Obama: No choice but to take majority stake in GM

[4real]

http://detroitnews.com/article/20090...ty-stake-in-GM

It reminds me of many a powerful mafia don, first they lend you money you can't pay back then they bleed you dry and close up shop.

I wonder what other businesses will he not want to take over.

[Sstashmoo]

It reminds me more of when they were building 696 and swarthy "investors" snapped up land in it's path, and tried to jam the state on the sale.

It's my understanding these "investors" bought some of these bonds at a devalued price, many pennies on the dollar, with the intention of pressuring money from the Feds in a bankruptcy. Didn't work, too bad.

[Hypestyles]

gm must be forced to ramp up development efforts for better fuel efficiency, also alternative-fuel engines for vehicles..

GM should also be forced to use its engineering resources to get on board with working with mass transit development systems across the country, starting in Michigan..

[Sstashmoo]

"Forced"? Does that sound like a free republic and democracy to you? Start a business and the government mandates what you'll produce, they've already got the unions setting their own wages.

Not everybody wants a cheap car and mass transit.

[O-Dawg]

1) GM went down the drain on its own; that happened before Obama took office.

2) No one forced GM to borrow money

3) Obama didn't, won't, and can't take a majority stake in GM, although the U.S. government may.

Other than that, great post.

http://detroitnews.com/article/20090...ty-stake-in-GM

It reminds me of many a powerful mafia don, first they lend you money you can't pay back then they bleed you dry and close up shop.

I wonder what other businesses will he not want to take over.

[mwilbert]

I'm not really sure that they are "setting their own wages", but if they are, they seem to be setting them downward. The UAW gets a minority stake in the company, and a non-voting director. I don't really think this adds a lot to their bargaining power.

The big benefit to the unions out of the proposed restructuring is that:

1) their contracts aren't immediately thrown out, and retirees/pensions jettisoned.

2) a lot more of their members continue to have jobs, at least for a while, than would have otherwise.

These are very substantial goodies, but the workers are still going to be substantially worse off than they were previously, and there are going to end up being a lot fewer of them. Of course, there is nothing new about that.

[Bearinabox]

Not everybody wants a cheap car and mass transit.

Well, not everybody wants a goddamn Lincoln Navigator, either. You've got your SUV and your cheap gas and your I-75, now where's my streetcar?

[Retroit]

GM should also be forced to use its engineering resources to get on board with working with mass transit development systems across the country, starting in Michigan..

I don't know about "forced", but maybe "strongly encouraged". It would be nice if all the High-Speed trains that Obama talked about a few weeks ago were built here in the US, as well as some of the Light Rail cars that are being proposed. GM does have [[or did have) experience in building buses and locomotives.

[Fury13]

Not everybody wants a cheap car and mass transit.

But many do.

[Sstashmoo]

Quote: "Well, not everybody wants a goddamn Lincoln Navigator, either."

Well, there sure is a lot of "goddam" people driving them if they don't want them.

As I've said before, the market dictates what companies produce.

[Cincinnati_Kid]

I'm not really sure that they are "setting their own wages", but if they are, they seem to be setting them downward. The UAW gets a minority stake in the company, and a non-voting director. I don't really think this adds a lot to their bargaining power.

The big benefit to the unions out of the proposed restructuring is that:

1) their contracts aren't immediately thrown out, and retirees/pensions jettisoned.

2) a lot more of their members continue to have jobs, at least for a while, than would have otherwise.

These are very substantial goodies, but the workers are still going to be substantially worse off than they were previously, and there are going to end up being a lot fewer of them. Of course, there is nothing new about that.

They announced tonight that the Pensions of both White and Blue collar workers will remain intact. They really can't afford to terminate those, it would create a war in this Country. It's not the workers fault that bad management doomed G.M. The CEO's are still bringing home the bank. When are they going to take a cut, and I don't mean that $1 per year B.S. Wagoner got bounced with a $20 million dollar Pension. So WTF???

[mjs]

Quote: "Well, not everybody wants a goddamn Lincoln Navigator, either."

Well, there sure is a lot of "goddam" people driving them if they don't want them.

As I've said before, the market dictates what companies produce.

It dictates what successful companies produce. In a pure market. Twice now they said they've been taken off guard by consumers wanting more fuel efficiency. The Japanese seemed to do pretty damned well making something you claim nobody wanted. The US companies are pretty good at lobbying, making beer style commercials, calling the market unfair, and calling auto buyers unpatriotic. Doesn't sound like responding the market; it sounds like manipulating it. We've shown you the quotes that they finally realize that they need to become a company ran by their engineers and plant managers rather than advertisers and attorneys. They need to work within the world the way it as rather than how they wish to redefine it. The company is a few hours from bankruptcy and your talking about how good they are at reading the market.

[Sstashmoo]

Quote: "Twice now they said they've been taken off guard by consumers wanting more fuel efficiency."

Because OPEC doubled the price of fuel practically overnight. The big 3 were selling SUV's faster than they could build them. At one time Michigan truck plant was the most profitable manufacturing facility in the world [[It's now shut down to retool for small cars). Would you have walked in and said "You guys got it all wrong"?

Quote: " The Japanese seemed to do pretty damned well making something you claim nobody wanted."

The Asians are doing what they've always done. Small cheap cars with a minimum of raw materials and compact to fit as many as possible on ships for US markets. Why were they all jumping on that SUV band wagon as well? They wanted some of that lucrative GI Jane market too. Oil prices should have been regulated, just like securities should have been regulated, and all these fly by night mortgage outfits should have been regulated. The Bush years and the crooks that destroyed this country.

[Danny]

We Americans open the free imperialistic markets to most foriegn nations. But ended up creating a capitialistic Frankenstein MONSTER that went out of control.

[Fury13]

There was nothing wrong with the domestic automakers making Navigators and Yukons as long as they were selling. The thing is, they should have ALSO been making a good, durable, cheap-to-operate small car -- or at least, they should have had such a design ready for production. But no, they didn't even bother. The US automakers saw the volatility of gas prices and STILL didn't read the writing on the wall.

[Sstashmoo]

Quote: "But no, they didn't even bother. The US automakers saw the volatility of gas prices and STILL didn't read the writing on the wall."

Well there was the Focus, etc that weren't selling. Development engineering, tooling costs money the automakers didn't have. Keep in mind the UAW was standing out on the sidewalk, eating free pizza and refusing to work, just months ago. Try running a business with that.

[mjs]

Exactly as Fury13 stated.

And thank you Stash for bringing up Michigan Assembly as proof that American automakers no longer support your claims that there's no market for affordable fuel efficient vehicles. Its being retooled to bring us the third generation Focus including a Focus EV by 2011. As Mullaly states, “The transformation of Michigan Assembly Plant embodies the larger transformation under way at Ford,�. Ford already ramped up production of the very popular Focus by 30% in 2008. They also just introduced their first mid size hybrid in the 2010 Fusion following their first hybrids in other 2009 models. They are now listening to what their engineers say can be done, not baseless predictions of what sales says won't sell.

By the way, Michigan truck was not the most profitable manufacturing facility in the world. However, it was one of the most profitable auto manufacturing facilities. I hope this isn't like the mpg thread where I cite and you just state.

http://www.theoaklandpress.com/artic...f258100096.txt
http://www.hybridcars.com/vehicle/ford-focus-ev.html
http://www.autobloggreen.com/2009/01...-mule-w-video/

[mjs]

Well there was the Focus, etc that weren't selling. Development engineering, tooling costs money the automakers didn't have. Keep in mind the UAW was standing out on the sidewalk, eating free pizza and refusing to work, just months ago. Try running a business with that.

Once again, please cite claims such as Focuses weren't selling. I guess I'll never convince you to look at problems as opportunities for improvement rather than another chance to whine and cry. I really hope I'm not a customer of your employer's.

[Sstashmoo]

Quote: "I hope this isn't like the mpg thread where I cite and you just state."

You mean: Stash says it like it is and you scurry off on a Google search for any info that might substantiate your delusions. It's the internet, written by people largely no smarter than yourself, you can find any info that supports anything. It's meaningless. What is it in our society that destroys short term memory? I swear, these people can't remember just a few years back. Small cars weren't selling in sufficient numbers to warrant shifting the majority of manufacturing thrust to that market, I don't give a fuck what you "cite".

[mjs]

Translation: I can't seperate solid sources like PBS, CNN, Newsweek, Ford, etc from basement blogs so I only trust what I think the world should be like and if you expect me to support my claims, you will be sadly disappointed. I find these cites easily because I have a great memory. Yours is obviously fading as you forget whether they were talking about auto manufacturing or manufacturing in general or one of the best or the best.

[mjs]

There was nothing wrong with the domestic automakers making Navigators and Yukons as long as they were selling. The thing is, they should have ALSO been making a good, durable, cheap-to-operate small car -- or at least, they should have had such a design ready for production. But no, they didn't even bother. The US automakers saw the volatility of gas prices and STILL didn't read the writing on the wall.

From which you quoted and responded:

Well there was the Focus, etc that weren't selling.

You later changed it to:

Small cars weren't selling in sufficient numbers to warrant shifting the majority of manufacturing thrust to that market.

Thats completely different and supports exactly what Fury13 had said. In volatile markets, smart investors hedge their bets by positioning themselves to respond quickly when the market changes. The past has clearly shown the gas guzzler market to be volatile.

[DenbyTar64]

One Big A$$ Mistake America = OBAMA

[Sstashmoo]

Quote: "You later changed it to:"

After your response, I realized I was going to have to dumb it way down for you. Not selling=sales weren't strong. One would have to be not very bright to think I meant "not selling" to mean they didn't sell any at all.

[mjs]

They way you said it, not selling means not selling enough to justify the product line. The very next sentence was about how the development and tooling couldn't be justified. Give me your definition of strong sales volume and then tell me how many units were sold. Better yet, tell me where the volume ranked in sales of other vehicles. I know you hate to do it, but you'll need cites.

[Sstashmoo]

Quote: "The very next sentence was about how the development and tooling couldn't be justified."

It was implied that the companies should have had small car model tooling and floorspace idle while they built SUV's in case gas prices spiked. It's too expensive. It takes years to switch from one to the other.

Are you asking me to do a Google search for you? LOL