Car Makers deserve loans

[telcoman]

This is what we here call chutzpah

Since when should the taxpayers have to bail out the American auto industry due to their poor management and turning out vast numbers of inefficient huge SUV's and trucks and fighting CAFE standards for the past thirty years?

New York Times

August 29, 2008Carmakers Deserve Loan Guarantees, G.M. Official Says By NICK BUNKLEYJOLIET, Ill. — A top General Motors executive said Thursday that automakers were “deserving” of as much as $50 billion in government-backed loans so that they can build more fuel-efficient cars.

G.M.’s vice chairman, Robert A. Lutz, said the car companies need money to retool their plants but probably cannot raise enough capital on their own because of the tight credit markets. He said the automakers have already made considerable progress in transforming themselves and that the government should help them proceed faster.

“The American auto industry is deserving of government loan guarantees,” Mr. Lutz told reporters at an event near Chicago where G.M. showed off its 2009 lineup. “We have done a whole bunch of things that people said, ‘Why aren’t you doing this?’ ”

The automakers, along with the United Automobile Workers union and Michigan lawmakers, are urging Congress to appropriate $3.75 billion to back the $25 billion in loans authorized last year.

They also want more money — up to double the original amount, given the sudden jump in consumer demand for fuel efficiency — and they are urging Congress to act by the end of September so that the money can be available next year.

Critics have denounced the loans as a bailout.

Detroit carmakers have announced plans to revamp numerous truck plants so that they can build the smaller cars and crossover vehicles that have become scarce at many dealers. The cost of each conversion is significant, ranging from $75 million at a Ford plant near Detroit that already had a recent major overhaul to several billion dollars at other facilities.

Sales of pickups and S.U.V.’s plummeted this year as gasoline prices climbed above $4 a gallon in much of the United States. In July, large S.U.V. sales were down 43 percent, and sales of full-size pickup trucks declined 28 percent. Automakers have been offering substantial discounts on some models and shutting down the plants that make them to keep inventories from growing larger.

But Mr. Lutz said that interest in trucks had begun to rebound and that big vehicles “still represent a great opportunity to register sales.” Since mid-July, the average price of regular gas nationwide has fallen 45 cents, or 11 percent, according to the AAA motor club.

“We’ve been hearing from some of our dealers that pickup sales have bottomed — same with S.U.V.’s,” Mr. Lutz said. “There has been some resurgence of demand for full-size pickups and sport utilities. Many people still simply need to buy a truck.”

Still, August is expected to be dismal for G.M. and most other automakers. Edmunds.com on Thursday projected that total sales for the month would be 14.4 percent lower than a year ago and that G.M.’s sales would be down 27.5 percent. Sales would also be down at Chrysler, Ford and Toyota, Edmunds said.

G.M. said it was seeing a good response to its current promotion, which offers “employee pricing” to all buyers, but Edmunds said big discounts had been overshadowed by the high gas prices and sluggish economy.

“Over all, the program has not been nearly as effective as its first implementation back in 2005,” the director of industry analysis at Edmunds, Jesse Toprak, said.

The falloff in truck sales has been devastating to the Detroit automakers because those vehicles historically have generated the most profit.

Mr. Lutz said small cars would become considerably more expensive, filling some of the void created by the evaporation of big profits from trucks.

Had they had union representation on their board of directors it is likely their failed policies would have been corrected a long time ago?

What a bunch of scumbag managers!

Telcoman

[Cold_Zero]

One of the GM VPs was on Hannity's Radio show about the time Congress was trying to pass the increased fuel standards and the VP was whining about not being able to compete in Japan. Somehow insinuating that if Japan dropped its tariffs on US made cars, GM wouldn't be in the mess that it is. When you loose $1 billion dollars from your books[I am not talking about a $1 billion dollar loss, I am talking about not being able to account for $1 billion dollars missing from your books] and you have underfunded the UAW Delphi pension to the tune of multi billion dollars and face fines and seizure of their foreign plants to be sold off. No amount of competing in Japan is going to fix your problems. You just done screwed up. I was talking with two UAW workers a few weekends ago about the status. Its crunch time for GM and I really have no sympathy for them.

[telcoman]

One of the GM VPs was on Hannity's Radio show about the time Congress was trying to pass the increased fuel standards and the VP was whining about not being able to compete in Japan. Somehow insinuating that if Japan dropped its tariffs on US made cars, GM wouldn't be in the mess that it is. When you loose $1 billion dollars from your books[I am not talking about a $1 billion dollar loss, I am talking about not being able to account for $1 billion dollars missing from your books] and you have underfunded the UAW Delphi pension to the tune of multi billion dollars and face fines and seizure of their foreign plants to be sold off. No amount of competing in Japan is going to fix your problems. You just done screwed up. I was talking with two UAW workers a few weekends ago about the status. Its crunch time for GM and I really have no sympathy for them.

Well the overpaid management could have cut their salaries.

At one time you couldn't even park a Japanese car in one of their parking lots. Then they lobbied and forced Japanese automakers to build plants here and create American Jobs. So they did and turned out superior vehicles using former laid off American workers. They paid and treated their workers well and operated union free in right to work states.

I have no sympathy for GM either

Telcoman

[spngr311]

I have no sympathy for GM either

I completely agree (although, seeing as this is a Nissan/Infiniti board, we may be biased!). We are not a Socialist or Communist nation, we should not bail out the auto manufacturers for making and continuing to make bad decisions. It's called capitalism and consumerism, build what the consumer wants. If they had made the right decisions in product development and engineering, they would be in a better place. The unfortunate part is that the heads of the management will not roll, and it is the rank and file workers that will pay for the collosal disasters of the management.

[rn79870]

Unfortunately, the workers who are guilty of greed only when it comes to union demands, are about to suffer for that greed. I hate to see anyone lose their job, but this is one I'm neutral on. Good job unions.

[C-Kwik]

I say let one of the big 3 go under. While it might have a big economic impact, the UAW would realize that not aligning their goals with the company's goals could spell disaster. Especially if its clear the government will not be bailing them out.

[spngr311]

Unfortunately, the workers who are guilty of greed only when it comes to union demands, are about to suffer for that greed. I hate to see anyone lose their job, but this is one I'm neutral on. Good job unions.

I'm with you on this too, but I am more for the engineer who is getting shafted - they only design what they are told.

[OriginalWheelman]

Free enterprise. Anyone remember the big changes in the auto industry in the 50s that helped GM, Ford, and Dodge shut down Edsel, Nash, etc? Now GM wants a bail out because it's them that can't keep up this time? Riiiiiight. Good bye GM. I wish I could say it's been nice, but I haven't liked a single thing from you designed after 1985. I'll miss my 85 Suburban, but I won't miss you.

[AZhitman]

telco, you just stumbled into a winner.

Something you and I agree on.

I said my piece on this issue in Jesda's "bailout" thread, so I won't repeat.... but the Big Three need to find another scapegoat for their failures.

[themadscientist]

telco, I am used to you pushing the envelope of retard with your posts. This is actually good though, what are you doing man! Don't move my benchmarks around by starting to make sense.

Extra props working the word "chutzpah" effectively into a sentence.

[AZhitman]

Extra props working the word "chutzpah" effectively into a sentence without cutting and pasting it from somewhere else.

Fixed your omission there homey.

And props to you for this:

...pushing the envelope of retard....