Auto Industry Bailout?

[Azazello1313]

 

at least they're spending what little money they have wisely

[Randall]

Isn't GM only worth about $4 billion now?

[Azazello1313]

It seems like it would be up to the workers to limit the unions, right? Why would they force a situation that they knew would kill their jobs? What benefit is there to that?

 

that's sorta the $50 billion question, isn't it. maybe because they know the democrats will ultimately bail them out?

 

Then that will be their death. I've already sent emails to my Senate and House dems to let them know that I'll vote against them if they give my tax money to the auto industry. I encourage others to do the same.

 

bump.

[H8tank]

OH SNAP!!!!!!

 

 

Thank you obamassiah.

[muck]

Isn't GM only worth about $4 billion now?

 

Worth, absent "our fine friends in DC" = bupkiss.

[AtomicCEO]

bump.

 

Good bump. It's important to remind people that Bush gave the auto industry this bailout, and democrats are left to clean up that mess.

 

I'm still against the bailout. Find one post that says otherwise.

 

Man, did Bush really really screw this country up in every way. You should be embarrassed.

Edited June 3, 2009 by AtomicCEO

[SayItAintSoJoe]

General Motors earned $3.2 billion in the first three months of 2011 for its fifth-straight quarterly net profit -- its highest in more than a decade and a sign the Detroit economy continues its recovery.

 

Yeah, I know these profits were bolstered by some one time gains but I’m wondering if anyone has changed their view of the whole auto bailout thing.

[SEC=UGA]

Yeah, I know these profits were bolstered by some one time gains but I’m wondering if anyone has changed their view of the whole auto bailout thing.

 

Don't forget all of the losses they are allowed to write down has weighed heavily into this. It is an accounting slight of hand.

 

But, congrats to them.

[Savage Beatings]

Yeah, I know these profits were bolstered by some one time gains but I’m wondering if anyone has changed their view of the whole auto bailout thing.

 

 

The next car that I purchase (probably in about 9 to 10 months) will specifically be from a local Ford dealership. This will be my very small way of saying thank you for not taking any bailout money. So no, time has not changed my view on the bailouts... I just haven't had a chance to show my allegience with my miniscule purchasing power yet.

[Azazello1313]

GM's stock is trading at around $31. for the taxpayer to recoup our bailout money, we would have to sell our remaining GM shares at $53 each.

[SEC=UGA]

GM's stock is trading at around $31. for the taxpayer to recoup our bailout money, we would have to sell our remaining GM shares at $53 each.

 

What yer saying is that it will eventually hit $53 a share? Time to buy!!!!!

[Ursa Majoris]

GM's stock is trading at around $31. for the taxpayer to recoup our bailout money, we would have to sell our remaining GM shares at $53 each.

That's a loss of $22 per share on the face of it.............as long as you don't count the economic effects of allowing GM to go tits up.

[Azazello1313]

as long as you don't count the economic effects of allowing GM to go tits up.

 

thousands of businesses went tits up during this recession. GM would have been just another. they would have went through bankruptcy and come out (hopefully) a new company with the same name better able to compete in the marketplace. GM maybe would've been larger than most of the businesses that failed or went through bankruptcy, but still a small piece of the overall pie, and worth no special weeping and wailing.

 

and ultimately, the economic costs to society of propping up failed businesses far outweigh the benefits.

Edited May 9, 2011 by Azazello1313

[Ursa Majoris]

thousands of businesses went tits up during this recession. GM would have been just another. they would have went through bankruptcy and come out (hopefully) a new company with the same name better able to compete in the marketplace. GM maybe would've been larger than most of the businesses that failed or went through bankruptcy, but still a small piece of the overall pie, and worth no special weeping and wailing.

 

and ultimately, the economic costs to society of propping up failed businesses far outweigh the benefits.

From what I read, they are still very much able to compete in the marketplace and are among the frontrunners for the pending explosion in China car sales. The costs to federal and state coffers in unemployment, public assistance and so on would have been monumental, especially as the supplier network would have gone south too.

 

Oddly enough, I tend to agree with your POV in principle but we should not underestimate the costs that would have been incurred, nor forget to factor them in.

[borge007]

thousands of businesses went tits up during this recession. GM would have been just another. they would have went through bankruptcy and come out (hopefully) a new company with the same name better able to compete in the marketplace. GM maybe would've been larger than most of the businesses that failed or went through bankruptcy, but still a small piece of the overall pie, and worth no special weeping and wailing.

 

and ultimately, the economic costs to society of propping up failed businesses far outweigh the benefits.

you can BANK on it!

[Seattle LawDawg]

The next car that I purchase (probably in about 9 to 10 months) will specifically be from a local Ford dealership. This will be my very small way of saying thank you for not taking any bailout money. So no, time has not changed my view on the bailouts... I just haven't had a chance to show my allegience with my miniscule purchasing power yet.

 

+1 (except I just bought mine). Doesn't hurt that Alan Mulally is a genius and has put Ford back on the right path.

[Azazello1313]

good info here

[SayItAintSoJoe]

good info here

 

 

That is a good article. I find it especially disturbing the part about the government locking into losses on the deal by selling off its ownership in GM prior to the 2012 election because of the political liability. There's something to keep an eye on.

[Azazello1313]

That is a good article. I find it especially disturbing the part about the government locking into losses on the deal by selling off its ownership in GM prior to the 2012 election because of the political liability. There's something to keep an eye on.

 

yeah, but at the same time....may as well sell it now when you can get $30 for it. they'll probably be on the cusp of bankruptcy again in a few years. could be waiting a LOOOOONG time for it to get to $55.

[i_am_the_swammi]

]the economic costs to society of propping up failed businesses far outweigh the benefits.

 

prove it, because I disagree.

 

We've discussed over and over what the 'cost" would have been to our society had GM (and others) failed at the exact same time our unemployment rate was touching double-digits, consumer confidence was at an all-time low, etc.

 

Please tell me the ultimate costs to our nation had the auto and banking industries collapsed during the same period that many industries were laying off hundreds of thousands of workers...how much more in unemployment benefits would our country have paid? How much more would we have lost in taxes on items that were never sold? All the other ways the net effect of millions of more people out of work would have had on our economy (lost homes, less items being purchased leading to more layoffs, etc.).....That is the only true way to measure whether the decision to rescue GM at that particular moment in time was worth it.

 

So please, back up your statement with a fact.

[SayItAintSoJoe]

 

prove it, because I disagree.

 

We've discussed over and over what the 'cost" would have been to our society had GM (and others) failed at the exact same time our unemployment rate was touching double-digits, consumer confidence was at an all-time low, etc.

 

Please tell me the ultimate costs to our nation had the auto and banking industries collapsed during the same period that many industries were laying off hundreds of thousands of workers...how much more in unemployment benefits would our country have paid? How much more would we have lost in taxes on items that were never sold? All the other ways the net effect of millions of more people out of work would have had on our economy (lost homes, less items being purchased leading to more layoffs, etc.).....That is the only true way to measure whether the decision to rescue GM at that particular moment in time was worth it.

 

So please, back up your statement with a fact.

 

 

I agree. You cannot look at just the stock price to determine what the true cost to our nation would have been had GM gone under.

[WaterMan]

The Republicans are going to fail so hard when they try to argue about the deficit in this election. Bush has given Obama a free 2 terms.

[Azazello1313]

 

prove it, because I disagree.

 

you want me to prove that it's a bad idea long term for the government to bail out any company that puts itself out of business?

[i_am_the_swammi]

you want me to prove that it's a bad idea long term for the government to bail out any company that puts itself out of business?

 

Please stop trying to spin, and re-read my post. Prove that the cost of keeping GM afloat outweighed the cost of letting it die.

 

Very simple request, and should be a simple answer for you, since your posts are so emphatic that it was the wrong thing to do.

[Azazello1313]

Prove that the cost of keeping GM afloat outweighed the cost of letting it die.

 

usually the burden of proof goes the other way, but whatever. cost to who, exactly? first of all, GM wouldn't have "died". it would have gone through a structured bankruptcy while it kept operating. there would have been layoffs, sure, but there were a whole bunch of layoffs anyway.

 

again, the government could have simply paid every GM employee $250,000 each and come out well ahead compared with the total taxpayer cost of the bailout.

 

but again, the real cost comes in essentially rewarding businesses that fail by keeping them afloat. any fool should be able to see why that is inefficient in the long run, and thus a bad idea in general. you are putting societal resources toward uses that consume wealth rather than create it. how many housing construction jobs were lost since, say, 2006? should the government have stepped in to keep those folks employed building houses there was no demand for? or do we only bail out large corporations with poltically connected unions? what exactly is the criteria for deciding which failed businesses to keep afloat with taxpayer money?