They are more than capable vehicles.

It is for a market segment. The people who want to go to the drag race, not the nurburgring

[HughMoran]

39. GM deserved to fail due to their gas-guzzling lineup

We helped the banks so we would be able to borrow money to buy cars & houses, helping GM was like throwing money into the toilet since there was no payback.

[spoony]

69. Well, now at least

I have a reason to dislike your positions besides your endless fawning.

[HughMoran]

88. Do you have an argument to make?

1) I deliberately left the above post harsh and open ended so that alternate positions could be promoted (can you say "Hummer") and,
2) I don't fawn over anybody (I'd say "or anything", but I do fawn over my car)

Also, since you've consistently been an anti-social jerk (and now admitted it in your reply to me), I'm putting you on ignore. One less hate-filled idiot's crap to have to read.

[Triana]

41. I agree. It shows that "somebody" STILL DOESN'T GET IT...

...if there are NO JOBS - there is NO recovery. Wall Street banksters are nothing but greedy pirates sucking on the public tit. It ought to be YANKED from them and they ought to be made to grow the f*ckup (ie: be REGULATED to Hell and back) and behave.

[HughMoran]

42. Without the availability of money for capital, payroll, loans etc., there would be NO jobs

Not at GM, not at Toyota, not anywhere. I don't like banks, but I'm not stupid either.

[Triana]

47. Did I write "shut the banks down"?

I don't think I did.

BUT - they need to be REGULATED - HEAVILY. And we need to STOP bailing out Wall Street while letting Main Street sink into CHINA.

Our TREASURY is now RUN by Wall Street tycoons (Geithner and Summers) who have LOOTED it. Have you noticed?

[HughMoran]

50. I agree

Everything you've said is true and needs to be dealt with - hopefully soon.

[Deja Q]

44. Jobs, the sort Henry Ford would pay because Henry understood the situation.

:shrug:

[Triana]

46. Yes. Decent-paying jobs. NOT $14/hour ones. n/t

[B Calm]

78. You think GM will pass on their savings for labor to the consumer?

Me neither!

[unblock]

53. "bankruptcy" and "squashing" are not the same thing

at least, not in this case. "squashing", one might understand to be a liquidation of a business, i.e., putting a company entirely out of business.

from what i understand, that's not being contemplated here. it's a reorganization, meaning that investors and creditors get screwed to varying degrees, but the company continues to operate during bankruptcy and eventually emerges as a viable company, having gotten a break on its obligations.

in all likelihood, employees and former employees get screwed as well, and some plants and dealerships may close -- but much of this could have happened outside of bankruptcy anyways (though bankruptcy laws do make raiding pension plans and such easier).

heck, even in a liquidation, some plants would be sold to competitors and some jobs would continue, as long as the demand were still there. only the duplicative jobs would really get squashed.


ultimately, corporate organization is a somewhat artificial overlay on the actual market. in a normal and reasonable financial and regulatory environment, if there is demand and supply, there will be plants and jobs, working for one corporations or another.

[MellowDem]

59. I am pissed too...

GM has no one to blame but themselves. They are a fucking shitty company. There are fucking shitty banks getting bailed out too. I have no sympathy for GM. They aren't being forced into bankruptcy, that's the biggest bullshit ever. They're being let into bankruptcy after wasting billions of US tax dollars. And they'll be getting more. I have sympathy for the individual who had no control in it, for the retirees even, somewhat. But then again, that company shitted on America for decades and helped ensure we'd still be addicted to oil. We're lucky we got seat belts from them.

Fuck GM. Bankruptcy is the only thing to change them.

So yes, this is a defense of this action, and you have fucking heard it.

[Grinchie]

65. Watch "Who Killed the Electric Car" and you'll be happy this stupid Corps(e) is gone.

No company that could physically crush, then grind up working electric vehicles without giving rhem to the owners that wanted them deserves to go belly up.

Then, have the audacity to show off the chevy Volt, but never opend the hood, nor was it ever seen to run under it's own power.

They are getting the fruits of their Karma, and emotions have nothing to do with it.

If the shareholders demanded that, which I doubt, then they deserve bankruptcy.

If they didn't, but were ignored, then the Company was broken and needed to be destroyed.

[B Calm]

77. They have to keep those hedge fund boys happy. They stand to

make billions by killing a company and throwing people out of work!

[bvar22]

90. I would LOVE to have seen our Democrats STEP UP,,,,

..and offer 10 year multi- billion dollar contracts to the auto makers to deign, retool, build, and maintain a state-of-the-art National Rapid Rail System (freight & passenger).


What a STIMULUS that would have been, AND the taxpayer would have something useful to show for their money.

But no....opportunity missed.


The handful of Wall Street Millionaires are happy and protected, so that must be worth something.
YAY America. :party:



NOW we have Your Children’s Money too !!!
And there is not a fucking thing you can do about it!
Now THIS is “Post-Partisanship” !
Better get used to it!!
Hahahahahahahahaha!

[UrbScotty]

92. Now *we* - it's *them*

[fortyfeetunder]

93. I am not comfortable about this outcome either

This will have long lasting economic repercussions. And potentially affect other large companies too.

[bridgit]

94. They should have made better cars

[sendero]

99. As if..

.... there was any other possible outcome that involved the company existing AT ALL in 3 years. Get a clue.

[LongTomH]

100. What it comes down to is Henry Fordism vs Reverse Henry Fordism

Professor Ernest Partridge posted this on his blog and on DU last year: Reverse Henry Fordism.

There are no sellers without buyers.

That's the first law of practical economics. Everyone knows this to be true, whether or not one has ever taken a course in Economics. Everyone except, apparently, a few Ph.D economists who seem to forget this rule when they are hired by the Heritage Foundation, the American Enterprise Institute, etc., from which they migrate, back and forth, between offices in Republican administrations and these right-wing think tanks.

For these worthies, the "first law" is replaced by the dogmas of deregulation, "trickle-down" and market fundamentalism: impoverish the masses, throw money at the rich who will then invest it, and then "the invisible hand" of the unregulated free market will bring forth a cornucopia of goods and services.

<snip>

Henry Ford saw the fallacy of such a policy when he raised the wages of his workers. His competitors in the auto industry were aghast. "Why did you do that?," they asked. Ford is said to have replied, "If I don't pay them more, who will buy my cars?"

Get this straight: Henry Ford was, in many ways, not a good man. Hell, old Henry was a cast-iron son-of-bitch. He was a racist and anti-semite who bankrolled the Nazis; but, he had that first law of economics down pat. People with money can buy things; people with less money buy less.

The corporatists and their paid whores in media, academia and the afore-mentioned think tanks have been engaged in a four decade campaign to drive down labor costs, and they've succeeded. People are afraid to ask for a raise and more willing to take a pay cut to save their jobs. More of us have lost a good-paying job and had to settle for any job, even at a fraction of what we made before. And we're being told we're lucky to have any job!

Add in the psychological factors: Even those of us hanging on to a job at a decent salary have seen our fellow workers quietly escorted out the door in headcount reductions to save company profits for the next quarter. How many people on this forum know people who've gone through two or more jobs in the last decade? How many know someone who has been unemployed six months, a year or more?

People are frightened, and frightened people are afraid to spend money. They're especially afraid to get in debt for a large purchase, say for a new car or home.

That's why I don't think car sales are going to 'come back' any time soon. Check out the article in the NY Times: Job Losses Hint at Vast Remaking of Economy. It includes statements by a an economist who predicts a permanent restructuring of the economy:

“These jobs aren’t coming back,” said John E. Silvia, chief economist at Wachovia in Charlotte, N.C. “A lot of production either isn’t going to happen at all, or it’s going to happen somewhere other than the United States. There are going to be fewer stores, fewer factories, fewer financial services operations. Firms are making strategic decisions that they don’t want to be in their businesses.”

Face facts, gang! They've screwed us - and in the process - screwed themselves. But, I don't think that last fact has settled in yet!

[Occam Bandage]

101. The banks didn't cause GM to fail. GM's been moribund for years,

and invested in the same credit tricks that the bankers did.

[Mike 03]

108. Thank you. You are telling it as it is, and I know emotions run high, but it's also important

that the truth enter the equation at some point.

Thanks.

[slampoet]

109. Watch "Roger and Me." then do a tour of Flint and Detroit. You'll get over that real fast.