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  • Criticism & Credit?

    Criticism has been given strongly towards the loan. Do we now give credit?

    http://money.cnn.com/video/news/2010...ney/index.html

    J.C.

  • #2
    Re: Criticism & Credit?

    Originally posted by JCsPlumbing View Post
    Criticism has been given strongly towards the loan. Do we now give credit?

    http://money.cnn.com/video/news/2010...ney/index.html

    J.C.
    I still give criticism, because we took away from bondholders in favor of others. We also gave them an advantage vs. other manufacturers.

    In an unrelated item, GM was showing off a cool Hydrogen fuel cell Equinox at work today.

    Comment


    • #3
      Re: Criticism & Credit?

      They have just scratched the tip of the iceberg. From the WSJ, " "The loan is a fraction of the $50 billion GM received from the U.S. government last year. The big payback will come when GM goes public and the U.S. can begin to sell off its 60% stake in the company." I sincerely doubt that GM will be worth 50 billion in my lifetime so that the government can recover that investment and get out of the car biz.

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      • #4
        Re: Criticism & Credit?

        You know Ford has pissed me off in the past but I think I'd have a hard time buying a Chevy (which I own now) or a Dodge after all the bailout b.s.. My thought is if they can't manage their companies any better than that they should fail. Some investment group could buy up the factories and inventories at a cheap price and maybe make a go of it.
        www.ClinkscalesSeptic.com

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        • #5
          Re: Criticism & Credit?

          Well, I supported the automaker bailout.

          I don't like the way any of the detroit makers managed their business but I didn't want to see them fold and turn 1-3 million people (including subcontractors and related trickle down jobs) loose.

          Ford had an option for gov't money and refused. So I don't see the argument that GM and Chry got an unfair advantage.

          Considering the massive job loss in the US anyway, does anyone still think that letting GM die wouldn't have been a five alarm disaster? Seriously?? I'm not a socialist but there is no question IMO that their failure would have been far more costly in all respects than saving them. We would have been in a world of hurt.

          I do see GM pushing their more efficient products harder... not so many ads for the enormous and irresponsible fuel hogs. That's good.

          I'm hoping the products get good. I will buy American whenever I can, absolutely. Even if it costs more. I could care less about the management, they should have all been fired (only some were). I DO care about AMericans and the American economy, though.

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          • #6
            Re: Criticism & Credit?

            Many Toyota products have higher domestic content than Big 3 cars. I think any of the big 3 that accept bailout money should be required to move production of cars that are primarily sold here back here. We have a lot of plants in Mexico that 100% of their output is sold here. This is ridiculous when there are so many auto plants shuttered here. If the Federal government is going to be in the car business, then they should be in the American car business, not the import business. If we have to subsidize auto workers, it should be American auto workers. Yes, it would cost a lot, but some of that would be offset by reduced shipping, etc.

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            • #7
              Re: Criticism & Credit?

              Originally posted by JTROANOKE View Post
              Many Toyota products have higher domestic content than Big 3 cars. I think any of the big 3 that accept bailout money should be required to move production of cars that are primarily sold here back here. We have a lot of plants in Mexico that 100% of their output is sold here. This is ridiculous when there are so many auto plants shuttered here. If the Federal government is going to be in the car business, then they should be in the American car business, not the import business. If we have to subsidize auto workers, it should be American auto workers. Yes, it would cost a lot, but some of that would be offset by reduced shipping, etc.
              For the most part I tend to agree with this post. I don't really see "forcing" production to the US to be an option, though. But I do see tweaking things (heavily) to provide an economic motivation. I would think that this should apply to many or possibly all industries, not just the auto industry.

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              • #8
                Re: Criticism & Credit?

                With the Federal Government owning 60% of GM stock, it wouldn't be forcing. It would be a business decision made by the majority stockholders. We can pay more for labor or pay more for unemployment, mortgage bailouts, etc. Our choice. I would rather pay people to work, than pay them not to work.

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                • #9
                  Re: Criticism & Credit?

                  Shareholders of GM don't get to make day to day operations decisions. Besides, it is not in the shareholder's (taxpayers, in this case) interest to do things that wold hurt the company. Moving automobile manufacturing operations, a very capital intensive plant, at this point would cost a fortune, take years and as I see it only ensure that the automakers continue to struggle. The reason for the bailout was to prop them up. Making things tougher for them right now is not in anyone's interest. Keep in mind that even though they got a bailout, they could well still fail if the business can't prosper.

                  And, in any case, it is an odd situation that the Government is a shareholder... a slippery slope for the Gov't to take the helm and make major policy decisions based on what is ostensibly a temporary ownership situation.

                  But, all that aside, I fully agree with you that they need to move in that direction. Edict isn't the way. For a return to domestic production to be practical and profitable, the goods produced domestically need to be cost competitive. This means that one must level the playing field AND provide an incentive for investment in US production facilities.

                  Changes to the tax code, credits for investment in domestic manufacturing, possibly subsidies of new manufacturing technology and factory development would be good ways to get it to happen. Plus, I believe that the US needs to pressure other countries to provide access to their markets for US exports. On top of that, we should impose safety, environmental and other regulations on foreign factories to bring their costs in line with what those of US factories, and add a tariff to imported product to be imposed on US-owned importers of those goods. The tariff would make up for the Treasury's loss of revenue due to the foreign workers that pay no US income tax. Business in the US is about money... these sort of things make it more attractive to produce domestically.

                  If you just force the car makers back to a more expensive manufacturing cost geo, you will only succeed in raising their costs. No one will buy their more expensive cars, and they will fail. If you want to revitalize US production on a continuing and sustainable basis, I think you need to make it viable for domestically produced goods to be cost competitive.

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                  • #10
                    Re: Criticism & Credit?

                    Originally posted by JCsPlumbing View Post
                    Criticism has been given strongly towards the loan. Do we now give credit?

                    http://money.cnn.com/video/news/2010...ney/index.html

                    J.C.


                    Does it count that charges may follow for deceptive advertising? You do realize they paid the loan back from a separate bail out account we the tax payers paid for?

                    Mark
                    "Somewhere a Village is Missing Twelve Idiots!" - Casey Anthony

                    I never lost a cent on the jobs I didn't get!

                    Comment


                    • #11
                      Re: Criticism & Credit?

                      Originally posted by ToUtahNow View Post
                      Does it count that charges may follow for deceptive advertising? You do realize they paid the loan back from a separate bail out account we the tax payers paid for?

                      Mark
                      No, don't know all of the particulars. Just wondering about the total picture.

                      Thanks.

                      J.C.

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