Thread: American Automakers get their money.

Originally Posted by F4Phantom

.....Snip..... and said hybrids were a bad business case.
Now after a decade these same people pretend they want to change, money is available and they want in, they are the people who are not sad they flew in an expensive jet, they are sad they were caught, they have no care or worry, they have forced good change out and used delay tactics to stop innovation when it was possible and now tell the public they didnt see this coming.

Fact is hybrids did/do make a bad business case, they cost too much to produce and can't be sold for enough. Take honda for example, that's why they stopped making the "insight", it was costing them $100,000 each to make and they weren't selling even at $50,000.
Times have changed, technology has advanced, people are more willing to spend the extra cash to get the warm fuzzy feeling pretending they are saving the environment, so honda has announced it will start making them again. Same goes for the rest of them, it is getting easier and more marketable to produce hybrids and the like.

As for taking the jet to Washington, can you see the lost time in driving? At the salary they are on (probably too much!) it just doesn't make sense to drive. Granted, they probably should have taken a commercial flight, but if your company has access to a fleet of jets (which are rented, so costing $$$ to sit), why leave them sitting there idle? They can't win either way.

There seems to be a lot of 20/20 hindsight flying around these days, particularly concerning these 3 companies. Fact is they are in completely uncharted waters, and trying to predict what to do with the company at the moment is probably earning them at least part of those huge paychecks.

Originally Posted by QLDMIKE

I do understand why the US government is doing all in its power to ensure these companies remain in operation (even though they are listed companies that try and avoid tax like the black death); however, i thought the whole idea of the open market place, (Capitalism) was that the weak, inefficient, poorly managed companies die off and the stronger more efficient companies that produce a better product live and prosper. This occurs so that in years to come we have better cars that are what the consumer wants and needs. Clearly, as a result of people not wanting their crappy product, these companies are going down the drain.

I do realise what the flow on effects would be, in the short term, but in the long run isn't it smarter to get rid of those inefficient companies so that in the future we produce what is a better product more efficiently? This is what governments tell us all of the time when they sit back and let companies go under or move over seas...

Just my two cents worth.

I do not think that the problem is inefficient or poorly managed companies. The problem is globalization. Just pay the workers in GM and Ford factories in USA and Australia the same wages that the workers get in China or Brazil and the companies will run in a big profit.
For that reason the German manufacturers are moving to China and in Germany now is unemployment on the car industry.
John Howard when he was under Malcom Fraser said one day that the solution for Australia is integrate with Asia and pay asian wages I remember that very well

Originally Posted by Chucaro

I do not think that the problem is inefficient or poorly managed companies. The problem is globalization. Just pay the workers in GM and Ford factories in USA and Australia the same wages that the workers get in China or Brazil and the companies will run in a big profit.
For that reason the German manufacturers are moving to China and in Germany now is unemployment on the car industry.
John Howard when he was under Malcom Fraser said one day that the solution for Australia is integrate with Asia and pay asian wages I remember that very well

And you reckon paying car company workers Asian wages will stop this happening in the future NO it wont !
Once all the lower paid countrys all gear up for mass production and higher employment rates their workers will all demand higher wages as we have done !

I would be disadvantaged if your plan would come in to effect as i work for GMH , Also every other company in oz and the usa would all want to pay their workers Asian wages ,which will affect more than myself ,
How would we all pay our enormous morgages then or pay for food fuel to run them 4x4,s

Originally Posted by rangieman

And you reckon paying car company workers Asian wages will stop this happening in the future NO it wont !
Once all the lower paid countrys all gear up for mass production and higher employment rates their workers will all demand higher wages as we have done !

I would be disadvantaged if your plan would come in to effect as i work for GMH , Also every other company in oz and the usa would all want to pay their workers Asian wages ,which will affect more than myself ,
How would we all pay our enormous morgages then or pay for food fuel to run them 4x4,s

Mate it is not my plan and I do not like it either, wes Johny Howard idea. Coming fron South America I can telling you that the big capital do not care less about the conditions of the workers of if they have to clese down a factory. They only care for the big share holders and keep their position in management.
I believe that was the big capital that pushed for globalization and now we are starting to pay for that. Here in Oz we finished without industry and the trend continues.

Detroit 3 seeking $6.8 billion from Canadian government

by Frank Filipponio on Dec 8th 2008 at 12:59PM


What to do when you wanted $34 billion and Congress only gave you $15 billion? Try again, but this time go North young man. The Detroit 3 are now making a pitch to the Canadian legislature seeking an additional $6.8 billion from Canada where nearly 100,000 workers are employed in factories and dealerships bearing the Chrysler, General Motors or Ford name.

General Motors of Canada has asked for $2.4 billion in loans, Chrysler Canada Inc. is looking for $1.6 billion and Ford wants a $2 billion line of credit on "stand-by" to be used "only if the current economic crisis worsens." GM is also seeking an immediate $800 million to make it through the end of the year. The Detroit automakers are quick to point out that these amounts are proportional to the U.S. bailout requests and that they are asking for loans, not handouts.

Federal Industry Minister Tony Clement was in Washington during the recent hearings and says the Canadian government will have to review the requests before pledging any funds. He had previously confirmed that funds were set aside to help automakers in the most recent budget. Premier Dalton McGuinty also pointed out the need to balance the public's needs with the carmakers' requests: "We want to move as quickly as we can, but we don't want to move so quickly that we end up with a response that is irresponsible given the legitimate demands of taxpayers." Thanks for the tip, Xeyad!

[Source: The Hamilton Spectator via MotorGears.com}

Actually the problem is only partly what the workers are paid. A large part of the US manufacturer's problem (and Australia) is simply that there are too many car manufacturers with too much capacity, making too many cars. In a large part because of governments everywhere either explicitly or implicitly subsidising them.

The result is that for years they have survived for years (rather precariously) on the basis of convincing customers to buy cars they do not really need. Give these customers a scare, as has happened, and they can (mostly) just put off buying that new car, in most cases for years.

The result is the only car manufacturers with a secure future are the ones with the most reliable government support. The ones that need the least support are the ones with new factories that are more fully automated than the old ones in Detroit (e.g. China, Korea, possibly India), and the ones already tooled up for the designs that people will buy in a severe economic climate. The further problem that Detroit has, is a huge unfunded superannuation debt that they agreed to when business was booming.

John

Filed under: Government/Legal, Earnings/Financials
Paulson: Automaker aid won't come from financial bailout money

by Jeremy Korzeniewski on Nov 12th 2008 at 5:58PM


Some U.S. policymakers believe that the domestic auto industry needs a multi-billion $hot in the arm, but the sticking point seems to be where to find the funds. Rep. Barney Frank (D-Mass.) is calling for a portion of the financial sector's $700 billion TARP buyout to be apportioned to Detroit, but Treasury Secretary Henry Paulson doesn't like the sound of that at all. Instead, Paulson would like to see the automakers get the $25 billion they've already been promised, and suggests that it be made available as soon as possible. Of course, that money was supposed to go towards retooling the industry to make more fuel efficient cars, not necessarily as a cash-infusion to keep the Detroit 2.8 running. In any case, Frank has called for a meeting with the heads of each automaker in Washington next Wednesday to discuss whether a new loan for Detroit should be sectioned off from the TARP fund. This could get interesting.

Filed under: Government/Legal
Canada to the rescue! (after U.S.)

by Alex Nunez on Dec 14th 2008 at 5:31PM
With all signs pointing to White House action on an automaker bailout despite the the bill not making it out of the Senate last Thursday, Canada has its taxpayers' wallets on standby as well. Our neighbors to the north account for a 20% share of the auto industry, and both the federal and Ontario governments are ready to add a commensurate amount of money to the bailout pot if U.S. government action does take place. So, assuming President Bush instructs Henry Paulson, the recently-crowned King of All Our Money, to give Detroit $14B out of TARP to tide them over and keep the RenCen escalators running until this all officially becomes Obama's problem next month, look for an additional $2.8B or so to float across the Detroit River. Thanks for the tip, BrandleSmith!

[Source: Reuters]