General Motors Is Headed For Bankruptcy -- Again

[dirtysix]

Porsche also tends to be one of the highest margin auto companies out there. Hell little old Porsche has done well enough on slim share to be a major owner of the whole Volkswagon Audi group.

Ummm, pretty sure that went so well that VW ended up owning Porsche?

[noid]

Do you really think the 18% market share that GM has would equate to 18% less demand if they were to go under? If GM were to go bankrupt 18% of the market would have to purchase cars elsewhere. The OEM's, suppliers, support companies, trucking companies, etc that are involved with the other auto makers would have to increase their production and employment accordingly to fill the increased demand.

Saying there was no way to liquidate GM is just absurd. Any companies assets are liquefiable and it has nothing to do with their brands being split up.

First off the massive unemployment that initially would have been caused (OEM's, suppliers, support companies, trucking companies, surrounding businesses) would make finding new work very difficult for many people (many of which may not actually deserve the jobs they have but that is a different arguement). I guess the government backstopping all those unemployment claims isn't tax money at all, because unemployment insurance certainly covers all of the losses (you know thats a lie). Follow this with the losses of tax revnue locally and nationally, absolute slaughtering (worse than we saw) of home prices and at minimum locallized foreclosure rates that would have further impacted banks (I sure hope you didn't want them bailed out). This will lead to losses of jobs in the public safety and education sectors since they are paid with the now missing tax money. Next comes the pension gauruntees, the government backstops those as well. All that money that was on the books at GM and Chrysler was still going to be paid to the people, you can argue they shouldnt' get that I'm sure but you know they would. The additional losses due to loss of confidence I don't even want to start to discuss.

There wasn't option for selling something as large as GM as pieces. All of their brands and models are so intermeshed and parts bin engineered you would have to have companies that would need to work together for years or a large investment from a single new owner, that worked so well with Cerberus owning Chrysler why not try is again on the other side of town.

I will never convince you how great the losses could be and you are always going to convince yourself that somehow the government is out to fuck you and spend your hard earned money on something you don't support.

[dannyyisntt]

That is an even weaker argument. Its a litter, you have all of the world's carmakers in that litter. Why is it only that GM and Chrysler are the runts? Why are the Koreans and the Japanese able to steal the budget buyers and the Germans have no trouble stealing the premium buyers in this "tough economy?"

You're attempting to move the goal line to ignore the issue.

It's interesting that your argument also solidifies mine. Your small corner of the world may not be effected by this country's (or the world's for that matter) current economic crisis, but in the actual world when money is tight people settle with the less desirable subpar product. But hey, let's break it down even further.

Firstly GM is not really a premium car manufacturer (discounting Cadillac). Granted that they do have a few premium cars in their Chevy and Buick lines, that hardly classifies them as a "premium" car manufacturer. So it's quite imaginable that the Germans have them beat in this class.

Secondly the Japanese and Koreans target a certain nitch in the market place called CHEAP transportation. Which (oh my god) happens to sell when gas prices are high and finances are in transitional phases, or hard times. They produce these cheap units at extremely low cost and sell quantity over quality (remember how people settle?).

[Vedubin01]

it's interesting that your argument also solidifies mine. Your small corner of the world may not be effected by this country's (or the world's for that matter) current economic crisis, but in the actual world when money is tight people settle with the less desirable subpar product. But hey, let's break it down even further.

Firstly gm is not a premium car manufacturer (discounting cadillac). Granted that they do have a few premium cars in their line, that doesn't classify them as a "premium" car manufacturer. So it's quite imaginable that the germans have them beat in this class.

Secondly the japanese and koreans target a certain nitch in the market place called cheap transportation. Which (oh my god) happens to sell when gas prices are high and finances are in transitional phases, or hard times. They produce these cheap units at extremely low cost and sell quantity over quality (remember how people settle?).

no!

[dannyyisntt]

no!

It's honestly whatever man. Guess the great part of the interwebs is that I don't have to share your opinion and mine yours. On that note, I'm done here.

[Jorgen]

Do you really think the 18% market share that GM has would equate to 18% less demand if they were to go under? If GM were to go bankrupt 18% of the market would have to purchase cars elsewhere. The OEM's, suppliers, support companies, trucking companies, etc that are involved with the other auto makers would have to increase their production and employment accordingly to fill the increased demand.

Saying there was no way to liquidate GM is just absurd. Any companies assets are liquefiable and it has nothing to do with their brands being split up.

You can have your opinion but I guess people with my opinion won the battle to keep them around.

[noid]

You can have your opinion but I guess people with my opinion won the battle to keep them around.

Politics aside.

This was never a permanent solution. This was literally kicking the can down the road. All bailouts do is create a backlog of inefficient companies who will fail in the future anyways. The only thing bailout money attempts to do is jump start the economy out of a recession, which directly translates into keeping a company afloat during times of recession. GM may stay afloat until the next downturn, in which time they will face the same issues. An inefficient company is an ineffiecent company, if it cant survive in times of recession and prosperity, it should exit the market so companies that CAN protect its jobs and interests can take its place.

The people with your opinion will loss the war.

[herbivor]

^Would you rather the US bail out GM or China? If we don't buy them I guarantee China would. They love them some Buicks.

[Jorgen]

Politics aside.

This was never a permanent solution. This was literally kicking the can down the road. All bailouts do is create a backlog of inefficient companies who will fail in the future anyways. The only thing bailout money attempts to do is jump start the economy out of a recession, which directly translates into keeping a company afloat during times of recession. GM may stay afloat until the next downturn, in which time they will face the same issues. An inefficient company is an ineffiecent company, if it cant survive in times of recession and prosperity, it should exit the market so companies that CAN protect its jobs and interests can take its place.

The people with your opinion will loss the war.

I never said it was long term or that they need to be saved forever. At the time they were saved I think it was the only option. An immediate dismantling in an already extremely fragile economy was not an option. Long term I have no reason to say they shouldn't be torn apart or allowed to fail in a different situation.

I also really don't like GM they are arrogant for no reason and as I said originally they do many things that I see daily that are rediculous and questionable.

As a side note you can PM me if you like to avoid adding an additional argument here. Are you supportive of the multiple times over bailout dollars that were given to banks, mortgage backers and "insurance" companies?

[Ryan Stewart]

It's interesting that your argument also solidifies mine. Your small corner of the world may not be effected by this country's (or the world's for that matter) current economic crisis, but in the actual world when money is tight people settle with the less desirable subpar product. But hey, let's break it down even further.

Firstly GM is not really a premium car manufacturer (discounting Cadillac). Granted that they do have a few premium cars in their Chevy and Buick lines, that hardly classifies them as a "premium" car manufacturer. So it's quite imaginable that the Germans have them beat in this class.

Secondly the Japanese and Koreans target a certain nitch in the market place called CHEAP transportation. Which (oh my god) happens to sell when gas prices are high and finances are in transitional phases, or hard times. They produce these cheap units at extremely low cost and sell quantity over quality (remember how people settle?).

LOL, you say that GM isnt premium but then go ahead and discount the Japanese as a discounter only. Despite the fact that its Toyota that is kicking GMs butt. Toyota a discounter? You're delirious. Your argument goes in circles and contradicts itself. Fine, the germans out do GM because they are premium. So why, then, are the major Jap (and now Korean) makers able to out do GM if they are nothing but discounters that people settle for? Also, if the Japanese are only those niche markets of cheap people when why are Lexii and Acurii at the top of the quality ratings with their leather interiors and infotainment systems among "premium" cars?

You speak like its a religion, you dont even have to understand the words coming out of your mouth. You act like the fact that you are saying them somehow gives them merit.

[noid]

I never said it was long term or that they need to be saved forever. At the time they were saved I think it was the only option. An immediate dismantling in an already extremely fragile economy was not an option. Long term I have no reason to say they shouldn't be torn apart or allowed to fail in a different situation.

I also really don't like GM they are arrogant for no reason and as I said originally they do many things that I see daily that are rediculous and questionable.

As a side note you can PM me if you like to avoid adding an additional argument here. Are you supportive of the multiple times over bailout dollars that were given to banks, mortgage backers and "insurance" companies?

It was an option, the best option at that if you ask me. Delaying the process only makes the situation worse. Not only is there now billions of public dollars involved, but auxiliary businesses are forced into investing in empty promises. The key term her is 'backlog', if a company does not fail when it needs to it will fail at another time when it is even more inopportune. A time when other companies are failing and creating a recession. The farther down you kick the can down the road the harder of a recession you are asking for. In times of prosperity I have no doubt that GM can be profitable, thus the only time it will likely fail is during an inopportune time. Simply because they are inefficient; they can survive during times of boom but not bust.

For me it has nothing to do with the actual tax dollars (although they could have ben better used better elsewhere) or about GM. Its nothing personal, all I want is for efficient companies to take the place of inefficient companies. That way we have companies protecting jobs instead of the government buying a facade that they are helping when in reality they are only prolonging the problem.

I am not supportive of bank bailouts either. Loans are inherently risky, and if the bank is incompetent to calculate appropriate risk then they deserve to be liquidated also. If you open the market to new companies and competitors you will solve the problem of incompetent companies.

^Would you rather the US bail out GM or China? If we don't buy them I guarantee China would. They love them some Buicks.

I would rather the US not bail out GM, and your point about china is moot. There is more value in liquefying GM then a foreign country investing in a company they know is a failure. There would be great economic advantages to all those assets coming onto the market, especially proprietary information and patents that would be better utilized by other firms.

[Wschnitz]

So do we finally all understand that GM must die?

[Jorgen]

Long live the King (well former King).

[Morrison]

Maybe Detroit could be the new Flint?

[Jorgen]

Maybe Detroit could be the new Flint?

Very very different situation.