Let GM go Bankrupt

@georgeob1,

Quote:

Either process would have produced the same result with respect to the subsequent health of the auto companies involved.

Laughable. The idea that a broken-up GM would have retained value to the same degree that the current one is? How can you possibly say this?

Cycloptichorn

1 Reply

@hawkeye10,

Quote:

What we did cost the Taxpayers more than properly ending GM would have

Totally and 100% wrong. Taxpayers were already on the hook for billions of dollars before the Obama admin worked out a deal, thanks to Bush's previous bailouts. By keeping GM around we had an opportunity to recover some of that money - which is exactly what has happened. With what you propose, we would have recovered none of it - and had many more people on unemployment to deal with simultaneously.

The result we have now is that the company is doing pretty well, we are getting some - most, even - of our money back, and there aren't tons more people added on to unemployment. Nothing about that can be said to be a bad result.

I don't think you've put any serious thought into this.

Cycloptichorn

1 Reply

@Cycloptichorn,

Cycloptichorn wrote:

Quote:
Either process would have produced the same result with respect to the subsequent health of the auto companies involved.

Laughable. The idea that a broken-up GM would have retained value to the same degree that the current one is? How can you possibly say this?

Cycloptichorn

GM wouldn't have been broken up in bankrupcy any more than was Continental airlines in its recent bankrupcy. The company would have shed its debt and renegotiated its agreement with the UAW in much the same way it did. It has all been done many times before by many companies (and individuals).

1 Reply

@Cycloptichorn,

Quote:

. Taxpayers were already on the hook for billions of dollars before the Obama admin worked out a deal, thanks to Bush's previous bailouts.

Maybe the numbers in my head are all wrong,but more likely you dont know what you are talking about. GM was into the american taxpayer for about $14 billion by the time Obama had 90 days to figure out what he wanted to do, and they now owe us about $30 Billion after the IPO, and that does not even include the $15 billion that the old GMAC (was part of GM at the time) still owes us. Last run I saw that the CBO ran said that best case saving GM will cost the taxpayers $27 billion,,,which is a lot more that the $14 billion Bush is responsible for.

Quote:

I don't think you've put any serious thought into this.

I dont think that you have any understanding of the facts. You sound like an administration official reading off talking points.

1 Reply

@georgeob1,

Quote:

GM wouldn't have been broken up in bankrupcy any more than was Continental airlines in its recent bankrupcy. The company would have shed its debt and renegotiated its agreement with the UAW in much the same way it did

Or we could have run it like Conrail and sold it off for top dollar down the road. The conservatives would not hear of it though, which is a pity because that was probably the way to get the most bang for the buck for America.

Now we are stuck with a NEW GM that is just as dishonest as the old one, with a business model that is just as iffy, with a somewhat new management that is unproven which is better than the old proven failures, this is true. Bottom line is we have every reason to believe that GM is now like the airlines...the only way they can stick around is with repeat trips through shedding liabilities. Now that they have suckled the public sector tit there is every reason that they will be back for more when they are ready, we have not really solved anything, we have spent a lot of money to kick the can down the road/shrink a failed American company, and proven to the world that we dont really believe in market economics to boot.

1 Reply

@hawkeye10,

I'm not sure I agree with that. GM appears to have recovered well. All it needed was the relief from its debt; divestiture of brands and plants that were chronically losing money; and an escape from the near fatal infestation of the UAW. While I have disagreements with details of the government bailout of the union, the rest of the action was effective.

3 Replies

@georgeob1,

What is the situation now with the unions, George? I honestly don't know, so I am curious about it. Is it still an embedded problem that will again manifest itself in the future, or has it been dealt with somewhat effectively for the long term health of the auto industry ?

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One of the things I am not very sold on is the reduction of dealerships in the country. I have seen similar things in other industries, which essentially involves the issue of something called "service." I believe one of the big problems with many businesses nowadays is that they are forgetting the importance of service, and reducing the number of dealers does not maximize the quality or availability of service for all the GM vehicles out there in the country. As a management decision, I seriously question that one.

I think realjohnboy has talked about the importance of service in the business he has been involved in, and how it can often be overlooked or under rated, especially in the long term.

http://www.autoblog.com/2010/11/06/surviving-gm-dealers-see-mixed-benefits-of-smaller-network/
"It's hard to tell how long it'll be until the remaining GM dealers start to feel the impact of the closing of 1,500 dealers, since many of those stores just stopped selling and servicing vehicles in October. The one thing that the entire dealer body would benefit from is a stronger auto market, but that doesn't appear as though it'll happen anytime soon."

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@georgeob1,

Quote:

All it needed was the relief from its debt; divestiture of brands and plants that were chronically losing money; and an escape from the near fatal infestation of the UAW

No, it needed to learn to build cars that people wanted to buy, at price that was competitive with other car builders. Laying of debt and unwanted assets only gives them room to do a turn around, it is not the turn around. The experience with the volt so far does not make GM look competent. There was a lot of PR about this car, but last I read it looks like a typical GM under performance, as it comes in at $8000 more than its closest competitor. There is still a chance that it is worth the extra money, but not much of one.

1 Reply

@hawkeye10,

Cadillac makes a good car by all reviewers , and the Buick is one of the best WORLD cars. The Lacrosse is the best selling car in China and India . They got rid of the really dumb brands like Pontiac and the Hummer.(Im not sure about the Olds mobile but since 5 cars were essentially the same platform, it was only cosmetically a different breed).

You need to have a better sense of the economies of restructuring debt and union contracts that were heavily weighing on total company performance.
"Portable retirement plans". not defined benefit promises saved the company HUUUGE burdens going forward. These will kick in within 10 to 15 yars and that light makes GM suppliers more stable.

As far as "cars that people want" is sort of like Monday morning quarterbacking. There are several models and badges that have completely turned around and quality seems to be a non issue when compared to some of the other brands like BMW or Toyota.

I saw that, for the first time in years the GM ande Chevy Trucks were handling Ford models pretty even. Light duty trucks seem to be popular and GM and Ford seem to be at the helm in sales. Dodge still needs to overcome some issues with percieved body integrity and poor performance in soen of their engines like their diesels. Which are just big displacement 6's , so they are not smooth running vehicles that people like.

1 Reply

@georgeob1,

Another thing that MUST be pointed out is that a few years back when everyone was talking about what was wrong with GMC the consensus was that GMC needed to become the American version of Toyota. Well, look at how that worked out! At that very same time, unbeknownst to most everyone, Toyota was a very dysfunctional company. It was ignoring its alleged standards and was sacrificing its quality and reputation for buck like a street corner whore packaged up and sold as $300 an hour escort.

What is the new model for what GM is supposed to become? IDK, and I dont think that those who are running GM know, and THAT my friends is a big problem.

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@farmerman,

Do you remember how the Volt was going to beat everyone to the market and was going to be extremely competitive because GM has learned how to develop car quick and now rid of the legacy debt can produce cars a cheaply as the Asians??

Ya, not so much. The volt will have 5 competitors with in a year, all of them a lot cheaper. This ain't good.

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@hawkeye10,

I think the real next generation fuel is gonna be small diesels. Remember VW came out with the SCirocco "DIESEL and it has reportedly , the handling nd performance of a canal boat. SO, I was never much impressed with the volt. Its an attention getter while GM restructures its main fleet. That it has pretty much done.

Duramax engines are so frugal and powerful that GM is catching up on Ford diesel units. Together Ford and GM own the world pickup truck market by a huge margin (and growing according to Powers)

I think GM has learned a mighty lesson about listening to the customer. Will it be sustainable? I have no idea.

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@farmerman,

I have been waiting for one of the companies to build a light truck, or heavy truck for that matter, that is a hybrid. The reason is that for towing a camper or trailer for example, batteries could boost the power on hills, etc., and it is a fact that if a vehicle could increase its mileage by using hybrid technology from 12 mpg to 14 mpg over a distance of 500 miles for example, it will have saved more fuel than a tiny vehicle improving its mileage from 35 mpg to 50 mpg over that same distance. I think similar achievements of savings could happen without towing as well, for half ton, 3/4 ton, and 1 ton trucks. It seems like I heard that innovation was in the works, but still nothing out there yet as far as I know.

The other aspect about this that would seem attractive it seems to me, is that heavier vehicles pack more energy in terms of being able to recharge the batteries with braking, etc.

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@farmerman,

Quote:

I think the real next generation fuel is gonna be small diesels

That was tried and failed for two reasons....the cost of Diesel fuel is out of whack (high) for reasons that I dont remember and because of problems with cold starts. It might work this time because the car maker is now in a position to say that the only way they can legally make the car is in diesel because of the gas mileage standards, and the cold start problem has been fixed. I am not sure how the Ethanol BS factors in but Ethanol does lower mileage and it is not added to Diesel correct? And Diesel has always had more bang for the gallon.

To sum up.....you are likely correct.

1 Reply

@hawkeye10,

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Ya, not so much. The volt will have 5 competitors with in a year, all of them a lot cheaper. This ain't good.

The volt is far better then the other fours as far as having both long range batteries and a engine to allow it unlimited range if needed.

1 Reply

@BillRM,

Quote:

The volt is far better then the other fours as far as having both long range batteries and a engine to allow it unlimited range if needed.

IDK, the first thing that comes to mind is remembering reading about a year ago that the majority of people who bought flex-fuel cars only burn standard gas in them. If volt buyers end up using it as a standard car, and use their gas engines to haul all of those heavy batteries around, we all lose. We can start with the taxpayers who give up a huge tax break to people who buy this car.

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@hawkeye10,

The little European engines tried to make engines without glo plugs. SO now theyve learned and the fact that biodiesel from algae seems to be an easy mix to make (just esterify the algae fatty acids and youve got diesel and glycerine).

I think diesel will be futire fuel especially with in situ coal gasification and insitu diesel from oil tars seems to be working quite nicely.

Diesels are quite peppy now(I onw 2 trucks and the new one is giving about 20 -22 mpg at a 6.8 L engine)and its a high torquing ngine. Most opf the EWWUropean diesels are still window fans but they will learn that small is not always the way to go.

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@hawkeye10,

The Volt is a next level up from the Escape hybrid . I own an escape and its amazingly efficient. The volt is primarily electric but has extended range by its little engine (4Cyl/). I outdoes the Ford Hybrid by a lot and , after 2 years or so itll be more competitive.

Ive been gearing up for several surveys to locate lithium ranges in the US Appalachians and in salt pans of the west.

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@hawkeye10,

Quote:

If volt buyers end up using it as a standard car, and use their gas engines to haul all of those heavy batteries around, we all lose. We can start with the taxpayers who give up a huge tax break to people who buy this car.

Hawkeye all you need to do is plug the car in at night and any normal commuting range you would used zero gas so why would anyone not charge them and used the engine instead?

You are after all paying a hell of a lot of money to have the ability to do local travel with zero gas used.

1 Reply

Let GM go Bankrupt

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