Democratic House Speaker Nancy Pelosi has met with the heads of Ford, GM, Chrysler and the U.A.W. While the meeting was closed to the press (way to go government openness), what’s the bet the words “how much?” escaped her plumpness-assisted lips? The Detroit News reports that Pelosi emerged from the confab with her political PR prepared for battle: “‘We may need to make a statement of confidence in our auto industry,’ Pelosi told NPR this afternoon. ‘We’re not saving those companies, we’re saving an industry. We’re saving an industrial technological and manufacturing base… It’s about jobs in America.'” More interestingly, “Congressional leaders are likely to put out a statement on Friday — the same day that General Motors Corp. and Ford Motor Co. are expected to announce heavy third-quarter losses.” So here’s how it goes down: Ford and GM announce catastrophic losses and third-degree cash burn, the stock market freaks (for the few remaining hours before the weeked) and Pelosi and Co. ride to the rescue with a fast-tracked bailout plan, which may or may not be pegged at $25b (for starters). Then it’s a race to the trough, as Cerberus hopes and prays no one notices that it’s using your money to cover their ass.
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If you ask me, they should just forget GM and Chrysler, as they are beyond repair, and just shovel all of the money over to Ford. Again, Ford is the only one that is still viable and has a chance of surviving. Chrysler was never intended to be turned around, and GM dragged their feet so long when it came to taking drastic actions to turn around that they are now completely beyond saving.
They should do like they did with the banks. They let Lehman Brothers and Bear Sterns go down, then dove in to save Freddie Mac, Fannie Mae, AIG, and financed the BOA takeover of Merrill Lynch. Do the same here, let Chrysler and GM go down, and then go all in to save Ford. That is the only place where the bailout will actually be put to good use.
After destroying our industrial base by pitting our middle class against Asian poor and stating beat them at the cheap game, the US congress is considering saving the industry.
What should they do. Maybe for every dollar the fish heads and rice group living in 50 sq. ft. of house hold don’t spend to live their frugal lives, we add it to the cost of a car. Maybe we accept fishheads and rice as our diet and live 100 people to our 3000 sq ft homes.
This is our intended lifestyle according to the US congress first fair trade act
How do I loathe politicians? Let me count the ways………..
Buckle up kids, the next 4 years are going to be a wild ride!
BO, the great uniter’s, first great idea was Rahm “the pitbull without lipstick” Emmanuel as chief of staff. Most famous quote “Republicans can all go F*** themselves”. Nice.
Now I hear he wants the American taxpayer to bail out all the pension plans for the UAW. Very nice. I have no pension plan but I gotta bail them out. Let the transfer of wealth begin….
OK, America – you voted to ‘spread the wealth’, so now’s your chance. Of course, we must also protect the union contracts and ignore the other reasons these businesses got into trouble.
Will Nancy Pelosi still want to pump them up even if nobody buys their products, because that’s pretty much what’s happening now!
No amount of money can save them from themselves, but I guess we’ll keep trying.
Hello Prime Minister Harper the Americans are bailing out the American car industry.Please make your/our check payable to GM Canada Oshawa.
Me thinks the American taxpayer is not crazy about helping GM.I’m quite confident they will really have some problems supporting GM Canada.
Blind Faith – NA’s industrial base is struggling because of the relentless drive for cheaper products and higher volume.
The book “The Wal-Mart Effect” describes what the mart’s desire for low prices does. Chases suppliers to get prices low and volume sky high, so it reaches a point where NA production can’t fufill the price demands placed upon it and that production has to go somewhere else to be made to fufill local demand. Not to be outdone, the book references suppliers as saying that Wal-Mart asks its suppliers for 5% discounts each year which makes suppliers decide between producing in China at $.50 per hour per worker or paying $.35 in Sri Lanka or some such place.
We are victims of our own society’s success, and pressure for cheap.
I’m not anti wal-mart, or anti GM, but I’m very suspicious of a business plan built on low profit-high volume, which strikes me as being GM’s business model except with local production. Yes, likely in response to Hyundai/Kia/whoever…
Interestingly, though, Toyota is able to make it work with Japanese production (of at least some of the autos) which is somewhat cost similar to NA. VW is able to make it work with what is probably a more expensive locale to build cars(german). Never mind the luxury name plates, with the cost markup on them it works out just fine.
The “dollar store” industry is a prime example of low profit high volume.
– I used to own a one dollar only store, it helped me grow my waryness with a volume based business plan.
Madame Pelosi,
If it’s about American jobs, then pay to train the people that will be fired as a result of GM taking that dirt nap.
“Loaning” money to GM and ChryCo is equivalent to taking a swig of milk from the carton, realizing its gone bad, and then putting it back in the fridge thinking it will be better in the morning.
“We’re saving an industrial technological and manufacturing base”
Yeah — pushrod V8s forever!
blindfaith,
So do you call the transplant factory workers in Texas, Alabama, Mississippi, and Indiana “Asian poor” as well? Toyota, Hyundai, Nissan, Subaru are building a big chunk of their US sold vehicles HERE. So don’t feed me the rubbish about unfair competition. The Big 2.1 are going out of business because of decades of moronic management decisions and greedy unions who think that an assembly line workers should NEVER be fired, should have their retirement funded by the company, and that UAW workers should be earning more than say UC Berkeley’s fresh graduate with a degree in civil engineering.
And by the way, Japanese market has been open to foreign competitors for more than a decade. However, the American car companies will never succeed there even if they try. How can they succeed in selling cars to Japanese, some of the most misunderstood and quirkiest consumers of the world, if the Big 2.1 still has not figured out how to build cars Americans want to buy?
Point Given: I’m not anti wal-mart, or anti GM, but I’m very suspicious of a business plan built on low profit-high volume, which strikes me as being GM’s business model except with local production. Yes, likely in response to Hyundai/Kia/whoever…
No, it is in response to Henry Ford I’s business plan. This has been the method of operation for the automobile industry since 1908. Contrary to popular belief, Walmart didn’t invent it.
Point Given: VW is able to make it work with what is probably a more expensive locale to build cars(german).
A fair number of VWs sold in the U.S. are built in Mexico, and even though it sources cars from a low-cost location for sale in the U.S., VW still loses money on its North American operations.
The cars that our built here are assebled here. They’re parts are created by $5.00 an hour workers.
If you believe it is healthy for the US to outsource all our products. Let me remind you that the following can be outsourced but the rich for their children’s sake will not allow it.
Outsourcing to reduce the rich peoples source of income.
Many hospital procedures such as knee, hip, and other replacements: heart,kidney transplants.For the transplants they have many poor people that would be glad to sell a kidney. They would sell a heart to help their dying child.
Plastic surgery.
Doctors visits can be done on a phone by nursing attending the direct contact. These can be done for $5.00
Attorney’s fees for many of the legal requirements
such as house closings. Trusts and fondation or will documents.
CPA work is simply definition of assets and liabilities based on government tax policies.
So, give away the work you want but remember you are just being short sited.