Dear GM - You deserve to go bankrupt.

[Rollo]

Dear GM,

I understand that whilst you may have hideous problems in shifting cars that a.) are too big and nobody is buying and b.) are butt ugly this latest series of moves simply defies description.

http://www.nytimes.com/2008/12/03/business/03auto.html?_r=1&em

The company said it would sell off its Hummer and Saab brands, shrink its Pontiac brand into a niche vehicle division, and explore opportunities to sell, close or consolidate the Saturn brand that — when it was started in the 1980s — was supposed to be G.M.’s answer to the smaller, fuel-efficient cars sold by Japanese competitors.

Saturn, ah yes the "little" car company; what the rest of the world would consider normal. Dare I point out that the Astra has been consistently selling in Europe for 20 years plus and that the Corsa is a mainstay of both Opel and Vauxhall dealerships. Yes somehow, the whole concept of building sensible cars or even selling pre-made sensible cars is lost on you.

If you look at your worldwide books, you'll notice that Opel, Vauxhall and Holden, as well as Chevrolet outside of the USA are all spinning tidy profits, and when someone thought it useful to give you the product lineup to save you in the USA, you shut your gob and now food has got all over your apron.

http://www.freep.com/article/20081220/BUSINESS01/812200338/1014

General Motors Corp. will receive at least $9.4 billion in federal loans to help it survive and restructure, but the world's largest automaker knows that tough challenges remain.

So to you dear GM of the USA, I bid thee adieu because once Congress decides not to drip feed you anymore, the rest of the world will cut you loose and switch off the life support...

...well we tried to help.

[Woodeye]

Totally agree.

And thanks a bunch for killing Saab. :( (yes, I know it's not dead yet, but for sure it will be in the near future.)

[jim mcglinchey]

What are you being so hard on GM for, sure Toyota are making their first loss, $1 billion no less, ever, in 70 years.

A GM union rep was saying that 8% of the cost of manufacturing a car was labour costs yet thats where they expect to make the savings.

[markabilly]

http://www.msnbc.msn.com/id/28344688
trade wars---the barriers have always been higher for american goods being exported into a country, than for goods being imported into the usa

banks do not know where the money went that they got: http://www.msnbc.msn.com/id/28344965 The photo is of an old prof who wore those dresses with the split up to her waist, which everyone said explained how ole elizabeth got to where she was----all you had to do was listen to her for about five minutes to realize how brainless she was...

Russian police stomp on protestors over increased tarriffs for imported cars; http://www.msnbc.msn.com/id/28337667/

[markabilly]

And the best so far, while no one has made cutting big pay and bonuses for the top dogs at banks and wall street a pre-condition to bailouts, the same is NOT true for workers and unions, so they can pay while the top dogs of wall street play in their private jets; http://www.msnbc.msn.com/id/28300781/

[schmenke]

The taxpayers are now paying the price for UAW collective bargaining :mark: . Some GM assembly line workers in the U.S. earn over $70.00/hr to produce vehicles that noone wants to buy :s

Yes GM, you deserve to fold.

[Easy Drifter]

I know what you mean. A friend of mine who worked for GM in Tonawanda 10 years ago (he is now retired) got paid $28 an hour (plus benifits) to, as he put it 'Screw'. He screwed radios into cars. He considered it a joke but knew that it was ridiculous pay for what he did.
That was 10 years ago. What do they get paid today for a job any one could do?

[Roamy]

I know what you mean. A friend of mine who worked for GM in Tonawanda 10 years ago (he is now retired) got paid $28 an hour (plus benifits) to, as he put it 'Screw'. He screwed radios into cars. He considered it a joke but knew that it was ridiculous pay for what he did.
That was 10 years ago. What do they get paid today for a job any one could do?

why is 56k per year ridicules for any worker when idiots who screwed the world make millions on millions. Why is 56k per year ridicules when the average price of a house is over 250k which would make the payment 2500 per month (taxes, int, ins maint incl)

[Hazell B]

why is 56k per year ridicules for any worker when idiots who screwed the world make millions on millions. Why is 56k per year ridicules when the average price of a house is over 250k which would make the payment 2500 per month (taxes, int, ins maint incl)

56k a year is stupid when it helps force your employer into debt.

Better 46k a year and employment ... and a cheaper house of course.

[lugnut_usa]

why is 56k per year ridicules for any worker when idiots who screwed the world make millions on millions. Why is 56k per year ridicules when the average price of a house is over 250k which would make the payment 2500 per month (taxes, int, ins maint incl)


56k per year to screw radios into cars on an assembly line.

As in, your only task is to operate a screwdriver, and for that you are paid 56k a year.

I earn less than that doing PC/desktop support where I work, and think of all the time and money spent learning operating systems, hardware, getting certifications.

This guy? All he has to know is how to turn a screwdriver. And it's probably not even that, it's likely just a powered screwdriver that he just holds and pulls a trigger.

THAT'S why.

[janvanvurpa]

why is 56k per year ridicules for any worker when idiots who screwed the world make millions on millions. Why is 56k per year ridicules when the average price of a house is over 250k which would make the payment 2500 per month (taxes, int, ins maint incl)

For the first time in nearly 7 years, I'm going to agree with Fousto.
Sheeet the bed, what's the world coming to???

At least when the guy screws in a radio, most of the time the f***ing radio stays in and actually works, unlike when the executives making 475 times the workers wage who get paid even when the company makes no profit.

The workers don't decide what gross, fat wasteful junk the company is making and trying to sell, executives do.

[janvanvurpa]

56k a year is stupid when it helps force your employer into debt.

Better 46k a year and employment ... and a cheaper house of course.


20,000,000 dollars for one typical executive is stupid when it helps force your employer into bankruptcy.

Maybe the mid and high level management could try and struggle by with just a million of two in salary.

Maybe.

[Easy Drifter]

Remember that was 10+ years ago. How many raises since then. Even he thought it silly for what he did and knowledge required. It was a power screwdriver that shut off when screws were tight. Then there were thousands of dollars a year in benifits.
I do agree that senior executive payments are totally obcsene in most industry and financial institutions.
By the way I, and my former wife and business partner drive used 2007 Chev Cobalts. We have found them to be a good car equal to any Japanese car we have owned which includes Nissan, 3 Mazdas and numerous Hondas. (She raced a Honda.)
We are anything but wealthy. We owned our own business for 12 years and sold out for less than we had invested in it, to say nothing of never getting a holiday and often 12 hour days. Getting up at 2 or 3 am to get or send shipments at the airport was not fun either.
Yes the big 3 misread the markets for years and did not adapt but the restrictions other countries place on imported cars does not help.
If they, or any of them do go under it will affect Canada as much as the US.
Do not forget, that despite the influx of Chinese goods Canada is still by far the largest trading partner the US has.
We are vital to each other. Most of the oil and natural gas imported into the US is Cdn.

[chuck34]

While I agree that the big wigs (CEO's and such) get payed waaaaay too much. Let's stop for a second and do a bit of math.

We have all been told that if the big 3 go under that there will be 3 million jobs lost. So I'll use that as a jumping off point. Let's say that all of those 3 million workers take a $1000 a year pay cut. Sure that would suck, but it wouldn't really ruin anyone's life, right? That would save 3 BILLION right there. Plus I am assuming that the 3 million jobs number would include the big wigs, who I would suggest could take a bit more than $1000 off the top

Not that I am saying this will fix their problems, just that it might be a place to start, rather than taking our money.

[rah]

I don't think the USA can afford to have those people loose their jobs.
That being said, is Ford in that much trouble? I heard some guy from Ford say that they were not even asking for money, they were just participating in the discussions.

The Big three have been basket cases for years. I hope the bailout works, but they need to change their line up pretty quickly. Maybe they are a victim of their own lobiests.

[Rollo]

Let's emphasise the key parts of this:


why is 56k per year ridicules for any worker when idiots who screwed the world make millions on millions. Why is 56k per year ridicules when the average price of a house is over 250k which would make the payment 2500 per month (taxes, int, ins maint incl)

The average worker is NOT responsible for the mess that GM, Chrysler et all find themselves in (for the most part) but those idiots who screw the world making millions on millions happen to be their bosses, making the stupid decisions who caused this thing in the first place.

The government doesn't hand out money to a local lighting store if they go bankrupt, nor does it fork over giant wad-o-bonanza-cash to a butcher's shop if they go under. The big three are looking to screw the pooch monumentally.

For the first time in eight years I agree with Mr Bush (which means that were most definitely up creek without a paddle, or even a boat) when he said:
"I think under normal circumstances, no question a bankruptcy court is the best way to sort through credit and debt and restructuring. These aren't normal circumstances. That's the problem."

[Daniel]

Well from what I've heard GM would be better off declaring chapter 11, restructuring and getting out of the union deals which are a big weight around their necks.

You can talk about execs making too much and perhaps they are, but the real thing causing this problem for the big 3 is the workers who are getting more than the workers at Honda and Toyota which make the big 3 unviable.

What Schmenke says is correct but for the wrong reasons. It's the UAW's fault for negotiating deals for their workers which do nothing to secure the jobs in the long term in the US. Toyota and Honda can simply tell the UAW to get bent if they try to negotiate ridiculous deals for their workers and they have done in the past.

As with everything worth debating the Simpsons said it best


You can't treat the working man this way. One day, we'll form a union and get the fair and equitable treatment we deserve! Then we'll go too far, and get corrupt and shiftless, and the Japanese will eat us alive!

http://www.simpsoncrazy.com/scripts/last-exit.php

Sure the big 3 didn't figure on petrol prices going so high but I think that pales in comparison with the greed and stupidity the unions showed.

Although a bailout isn't the right way to do things (chapter 11 would help much more) why the **** should the banks who are in this trouble PURELY through their own fault get money when they created this problem themselves? I'd MUCH rather see the banks go to the wall than the Big 3 who aren't entirely to blame for the problems they find themselves in.

[AndyRAC]

What about the British unions wanting bail outs from the Government for 'British' car makers? Vauxhall are owned by GM, Jaguar by Tata, why should we bail them out? Or am I missing something?

[Daniel]

What about the British unions wanting bail outs from the Government for 'British' car makers? Vauxhall are owned by GM, Jaguar by Tata, why should we bail them out? Or am I missing something?

The important thing is the jobs are here. If they don't bail them out and get some sort of guarantee that the jobs will stay here then the UK loses out.

[Daniel]

Totally agree.

And thanks a bunch for killing Saab. :( (yes, I know it's not dead yet, but for sure it will be in the near future.)

Saab died for me when they stopped making this

http://digiads.com.au/carsales/used-cars/car_ad_photos/digiads_car_ads_85358_1.jpg

and started making this

http://www.vsrautomobiles.com/images/saab11.jpg

[Roamy]

I think the death of Saab is warranted matter of fact they can bury it vertical with a Dummer (Hummer) on top. The first thing detroit needs to do is hire some italian and german designers.

[Rollo]

The first thing detroit needs to do is hire some italian and german designers.
Like the people at Opel by any chance? The people who currently build... Saturns? Is Rüsselsheim German enough? See post one.

[rah]

Well from what I've heard GM would be better off declaring chapter 11, restructuring and getting out of the union deals which are a big weight around their necks.

You can talk about execs making too much and perhaps they are, but the real thing causing this problem for the big 3 is the workers who are getting more than the workers at Honda and Toyota which make the big 3 unviable.

What Schmenke says is correct but for the wrong reasons. It's the UAW's fault for negotiating deals for their workers which do nothing to secure the jobs in the long term in the US. Toyota and Honda can simply tell the UAW to get bent if they try to negotiate ridiculous deals for their workers and they have done in the past.

As with everything worth debating the Simpsons said it best



http://www.simpsoncrazy.com/scripts/last-exit.php

Sure the big 3 didn't figure on petrol prices going so high but I think that pales in comparison with the greed and stupidity the unions showed.

Although a bailout isn't the right way to do things (chapter 11 would help much more) why the **** should the banks who are in this trouble PURELY through their own fault get money when they created this problem themselves? I'd MUCH rather see the banks go to the wall than the Big 3 who aren't entirely to blame for the problems they find themselves in.

Nah mate, while I agree that the unions probably went for more than they should, last time I checked you need more than one side to have a negotiation.

[rah]

I think the death of Saab is warranted matter of fact they can bury it vertical with a Dummer (Hummer) on top. The first thing detroit needs to do is hire some italian and german designers.

Personally I never liked Saab anyway. I have yet to see a man drive a convertible Saab and look...um... manly.

Negative on the designers. The USA has had some great designs over the years and I would hate to see the big three start churning out European cars. Hire some of their engineers sure, but keep the designers local.

[Roamy]

Well Rah I like the guy who designed the Dodge Ram Diesel!!

[Daniel]

Nah mate, while I agree that the unions probably went for more than they should, last time I checked you need more than one side to have a negotiation.

You've obviously never seen the CFMEU at work!

[markabilly]

20,000,000 dollars for one typical executive is stupid when it helps force your employer into bankruptcy.

Maybe the mid and high level management could try and struggle by with just a million of two in salary.

Maybe.

Gee, that was my point--make the workers take pay cuts while the wall street exce keep their private jets and 50 million bonuses


While I agree that the big wigs (CEO's and such) get payed waaaaay too much. Let's stop for a second and do a bit of math.

We have all been told that if the big 3 go under that there will be 3 million jobs lost. So I'll use that as a jumping off point. Let's say that all of those 3 million workers take a $1000 a year pay cut. Sure that would suck, but it wouldn't really ruin anyone's life, right? That would save 3 BILLION right there. Plus I am assuming that the 3 million jobs number would include the big wigs, who I would suggest could take a bit more than $1000 off the top

Not that I am saying this will fix their problems, just that it might be a place to start, rather than taking our money.


And Dear Chuck, you really mess the point.

Sorry, but under Keynesian logic (note that I did not use the word"truth"), in order to pull out of a recession, the goal is to employ more people and to pay more more money, so the people have more money per capita to spend more and increase demand, thereby generating more jobs and more income.

It has been consistently shown, much to dismay of wall street fat cats, than a 50 million bonus has not the same impact as a pay increase of 10 percent to those making 75k or less a year due to consumption ratios, so if the choice is 50 million bonus or 50 million to workers, the most bang for the buck is to the workers.

The real problem is that by cutting back in spending to save money, while a looks like a good idea, damages pulling out of the recession as it cuts back spending, cuts back demand and leads to further job reduction in a downward spiral and destroys what ever good effect of any Bama "stimulus package"---even to the point of overpowering the stimulus......

[Easy Drifter]

While I do not subscribe to the Keynesian theory of deficit budgets to spend Govt. money to get out of recession the major problem arising from it is that almost all politicians only pay attention to this part of the concept. They forget the second part that once the recession is dealt with deficit budgets must stop and getting rid of the deficit should be dealt with as quickly as possible. Most Govts. carry on with deficit fianancing once a recession is over rather than trying to not only balance the budget but get rid of the deficit.
I do not have the solution but I just shake my head when I see the salaries and bonuses still paid to the executives that got the economy in the mess it is.
Then again you look at the Yankees paying outrageous salaries to some guys who throw baseballs around.

[markabilly]

While I do not subscribe to the Keynesian theory of deficit budgets to spend Govt. money to get out of recession the major problem arising from it is that almost all politicians only pay attention to this part of the concept. They forget the second part that once the recession is dealt with deficit budgets must stop and getting rid of the deficit should be dealt with as quickly as possible. Most Govts. carry on with deficit fianancing once a recession is over rather than trying to not only balance the budget but get rid of the deficit.
I do not have the solution but I just shake my head when I see the salaries and bonuses still paid to the executives that got the economy in the mess it is.
Then again you look at the Yankees paying outrageous salaries to some guys who throw baseballs around.


Very correct....and the state and local governments are worse because when times are good, their tax coffers swell,and spend like crazy----- and then when times go bad, they CUT spending, only contributing to the problems getting worse

The Yankees are just being good citizens and trying to help out the economy :love: but the union guys are producing something unlike baseball....

Golf is even worse....that is a lot of money paid to guys in baseball and golf for doing nothing but playing with their little white balls......

[Easy Drifter]

Golf: A bunch of people with clubs hitting a hunk of rubber all over a cow pasture trying to put the hunk of rubber in a gopher hole. :D

Should I duck now? :uhoh:

[markabilly]

Golf: A bunch of people with clubs hitting a hunk of rubber all over a cow pasture trying to put the hunk of rubber in a gopher hole. :D

Should I duck now? :uhoh:


Not necessary unless you are planning on hitting my little white balls......

[Mark in Oshawa]

What are you being so hard on GM for, sure Toyota are making their first loss, $1 billion no less, ever, in 70 years.

A GM union rep was saying that 8% of the cost of manufacturing a car was labour costs yet thats where they expect to make the savings.

That 8% is for the guys who are working ( including those sitting at home in the "job bank"). That 8% doesn't likely count the guys on full pensions. It was once said that GM is a large pension and benefits company that just happens to build cars.

As for that 8%, that is often all the profit margin you find on revenues in some successful companies of large size. While you need employees to build product, GM and the rest of the Big 3 have to pay more per car than the competition. It isn't like Toyota, Nissan, Subaru and Honda are paying American's to build their cars slave wages. They are just not tied up into obligations that the unions have forced upon the big 3. That is more than enough of the reason to make the fact the product planners and engineers at the Big 3 missing their design targets all the more dear.....

[Jag_Warrior]

No GM assembly line workers make $70/hour in straight time wages. There are people in auto assembly plants, domestic and transplants, who do average $70 or more per hour. They're called Area Managers - and that's only because their salaries would average out to that approximate amount per hour. But hourly supervisors, shift leads and assembly line workers don't get anywhere near $70/hour. That number has been widely circulated of late and has made its way to urban legend status.

As of 2007, GM, Ford and Chrysler assembly line workers averaged about $28/hour in straight time wages. I've noticed some people here have said that is too much money to assemble components on a car. OK. Toyota averages about $26/hour at its Georgetown, Kentucky facility. Honda's U.S. wages are somewhere between $23-$25/hour. Hyundai/Kia averages about $21/hour in the U.S. I have no data on what Mercedes pays in Alabama, what Nissan pays in Tennessee or what BMW pays in South Carolina. If you look at the reasons for those obvious (but not dramatic) wage gaps, you need to look at where the GM, Ford and Chrysler plants tend to be located versus where the Asian and Euro transplants tend to be located: higher cost of living midwestern and northern states for the Big 3 versus lower cost of living southern states for the transplants. There are other factors as well. But the point being, there is not a 100% wage gap between the Big 3 and the foreign transplants. The Big 3 do have somewhat higher current wages and benefits. And the Job Banks (soon to die) are a joke. But IMO, people are making too much of a lower pareto category.

The $70/hour figure is real. Mark in Oshawa has it right: it includes the wages for current workers and the benefits for current and retired workers. It's what is commonly referred to as "legacy costs" that is truly crippling the Big 3 - not current wages. The transplant OEM manufacturers are relatively new to North America. Their workers tend to be younger and of course tend to eat up less in medical benefits.

Like Mark, I think what always amazes me on the boards I visit (political, racing and auto related), is that so many people tend to place the majority of the blame on the UAW and the workers in general. I'm anything but a "union man". I have devoted a lot more effort than not in shifting work away from union facilities. And I've had more than a few run-ins with the UAW. I'll be having another one in late January. But I challenge anyone to show or name a car that the UAW designed and engineered for the BIG 3. And while the UAW may have asked for the world in negotiations, without management's signature, the contract would not have been valid. Why are people so willing to let management totally off the hook??? Bob Nardelli received roughly $200 million as he exited Home Depot. Yep, it cost Home Depot $200 million to "fire" someone who was taking the company down the drain. And now? Well, now he is at Chrysler, again applying his Midas Touch. With or without government backing, I'll be amazed if Chrysler survives 2009 in its current form. I do think the UAW should be prepared to give back much of what was gained in past negotiations. I don't think they have a choice. But it was not the UAW that made Chrysler kill its remaining compact, the Neon, with no replacement in sight. It was not the UAW that made GM develop and build the H3-T Hummer pickup. It was not the UAW that made Ford build the 500, and then realize that the marketing campaign supporting it made absolutley no sense to consumers - now it's being called the Taurus. Just to "rename" a car costs tens of millions of dollars.

I have no love for the UAW. But if you want to know why a snake is confused or stupid, look to the head, not the tail. Many of the same people who now build Hondas and Toyotas have built Pontiacs and Mercurys in the recent past. Neither Japan nor Germany import assembly line workers to build their vehicles. So if the car to be built is an ill conceived dud, or if the production process is not robust, I blame management, not the workers.

I don't want to see GM fail (cease to exist over a short period of time), only because I don't want to see that level of failure be spread across most of the American economy. It would be devestating.

[Mark in Oshawa]

Jag....you are BANG on the money. The Big 3 have messed up marketing wise and have always missed what the public wanted. Yet you look at their European and overseas operations and realize that it just the AMERICAN part of the companies that cannot get their act right. As someone who is driving a domestic for the first time in his 23 years of car ownership I can honestly say I want to keep buying domestics but it is my money that has to go out for repairs and maintenance and I will not make payments on any car that wont stand up to what my Honda Accords used to take as routine. I owned two Accords and two Sentras in the last 16 years and before that a Mazda RX-7. All were built solidly and in the case of one of the Accords, built in the US. Great cars. Now my wife has a Sunfire which has been a good car, not great and I have a used 97 Chevrolet Lumina that was only bought because the price was right. Both of my GM products are good solid cars on the surface but both in the last year have collectively cost me 5000 dollars. Why? Design faults that GM had hidden recalls for engine issues. GM wouldn't recall the cars but if you raised hell about the issues, they would come good. This of course doesn't work if the car is off warranty and you take to local garage. Anyone see why I maybe wont be buying GM again?

To really annoy me is the issue that finally the Big 3 are making cars maybe I might want to buy now, but because of the sneaky way of hidden recalls (Honda has done similar but not to this degree)are handled, I would always wonder if a parts failure was a design defect I might be compesated for. Heck....I just might buy a Toyota and never have to deal with any of it......

No one in Detroit gets this apparently. They are building now some of the best cars in the world but generations of people are tired of being screwed..

It aint the UAW/CAW's fault the companies are going under...but they are not exactly innocent either....

[Rollo]

The latest in the saga:

http://www.freep.com/article/20090106/BUSINESS01/90106080/1014

Dealers were told today that the new Pontiac G8 Sport Truck, the car-pickup slated to hit the market later this year, has been killed, Pontiac spokesman Jim Hopson said.

Dear GM,

You could have practically invented a new market for a car in the US but undercutting the bloated and flabby "pick-up trucks" most of which I might add have the handling of a brick and the style of a cow turd, but no.
You've rejected the idea of selling the ute and the stationwagon, both of which are based of the G8, so this more or less proves that A: you don't know a good idea if it bites you in the face, and B: don't really understand your own markets.
GM, please die soon. You're already braindead. Please stop raping the American taxpayer's wallets by taking their taxes without just cause.

PS:

Dear America,
You got screwed out of the UTE! You poor unfortunate souls. I feely deeply sorry for you.

[steve_spackman]

Personally I never liked Saab anyway. I have yet to see a man drive a convertible Saab and look...um... manly.

Negative on the designers. The USA has had some great designs over the years and I would hate to see the big three start churning out European cars. Hire some of their engineers sure, but keep the designers local.

you will find that ALOT of americans are confused as to the fact that the rest of the world gets decent cars made by FORD and GM...Even im confused

compare the Ford US line up to the UK or any country in EUROPE and even AUSTRALIA http://www.ford.co.uk/Cars http://www.ford.com.au/servlet/ContentServer?pagename=DFY/AU

and GM USA to say OPEL or VAUXHALL or HOLDEN http://www.vauxhall.com/vaux/pages/cars/carRange.jsp

http://www.holden.com.au/www-holden/

[Jag_Warrior]

The latest in the saga:

http://www.freep.com/article/20090106/BUSINESS01/90106080/1014


Dear GM,

You could have practically invented a new market for a car in the US but undercutting the bloated and flabby "pick-up trucks" most of which I might add have the handling of a brick and the style of a cow turd, but no.
You've rejected the idea of selling the ute and the stationwagon, both of which are based of the G8, so this more or less proves that A: you don't know a good idea if it bites you in the face, and B: don't really understand your own markets.
GM, please die soon. You're already braindead. Please stop raping the American taxpayer's wallets by taking their taxes without just cause.

PS:

Dear America,
You got screwed out of the UTE! You poor unfortunate souls. I feely deeply sorry for you.

A new "El Camino"?

[ShiftingGears]

A new "El Camino"?

I suppose any ute with any style would be branded as an El Camino. It's essentially a Holden ute converted to LHD.

[veeten]

The El Camino, a history...

http://en.wikipedia.org/wiki/Chevrolet_El_Camino

and its counterpart, the Ford Ranchero...

http://en.wikipedia.org/wiki/Ford_Ranchero

so,you see, this is nothing new to us in the States. :)

[chuck34]

And Dear Chuck, you really mess the point.

Sorry, but under Keynesian logic (note that I did not use the word"truth"), in order to pull out of a recession, the goal is to employ more people and to pay more more money, so the people have more money per capita to spend more and increase demand, thereby generating more jobs and more income.

It has been consistently shown, much to dismay of wall street fat cats, than a 50 million bonus has not the same impact as a pay increase of 10 percent to those making 75k or less a year due to consumption ratios, so if the choice is 50 million bonus or 50 million to workers, the most bang for the buck is to the workers.

The real problem is that by cutting back in spending to save money, while a looks like a good idea, damages pulling out of the recession as it cuts back spending, cuts back demand and leads to further job reduction in a downward spiral and destroys what ever good effect of any Bama "stimulus package"---even to the point of overpowering the stimulus......


Mark, sorry I haven't checked this thread in a while, but I would like to address you here. I most certainly do not believe in Keynesian economics. I don't see any evidence as to government spending alone pulling us out of a recession. Just think about FDR. He spent a boat load of money, and what actually pulled us out of the Great Depression, the War, not his spending. Also look at Carter and stag-flation. Spending didn't do much there either.

The only time I can think of where spending helped a recession was in '81-'82. That is when Reagan spent a bunch on defence, but it also went along with huge tax cuts.

But I do agree with you about the bonus. If a company has that kind of money, they probably should spend it on the "workers". However, that is the company's decision, not the government's. Company's decisions should not be controlled by Keynesian "logic", IMHO.

[gloomyDAY]

Just in case no one noticed, GM is filing for bankruptcy. :(

[chuck34]

Yep pretty much what I thought back in Nov-Dec. They were bound to go bankrupt, but now the US taxpayers on on the hook for muliple Billions of dollars so far, and who knows how many more to come?

Sad very sad, from every aspect.

[Donney]

It is very sad, but business is business....

[anthonyvop]

Great.

Now the people who brought you AMTRAK and the U.S. postal service is now in the car business.

I am so glad I bought Ford stock when it hit $1.82.

[Roamy]

20,000,000 dollars for one typical executive is stupid when it helps force your employer into bankruptcy.

Maybe the mid and high level management could try and struggle by with just a million of two in salary.

Maybe.

Yes we have lost our way.
A pig get fatter and a hog get slaughtered
Guess the Repubs just decided to keep eating.
A golf course lot for 500K in Utah or Idaho.
taxes on a 2400 sq ft house in Sammamish WA 1000 per MONTH
California bankrupt

My fear now is for incredible inflation.

[Jag_Warrior]

It is a sad day in many respects. But at least this will be a relatively orderly Chapter 11 bankruptcy, as opposed to the rocky path to Chapter 7, which is what would have happened if GM (and Chrysler) had filed Chapter 11 without DIP financing.

[Daniel]

On a related note.... Chrysler being sold to Fiat has been approved.

[Easy Drifter]

It is not just the US that is on the hook. Canada is in it, along with the Province of Ontario, proportionately just as deep.
Another related story has Magna Corp. (a Cdn. Co. and huge parts supplier to all the car companies) trying to purchase Opel from GM and planning to build Opel's in Canada, probably by purchasing a shut down GM or Chrysler plant. They will market them in both Canada and the US if they succeed.

[Mark]

It is not just the US that is on the hook. Canada is in it, along with the Province of Ontario, proportionately just as deep.
Another related story has Magna Corp. (a Cdn. Co. and huge parts supplier to all the car companies) trying to purchase Opel from GM and planning to build Opel's in Canada, probably by purchasing a shut down GM or Chrysler plant. They will market them in both Canada and the US if they succeed.

Now that would be interesting. If Opel managed to carve out a significant market share in the USA. Would GM whine to force them to sell the company back to them?!

I can't see the Corsa selling in the USA, or the Astra, really. But the Insignia might do well, they'd probably consider that a super-mini :laugh:

[Hondo]

Over the years I've owned a number of GM vehicles. With the exception of a Buick, the rest were performance cars. Performance parts and modifications for GM products are both plentiful and inexpensive with a wonderfuly high degree of interchangability. You could build all sorts of silly things with GM parts, including cars. Dependability by performance standards, was great and if something did break, the chances of having it back on the road in a couple of hours were pretty good.

Unfortunately, the same can't be said for your Porsche, especially when it gives it up in Luling, Texas on a Saturday evening.

[steve_spackman]

Now that would be interesting. If Opel managed to carve out a significant market share in the USA. Would GM whine to force them to sell the company back to them?!

I can't see the Corsa selling in the USA, or the Astra, really. But the Insignia might do well, they'd probably consider that a super-mini :laugh:

I have seen a few Astras driving around the US...

Wonder how many Ford Fiesta's i will see?