Fresh from their closed door meeting– which included Ford CEO Alan Mulally– presidential hopeful Barack Obama and GM CEO Rick Wagoner took the stage at Carnegie Mellon University to discuss federal handouts. As reported by The Detroit News, Barack set 'em up. "How do we shape our energy future in a way that allows GM to remain competitive, keeps some of the best workers in the world on their jobs [some?] and generates profits for the company and shareholders?" GM's jeffe knocked 'em down. "Wagoner sounded a note of optimism," the DeN notes. "Noting GM's plan to introduce the plug-in hybrid Chevrolet Volt by 2010 and more advanced research on hydrogen fuel-cells. But he said the researchers developing batteries for hybrids and taking hydrogen power from the lab to the highway need federal research money. And he asked for government help to offset the high costs of newer technologies for consumers — aid that traditionally has come in the form of tax credits." "We need to provide some support to make sure these new technologies are affordable to consumers," Wagoner said. Anything else? "Wagoner suggested that the carmakers' 'relatively weak balance sheets' make it difficult for them to make the large capital investments needed to shift production lines to new vehicles." So that "we" is "we the people." As in you. And your tax dollars. To GM. To pay for them to make better cars. In case you hadn't figured that out.
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This is ridiculous, federal money for GM? let’s hope not. GM has squandered their wealth (Why doesn’t the GM CEO contribute some of his huge salary to research? other than researching retirement locations). I hope every American is appalled at the suggestion GM should get tax money, Obama will be a disaster. I personally will never buy another automobile from an american company.
GM did not keep its own house in order now they want tax money. Screw them.
By the way, GM lost another billion dollars in market cap this morning.
GM can’t/won’t/couldn’t do the right thing for years with their money…why on earth would I ever want a penny of my tax dollars to prop that company up?
Maybe Rick can start subsidizing his own company by not raping it for a huge yearly salary.
It’s like a drunk owning a bar…you’re not sure how it will end, but you know nothing good is going to happen.
How about, oh, fourteen million dollars in support?
psarhjinian : How about, oh, fourteen million dollars in support? If you're referring to Rick Wagoner's annual compensation, it's $15.4m.
Here’s a QOTD: how much would you pay in extra taxes to have Wagoner (and the other GM execs) replaced? I’d chip in a hundred or so.
Unless you shake up the management (a la Mulally), any federal money will disappear into the black hole of GM’s debt and mismanagement.
RF,
Thank you. For some reason, I thought it was $14.1m.
Now, that said, I won’t begrudge Rick one point four million dollars per year. That’s, what, five to eight engineers? Or fifteen lineworkers?
Let them die, they wont get one cent of my tax money if I have any say in it. Meaning Obama if your plan is to squander more of my/our money you sure aren’t getting my vote. Force them to compete or die, no more of this corperate welfare. And just because you steel my money from my back pocket doesn’t mean ME or any of the other American’s who share my distrust for GM are going to by any of their sorry products in the future. Man this pisses me off!
Here’s a QOTD: how much would you pay in extra taxes to have Wagoner (and the other GM execs) replaced? I’d chip in a hundred or so.
Nothing not one penny, other companies can be responsible with their money and profits why can’t they be. If I am forced to INVEST in the company with my tax dollars I want to see a return on the investment as in money back to me, or a high paying job fixing the sh*t that is GM. You know what you HAVEN’T been doing old Ricky.
RF – something is screwy with the comment window!
if you wish to deny the general & its incompetent peers a taxpayers funded bail-out, then you better start bombarding your congress critters with daily notices. but given the brainless political spin that this issue will attract, i think you’re already beat. however, do insist that rabid rick’s paycheque & golden parachute are null & void if taxpayer dosh is involved. same for his inept cronies. you may get that concession – though i wouldn’t hold my breath.
hltguy :
“Why doesn’t the GM CEO contribute some of his huge salary to research?”
It’s simple, because he only makes *millions*. They’re going to need *billions* to do what they want…
If we the tax payers are going to end up paying for development of the next non-oil power plants, then giving GM cash is not the way to do it.
Instead, I’d feel better if a quasi-public company was created to develop the technology which can then be leased to the auto makers. ALL automakers, even Toyota. This company can be run with the top engineering schools, sort of like DARPA (which gave us GPS, the Internet, and many other things was can’t live without today).
We can’t trust GM not to blow it. How do we know that they aren’t going to take the money and simple give to the shareholders as their quarterly dividend?
My guess to paraphrase Waggy: “We fucked up but I won’t ever admit it, of course – but in order to keep my $16M+ salary and all the non-performance based bonuses a year I need you to give us several billion in funding to keep our poorly run businesses afloat. We will burn through it quickly but send out a lot of press releases and tout your insight and support for out corrupt and failing business model. God Bless America and my golden parachute!”
Screw Red Ink Rick and the rest of the Bystanders.
Where is my 80mpg car that GM promised me back in 1996!
Where is the hydrogen powered car that was supposed to be available .. five years ago!
Let them eat cake, I say.
I think I’ll write a letter to my Senator asking him to not support a bailout of the D2.8. They need bankruptcy to straighten years of corruption and bad business practices out – not money from the Gov’t to maintain a unsustainable status quo that benefits a very select and wealthy few.
…and I assume Rick and his colleagues will work for federal executive compensation – which would be a bit under 200K per annum, right?
netrun: Where is my 80mpg car that GM promised me back in 1996!
Where is the hydrogen powered car that was supposed to be available .. five years ago!
Not to support a GM bailout, but, in all fairness, has ANY car company made those vehicles available for sale at reasonable prices yet?
Seeing as though GM is a multinational, I wonder what the WTO has to say about the US government supporting the US car industry.
Not that I have the illusion they could really stop it before it’s too late, but I’m sure this goes against some of their regulations.
Maybe they’ll defend themselves by saying the Big 2+? are part of the US cultural heritage (btw, apart from some noteable exceptions, some heritage that would be…)
Anyway, could another Airbus/Boing dispute be on its way…
The stock market took GM out and shot it today. Last I checked it was trading at a new low of just over $11 and change.
Bankruptcy over the weekend? June sales report comes out in a few days. Must be terrible.
Man I don’t know if there will be a big political push for bailing them out this time. All that market share loss is people voting with their wallets and this time around a majority has indicated that American car companies can suck a tailpipe.
I’m not for a bail out, but my vote wont count. I’m just a taxpayer. The old boy network is gonna intercede. Just like it did for Bear, Stearnes. Gotta love socialism for the rich.
The situation of a CEO with the salary of 15.4 Mil asking the government for help from the taxes it collects from people making as little as 10K(just a wild guess, couldn’t find the minimum taxable income on Google really fast). How on Earth is this overall situation economically viable? Or for how long?
Marc,
As I recall, there already is a sticker on cars that notates this info. It’s called the window sticker. The same information is also available at fueleconomy.gov.
$800mm for this department?? And we’re $17B in the red at the state level. I think we’ve found a place to start cutting that budget and get some teachers back to work. After all, with our high school drop out rate in LA hovering around 50%, some new car buyers may not even be able to read that nice new label CARB wants to use.
How ’bout this – we take CARB’s budget and hire some cops, build a charter school or two or maybe even (gulp) pay down our debt.
What an idea.
Bloodnok my congressmen are pretty much owned by Toyota being a resident of the great state of Kentucky with its successful auto manufacturing businesses. They might have interest in helping Ford but probably not if they kill more jobs. I am more worried about the other wishy washy states. Of course these congression crooks tend to work on their own self interests when they get to DC.
Re: Andy D The Fed essentially monetized $30 Billion (with a capital B)of bad mortgage securities that Bear Stearns had, and somehow the stockholders still received some money! Combined with the billions that agriculture receives, and, well, I am sure everyone on this site can come up with their own favorite forms of government largesse, coming up with a rational reason for NOT giving money to the 2.8 is fairly difficult. All Mullally and Wagoner really have to do is convince enough members of Congress (via the Archer Daniels Midlands’way) and they should get their money fairly soon.
netrun: “Where is my 80mpg car that GM promised me back in 1996!”
geeber: “Not to support a GM bailout, but, in all fairness, has ANY car company made those vehicles available for sale at reasonable prices yet?”
I helped fund the 80mpg GM car back then through my tax dollars, so as a unintended shareholder in the enterprise I’m looking for some return on my investment!
GM won’t build cars that people are willing to buy so GM goes and gets a political terrorist to steal our money from us.
Luther
Are you really calling a likely nominee for president of the United States a terrorist?
First they are only talking. Second they are doing it in public. I don’t want GM or Ford getting any of my money either, but this is certainly refreshing considering the closed door energy policy meetings that occured about 7 yrs ago. Maybe $140 a bbl oil was the goal.
Re: Andy D The Fed essentially monetized $30 Billion (with a capital B)of bad mortgage securities that Bear Stearns had, and somehow the stockholders still received some money! Combined with the billions that agriculture receives, and, well, I am sure everyone on this site can come up with their own favorite forms of government largesse, coming up with a rational reason for NOT giving money to the 2.8 is fairly difficult. All Mullally and Wagoner really have to do is convince enough members of Congress (via the Archer Daniels Midlands’way) and they should get their money fairly soon.
Does “essentially monetized” mean “gave” in plain English? The whole deal, any porkbarrel deal, is socialism for the rich. Such behavior shouldn’t condoned. People should be held accountable.
How could you, as the CEO of a corporation, ask the government for a handout without dieing of embarrassment? I can’t stand these guys.
This fall, American voters have a tough choice to make.
Send your tax dollars to Iraq
or
Give it to GM.
I am betting on option C. We’ll stay in Iraq and bail out Detroit, banks, stupid “home owners” who bought more than they could afford, Wallstreet, farmers, and anyone else who has political pull and wants free money. It won’t matter who is president; the government is already bought and paid for by corporate interests.
The situation reminds me of the 70s movie Rollerball, where the country is run by corporations and the prols willingly accept it as long as they get their mindless entertainment.
Let them die, they wont get one cent of my tax money if I have any say in it.
It’s highly unlikely that a bailout would involve a direct transfer of taxpayer cash into GM’s coffers.
The more likely outcome would be something similar to what was done with Chrysler — federal loan guarantees.
In this scenario, banks and investment banks would make the loans with their own money. It might also include some investment from a private equity firm. The federal government would guarantee the loans, in order to induce the banks to make the loans and to lower the interest rate.
The taxpayer would be on the hook only if GM defaulted on the guaranteed loans. If the lenders are smart, the money will come with strings attached. I’m guessing that they would take a piece of equity (stock) and get membership on the Board of Directors.
My prediction is that a bailout would be more for Wall Street’s protection than for anyone else. The federal government needs to prop up the banking system, and GM owes too much money to too many institutions to allow them to fail. If we could bail out Bear Stearns, we will certainly give serious thought to bailing out GM.
Number one issue is job losses and impact on the economy from GM going down. I want to ask Obama if he has figured (hypothesized) that out. What are the consequences of the options being considered. Oh well, its not my responsibility, I’m glad I got the clarity to see so many things for what they are, also I do feel frustrated and angry.
Imagine Toyota and Honda having a more challenging time because GM does not need to run a business as efficiently to compete. Not fair, Toyota and Honda can probably manage though.
Now job losses, how bad is that? How bad is giving handouts? Is it better or worse than Job losses? Say GM does not get handouts, bunch of people lose their jobs. What happens to the economy in that situation? Will that negatively impact me? How much do handouts impact me?
I’m starting to think handouts are not so bad. People losing jobs may force them to work harder or not. I wanna improve my living conditions, have an easier life, live in a healthier economy and have fairer access to wealth. I think I need to know were money is going and why, if for no other reasons then to understand were the money is. I mean even if GM is giving $10b a year, its what they pay in taxes anyhow. How money affects my living opportunities is more important to me.
Dear S I’m starting to think handouts are not so bad. People losing jobs may force them to work harder or not. I wanna improve my living conditions, have an easier life, live in a healthier economy and have fairer access to wealth. I think I need to know were money is going and why, if for no other reasons then to understand were the money is. I mean even if GM is giving $10b a year, its what they pay in taxes anyhow. How money affects my living opportunities is more important to me.
That is all well and good, until YOU lose your job.
Andy D:
Dear S I’m starting to think handouts are not so bad. People losing jobs may force them to work harder or not.
That is all well and good, until YOU lose your job.
Coming from a blue-collar upbringing myself (many moons ago), my parents emphasized education, education and education. So while the ambition of my peers only extended as far as getting that union job that will make them “set for life” (yeah, right), I had bigger goals in mind. I didn’t come from money, but I made it happen via the following route:
1) Air Force – took advantage of educational/technical training – which led to:
2) Undergrad degree in Computer Science. Was hired by a good company upon graduation, then took advantage of the company’s educational reimbursement program which led to:
3) Masters Degree in Software Engineering.
I now work for a small, agile, company, and get paid very well. And I am currently taking advantage of their educational and training opportunities to keep my skills up-to-date.
The point of all of this? Proper preparation, ambition, and long term planning will enable anyone to be in a better position to not only survive, but thrive during an economic downturn.
Handouts only serve to blunt ambition, and allow the Big 2.8 companies to maintain the status quo for a few more years. These companies need to go bankrupt so they will finally be forced to change their current, inefficient ways and come out of this leaner, meaner, and stronger in the long run.
It’s simple really: Michigan is a battle ground state in the fall election. Need I say more?
The point of all of this? Proper preparation, ambition, and long term planning will enable anyone to be in a better position to not only survive, but thrive during an economic downturn.
Using this logic, everyone would be a software engineer (until those jobs are ultimately outsourced to developing countries at a fraction of the price), and we’d all be walking barefoot because everyone would be smart enough to avoid working in an auto plant or a shoe factory.
It’s to our benefit that some people are willing to do manual labor for large companies. Without such people doing nasty, repetitive work, the rest of us would suffer for it. You can’t just download your food.
In the words of Assy McGee
“F**k that noise”