Question

[edge2794]

although this is an infiniti forum, what is the deal with the chevy 09 camaro, since the company is slowly going out of business can you still get one...at a price of only 22 k, i would have interest in investing in one....although i already have a brand new car, this is something i have interest in...we have all seen transformers, nd hey, who doesnt want bumblebee as their car, would look pretty sweet next to my g37

[tollboothwilley]

Kinda waiting on the actual release til the $14 billion loan saves them is my guess. At first light though, it might be worth picking one of these up. Assuming they are still keeping the price low.

[notalk]

since the company is slowly going out of business

You're kidding, right? Do you really think General Motors, the second largest business on the planet, is truly going out of business?

[edge2794]

apparently the buyout plan for them isnt going so well right now....our economy is in the ****ter, nd lets say they do go out of business...if you can get your hands on that car, it could be worth alot in a few years....i hope they dont go, but right now things arent looking so good

[kmckis1029]

yeah i did like the car in the movie... its funny how a car can be an investment or a liability depending on when you buy it... who would of known a old mustang could be worth 3 and 4 times more than it costed when IT WAS NEW.

but i doubt the US government lets its domestic auto makers go down the drain with the economy.. too many jobs at stake... im just happy to work for the goverment in these economic times...

start rant here:

when the next predsident is in office a lot of money spent on the war will be diverted back to the USA and should help our economy... We are spending our selfs broke trying to support another country... who really dosent want us there... i have nothing against helping our fellow neighbor... but not at the expense of our economy...

:end rant

[Jacko3]

GM will continue to produce cars for many years to come. The $14 billion bail out for the big three auto makers, is just a downpayment for an eventual funeral. yes, even the death of a company can be costly. At a minimum, if the three big autos don't die out by filing bankruptcy (dissolution or re-organization), they will consolidate (merge).

So , have no fear, if you buy a Camaro today, you will still get your warranty and parts.

I generally feel it is unfair to bail out the big financial corporations who had no unions to begin with, and yet failed in their due diligence to investor funds, and then somehow a few members of Congress feel that GM and their unions should be allowed to die off without receiving a corresponding assistance from the govt. I think this thought process is very unfair and very unamerican.

What even makes me mad is how they continue to push the pay difference between the big three workers and the foriegn auto makers. Pay is just an direct form of compensation and it does not represent total compensation.

Total compensation = direct compensation + indirect compensation.

Total compensation is first and foremost a direct result of comparable economic factors or concerns. Thus, the big three's worker total compensation is equal to, or no more than 10% above the total compensation of the Japanese auto workers. So, if you assess total compensation instead of pay (direct compensation), you can see how some politicians are actually spreading lies for thier own political purpose. If the total compensation of the big three was that much higher than those of the Japanese auto makers, Japanese auto workers will be moving in droves to Michigan from their plants in Alabama, Tennesse, and Georgia. Apparently, that isn't happening.

Another reason the big three need to be bailed is that their current problems are a consequence of poor management plus global forces beyond their control. Thus, by demanding that they fail, we are punishing them for the global forces affecting them, which they cannot control directly. So, if they have to fail, it has to happen under normal economic conditions where we can point squarely at poor management decisions alone as a cause of their problems. Normal economic conditions can only occur once the economy starts growing again. So, If we are bailing out the big corporations for their exposure to global forces, then we also ought to bail out the big three auto for their exposure to the same global forces as well. Their failures is not simply due to poor management decisions alone. It is now a complex mix of poor management decisions and powerful global forces.




Modified by Jacko3 at 5:11 AM 12/15/2008

[zozoka1212]

Intersting view point.

What if they don't bail them out?

Maybe Chinese would buy them. That would be a big twist.

Than they would have a car like GMC Wu-tang SUV. LOL

zozo

[Jacko3]

They will bail them out. President Bush will use part of the $700 billion which he did not want Congress to use initially, to bail out the big three auto makers. Consequences to the economy for not bailing out the big three is too enormous and too dire for this economy.

In fact, from a manufacturing perspective, the failure of GM will probably have 2 - 3 times the effect on employment as say the failure of Citigroup. Though, Citigroup could possibly have twice the negative effect on investor confidence if it fails , than say, the failure of GM. Both types of corporations--manufacturing and services, are both important to our economy.

[zozoka1212]

But this money won't last long. They have no real plans. It is just a delay. It feels like more of a socialism than capitalism with govorment helping them out because they have a stupid mangement who can't see 2 years ahead. Fish always stinks from the head. Sure thids smells ike a big pile of dead fish. LOL

I don't think it would be as bad if they don't bail them out. There would be a buyer and it would be a big cleaning after that. The whole GM system is garbage. Starting with the way too many dealerships.

Just my .02

zozo

[Jacko3]

Zozo:

If GM is not bailed out, I guarantee you then that we are off to a good start of depression if Obama does not burn at least $1.5Trillion in capital projects. With the way the economy is right now, Obama is talking about spending in the neighboorhood of $600 - $800 billion.

If you add GM failure to that mix, together with the many Option Arm mortgages and Alt-A loans that will reset next year (2009), you can see how quickly things can get worse, and very likely so, if nothing is done to avert these failing organizations. Our industries were way too over-leveraged in proportion to their level of productivity.

I see your point about capitalism. however, capitalism as we know it is now subject to global forces of the likes we have never seen before. So, it is no more things as usual. A nation should hvae the capacity to make necessary adjustments to its economic policies even if it means going against the grain. Given that we as a nation espouse a utilitarian model of economics---that which benefits the greater good, there has always been small elements of socialism in our policies even from the very begining of the creation of the US. What we see today through the bailouts is a magnification of what we always had as part of our national character.

GM is a crucial aspect of US productivity. Thats why they have been featured on the DOW listing of 30 companies that reflect the state of the economy (I am not sure if they are still listed there or not since their share price has fallen drastically).

The auto industry is unique in that you have few sellers of a product. We call that an oligopoly. In addition, many recent acquisitions have been very unsuccessful. Nissan and Renault relationship which is a synergestic and mutual combination---Nissan owns part of Renault, and Renault owns part of Nissan, is one bright spot in auto manufacturer cooperation. Daimler- Benz acquired Chrysler a few years ago, and they had to sell Chrysler to Cerebrus--private equity firm. Ford, gave up Land Rover and Jaguar to Tata Motors of India, and GM's relationship with Fiat of Italy is also in trouble. I beleive BMW which acquired the Mini has been successful so far in such acquisitions. So, there isn't a lot of 21st century success stories in mergers and acquisitions in the auto industry.

What makes oligopolies a problem for acuisitions is the high barriers to entry, sunk costs, and high learning curves. An established auto company would overcome these challenges, but then, will they be able to fully deploy the economies of scales already existing in that organization? Mercedes -Chrysler is a perfect example of how such a tactics failed.

This is not to say the same case will happen with GM. But the cost of letting GM die under the current economic conditions, will be far higher than bailing them out. What we are talking about here is a huge opportunity cost of acting one way versus the other way.

In my professional opinion, GM should be allowed to die, only after normal economic conditions have been resumed. And i fear we are not in such a normal economic condition at all. Thus, it would be a huge policy mistake to let GM die out under current conditions. Once our govt normalizes the economic condition and have wrestled the global forces to a reasonable level, then Gm can be allowed to fail normally.

[marlin29311]

Holy walls of text Jacko!!! lol.

I doubt the $14 billion will go through. The big three will file chapter 11, resort the business, and work from there. GM will still be on the road years from now...

and OP - you're 18 - how did you manage a new G37??

[Jacko3]

Marlin:

Thats right! When I get into this economics and strategy stuff, I lose myself.

[edge2794]

well im glad this thread went in a total different direction