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So proclaimeth our good friends at Automotive News. They report that “The director of the Congressional Budget Office says the cost to taxpayers of a $25 billion loan program probably would be about $7.5 billion — about twice earlier estimates… Worsening credit conditions mean 30 percent of the loan total may be needed.” Like that’s going to make a difference. But the way GM’s spinmeister handled the news is revealing, in the usual denial is a river in Africa sort of way. “General Motors spokesman Greg Martin said today that the budget office director’s observation is not a formal cost estimate. ‘We know we have our work cut out for us,’ Martin said.” Yeah, getting Uncle Sam to get the tit out can be such a hassle.
19 Comments on “Bailout Watch 46: “The odds against automakers and suppliers getting federal low-interest loans just got worse”...”
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Holy geez, what a photo, please bring the cheerleaders back!
I have been posting on TTAC for sometime about the coming meltdown of the U.S. economy. Despite other people’s assertions posted on this site that it makes sense to have the taxpayers fork over large piles of dough to the Detroit boys, it is a very bad idea. Remember folks, loan guarantees are just that, guarantees, meaning when the primary borrower does not make the payments the “guarantor” has to, and that would be you and me folks. Now what are the odds of the the automakers NOT making loan payments? About the same as betting on the crocodile in the battle with the human.
We should not give them a dime becasue they will just piss it away.
OOps! There goes my lunch!
hitguy:
Holy geez, what a photo, please bring the cheerleaders back!
Done.
Thank you, my stomach and eyes appreciate it.
See how well deregulation and trickle down economics worked ? Read my lips, Just print more money dammit.
hitguy —
So what should we do, buy gold ? Euros ? Rubles ?
stop squirming – just bend over and kiss your money good-bye
All across America…in this Great Land of ours…each and EVERY small town, every farm village…every one-horse / one-prison town…there is a yard…
Oh you know the kind…old delivery trucks, old busses, old mobile cranes….acres upon ACRES of rusted out CRAP!!! Eyesores which are the blight of an otherwise beautiful county.
GM, if you want it, you miserable wretched excuse of a company….
Go get it. Clean up this pigsty. You can have the scrap value of all the tons upon TONS of Ferric CRAP which pollutes the scenery.
You want a handout, by God…do what you’ve done to your “Loyal” customers…sweat, work, labor, slave away…
GAS, GRASS, OR ASS…nobody rides for free!!!
Not even in a rusted out Pontiac Firebird on blocks!!!
Despicable pieces of worthless trash…the rusted out cars…or the company?
You decide!! :)
I hope Lehman’s BK makes people realize that businesses can go BK and life goes on. Lehman will probably be liquidated, but as a manufacturer GM is the kind of going concern that Chapter 11 is specifically tailored to.
GM, etc. suffer from daft management and extreme dealership and union burdens that no guaranteed loans will get rid of. Chapter 11, on the other hand, will clear the boardroom and executive offices, free the manufacturers of unnecessary dealers and allow for escape from the most onerous union provisions.
cheezeweggie:
“See how well deregulation and trickle down economics worked ? Read my lips, Just print more money dammit.”
+1.
“Regulation” isn’t necessarily a dirty word, you know. I’m all about freedom and everything, but as we all too often see, it needs its checks in areas like these, where the actions of a greedy few can have dire consequences on the innocent many.
Great, let’s let GM go belly up. So the people and companies that depend on GM for their business and livelihoods can also go belly up and become dependent on the goverment. That makes a lot of sense…gonna cost more in the medium to long term that a bit of assistance (what, two days in Iraq?) in the short term.
There won’t be a commensurate increase in employment in the import/domestic plants to offset the loss of GM jobs. Many of their suppliers are in their home countries so we have another net loss of jobs. I’m sure there won’t be a further ripple effect in the rest of the economy, oh heck no, certainly not affecting those who post on this board. But you can smugly pay some more taxes to support the laid-off who will be collecting unemployment for the foreseeable future, until…I don’t know where and when the last of these dominoes will fall.
Not saying that GM deserves the loan guarantee–they don’t. All the charges of mismanagement and short term thinking are certainly true. But for gods sake, can SOMEONE look at the long term consequences for a change? We need, as a country, to encourage domestic manufacturing/farming–ANYTHING that slows down the flow of money overseas, or that is unique enough that people overseas will buy it.
Lehman is a fine example of the greedy money manipulating philosophy, rather than value creation. Not that many people, relatively, are going to lose their jobs because of Lehman tanking–not much of a ripple effect.
“So what should we do, buy gold ? Euros ? Rubles ?”
I’m beginning to think: farm land with a source of fresh water and a windmill, all the canned goods you can bring home from Costco, and some livestock. Possibly a hunting rifle.
cheezeweggie
I get irritated when the first thing I read with my coffee is someone making a statement about which one has no concept.
This is the kind of humor that kills late night comedy for me.
The “throw a bomb and see if it gets a laugh” attempt at a joke.
At any cost.
This is not the result of trickle down economics nor of deregulation.
If anything at all, its the regulators themselves we need to fire…
and the result of white collar crime getting softly slapped on the wrist punishments.
Like I said before, I am willing to bail out people, but not until I see the greedy in the public square being stoned.
I would like to see the greedy investors pay for thier selfishness and home-rich/income poor lose their homes they shouldn’t have gotten in the first place.
So take your pic. Who would you rather bail out?
Some sleezy Wall Street schlep, who frequents Starbuck’s, in a cheap suit or some guys who think the Camaro is a good idea?
I’m leaning toward the guys who build a Camaro.
It’s going to go somewhere, I’m not favoring Haley -Burton.
monkeyboy:
So take your pic. Who would you rather bail out?
Some sleezy Wall Street schlep, who frequents Starbuck’s, in a cheap suit or some guys who think the Camaro is a good idea?
How about neither?
monkeyboy
I just don’t understand all this bailout crap.
Please, try doing some cutting in the office!
Before these companies get any assistance from me, they need to start fixing their own businesses.
Once I see that they are trying, then perhaps some help.
If lending support will result in the rediculous pensions being unaddressed, or continued duplication of white collar jobs…forget it.
I am not going to help my brother-in-law sit around and watch TV while getting 60 percent of his Chrysler salary!
He’s not even 50!
Before I go around asking my neighbors for money to help me pay my bills, I would get rid of the cable TV in everyroom (well, not in the bathrooms!), create a budget for me and my wife.
Get rid of a few cars…OK, maybe keep the cars and get rid of the kids and dogs.
But I would make an attempt to do the job myself.
GM alone should only have half the cars they have.
Corvette, Malibu,Impala,LaCross,Enclave,Solstice, G8, VUE,9-3,CTS, DTS.
The rest is duplication or junk.
Keep these and introduce better and more competitive cars.
The Cruz look promising…but its getting late.
CTS wagon looking good.
VUE 2 mode…looking great.
But show you are cleaning your own house first!
I think we should fight just as hard against the bailout as GM fights their customers to fix the problems with their cars. If you think this is a problem relegated to the 80’s, you are vastly mistaken.
GM and their dealers are still in the business of making below par vehicles and shafting customers who buy them. Just ask the people I work with who bought GM products, for the last time.
I work with people who tow trailers to the dunes and boats. And they’re vastly content with the product. They also race and drive to work.
Maybe it’s that like minded seem to coagulate. Like any occupation.
Ironic – we have to pay whether or not we get or want a car