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Old 11-18-2008, 02:18 PM   #29
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Dealerships - fact

DEALERSHIPS - FACT
The lost of the big 3 would lead to a collapse of the new-vechicle dealerships in all 50 states. Go to below site, click on your state and take a look at what your "state" will lose just in annual employee payroll. Yes, this will effect everybody, there is no running from this.

Automotive Retailing: Driving the U.S. Economy
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Old 11-18-2008, 02:23 PM   #30
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In the long run, wages increase with productivity and marketable skills. The key to rising incomes is not protecting union manufacturing jobs in rust belt industries; it is ensuring workers are job ready in emerging and growing sectors of the economy.

The biggest destroyer of jobs is not outsourcing; it's technology. Witness agriculture. During the past century, agriculture went from 40 percent of the American workforce to three... and we produce more food now than we ever have. Would we, as a nation, be better off today if we had subsidized mule breeders rather than allowing tractor manufacturers to compete and flourish?

GM is broken and I see no reason that loans will fix the firm's structural problems. More money won't rewrite union contracts or trim benefit costs or make better automobiles.
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Old 11-18-2008, 02:29 PM   #31
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Does anyone on this board have any information on Honda, Toyota etc retirement benefits? Wait, they haven't been around here long enough to pay retirement benefits. Honda is just getting to the point where there will be significant numbers of retirees. While I don't want socialism any more than anyone else here, if 17 million workers lose potential pensions and medical insurance and over 2 million more lose what they have, what happens to them? If the contracts at the big 3 are broken, what will be the benchmark to which all other employers are compared. If the big three, for instance, stops providing medical insurance, do you really think anyone else will. The Japanese transplants only pay what they do to keep the UAW out. They, along with every other employer will cut their employee's throats in a minute if the big 3 can. To help out the big 3 thru loans or bail outs or whatever you call it won't cost anyone any more taxes, we sure as hell won't get a tax cut anytime soon no matter if they live or die. Politicians will find somewhere to spend tax money, after all, there are nations to attack. Helping them might be the best thing to do to avoid socialism.
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Old 11-18-2008, 02:37 PM   #32
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I am torn on what is right as far as the big 3 go. In my line of work, I always see the slow down when the big 3 shut down at Christmas and in July for retooling.

I watched a TV program last night from out of the country, (China) Chevy accounts for 18% of there market. In China, Japan, and other markets. GM Got Dae Woo going again, Chevy is the most sought after car (Aveo)
When they interveiwed new buyers they attributed that to a better track record for longevity and a proven history by the manufacturer.

G.M.'s official said in other markets, they are doing fine. In the American market, all are hurting.

My Opinion is many years of a free for all, on lending, CEO purks / bonuses, and unaccounted for labor wont get fixed over night. If they really want to fix the big 3 they should first sit down with the unions, explain there plans. 1st CEO salery cuts 2nd renegotiate union contracts.
making sure they protect the retired people that built those great companies. 3rd then ask for help from the government to fast track the results. Banks and Big firms included.
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Old 11-18-2008, 03:04 PM   #33
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Old 11-18-2008, 03:15 PM   #34
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How ironic we are having this conversation....I just got this email:

You made the right choice when you put your confidence in General Motors, and we appreciate your past support. I want to assure you that we are making our best vehicles ever, and we have exciting plans for the future. But we need your help now. Simply put, we need you to join us to let Congress know that a bridge loan to help U.S. automakers also helps strengthen the U.S. economy and preserve millions of American jobs.

Despite what you may be hearing, we are not asking Congress for a bailout but rather a loan that will be repaid.

The U.S. economy is at a crossroads due to the worldwide credit crisis, and all Americans are feeling the effects of the worst economic downturn in 75 years. Despite our successful efforts to restructure, reduce costs and enhance liquidity, U.S. auto sales rely on access to credit, which is all but frozen through traditional channels.

The consequences of the domestic auto industry collapsing would far exceed the $25 billion loan needed to bridge the current crisis. According to a recent study by the Center for Automotive Research:

• One in 10 American jobs depends on U.S. automakers
• Nearly 3 million jobs are at immediate risk
• U.S. personal income could be reduced by $150 billion
• The tax revenue lost over 3 years would be more than $156 billion

Discussions are now underway in Washington, D.C., concerning loans to support U.S. carmakers. I am asking for your support in this vital effort by contacting your state representatives.

Please take a few minutes to go to www.gmfactsandfiction.com, where we have made it easy for you to contact your U.S. senators and representatives. Just click on the "I'm a Concerned American" link under the "Mobilize Now" section, and enter your name and ZIP code to send a personalized e-mail stating your support for the U.S. automotive industry.

Let me assure you that General Motors has made dramatic improvements over the last 10 years. In fact, we are leading the industry with award-winning vehicles like the Chevrolet Malibu, Cadillac CTS, Buick Enclave, Pontiac G8, GMC Acadia, Chevy Tahoe Hybrid, Saturn AURA and more. We offer 18 models with an EPA estimated 30 MPG highway or better — more than Toyota or Honda. GM has 6 hybrids in market and 3 more by mid-2009. GM has closed the quality gap with the imports, and today we are putting our best quality vehicles on the road.

Please share this information with friends and family using the link on the site.

Thank you for helping keep our economy viable.

Sincerely,



Troy Clarke
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Old 11-18-2008, 03:15 PM   #35
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I have to commend everyone who has posted to this thread. This is one of the most insightful and civil discussions I've seen on a very complex topic in a very long time. Each of you make excellent points in defending your views. There is little doubt that if the big three go under, the economy of the U.S. will be depressed for a very long time. There is no guarantee that a loan package, regardless of the terms, will be successful in keeping the economy out of the tank. The question becomes is it worth trying? What are the long-term costs of trying? What are the short and long-term benefits of trying? What is the downside to NOT trying?

We are absolutely in uncharted financial territory. There is no historical precedent for where we are today. I've read some fascinating commentary about the financial platforms of the Republican and Democratic parties over the past sixty years and about failures and successes of each of those policies and how the entire sixty years of policy making has led us to where we are today.

That, coupled with un-budgeted war spending and unprecedented growth of government, and a vague and uncertain energy future... there seem to just be too many variables to manipulate to make a coherent prediction about the effect of any particular input into the financial system. And then, of course, there's the minor issue of consumer confidence in government(s) and the financial system.

There's an old Chinese curse that says: "May you live in interesting times."

These are, my friends, interesting times.

Roger
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Old 11-18-2008, 03:19 PM   #36
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Quote:
Originally Posted by hampstead38 View Post
Would we, as a nation, be better off today if we had subsidized mule breeders rather than allowing tractor manufacturers to compete and flourish?
I guess you're right, instead of subsidizing the farmer to farm, we subsidize them not to farm as we currently do, and it makes perfect sense. Either way the farmer gets money..and who's money? That's right, yours and mine via taxes.....

I think this is not a good comparison of a farmer to the auto industry because most farmers are not unionized and are not susceptible to the pitfalls of unionization. Look at education, similar issue as the automakers....except guess what, John and Jane Q. Taxpayer continually shovel dollar bills into the blast furnace for education and frankly, look how well the kids have been learning over the past 20 years in the public education sector...... oh and it makes no difference if you have kids in the public systems or not...don't pay, guess what, they'll put a lien on your house and eventually sell it to pay for your taxes, which around here represent 80% of the real estate tax bill.

You seeing similarities? Hint, hint...unions and poor mgmt? Still, why throw the baby out with the bathwater when you can maybe fix it, and make some changes because you hold the purse strings? However, the odds are like education, we'll still keep throwing money at it no matter how any of us feel here. Those who fail to heed history are destined to repeat it.
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Old 11-18-2008, 03:39 PM   #37
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I'm on the fence on this one. The real point as to what is going on is that people aren't buying cars. The question I think of more is what will it take for me to buy another GM car? Yes the tow vehicle is always there because America at this time builds great tow vehicles. But that vehicle to me is a specialty vehicle. Gas hungry and for all intents relegated to life in the garage with occasional use for towing or hauling big items. After 5 years of use and 24,000 miles on the odometer, with proper care it will be there for a long long time.

Now my daily use vehicle is another story. After listening to my neighbor and others laud the virtues of their family Honda's and Toyota's, and seeing their vehicles running well after 200,00+ miles of service and my own experience of each of my GM cars becoming junk by 100,000 miles, I jumped the GM ship and in 1997 bought my first Honda Accord. In 10 years and 168,000 miles the Accord had no major repairs, was on its third set of tires, its second set of brakes, and its second muffler. Nothing else in that 10 years of service other than the normal required maintenance. It did 30 mpg from the day I got it until the day I traded it in. Only in its last months of service did we see the need for some repairs. With gas prices going up I decided to go to the Honda Civic line picking up an '07 that does 35+ mpg that was a little over 17K before trade in of the Accord. I can honestly tell you that these two vehicles, both assembled in the US, made me a believer that there were better alternatives than staying GM.

Are American cars better today? I'm sure they are. But the question is how do you sway me back? That's the real problem that the American auto manufacturers have gotten themselves into over the years. They virtually lost their loyalty due to quality issues and missing the pulse of what the consumer wanted. It wasn't lost overnight. It eroded over a long period of time and people like me who made the switch realized that the foreign product we bought was better.

So the American big three concentrated on the big stuff. With the economy booming and the price of oil what it was, those big vehicles were the gravy train for them......and the erosion of the auto side continued.

So where do we go from here? You can pump the $$$ into the big three.....but what will get folks to buy again? Personally I think the future of the American automobile manufacturer will be the electric car or the alternative fuel vehicle. If the American's can focus on that side they could beat the foreign manufactures at their game. The question lies if any funding will be used to break those new technology vehicles to the surface...or whether it will be used for more of the same thinking that has gone on previously.

Bottom line if you don't put out a breakthrough product, more of the same won't bring the American buyers back. The business has changed, the horse is out of the corral, and the American industry needs some new pony's.

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Old 11-18-2008, 03:42 PM   #38
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I think Silvertwinkie is right on. I haven't owned an American car or truck very often because they have generally been behind the times and unreliable. Nonetheless, they are a very big part of the US economy. When the feds let Lehman Bros. go bankrupt, the shock through the banking and financial community was huge and led us to the credit medltdown mess that happened subsequently. The big 2.5 going bankrupt would likely have a similar effect.

Think of the effect in the upper midwest manufacturing states. Will they go bankrupt too? By law, the feds have to pick up pension costs which are huge. All the retired blue collar workers health benefits go away which means Medicare costs go up.

I think the big 2.5 have been horribly managed, and penalizing the idiots who run these companies is fine with me, but why penalize everyone else? Yes, the unions have tried to get the best wages and benefits possible, and why not? And they have accepted the loss of most of that in recent years. New people start at $14/hour and how many families can live decently on that, about $30,000 a year. They're certainly not going to be buying any Airstreams.

I know some people want to see unions go away. Unions have raised wages for mostly everyone by setting the standard so there could be a vibrant middle class. Since unions have been weakened in recent decades, wages have stagnated and then gone down for most everyone. Sure there are corrupt unions. There are corrupt banks, politicians, lawyers, doctors, etc., so what's new? Some people are corrupt, most in this country anyway, are not.

If you want the free market, maybe China would be a good place. The economic side of things there is pretty much free market and wages are very low for most people, there are hardly any health benefits, companies steal from employees, and if they complain, out they go. There are no real unions. There's a little problem with freedom, but some entrepreneurs can make out very well. When the US was a laissez faire, free market country, there were frequent panics, grinding poverty in the cities, farmers were regularly screwed by buyers and railroads, the aged, if they had no relatives to help, ended up in county run poor houses, monopolies raised prices whenever they wanted, many products were badly made, food could be dangerous to eat, and corruption in politics was everywhere. Not everyone did badly, especially if you were of the older WASP culture, but many did. Many suffered through no fault of their own. The rosy picture of the America in the 19th century in some history books is just not accurate.

All this led to the progressive era with direct election of senators, the Sherman Anti Trust Act, the Food and Drug Administration, and the like. We haven't pure capitalism since, and we never have had pure socialism. Neither work well and we have had a blend of both for a century, with the blend going back and forth between left and right. If you wantchaos in financial markets and a poverty class working in many companies, the free market is for you. We're now seeing gthe effect of an emphasis on the free market in the blend—the worst economic crisis since the free market decade of the 1920's.

If the gov't can loan $25 B to banks that don't need or want it with no strings attached, why can't we loan the same amount to the auto companies with strings attached? I don't like those company execs., but the companies are needed. I sure would like them to make a truck with good gas mileage and reliability so I can buy it someday. Otherwise, they may well get chopped up and parts of them sold to Asian companies and rest goes away. Maybe bankruptcy would work out, but the risks are enormous.

Gene
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Old 11-18-2008, 03:45 PM   #39
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If your brother-in-law asked for a $25,000 loan to cover gambling debts, do you think the loan would prompt him to change his behavior? What are the odds he would repay the loan? If the bank wouldn't lend your brother-in-law money, why should you?

The bottom line is that no amount of loans will change the fundamental problems at GM. Loans won't dissolve the UAW contracts or lower retiree costs. The execs at GM will burn through any grants or loans and they'll be in the same position in 12 to 18 months that they are today.

As for K-12 public education, it is a government program, not a private business. The local public elementary school exists to educate children, not make a profit. Would market forces like school choice make a positive impact on public schools? I think so. Look at the success of charter and magnet schools in some areas.

As for farming, the example was meant to show the job displacing force of technology... not to serve as a model of free market economics. I'm against all farm subsidies and think we do a serious disservice to the lesser developed countries throughout the world by subsidizing agri-behemoths like Cargill and Conagra.

As for blaming unions and management... well, who's left? Yes, I think it's safe to say the problems at a given company are to at least some extent the responsibilty of the workers and the managers. I mean, you could blame the UPS guy, but I'm not seeing it.
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Old 11-18-2008, 03:46 PM   #40
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Thats the one...

Quote:
Originally Posted by Silvertwinkie View Post
How ironic we are having this conversation....I just got this email:

You made the right choice when you put your confidence in General Motors, and we appreciate your past support. I want to assure you that we are making our best vehicles ever, and we have exciting plans for the future. But we need your help now. Simply put, we need you to join us to let Congress know that a bridge loan to help U.S. automakers also helps strengthen the U.S. economy and preserve millions of American jobs.

Despite what you may be hearing, we are not asking Congress for a bailout but rather a loan that will be repaid.

The U.S. economy is at a crossroads due to the worldwide credit crisis, and all Americans are feeling the effects of the worst economic downturn in 75 years. Despite our successful efforts to restructure, reduce costs and enhance liquidity, U.S. auto sales rely on access to credit, which is all but frozen through traditional channels.

The consequences of the domestic auto industry collapsing would far exceed the $25 billion loan needed to bridge the current crisis. According to a recent study by the Center for Automotive Research:

• One in 10 American jobs depends on U.S. automakers
• Nearly 3 million jobs are at immediate risk
• U.S. personal income could be reduced by $150 billion
• The tax revenue lost over 3 years would be more than $156 billion

Discussions are now underway in Washington, D.C., concerning loans to support U.S. carmakers. I am asking for your support in this vital effort by contacting your state representatives.

Please take a few minutes to go to www.gmfactsandfiction.com, where we have made it easy for you to contact your U.S. senators and representatives. Just click on the "I'm a Concerned American" link under the "Mobilize Now" section, and enter your name and ZIP code to send a personalized e-mail stating your support for the U.S. automotive industry.

Let me assure you that General Motors has made dramatic improvements over the last 10 years. In fact, we are leading the industry with award-winning vehicles like the Chevrolet Malibu, Cadillac CTS, Buick Enclave, Pontiac G8, GMC Acadia, Chevy Tahoe Hybrid, Saturn AURA and more. We offer 18 models with an EPA estimated 30 MPG highway or better — more than Toyota or Honda. GM has 6 hybrids in market and 3 more by mid-2009. GM has closed the quality gap with the imports, and today we are putting our best quality vehicles on the road.

Please share this information with friends and family using the link on the site.

Thank you for helping keep our economy viable.

Sincerely,



Troy Clarke
Got it this morning.
I'll bet this thread was started as a result.
Maybe Troy should start reading it.
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Old 11-18-2008, 03:55 PM   #41
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Despite our successful efforts to restructure, reduce costs and enhance liquidity, U.S. auto sales rely on access to credit, which is all but frozen through traditional channels.


It's interesting to note that some of the ad's on local TV, radio, and newspapers are telling the public, "loans are available"......so the question at hand is it a lack of credit at the consumer level? Probably not. What's got folks worried now is the potential lack of employment and the need to pay down their debt. The fact of GM riding through these rough times, is not going to get me back in the door.

It's a vicious circle. I wish I knew the answer. Until you get the consumer confident that they will stay employed, the money stays in the pockets.

We just got notice today that two conventions booked for next October have canceled with the Convention Center. One of these organizations was based on MLM. It will be an interesting spring to see how the times will afffect the auto show, the RV show, the Sports and Boat show, and the Home and Garden show. All big public events.

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Old 11-18-2008, 04:09 PM   #42
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What the argument, at least as I see it, is really about is how the cost of failure of the big three is assessed. Do we pay it up front with tax dollar loans that may be paid back if they don't fail, or do we pay it post-failure? A significant amount of the UAW contracts and cost of U.S. cars are pension and healthcare costs. If the Big Three fold their cards and cash in, all those auto workers and the pensioners are out without healthcare and without pensions. So, they go from seeking healthcare at their private physician to using catastrophic healthcare in emergency rooms at taxpayer expense.

We saw a similar shift in expensing in the '80s after then-Governor Reagan, in order to save the State of California some dollars, essentially gutted the mental health care system of California. Granted, it was a system of warehousing mental patients, and you can agree with it or disagree with it as you choose from a philosophical perspective, but the fall out was that many of those folks who had been housed, fed, clothed, and had access to preventative medical care ended up on the streets. They were homeless, had no way to provide for themselves, and ended up in the courts, jails, and county E/Rs; all at huge local taxpayer expense (rather than at State expense) and with a much poorer quality of life, not only for them but for everyone.

Right, wrong, or indifferent, there is a cost of doing business and a cost of NOT doing business. The problem today is trying to get a good estimate on what the costs to the taxpayer will actually be if we do a bailout, or if we let them fail. Believe me, there will be HUGE costs to society if we allow them to fail. The question is, will infusing money into them today allow them to restructure and be successful, or merely delay the failure and STILL cause society to incur those huge costs.

Roger
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