General Motors Corp. and Chrysler LLC told the federal government they need at least $21.6 billion more combined in bailout loans to put them on the road to recovery, and outlined possible scenarios if either auto maker should have to file for bankruptcy protection.
Both GM and Chrysler, in the recovery plans submitted Tuesday to the U.S. Treasury, argue that bankruptcy would be more costly and drawn out than government-funded restructurings.
GM said it might need as much as $100 billion in financing from the government if it were to go through the traditional bankruptcy process. Rick Wagoner, GM’s chairman and chief executive, said the bankruptcy scenarios are “risky” and “costly” and would only be pursued as a last resort.
Chrysler’s plan said the company would likely have to file for Chapter 11 protection if it doesn’t get additional loans from the government and concessions from unions, creditors and dealers. It said it would need $24 billion in financing if the company were to file for bankruptcy. But company officials said in a conference call that they believe a Chapter 11 filing is “not necessary” for Chrysler’s survival.
# 20 GF said, “I can’t believe Putin actually said it the other day. He warned Obama about the evils of socialism and said that we should let the chips fall where they may.”
Great! Our gov’t is so messed up that the Russians have to start reminding us not to repeat historic mistakes.
Coupons?? – The money has to come from somewhere. There is no such thing as something for nothing.
These companies have a poor business model and are unwilling to change. Either evolve or die.
Don’t throw the money the government will have to borrow at interest after anything that will not be able to pay it back.
Well they gave bailout money to owners of banks(the shareholders got most of the money), so why not for some car companies?
Any agreement should throw out the union contract. The work rules make them less productive, with all the different job categories.
18,
You should have used the AND/OR operator. Now you’re just re-arranging English to suit your purposes. Do YOU get it now?
Any patriotic American will start by only buying from non-UAW automakers. When the union is gone, the first strep to recovery will have been taken.
# 24 Named said, “You should have used the AND/OR operator.”
Naw, anyone familiar with business operations would understand.
Do they have major corps in the country you live in?
26,
One of the most interesting things about English is that it does lend itself well to ambiguities. When you’re trying to prove a point you need specifics. Well WRITTEN specifics. I can’t see you in your moms basement shaking the mouse in anger as you telepathically fill in the blanks and shouting at the screen that the RAGU is almost finished.
We have well managed major corps in fact. As CEO of the larder, I expect you to know your competition.
25,
Just because the UAW fights for improving wages and conditions for their workers means they hate America. Question: Would you like to have the benefits and wages of a UAW member? If yes, STFU.
I don’t get it. Won’t foreign countries simply introduce oppressive duties on the import of cars from government-subsidized (bailout) industries in the same way the US introduced industry-killing duties on Canadian softwood imports when they determined that artificially lowering stumpage fees was a de facto government subsidy to the Canadian forest industry? (Nice run-on question.)
Or are these car bailout subsidies in fact a form of stock purchase? Even so, it would have to be at market rate to be legit.
RBG
# 27 Named said, “We have well managed major corps in fact.”
Really? What country?
29,
Soviet Cannuckistan. Number 1 in banking now.
# 30 Named said, “Soviet Cannuckistan.”
That’s where I figured you were from…
No.
Seems to me we are making a critical error in all this bailout business. Reminds me of nurse training in a hospital re the care of patients.
When a patient is falling, the goal is NOT to prevent that fall but rather to help guide the patient safely to the floor. This applies to most other areas of human endeavor. Gravity Exists. Ignoring reality creates more harm–to the nurse, to the patient. Instead, guide the inevitable to a softer landing and write an order for the patient to be restrained to bed, perhaps with a sedative drip.
The stimulus package should require the US population to spend their stimulus on US products. This may be an American car for some families and will naturally stimulate the US auto industry (from the bottom-up). It should work hand-in-hand with the stimulus. Don’t just give them money for building a crappy product. That’s rewarding failure. Let another company (remember the Saturn car company?) come up to bat if the existing companies can’t make it.
# 33 scumola said, “The stimulus package should require the US population to spend their stimulus on US products.”
Umm, the average tax payer will get a $400 tax credit from this whole mess. How is that going to purchase a car?
#33…don’t feed the troll
The “let them fail” crowd is speaking from emotions rather than logic. The bill for letting them fail would also include their suppliers and contractors, maybe twice the number of GM employees. The costs just multiply as this goes on. But GM needs to make severe cuts, and we need to start buying American made stuff again.
Despite being basically libertarian, I actually think that a federal takeover of GM and Chrysler might work out best in the long run.
They did it with the Northeastern railroads with Conrail back in the 70s, and it worked out quite well. One of the reasons was that Conrail, unlike the predecessors, was able to shed unprofitable routes, duplicate facilities, and improve service to a point that customers began to return.
Yes, the feds put a lot of money into Conrail in the early years. But it ultimately became profitable, and was sold to private (well, corporate) owners at a profit.
if you are cutting 46k jobs, stopping three models of cars (hummer, saab, and saturn) AND need 20+ Bil, it might be time to think of another industry….
There are lot’s of ways to stimulate the economy, bailouts aren’t one of them. Bailout’s what happens when private interests get so gimungous they can extort society by saying give me some money or your country’s going down the drain. This isn’t helping it’s making things worse. If we’re lucky someday, somebody will realize that it’s not good for a country to have private interests that get this large.
Giving them loans isn’t going to destroy the world. And if they STILL go under, most likely we’ll still get most of the money back since the government makes sure their loan guarantees are higher up in the food chain for bankruptcy.
Restructuring should involve: removing the board and higher ups and replacing them with a better team (I notice shareholders aren’t rushing to do squat about them… why is that?) ALL workers in the companies should take a 5% pay cut. 100%. Top of the line to the bottom. With a short term cost of living freeze. UAW should accept it with the stipulation that when the company starts being profitable again the COL freeze is removed. UAW seems to think they can just sit and keep their hand, when there are no chips to win here.
The carmakers MUST drop the local dealer model entirely. This doesn’t work any more, and they spend far more money trying to make it work than they get in return. They can’t do complete Just-in-Time building, but they CAN tool some factories to be more order-specific and able to switch quickly to generate customer requirements — at an extra cost for the convenience.
I don’t think people want THAT car they saw on the tv — they want THEIR car, which is LIKE that car. The automakers don’t seem to grasp that concept.
It’s probably also fair to say that the fed allowing: fuel prices to do what they did, banks to do what they did, and encouraging companies to send jobs out of the country, are all good reasons to smack down the government, too. These things all combined with the October Freak-Out to put the auto industry in the shitter.
GM and Ford have been restructuring and offering retirement incentives for many years, they haven’t been sitting idle all this time burning up capital. True they didn’t make massive and severe cutbacks 12 months ago, but nobody expected all this, or Bush to do absolutely nothing for his entire final year.
When we elect a$$holes to run our country–only because they are against killing pre-born babies and all that other crap–this is what we get. If you voted for Bush in 2000, raise your hand…