Govt + UAW = GM Owners - What could possibly go wrong?

[tabs]

Originally Posted by jyl

You don't appreciate it, but TARP was in fact successful. How do we know? Because the US banking system is not currently in wholesale collapse, there have only been 20-ish failed banks (all small) in 2009 so far instead of thousands (including the biggest), and the country is not in a full-blown Depression.

I am continually surprised that people don't realize how close the US, and indeed global, banking system was to a total meltdown back in fall 2008. We were very close to it. The actions that Treasury and the Fed took then, of which TARP was just a part, were emergency steps to prevent a severe recession from spiraling into a genuine economic collapse.

Anyone who complains that TARP didn't prevent or end the recession - sorry, you are really misguided.

DITTO

BTW, what was important was that they TOOK action, any plan would basically have worked...including burning the money at high noon on Pennsylvania Ave in DC

[tabs]

You can say THANK YOU to Bernanke and Paulson...that you ALL are not in Bread Lines...

[Shaun @ Tru6]

Originally Posted by jyl

You don't appreciate it, but TARP was in fact successful. How do we know? Because the US banking system is not currently in wholesale collapse, there have only been 20-ish failed banks (all small) in 2009 so far instead of thousands (including the biggest), and the country is not in a full-blown Depression.

I am continually surprised that people don't realize how close the US, and indeed global, banking system was to a total meltdown back in fall 2008. We were very close to it. The actions that Treasury and the Fed took then, of which TARP was just a part, were emergency steps to prevent a severe recession from spiraling into a genuine economic collapse.

Anyone who complains that TARP didn't prevent or end the recession - sorry, you are really misguided.

Many folks employ Y2K bug logic: there was no collapse, so it wasn't real to begin with.

[Superman]

So......you'd prefer that the workers at this company NOT have a stake in its fortunes? Your preference is for a more purely adversarial role between workers and management? Your strategic thinking is......let's call it "unconventional."

[jyl]

Originally Posted by tabs

Talked to a Tool Mfg in Detroit who has GM as a client this morning, he says it is VERY bad, and that he thinks GM is going BK.

Guess what those Bond holders are YOU...Institutional investors....Pension Funds, College Endowments, Mutual Funds and Annunities....

Also those GM retirees who put in 35 on the Line will get screwed outa their Pensions...

If the Dems ABANDON those Pensions and UAW Retirees there will be a Million Man march on Washington with lynch ropes and tar and feathers..The Dems will in effect have turned their backs on their own demographic...and will have destroyed themsleves in the process...

Also I think the govt is backstopping the parts suppliers...to keep them from going BK.

Who would want a Government Motors product? The liquidation of GM is only going to be a matter of time now.

I assume GM will file BK. By one estimate, the deal GM is offering bondholders is worth 5 cents on the dollar or less. For bondholders, might as well roll the dice in BK.

But, honestly, what GM bondholder didn't know, long ago, that the bonds were worth very little? I expect that plenty of the bondholders also hold CDS contracts on the bonds, so they would actually prefer it if GM defaults - better to collect on the CDS rather than take 5 cents on the dollar in settlement. And plenty more are hedge funds who bought the bonds at a huge discount, gambling for a quick double or triple - high-risk traders, just like those who are buying and selling GM stock here. And even the long-term investors who have been killed in the bonds, they are professional investors and made a very bad bet, tough luck and hope you don't get fired. I don't know how many grandmas still hold GM bonds, they are the only ones I'd feel sorry for.

[tabs]

GM owes the UAW 30B at the end of 09 to take the burden of the Retireees off GM's back. The whole fking company should belong to the UAW to pay for the Retirees pensions...

You put 35 on the line in one of those factories and you are owed what was CONTRACTED with you...you spent the only thing you have and that is your life and time and now they are going to tell you to take it up the a$$ some more...go get a job at 75 or 80 years old, because the managment of the company fked up...I also am not going to excuse the UAW's participation in this cluster fk either...

[Shaun @ Tru6]

Originally Posted by jyl

I assume GM will file BK. By one estimate, the deal GM is offering bondholders is worth 5 cents on the dollar or less. For bondholders, might as well roll the dice in BK.

But, honestly, what GM bondholder didn't know, long ago, that the bonds were worth very little? I expect that plenty of the bondholders also hold CDS contracts on the bonds, so they would actually prefer it if GM defaults - better to collect on the CDS rather than take 5 cents on the dollar in settlement. And plenty more are hedge funds who bought the bonds at a huge discount, gambling for a quick double or triple - high-risk traders, just like those who are buying and selling GM stock here. And even the long-term investors who have been killed in the bonds, they are professional investors and made a very bad bet, tough luck and hope you don't get fired. I don't know how many grandmas still hold GM bonds, they are the only ones I'd feel sorry for.

Exactly.

[tabs]

Originally Posted by jyl

I assume GM will file BK. By one estimate, the deal GM is offering bondholders is worth 5 cents on the dollar or less. For bondholders, might as well roll the dice in BK.

But, honestly, what GM bondholder didn't know, long ago, that the bonds were worth very little? I expect that plenty of the bondholders also hold CDS contracts on the bonds, so they would actually prefer it if GM defaults - better to collect on the CDS rather than take 5 cents on the dollar in settlement. And plenty more are hedge funds who bought the bonds at a huge discount, gambling for a quick double or triple - high-risk traders, just like those who are buying and selling GM stock here. And even the long-term investors who have been killed in the bonds, they are professional investors and made a very bad bet, tough luck and hope you don't get fired. I don't know how many grandmas still hold GM bonds, they are the only ones I'd feel sorry for.

Hmmm I hope YOUR pension fund is not holding those Bonds either....

[jyl]

Nope, at least not more than some infinitesimal fraction of a percent.

[MotoSook]

TARP money was not needed for survival, but the banks and financial sector sure want people to think so. Money was funneled into and sat in the banks or used for activities the money was never meant to be used for. It made a lot of people feel good about their efforts though...event the guy on the street that was for TARP. There'll always be folks saying how close we were to a depression and how TARP prevented it, but that was a rush to do something...just anything!

Any well thought out plan that didn't require throwing money at the problem would have helped. Just like this GM thing.....but I'm hoping the people who voted for TARP learn something and use their heads on this if it goes to a vote.

[jyl]

Right. You spend 10 hours a day in the financial markets for 10 years. Then I'll pay attention to your insights on those markets.

[MotoSook]

Others have spent more time in the financial sector than you John...and they screwed up big time and cost me and you a hell of a lot of money....

Just because one works in or analyzes the financial doesn't make one a good problem solver.

I find it funny that guys on your side think you solved your own problem with our money....and now we all should be thanking you for saving the world...or fixing the problems that all you financial geniuses got us into.

Maybe you guys should spend a part of your 10 hr days looking at it from the perspective of someone outside the circle....

[MotoSook]

A $78B loss is not a success John...

Perhaps you think Weinstein should spend more time in the financial sector?

DALLAS, April 14 /PRNewswire/ -- In an exclusive article in the April issue of DS News, the only news source dedicated entirely to the residential mortgage default servicing industry, Adam Weinstein, a former editor of the Wall Street Journal, poses the question: did the Troubled Asset Relief Program (TARP) trickle away needed funds, making matters worse?


According to a bipartisan Congressional Oversight Panel, the Treasury paid more for the assets it purchased under TARP than their market value at the time the program was approved. For every $100 spent, the panel said, the Treasury received about $66 in value, translating to a government loss of $78 billion on its first quarter-trillion-dollar spending spree. On top of the program's failure to unfreeze credit, Weinstein says some have argued that without the bailout, the bottoms in housing prices and mortgage assets might be in sight.

[Racerbvd]

1/4 black Hitler should be shot for this
This was done to pay back the union, screw the Amican people, the dems & unions know what is best for America

[Jim Richards]

For 8 years Byron couldn't see fascists, and now they're everywhere. Dude, you need to get back on your meds.

[Jim Richards]

Right or wrong, the federal bailout of the auto industry is not a high probability bet (IMO). It takes years to build customer loyalty, and for the past 3-4 decades, the US automakers have done huge damage to their perceived quality, lost existing customers forever(?), and the younger generations grew up never even considering a domestic automobile. Look at Chrysler since their last federal intervention. Except for a few years feeding off the Daimler cash cow, they have floundered and are back in dire straits again. My money is on GM and Chrysler failing. Maybe this spring if the government decides enough is enough, or definitely later, when their hoped for recovery never materializes. Just my $0.02.

Edit: I'm curious about the impact Fiat will have on Chrysler if their restructuring plan is approved. They want to take a 35% stake in Chrysler, and Chrysler gets access to Fiat's small car technology. Will the Chrysler badge hold back any potential success due to buyer perceptions of Chrysler? Will their new product offerings incorporating Fiat technology come to late to help?

[onewhippedpuppy]

Originally Posted by Jim Richards

Right or wrong, the federal bailout of the auto industry is not a high probability bet (IMO). It takes years to build customer loyalty, and for the past 3-4 decades, the US automakers have done huge damage to their perceived quality, lost existing customers forever(?), and the younger generations grew up never even considering a domestic automobile. Look at Chrysler since their last federal intervention. Except for a few years feeding off the Daimler cash cow, they have floundered and are back in dire straits again. My money is on GM and Chrysler failing. Maybe this spring if the government decides enough is enough, or definitely later, when their hoped for recovery never materializes. Just my $0.02.

Edit: I'm curious about the impact Fiat will have on Chrysler if their restructuring plan is approved. They want to take a 35% stake in Chrysler, and Chrysler gets access to Fiat's small car technology. Will the Chrysler badge hold back any potential success due to buyer perceptions of Chrysler? Will their new product offerings incorporating Fiat technology come to late to help?

Agreed. Right now we're throwing good money after bad, trying to sustain something that cannot be sustained. Eventually they will both fail and the taxpayer's billions will be wasted. Actually, I would argue that bankruptcy is the key to their survival. Short of bk, they cannot make the drastic and sweeping changes required to turn a profit.

I predict that they drag Fiat down as well. It's the same issue as the Daimler-Chrysler merger - what does Fiat gain? Dealer and parts network that Fiat can utilize to reintroduce their cars to America? Chrysler has an extensive network, but does Fiat want to market and service their semi-upscale products through a sub-par dealer network? How many people would buy a Fiat off of a Chrysler lot?

[onewhippedpuppy]

Originally Posted by Superman

So......you'd prefer that the workers at this company NOT have a stake in its fortunes? Your preference is for a more purely adversarial role between workers and management? Your strategic thinking is......let's call it "unconventional."

That depends. If the UAW has ownership, will it accept fair wages for its workers? Fair, as in competitive with the non-union wages that many other automakers pay? Or will everyone get a raise and extra time-off?

You have to admit that the current UAW is out of control. The problem goes to the top of GM and Chrysler, but they're one of the issues. I always go back to a news piece I saw a few months ago. It described a job on one of the GM truck lines. Without this job, the line would stop. Three people in the plant were qualified to do this job, and it paid $40/hr. Then they showed the job: a mechanical arm swings the spare tire under the truck bed, where the worker secures it in place. As a counterpoint, they mentioned that a Porsche tech that HAND BUILDS motors is paid $25/hr.

[red-beard]

Originally Posted by Souk

Any well thought out plan that didn't require throwing money at the problem would have helped. Just like this GM thing.....but I'm hoping the people who voted for TARP learn something and use their heads on this if it goes to a vote.

In the months since, no one has come up with a plan. We've thrown trillions of dollars out the door, expanded the money supply by a factor of 6, we've started force feeding the goose. I think the plan is some sort of bank foie gras.

GM should have simply gone bankrupt last December, chapter 11. All of this messing around is just putting it off. GM would have eventually survived, but would have been smaller and leaner.

Instead, we now have Government Motors. It will make cars decided on by the whims of Nancy, that the people will not want.

It may look something like this:

[legion]

Originally Posted by onewhippedpuppy

That depends. If the UAW has ownership, will it accept fair wages for its workers? Fair, as in competitive with the non-union wages that many other automakers pay? Or will everyone get a raise and extra time-off?

The ultimate irony is that the UAW may well become "management". For decades, like a fascist dictator, the UAW has built-up "management" as the enemy so that they could be the solution.

Now that it is their show to run, will they become the thing they allegedly despise? Will they finally be forced to stop being a parasite?