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sabra Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-05-09 08:13 AM
Original message
GM: 'Substantial doubt' about continuing
Source: CNN

Automaker's annual report says it hopes to get $7.7 billion from the government to remain viable.


NEW YORK (CNNMoney.com) -- General Motors Corp. said Thursday that it hopes to get additional loans from the government and that there is "substantial doubt" about the automaker's ability to remain a "going concern."

GM hopes to receive an additional $7.7 billion in federal aid, which would bring its total debt to the government to $30 billion by 2011, the company said in its annual report.

"The failure to obtain sufficient funding from the US government or governments outside the United States may require us to shrink or terminate operations or seek reorganization for certain subsidiaries outside the United States," the report said.

"If we fail to obtain sufficient funding for any reason, we would not be able to continue as a going concern and could potentially be forced to seek relief under the U.S. Bankruptcy Code," GM added.

Read more: http://money.cnn.com/2009/03/05/news/companies/GM_10K/index.htm
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harun Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-05-09 08:31 AM
Response to Original message
1. I think this economic slow down is proving too long for GM. I think they will declare bankruptcy
within six months.
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ixion Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-05-09 08:37 AM
Response to Original message
2. ah, the smell of corporate welfare in the air
CNBC and FAUX all atwitter because Obama may do something "socialist" like helping the middle-class homeowner. Yet nary a word about the bloated multi-nationals, who have been stifling innovation and competition for decades. When they need a few billion, our government is more than happy to share our money with them. It's just US -- the 'we' in We, the People, who are apparently not entitled to help.

In other words: it's a scam.
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CreekDog Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-05-09 05:42 PM
Response to Reply #2
12. Lack of innovation is not why the Big 3 are in trouble
The poor state of their finances can be attributed in large part to the vast amounts they must spend on their retirees pensions and health care costs, something that does not affect automakers in countries with national health care and government pension systems.

GM deserves many criticisms, but the biggest part of their cost problem is that they are saddled with costs that other automakers don't have to the same extent and those costs are greater because the US is not providing the same employment/benefit environment as other countries.

Those costs are coming out of engineering, new models, etc. They come from all the parts of the company that could produce innovations.
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blue_onyx Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-05-09 06:34 PM
Response to Reply #12
14. Our horrible trade policies aren't helping either
The fact that we allow other countries to sell their vehicles here with little taxation/restrictions (in the name of "free trade") while they don't do the same in return puts the US auto companies at a big disadvantage.
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AngryAmish Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-05-09 09:05 AM
Response to Original message
3. This is what crony capitalism is all about
GM has several hands on several levers of power, and they will use them. Too big to fail is just another way to say we have a lot of lobbyists.

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mac56 Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-05-09 09:23 AM
Response to Original message
4. I don't think you needed to be Nostradamus to see this one coming.
:eyes:
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IrishBuckeye Donating Member (336 posts) Send PM | Profile | Ignore Thu Mar-05-09 10:02 AM
Response to Original message
5. I hope they get the money
Edited on Thu Mar-05-09 10:03 AM by IrishBuckeye
Simple Facts: Last year GM's prescription drug plan, not their healthcare plan thats a seperate cost just the presciption plan, cost GM $5 billion dollars. GM supports over 800,000 retired workers and their spouses with healthcare and pensions. If they go bankrupt the pension fund will run out and the workers will be placed on the federal pension plan (already in debt by $11 billion) which will cost U.S. tax payers roughly $7 billion dollars a year. The healthcare for all these people will go away, most of these 800,000 retires are over 60 and health agencies who help those without insurance will be crippled further than they are now.
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Sen. Walter Sobchak Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-05-09 10:08 AM
Response to Reply #5
6. Sounds like GM should get out of the car business and just become an HMO
I am sure it would be cheaper to just assume all the GM legacy obligations than to actually bail this trainwreck out further
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IrishBuckeye Donating Member (336 posts) Send PM | Profile | Ignore Thu Mar-05-09 10:16 AM
Response to Reply #6
7. I wouldn't be so sure of that
The fact is GM sells the second most cars in the world, the fact is they do have a product that sells when the economy isn't tanking thus if they can reduce costs they can make money and support their oblingations as they have been able to in the past.
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Delphinus Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-05-09 11:25 AM
Response to Reply #5
8. The unions
should have been pushing for a Single Payer Universal Health Care years ago.
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depakid Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-05-09 11:33 AM
Response to Reply #8
9. Yep- but unfortunately, many unions didn't see that in their self interest
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Earth Bound Misfit Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-05-09 12:47 PM
Response to Reply #8
10. They did, actually...some 60 years ago.
and have continued to do so since.

TWENTIETH-CENTURY CAMPAIGNS FOR HEALTH CARE REFORM



In the 1940s, new potential for grassroots mobilization arose when organized labor became a major backer of national health insurance. As the cost of medical care began eating up more of the average worker’s budget, both the AFL and the Congress of Industrial Organizations (CIO) took leadership roles in the struggle for health reform. In 1943, labor unions joined the reformerexperts of the Committee for the Nation’s Health and liberal administration officials in drafting the Wagner–Murray–Dingell bill (named for its congressional sponsors), the major health insurance legislation of the Truman era. This bill proposed a national medical insurance program financed through social security payroll taxes, and it enjoyed the strong support of Harry S. Truman.

During the struggle over Wagner–Murray–Dingell, the opportunity to mobilize a broad-based movement was once again lost. Labor leaders and policy intellectuals believed they could make change from within the system and so did not need the organized activity of union members to back up their efforts. The “failure of union leaders to enlist union members in the battle,” historian Alan Derickson argues, was “a crucial flaw in the campaign for health security.” Both AFL and CIO leaders, aiming for a place in the postwar power structure, “discouraged rank-and-file initiatives” and “never considered grassroots mass mobilization.” The lack of rank-and-file participation greatly weakened the cause of union-led health reform as it became associated with “union bosses” rather than ordinary workers. The other major reform backer, the Committee for the Nation’s Health, a successor to the CCMC with many of the same members, also decided not to solicit grassroots participation on behalf of the Wagner–Murray–Dingell bill, arguing that it lacked the funds to organize local branches.9

Reformers needed all the help they could get to fight an unprecedented onslaught by the AMA. After Truman’s electoral victory in 1948, the doctors’ organization spent over $1 million on an anti–health reform public relations blitz that included advertising, television and radio spots, telegram and letter-writing campaigns, and the lobbying of legislators by their own personal physicians. Unlike reformers, AMA members successfully reached out to the grassroots with “doctor-to-patient” letters denouncing the Wagner–Murray– Dingell bill.10 And in the midst of the Cold War, health reformers’ insider status made them vulnerable to opponents who saw a Soviet-inspired conspiracy for “socialized medicine” at the very heart of the federal government. Prospects for the passage of the health bill vanished when most of its congressional supporters were unseated in 1950 with the help of the AMA’s campaign.11

By then, organized labor’s attention had turned elsewhere. Unions were increasingly winning health benefits for their members through collective bargaining agreements with employers, so the need for national reform seemed less urgent. The failure of national health legislation further encouraged labor to pursue private solutions, while these solutions themselves, by meeting the needs of at least some of America’s workers, made it more difficult to argue for systemic change. Organized labor would continue to be a major supporter of universal health care proposals, particularly through Walter Reuther’s Committee for National Health Insurance in the 1970s. But, “because most of the working-class constituency for social insurance had been accommodated , the potential for building a mass movement . . . dwindled.”12


9.Alan Derickson, “Health Security for All? Social Unionism and Universal Health Insurance, 1935–1958,” Journal of American History 80: (1994): 1333–1356 (quotes from pp. 1342–1343); Gordon, Dead on Arrival, 413.

10.Gordon, Dead on Arrival, 339. See also Monte M. Poen, Harry S. Truman vs the Medical Lobby: The Genesis of Medicare (Columbia: University of Missouri Press, 1979).

11.Alan Derickson, “The House of Falk: The Paranoid Style in American Health Politics,” American Journal of Public Health 87: (1997): 1836–1844; Marmor, Politics of Medicare, 12–14.

12.Derickson, “Health Security for All?” 1355. On the postwar rise of employer health benefits, see Marie Gottschalk, “The Elusive Goal of Universal Health Care in the US: Organized Labor and the Institutional Straightjacket of the Private Welfare State,” Journal of Policy History II, No. 4: (1999): 367–398; Jennifer Klein, “Managing Security: The Business of American Social Policy, 1910s–1960” (PhD diss, University of Virginia, 1999); Raymond Munts, Bargaining for Health: Labor Unions, Health Insurance, and Medical Care (Madison: University of Wisconsin Press, 1967). On the Committee for National Health Insurance, see Starr, Social Transformation of American Medicine, 382, 404.


Read More: http://www.pubmedcentral.nih.gov/articlerender.fcgi?artid=1447696
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doc03 Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-05-09 01:09 PM
Response to Original message
11. After seeing the GM line-up at the
Cleveland Auto Show this week I am starting to think GM won't make it no matter how much money you feed them. Except for a couple models their cars are just boring, every Chevy has the same tired styling. The Cadillacs have the ugliest vehicles on the market in my opinion, they have the same angular style they appreantly patterned after the stealth fighter nearly a decade ago. They either got rid of their designers or maybe they are getting too old and have no imagination. GM has a Malibu hybrid available and it only gets a couple more MPG better than the 4 cyl model. The Volt has been touted as the savior of the company and they don't even have a prototype to look at and it will be another year and a half before it goes into production. The Volt will only have a very limited market if it's ever produced anyway. The only other hybrids GM has in production are SUVs and pickups where hybrid technology gives only a minimal improvement in MPG. The new Ford Fusion beats the comparable Toyota Camry Hybrid by 8 MPG in the city. The new Mustang looks great, they finally got their act together and the new Taurus looks great and the F150 pickup has been restyled and kicks ass too. I think if GM died other manufacturers would pick up the slack, people will not quit buying cars just because GM is not making them. If GM were gone Ford would pick up much of their market and would be able to run at a profitable rate of production. Let GM liquidate seize their
their pension assets and let the PBGC take them over, sure pensioners will have to take some cuts. The steel industry and USWA had to suck up their pride and make huge concessions in order for that industry to survive, but the UAW has never had to take any meaningful concessions. It's a sad thing but as long as the US keeps following the NAFTA/WTO Free Trade BS it's inevitable, you either change or die.
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blue_onyx Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-05-09 06:30 PM
Response to Reply #11
13. "Except for a couple models their cars are just boring"
You're kidding, right? Toyota and Honda make the most boring vehicles ever designed. The Chevy Malibu is the best looking mid-size car on the market. The Saturn line is fantastic which is why I'm so bummed that the brand will likely be discontinued. I think their design for Buick is great and has a lot of potential. Cadillac has a great designs. I'm not a fan of Pontiac but they aren't considered a core brand anymore.



"I think if GM died other manufacturers would pick up the slack, people will not quit buying cars just because GM is not making them. If GM were gone Ford would pick up much of their market and would be able to run at a profitable rate of production."

If things were only that simple. GM is a very large company and many suppliers, who are barely hanging on, would be forced out of business. The closing of thousands of dealers would hurt every state. It's not as simple as Ford picking up GM's business. My state would be devastated if GM were to go under and wouldn't recover for many more years. Thankfully, I believe Obama will do what's necessary to help the US auto industry. It will be a very different auto industry (smaller, probably only Ford and GM will survive) but the industry will survive.


"UAW has never had to take any meaningful concessions."

They agreed to cut starting wages by 50%! I guess on "progressive" DU, that's not meaningful concessions.
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doc03 Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-05-09 07:19 PM
Response to Reply #13
15. I have worked in the steel industry for almost 39 years
Edited on Thu Mar-05-09 07:31 PM by doc03
we started taking concessions starting way back in the late 70's. In the late 90's through early 2000's around 40 steel companies closed down. In order to get Bush to put trade sanctions on illegally imported steel the steel companies agreed to consolidate and the Union agreed that we had to cut our legacy costs or lose what jobs were left. Our pensions were dumped on the PBGC and our retirees lost their health insurance, it was that or look for a job. "We cut starting wages by 50%" with all the layoffs how many new employees could there be, the senior employees are still making around $30 an hour and another $40 in legacy costs. We lost our pensions and our retirees lost their health insurance and now you want us to pay taxes to subsidize them. I will have nearly 40 years in the mill next year when I turn 62, my pension will be $1320 a month (if I don't lose that too) and I will have to pay for health insurance. An auto worker with 40 years service gets around $5000 a month in pension and health insurance. Back when we lost our pensions and health insurance the American auto industry was front and center trying to stop the trade sanctions on steel, they were willing to let us die so they could buy cheap steel. I don't want to see anyone lose their benefits but wake up and smell the coffee if Toyota's total labor costs are $20 less an hour you can't survive. I got some news for you, there is a man named Ron Bloom the President appointed to try and save the auto industry. You know who he is? He is the man that worked out the deal us in the steel industry made with the devil back in the early 2000's. So I suspect he will make a similar recommendation for the auto industry. You think "Obama will do what is necessary to save the auto industry", I think the auto workers are going to have to go through some pain in order to save the industry and I see Ron Bloom was appointed to work out the deal. If he follows the recipe he used in steel they are in for a rude awakening indeed.
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blue_onyx Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-05-09 07:59 PM
Response to Reply #15
17. Ok...
"The auto workers are going to have to go through some pain in order to save the industry."

My state has been in recession for 8 years because of the restructuring going on in the auto industry. Auto workers have gone through a lot of pain.


"If Toyota's total labor costs are $20 less an hour you can't survive."

Maybe rather than participating in the race to the bottom we enact policies that will help our auto companies compete. For example, universal health care would save the US auto companies 1500 dollars per vehicle. We could change our trade policies that give companies like Toyota unfair advantages. It's unacceptable that we barely tax imports but Japan protects their companies by imposing high import taxes (in addition to preventing our companies from building plants in their country). I'm tired of the free market, Reaganomics BS. Sick of hearing that the problem is workers make too much. We need to completely reverse the economic thinking our country has had for the last 30 years.

And yes, I think Obama will assist in saving the US auto industry. I doubt he wants to have the US auto industry collapse under his watch.
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doc03 Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-05-09 08:10 PM
Response to Reply #17
18. I totally agree with you on universal health care
Edited on Thu Mar-05-09 08:15 PM by doc03
and trade policies. But hasn't Obama shown himself to be another free trader? He even opposed the requirement in the Stimulus Bill requiring use of American steel in the infrastructure projects I believe. As far as universal health care I will be very surprised to ever see it in my lifetime.
Don't take me wrong I don't want anyone to take any concessions but sometimes you have no choice, if we wouldn't have I would have lost my livelihood 20 years ago. In this day and age that's the way it is nobody ever said life was fair.
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Bake Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Mar-06-09 11:17 AM
Response to Reply #11
20. I kinda like the angular Caddies.
At least they don't look like every other Lexus/BMW/Mercedes out there.

Bake
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Mr. Hyde Donating Member (314 posts) Send PM | Profile | Ignore Thu Mar-05-09 07:43 PM
Response to Original message
16. They just laid off about 250 more people at the Defiance, Ohio plant.
It was even worse last month though when unemployment for Defiance county jumped nearly 5% after they laid off over well 500 people.
http://www.indianasnewscenter.com/news/local/40744367.html
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bluecollarcharlie Donating Member (171 posts) Send PM | Profile | Ignore Fri Mar-06-09 10:00 AM
Response to Original message
19. Is there just a default mechanism here to lay blame......
........and not look at facts? I'll put it more blunt for some of you thick headed morons out there: THE UAW GAVE UP A LOT OF SHIT IN THE LAST 6 YEARS. I know. I'm one of the guys that have to watch while the misguided, the misinformed,and the criminally insane fly overhead like vultures waiting AND wanting for us to die. You know, Toyota just asked for 2 BILLION from the Japanese government. You can bet no one here is going to call them blackmailers. Honda and Mazda are going to do the same. Props and hosannas all around!!! And no one is going to call them failed auto concerns either. The facts as i see them run like this: You people here do not give a flying damn who gets hurt, who becomes unemployed, who stops being able to pay for college, which state goes bankrupt, what marriages fail, or who goes into poverty as long as you can take down a "big" company. It's always "big" this and "big" that. But never anything about the "little guys" that work there. Like me. Or the thousands of other "little guys" that work in smaller companies all across the country. Nope, none of that. Just you people's paranoid obsession with "big". As far as i'm concerned, a lot of you are nothing but backstabbers. You go on and on about how you want to stand up for the little man and then you try your damnedest to kill off his means of income and livelihood. And when presented with the hard questions about what happens next, some of you trot out the same cheap-ass platitudes that have made the republican party what it is today. Tell me, is there really any difference?
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maxrandb Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Mar-06-09 02:09 PM
Response to Original message
21. They should have never begun advertising on Rush'
and Insanity's Radio Shows.

Is there any part of our economy that the wingnuts haven't wrecked?
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