Yes that was absolute BS. Unacceptable behavior I agree.

But unfortunately AIG could not be allowed to fail. The Big 3 argument is more debatable on that topic.

I think it's just a harder sell to Washington that carmakers need to be rescued, as opposed to some of the banks and financials that could have brought the domestic and global financial system to its knees if failed.

Herein lies the difference. The money given to banks/financials was not just to save them, but to stimulate further lending in our economy and to help keep this flailing economy moving. Some of them are accused of not using the money to actually lend, which is a big problem. But the automakers have no plans for getting back to profitability, and they didn't help their collective and individual causes with that poor showing in front of Congress the other day. They refuse to consider bankruptcy in any form? Why not?

Underlying reasons for the crisis aside, I am really taken aback by the irony of a panel of rich, financially out of touch, fiscally irresponsible politicians looking down their noses and brow beating a panel of rich, financially out of touch, fiscally irresponsible capitalists...

At least the politicians learned something from the last round of loans that they doaled out... ask how the money is going to be used before signing the check (or in this case, printing the money).

Update
 

Associated Press:


updated 1 hour, 10 minutes ago
WASHINGTON - Democratic leaders in Congress sidetracked legislation to bail out the auto industry Thursday and demanded the Big Three develop a plan assuring the money would make them economically viable.

“Until they show us the plan, we cannot show them the money,” Speaker Nancy Pelosi, D-Calif., said at a hastily called news conference in the Capitol.

She and Senate Majority Leader Harry Reid, D-Nev., said Congress would return to work in early December to vote on legislation if the General Motors Corp., Ford Motor Co. and Chrysler LLC produce an acceptable plan.

The decision averted a likely defeat of legislation providing $25 billion loans for the industry. Reid and Pelosi both said there was no plan in circulation that could pass both houses of Congress and win President George W. Bush’s approval.

While the decision headed off the defeat of one bill, it did not necessarily translate into passage of a different one.

As a result, the fate of hundreds of thousands of auto workers and even of an iconic American industry hangs in the balance.

The chief executives of the Big Three automakers appealed personally to lawmakers for the loans this week, and warned that their industry might collapse without them. In testimony, they said their problem was that credit was unavailable, and not that they were manufacturing products that consumers had turned their backs on.

But whatever support they found sagged when it became known that each of them had flown into Washington aboard multi-million dollar corporate jets. Reid observed that was “difficult to explain” to taxpayers in his home town of Searchlight, Nev.

Pelosi: Auto industry needs a plan
Nov. 20: House Speaker Nancy Pelosi says that the auto industry is an important part of the economy, but it needs a plan to help return to viability and accountability.

The automakers are on a tight timeline. Reid and Pelosi said their plan must be turned over to key lawmakers by Dec. 2 They said hearings were possible the first week of December, and Congress may return to session the following week to consider legislation.

Pelosi stressed that whatever the Big Three provided to Congress, it must show they had a plan for “viability and accountability,” meaning that the were transforming theoir industry in a way that it would become competitive, and that they were clear about how the federal loan money was used.

Even if lawmakers return to vote, they are likely to insist on numerous conditions on any loans. One possibility is to seek a partial ownership of the companies. Another is to limit salaries of top executives. A third is to prohibit use of the funds for any lobbying.

What she said!

Further update
 

By Tom Curry
National affairs writer
msnbc.com


WASHINGTON - One thing professional politicians are expert at judging is public relations.

The bipartisan consensus here at the Capitol Thursday was that the Big Three auto executives had failed spectacularly in their testimony this week to House and Senate committees. And by flying to Washington on private, corporate jets they created a monumental public relations fiasco.

In the wake of this disaster, it would have been political poison for the Democratic-controlled Congress to hand them a $25 billion subsidy to stay afloat.

Senate Majority Leader Harry Reid knew he did not have the 60 votes needed to overcome a likely filibuster against the bailout.

He also knew that any "bailout" is likely to be unpopular right now. The $700 billion bailout, or rescue plan, for financial firms has become even more unpopular than it was when Congress passed it last month.

There are some members of Congress, such as Sen. Roger Wicker, R-Miss. who won their elections Nov. 4 partly because they voted against the Wall Street bailout. Sen. Saxby Chambliss, R Ga., was forced into a runoff election partly because his vote for the bailout gave his Democratic opponent, Jim Martin, a stick with which to beat him.

Risk of rejection
Reid did not want to put the proposed $25 billion loan to a vote and have his colleagues reject it because that would have further spooked the stock markets. As it was, the stock market tumbled Thursday after congressional leaders announced the bailout vote had been delayed.

“We don’t need to go through a bunch of votes here that fail,” Reid told reporters. “The stock markets, the credit markets are having a lot of difficulties. What kind of message do we send to the American people by having a bunch of failed votes here? We do not have the votes.”

Alluding to the PR fiasco, Reid summed up the obvious: “What happened here in Washington this week has not been good for the auto industry.”

Executives flying to the Capitol on corporate jets to seek a loan “doesn’t send a good message,” he said.

What the Big Three leaders utterly failed to do this week, said Senate Banking Committee chairman Sen. Chris Dodd, D-Conn., was to give “any willing admission of their own culpability in the situation they’re in.”

But while Democratic leaders wanted to be tough on the CEOs, that inevitably entailed hurting workers as well.

The Democrats didn’t want to appear as if they were shrugging their shoulders in indifference about the jobs at stake in Michigan and other states. “We are here to help," said Reid. "We are not against the auto industry. We want to help those people keep those jobs.”

So Reid reverted to the practical rule in politics: “When in doubt, delay.”

How to define 'viability'
Reid and House Speaker Nancy Pelosi insisted in a joint press conference that executives of Ford, General Motors and Chrysler must present a business plan after Thanksgiving.

On Dec. 2, Democratic leaders will begin hearings to judge those plans. The buzzword that Reid and Pelosi kept using as they faced a horde of reporters Thursday was “viability.”

Reid said it would be up to Dodd and House Financial Services Committee chairman Rep. Barney Frank, D-Mass., to judge what “viability” was and whether the automakers had it.

When a reporter asked Dodd if he and Frank had a common understanding of how “viability” could be determined, Dodd joked, patting his heart, “It’s all right here.”

Dodd said the plans that will be submitted by the Big Three would be analogous to a firm approaching a venture capitalist and presenting a business plan. The taxpayers are the venture capitalists, Dodd said. “They are coming to us to submit a plan on what they’re going to do if we decide to invest,” he told reporters.

But how to define “viability”?

Dodd replied, “Well, I don’t know; that’s a great question. Obviously those are the important issues and we’ll have to sort that out ourselves.”

Asked whether GM for example, would have to tell Congress what product lines it would phase out and what new models it would unveil over the next few years, Dodd replied, “Certainly we want to hear about retooling and reorganization. There will be some detail to this. We are going to want to get as much of a sense (as possible) of where this industry is heading.”

But the decision by Democratic leaders to insist on the auto industry executives proving viability raises this question: if most members of Congress found the Detroit executives so unskillful in their presentations this week, are these really the men whom Congress trusts to chart the future of their firms?

If they cannot manage PR, can they manage retooling, market strategy and all the other challenges of competing with Honda, Toyota and Hyundai?

Those questions will be waiting when Dodd and Frank return to the Capitol after Thanksgiving.

© 2008 msnbc.com

Everyone needs to be worried about competing with Hyundai.
http://www.orbitcast.com/archives/hyundai-genesis-1.jpg Best everything in its class and 35,000 bucks. Hard to compete with that. Bigger, faster, stops faster, and gets better mileage than BMW Mercedes and Lexus.

Everyone needs to keep an eye on Hyundai. My wife wants a new Genisis so bad, she's threatening to sell my car to get one.

I don't think so....Hyundai is like GM bad stigma. I don't think the torch gets passed quite so easily.

Couple of thoughts on this.
1. Didn't we bail Chrysler out in the 80's? When they got back on their feet they tried to screw the govt out of the rest of the deal they made with them. And now they are asking for another handout?

2. Don't the big 3 employees that are unionized have the ability to decertify the union? They act like it's not their fault that the union exists. The union only exists because you allow it to. The results are consistent with the hypothesis that successful union decertifications increase firm valuation and unsuccessful ones reduce firm valuation.

3. There is an economic theory called Comparative Advantage. It refers to the ability of a person or a country to produce a particular good at a lower opportunity cost than another country. It goes on to imply that if we are only producing cars that are of equal quality with foreign car makers but our cost is higher then we should stop making cars and let the foreign car companies make the cars. They are obviously more efficient at it. I would hate to see these companies disappear but it is just not good business.

only way for them to lose the union is to file bankrupty. i think they should take the bailout money, pay off thier suppliers, file bankrupty, lose the union, then work on a game plan.

First off...........The cars that GM is producing right now are some of the best cars in the world.....dollar for dollar....
The main problem (In my opinion) is the Union and the Union Legacy that has been built into the Automotive system....who's to blame is not the Issue.....It's there....and they can't do anything about it.....
Today's business climate changes on a Daily basis and we have to "Adjust" to the market (and Customers) on a Daily basis to be "First" successful and "Secondly" Profitable ....also......the access to this Flexability to do business in the New world market has been removed from the Manufacturers......."Right, Wrong, or Indifferent"..........
Everyone wants everything to stay as it was because that's what we are accustomed to and have comfort with..........Ain't gonna happen......."Things Need to be Adjusted" and......It's not gonna be "Fair"..........But for the Good of all.........It's got to happen........
Now.........the bigger problem......................Who is going to regulate what changes are to be made......the CEO's.......the Barney Frank and Chris Dodd Show...........or the rest of the "All Knowing" Elected Officials in Washington.........

Who do we put our Faith in????

Bring back Ross Peroit.............

Just my $.02

Ken

Korea is to Japan as Japan is/was to the U.S. as India will soon be to Korea.

The big difference is the Asian companies seem to take a lot more pride in the success of thier companies not thier stock. Not sure what India's business practices will be yet.

My two cents:
1) break the unions contracts
2) build cars people want
3) shake up the fatcats at the top of the big 3
4) let the auto designers design cars not the government
5) give incentives to big 3 to modernize/retool plants
6) throw all the arrogant politicians out
7) cut corporate income taxes for all buisness ( they are among the highest in the world, and it could be a way for detroit to meet some of there pension obligations)
8) why are the big 3 doing better over the big pond?

these are in no particular order. I have owned about 20 vehicles over the last 10 years. and as a owner of 3 first gen. camaros I truly love GM, but with that being said the quality issues are still there. I currently own a 07 Avalanche that is probably 1 of the best vehicles I have owned. but compared to the the 08 Nissan SUV my wife just got there is a clear difference. I think dodge and ford have larger quality issues. Also detroit and the uaw could both use an attitude adjustment. And for those who believe the unions days are long gone wait until "card check" comes around. I would rather close the doors on my buisness than have union dictate my labor terms.

Guys it is the cars plain and simple. They have gotten better but in the end they need to reorganize or wipe out their design studio. They are almost there but again insist on adding those tacky GM style add ons. It is like they just can't build a car without them. The GTO was the 1st sign of a good change but then again the people who buy GM cars didn't like it.

They are building a product for a dying off crowd and do not have the attention of new buyers and it is now coming up and bitting them in the ass. Is it the unions fault? Maybe money wise but then again look what Hyundai has done with budget cars.

Again the mechanics are spot on and the best out there but the packaging is just out of touch.


Just to prove a point on how writting some emails or getting a petition started can help, there is some guy from out West who drives a Japanese car who is against the bailout who did take action. He wrote something and got attention. He is on his way to being the next Joe the plumber.

Get off yours asses and get some emails or letters out to your local Gov't leaders. I know it is easier to post 10 pages worth of stuff on the internet. Not sure where everybody will be getting their parts from???? For a web site who banned together to help someone with a bad paint job it seams a little silly not to help keep the Industry you enjoy alive??? Just my 2 cents.

You do understand that not everyone is for the bailout, don't you?

Also, why is everyone making it out that if they do not get a bailout, then they will go out of business? Can they not reorganize and build cars on a much smaller scale?

This whole thing is no different than Bush shouting that a bank baiout is a must or we will all die. Since then, they have spent only 300 billion or so to Paulson's buddies, and yet people are still kickin.

For another $5k you can have the new twin turbo 335i
from BMW. I bought my daughter one for college graduation and it drives like it's on rails.

http://resource.bmwusa.com/[email protected]

http://resource.bmwusa.com/[email protected]

Car and Driver voted it the best engine and handling of any car in it's class for 2008.

Don't get me wrong, this is the only non American car I've ever bought and the reason I bought it wasn't because GM makes crappy cars however, GM doesn't make car comparable to this and if they did it would cost somewhere in the neighborhood of $50k

I got hers out the door (inc tax lic, fully loaded) for $42k. 20 mpg city and 28 Hwy

Why can't GM make cars with comparable quality with a comparable price? The equivelent car is a Cadallic and it runs around $52k

I think it's already been explained why our cars cost so much more.

The BMW is nicer because that's the only brand they sell and they can concentrate ALL their resources on just a few cars. Also, they're a much smaller company, have no unions, and have a tax advantage from our government, that's how they do it. It's not rocket science.

I'm sorry to see that we didn't have a car you felt was good enough for your daughter. Maybe next time.

If there is one.

Rich nailed it. The BMW is such a better car (that new 335i is sweet). I don't care how it gets done, but the Germans just make better cars, and sometimes cheaper like he said!

I really doubt I will ever buy a newer GM car again. It is what it is. But I will continue to support them by buying parts for my Camaro, Chevelle, or whatever GM musclecar I get into next. That's better than nothing!

I think GM could save it's self by bring some of the overseas models to the states. I'm over in the Middle East, for a couple of months and some of the Chevy's here would sell big time in the states. I love Chevy, but let's be honest their line-up is pretty borning if you can't afford a Vett or the new Camaro. Take a look at the Chevy's they sell in the United Arab Emirates. Sorry for the long post,just a long time bow-tie man giving his 2 cents.

double post.

Well of course you won't. You're going to stick with the popular perception because THATS the popular thing to do.

Why worry if the Big Three go under?

If won't effect you. Right?

A great read by a great writer....

http://www.freep.com/article/2008112...1230371/?imw=Y

DING DING DING! Tell em what he's won johnny. It must be!

GM needs to focus on a brand or two at most. Sell off all the dead weight Build what they are best at building and proceed forward.

You certainly don't have to answer this, but would you take a 30% paycut, if it meant GM would survive on it's own? And do you think that would ever be a viable option for all employees?

I am willing to bet that no one would because of all the **** in place for union employees to get paid, for sitting in a room "unemployed" for eight hours, is more than they would get paid for working under a paycut.

The problem with the Big three is that NOONE is in it for the companies. They are all in it for themselves, from the CEO to the floor sweeper. No one is wanting to rebuild and lasting business model that will go on for decades.

I suppose this wouldn't have anything to do with our disdain of GM
Title of article:
"GM to spend $1billion of the bailout money… in Brazil"

General Motors plans to invest $1 billion in Brazil to avoid the kind of problems the U.S. automaker is facing in its home market, said the beleaguered car maker.

I think it's too bad.
The US car makers should never have been in this much trouble, or the econmy for that matter, to begin with.
It's kinda heart-breaking. I just hope it works out for the US big 3!!:thumbsup: :thumbsup:

In all fairness, GM has received (in the past) some pretty similar and substantial tax incentives to locate plants in specific cities (ie. Flint), states (ie. Ohio), and countries (ie. Canada) so that does not make BMW much different from GM in that regard. The number of brands they build and how they focus their development capital and their size all represent their business model which, if successful, is difficult to criticize. No unions... that would appear to be the largest "operational" (?) or "physical" (?) benefit with respect to unit cost.

My worry is that if the big 3 are ultimately bailed out, and if the terms of the bail out is a government approved "plan" we could see the "dumbing down" of the North American auto industry to satisfy the perceptions of a group of individuals who probably haven't sat in the front seat of a car in a long time.

Just my 2 cents.

James....there's a lot more that I wish I could say on these forums, but Big Brother has told us he'll be watching and I don't want that to be why I lost my job.

I understand Tony and I know that you are in no win situation here on public forums like this. Public perceptions of specific industries never ceases to amaze me and I have learned to tune out the rhetoric from people who are the outside.

Regardless of what happens over the next few weeks, I am certain that changes are coming to the big 3 and I hope that you and others in the community weather the storm ok.

I'm worried that GM won't be a US company much longer, bankruptcy or not. Get ready for Shanghai GM, a joint venture between SAIC and GM. The groundwork is already there, and with SAIC being the 2nd largest auto maker in China, and with where the value of GM stock is today, they could easily come up with the cash to take it over.

With the apparent love that Americans have for Asian cars that are assembled here, combined with hatred for all things domestic, it could be a big hit. </sarcasm>

That's not a bad idea Scott. At least one media pundit is touting this.

http://www.autonews.com/article/2008...811209967/1125

Yeah really....maybe they'll finally love us once they have the knowledge that their money is leaving U.S shores and headed for China. For some reason this makes them feel better about their purchase.

I guess if you can't beat em...might as well join em. Eh? :thumbsup:

our homes have 90% asian made goods in them anyways, and we all love buying cheap goods.

The big three might as well be owned by China. Most of the industry is already produced in China. In the general repair business 90% of all the replacement parts I have access to are from China. Anyone who went to SEMA go over to the APEX show? Better be able to speak Chinese to talk to those vendors. Almost all the "American" parts producers are simply re boxing items made in the R.O.C. I believe even most of the bigger companies selling go fast parts are sourced from China. Isn't Pro-Form stuff all made there? Take a walk through Wall-Mart or Target and look for a "Made in the U.S.A." tag. You will probably be able to count the products on one hand. Every year we produce less and less in this country leaving only investment and executive jobs and then service industry. That wonderful widening gap between the haves and have nots. Kinda like the Feudal system.

A few thoughts on this...
 

1. I believe that this is a perfect opportunity for the US Government to squeeze the Unions out of the Big Three. "We'll consider the loans only if you play ball with us." Usually this means Greasy assed politicians want the most bang for the buck out of the deal AND ONLY if it benefits them any way the mop flops. Bankruptcy if the Unions are made a smaller player? So be it.

2. The Golden Rule. He who has the Gold gets to make the rules. Guess who has the Gold here.

3. I have to say, in my opinion, the Big Three need to be saved. The tremendous amout of companies that are 'Lean To" companies on the big three are just about uncountable. If 90% of the parts are made overseas, the remaining ten percent is critical here. Dealerships closing. Parts stores, Body Shops, fix it car repair shops all going under.

4. Jeff Trush said one time : This is how the Media reports the Big Three (He was specifically speaking of GM at the time.)

Assume that a house is on fire. There are five people in the house.Toyota runs to the door and grabs the closest person near the door.

GM runs all through the house and rescues three people, at great peril to themselves.

The headlines the next day reads:

Toyota saves One, GM allows one to die.

A brilliant analogy of how the US automakers have been spit on by the Media.


5. There has to be someone somewhere that lost his/her job over the question asked by the Senator about who flew there Commercial. These guys are 'schooled" about the vast array of potential questions that could be asked. Someone missed that one in a big way. I will confess to a "Tip of the Hat" to the dude that asked that one. Tou'chet.(Pronounced Two shay)

6. Last, but certainly not least, it never looks good to step out of your Lear Jet with a Tin Cup in your hand.

Make the cars that sell, cut the excess fat, better efficiency, and become even stronger than before. All of us would be required to do that. Can't ask for money with no plan of attack, that is ridiculous. I think GM is buiding the best cars they ever have right now.

I am the biggest GM homer there is and have a personal friend here that works for them, so I hope it works out.

The problem that I see right off the bat is that they (the big 3) have to show a plan to a group of people who have even less of an idea what a good plan is than the people who made the plan in the first place. that is one circular arguement right there...

I guess the thing that bothers me is... what qualifies the senate committee to determine if "the plan" has merit? For the most part, it seems to me that their exposure to the auto industry comes from comparing the relative merits of a Lincoln vs. a Cadillac when picking out a limo for the year...

Same Here. Most of my dad's Brothers worked for GM. I am a GM man all the way. I am pulling for them and the other "Biggies" Ford and Chrysler.

Dude. Please don't try to tell me I follow others and don't think on my own. You don't know me. I do my research and make my own decisions, thank you.

I never said I am not worried in general and that I don't care what happens to people.

I have always loved GM (owned Nova, Chevelle, 2 Camaros, Corvette) but I just know we have bigger problems for our country right now than the automakers.

Fair enough. I am sorry I put words in your mouth. But you have to understand that when I read comments like, "I don't care how the German's get it done" and "I will probably never own a GM vehicle ever again" it just makes me shake my head and I wonder what we could have done so wrong to elicit such apathy.

Thanks. I am sure this is not easy to watch as a GM employee.

But seriously, you are always going to win some new customers with your new product line and lose some old customers. It's just the way it goes.

And for me, it's not what GM did wrong. It's the fact that I moved up the income scale in recent years and have been able to try out some German cars as daily drivers, and I happen to like them. They make much better daily drivers IMO compared to the GM cars I would be interested (Z06?).

I also just like variety and change my mind too often on cars. :yes:

After spending a lot of time reading and digesting the posts and the information available concerning the auto industry, I have taken the time to compose a post. My thoughts on the industry are based completely on the fact that I own an industrial distribution/engineering firm. In other words, I make my living as well as the 5 people I employee working with manufacturers.

It is no secret that I have complete disdain for the Japanese automobile industry for several reasons. First and foremost, they absolutely will not buy any products that are not manufactured in Japan. Forget about it. If you have the opportunity to walk thru a plant you will see what I mean, Sony computers, Panasonic flat screens in the conference room, and Hitachi tools on the floor. Etc. They use us for labor plain and simple. Honda has been in the news a lot here lately, talking about what a great company they are and they are not laying anyone off during this downturn. The real story is that 30% of the workforce at the Honda plant in Marysville, Ohio is brought in through temp services! So of course they have not let anyone go, but they sure as hell have kicked the temps to the curb! (and with temps, no health care or retirement) Honda fails to mention that they quietly closed the Goldwing plant here, because it could no longer compete with HD.

The legacy costs are crippling the big 3.

There is a lot of discussion about “build cars that we want” what do you want? You guys realize that GM up until last year sold more CARS than ANYONE. If you guys want them to build cars YOU would buy, what should they build because the rest of the country IS buying their cars. If you factor in truck sales, GM kicks Toyota’s ass by about 1.1 million units last year. (http://www.motorintelligence.com/m_frameset.html)

Now Ford and Chrysler, yeah you guys got spanked. Compare that to BMW, with 215,836 units. And the question was asked why can’t GM build a car like the 3 series for that kind of money? There is your answer, because they are boutique manufacturer.

About BMW and Benz, Lexus falls into this category as well. Anybody that has owned one of these vehicles knows about service. Can you imagine the media smear job if a new Cadillac required service calls that would total $1500-$2000 each time it went in? A buddy of mine has the new big Lexus and was complaining about his $180 oil change! My points is, the German cars, while nice and have quality details and safety features, they are expensive to maintain. I am guilty of having owned a Porsche 911. It had electrical gremlins and the service manager said to me as I was complaining of the cost of service, and the number if times I had it worked on ‘you have to pay to play!’

I have a friend that works at a shop that specializes in Italian stuff, Ferrari’s Lambos’ etc. He tells me stories all the time about Murcielago/Diablo’s having the clutches replaced with 7,000 miles! Or how about F430’s requiring top end work with 20,000 miles on them! And the ZR1 comes with a 100,000 mile warranty. I am not comparing ZR1’s with Lambos and Ferraris, in terms of styling or exclusivity but wholly smoke, 200 mph and world beater horsepower for 100k. All that with a warranty!

Should they be bailed out? absolutely, manufacturing jobs have a ripple effect, for every manufacturing job, it supports 4 other jobs.

The auto industry is in a strange mess. If the big 3 could shed the union contracts and the government would work an arrangement out from a trade agreement stand point (we currently export ZERO cars to Korea (another rant for another time) and less than 10K a year to Japan) the big wigs need to be removed and replaced with new management.

Whatever the answer is, short term they need the money, give it to them.


Darren

So the answer is "give it to them"??? So just give them the cash and HOPE things work out?