GM and Chrysler say they need $21.6 billion more in loans.

[Bob Hubbard]

Auto bailout tab could top $130 billion

GM and Chrysler say they need $21.6 billion more in loans. But that won't be enough to save Detroit. Here's a rundown of all the auto bailout proposals.

DETROIT'S DOWNFALL

• Auto bailout tab could top $130 billion
• GM, Chrysler ask for $21.6 billion more
• How to bring back the Big 3
• 4 questions for GM and Chrysler
• GM, Chrysler gain traction in UAW talks

​

NEW YORK (CNNMoney.com) -- General Motors and Chrysler LLC asked the government Tuesday for $21.6 billion in additional loans, but the final cost of a bailout of the auto industry could be significantly higher.
The two struggling auto giants have already received a total of $17.4 billion in loans. If they get the new loans they want, the price tag of the bailout would climb to $39 billion.
What's more, $7.5 billion in loans have already been approved for the financing arms of GM and Chrysler. Congress also approved funding last year for $25 billion in loans to help automakers convert their plants to produce more fuel efficient cars.

http://money.cnn.com/2009/02/18/news/companies/auto_bailout/index.htm?postversion=2009021818


For a good comment, see here
http://www.cartoonstock.com/lowres/jmo0910l.jpg




I have a plan to fix the auto industry.
Step 1 - Everyone gets paid $50,000 / year. Period. From Jake the Janitor, to Biff the CEO. That's $24/hr. Anyone squacking about that not being a "living wage" should be required to work 30 days at McDonalds at what a fry cook earns.


That rate includes -all- extras like pension, insurance, overtime and vacation pay, medical, etc.


That alone should save them around 10 Billion.


And, don't give me any of that "who am I to tell them how much they can make" crap. If they want the big save their *** government loan, they can meet those terms. If they want their nice cushy union contracts, and stock options, do without the loan, and let us know how that works for you. Note to Saturn, SAAB and Hummer, I would decide fast.

 

[Thesemindz]

I have a plan to fix the auto industry.
Step 1 - Everyone gets paid $50,000 / year. Period. From Jake the Janitor, to Biff the CEO. That's $24/hr. Anyone squacking about that not being a "living wage" should be required to work 30 days at McDonalds at what a fry cook earns.


That rate includes -all- extras like pension, insurance, overtime and vacation pay, medical, etc.


That alone should save them around 10 Billion.


And, don't give me any of that "who am I to tell them how much they can make" crap. If they want the big save their *** government loan, they can meet those terms. If they want their nice cushy union contracts, and stock options, do without the loan, and let us know how that works for you. Note to Saturn, SAAB and Hummer, I would decide fast.

I agree.

Except I say let em drown. Here's my bailout plan for America.

Let the companies that failed, fail. Let the banks that made bad loans go under. Let businesses learn that there are consequences to poor money management and risky decision making.

That's what the rest of us have to do with our lives.


-Rob

 

[Gordon Nore]

And, don't give me any of that "who am I to tell them how much they can make" crap. If they want the big save their *** government loan, they can meet those terms. If they want their nice cushy union contracts, and stock options, do without the loan, and let us know how that works for you. Note to Saturn, SAAB and Hummer, I would decide fast.

It ain't a loan until it gets paid back. In the mean time, banking and auto execs should be tethered to organ grinders and dance when commanded to do so.

 

[Deaf Smith]

They owe me a car. Not that I'm bubbly for a GM or Chrysler.

Deaf

 

[Empty Hands]

Not a bad plan. Of course, something similar for the banks and financial industry was quickly labeled the dread "socialism" by conservative leaning commentators. Whaddya gonna do.

The auto bailout situation is a tough one. Fundamentally, these are not well run businesses. They probably should fail. Unfortunately, that failure will have widespread consequences in immediate job losses, and an immediate and widescale ripple of job and business losses to the supply and distribution chain. Every single community (at least every community with a auto parts store or a dealership) will be affected. That's a lot of jobs and businesses, and will only worsen this repression. So, they probably, sadly, do have to be bailed out. I hope the government takes the spirit of your plan into account Bob and makes sure the money is well spent. How the money from the first half of the TARP fund was used by the banks who received it certainly doesn't lend confidence.

 

[Phoenix44]

Not a bad plan. Of course, something similar for the banks and financial industry was quickly labeled the dread "socialism" by conservative leaning commentators. Whaddya gonna do.

Well, that's because IT IS socialism. But it's amazing how these big capitalists decry socialism until they need a government handout. Then they just love socialism, but they don't want to call it socialism. Plus they still want to act like THEY own the company!

I personally don't care whether you call it "socialism" or whether you call it "harvey," but when the taxpayers of this country basically buy your company, well, we own you, and that means we get to tell you how to run your business. And $50K/year seems a pretty decent salary when you work for a failing company! It would be a raise for most of the workers, and a pay cut for the CEOs--too bad. If they don't like it, then they're out of a job. (But somehow, the rich always survive)

 

[MA-Caver]

Where do GM and Chrysler think they are... at a buffet?


"Please sir... can I have... some ... more?" ~Oliver Twist

 

[Bob Hubbard]

I don't see it as Socialism. I see it as they have a choice. They can always go to other companies in that industry and keep making their $500k salaries.

 

[CanuckMA]

Let them fail.

The NA market consumes about 8,000,000 cars a year. If those 3 dodos become extinct, somebody has to make up that production. Once they're cone, I'm in favour for the governmnt to subidize whoever wants to buy those newly idled plants to ramp up their productoin. Don't care if it's a reborn General Forchry and if it's Toyota, Honda and Nissan.

 

[Phoenix44]

Here's my bailout plan for the Big Three: let Big Oil pay for it. In the past few years, Exxon-Mobil has made more profit--PURE PROFIT--than any corporation in the entire history of corporations.

With rising oil prices, 9/11, and increasing unrest in the middle east, why in the world did the Big Three continue churning out gas guzzlers? Why did GM shred the electric car that they produced in the 1990s, and that consumers demanded? Why are oil companies buying up the patents on the batteries for electric vehicles?

Well, if I had to guess, I'd say that Exxon-Mobil was either paying, or threatening, the Big Three automakers. AND that they're holding the patents to increase demand and price for their oil.

So, I think Exxon-Mobil should be hit with a windfall profits tax, and let them pay to shore up the Big Three.

 

[qwksilver61]

yeah and if Uncle Sugar gives in they all need a shrink,who the hell can afford
or would want a new car in this messy economy? They need to fail and then restructure,asking for more moolah? Get real! Disperse the funds amongst the taxpayers! 'nuff said!

 

[Gordon Nore]

Well, that's because IT IS socialism. But it's amazing how these big capitalists decry socialism until they need a government handout. Then they just love socialism, but they don't want to call it socialism. Plus they still want to act like THEY own the company!

Not to put too fine a point on it, because I understand your frustration, but I see this as the sort of welfare that people really should be angry about. Hell, a welfare recipient can't walk back into a government office two days later and say, "All spent. I'll be needing another cheque now."

I personally don't care whether you call it "socialism" or whether you call it "harvey," but when the taxpayers of this country basically buy your company, well, we own you, and that means we get to tell you how to run your business. And $50K/year seems a pretty decent salary when you work for a failing company! It would be a raise for most of the workers, and a pay cut for the CEOs--too bad. If they don't like it, then they're out of a job. (But somehow, the rich always survive)

That actually would be socialism IMO. But in this case, if Americans must pump hundreds of billions of dollars into the company, maybe they should own it.

In for a penny...

 

[FearlessFreep]

but when the taxpayers of this country basically buy your company, well, we own you, and that means we get to tell you how to run your business.

Not quite. There is, I believe, a very important principle at work here that's been bugging me a bit (and I just happened to pick on your post to bring it up : )

First off, the CEO is not the Company. The CEO is an officer of the company. The CEO's are not being given money for their own sake. The company is being given money which the CEO must oversee the same as any other revenue of the company.

Now here's the rub , the CEO and the company have a contract, agreement, whatever that outlines their relationship. Most of us who are not self-employed, even us contractors, have similar agreements with those we work for. Those agreements include many clauses such as compensation, and causes for dismissal.

So what is basically at work here is that the idea that the government is providing the money to the *company* and if the government is not happy with the actions of an employee of the company, the government if forcing a breaking of an existing contract or a renegotiation of said contract under new terms dictated by the government. Keep in mind that most of these people were acting within the bounds of that contract in good faith for the benefit of the company and it's stockholders and owners within restrictions of government regulations, economic conditions and social pressures.

If the government gives money to a company, than that is one issue. If the board of said company decides that the compensation, performance, etc..of one the company's officers or employees is not appropriate, that is a separate issue.

I'm no CEO or anything but I'm not all happy with the idea that the government, deciding it doesn't like the terms of a legal, good faith agreement and forcing the renegotiation or breaking of that agreement to the detriment of one part of the agreement because it gave money to the other part. I know I certainly want that hanging over my head if the government could tell my boss that they had to drop my pay to $10/hr because the government didn't like what I was making.

Maybe these boards should fire these CEO for bad performance, maybe they should renegotiate the agreements in the legally prescribed manner, maybe the government should just not lend the money, but I think this approach of blackmail after the fact is wrong

 

[jetboatdeath]

Signing a "deal" with the government is a death sentence in itself.
They got what they asked for. Our government is not a business and has no idea how to run one best thing that will come out of this is that people might realize that anything ran by Washington will fail...

 

[Deaf Smith]

My goodness! You have all better be glad Wal-Mart doesn't go belly up. I bet they would handed a REAL bailout! And think of Microsoft! The nation can't survive without PCs.

Shhhhhhhh. Let's keep this under our hat before Bill Gates finds out he can become the richest man in the world by simply going bankrupt. Ironic huh?

Deaf

P.S. They still owe me a car.