U.S. Expected to Own 70% of Restructured G.M.

[DuaneBidoux]

Source: New York Times

DETROIT — In better times, many employees of General Motors called their company “Generous Motors” because of its rich benefits.

Now G.M. may stand for something else: Government Motors.



Read more: http://www.nytimes.com/2009/05/27/business/27auto.html?_r=1&ref=global-home

---

Now this IS, actually, the DEFINITION (check the dictionary) of socialism.

And frankly I don't particulary want to own GM.

[Fearless]

1. Why not? I hear a fleet of electric cars coming... and the means to do it.

[Dr.Phool]

2. Our very own foreign car manufacturer!

[blue_onyx]

5. Oh yeah

An American based company that produces over 80% of its product in the USA is foreign. :eyes:

I bet most non-automotive US manufactures don't even come close to producing that percent of products in the US. Maybe now that we own most of GM, we'll change our "free trade" policies and enact universal health care to make it affordable for GM to build ALL vehicles here.

[DuaneBidoux]

7. Personally I want our companies to compete with all global companies.

But fairly. If BMW doesn't have to pay health care for their workers I don't want ours to be penalized because they do.

Competition is good. That is one thing conservatives have right. What they forget is that you can't have one guy bullying everyone else and expect that to be considered "competition."

And we have been bullied by the world (with our permission of course). I would still rather find a handfull of progressive capitalists (like the Virgin Air guy, and Warren Bennet, maybe Steve Jobs (a real taste for what will be "cool.") to create truly world class cars, than our government. I do believe government is for protecting those who cannot protect themselves. Of creating a fair minded and civilized country, etc. Of providing for those in need, etc. (and, incidently, putting mileage standards on cars to guard our energy and environmental future).

But in spite of the fact that I do believe government can and should do the things I just said, I still do not associate them with the production of cutting edge world class automobiles. And that has me a tad nervous.

[blue_onyx]

8. The government won't be designing the vehicles

GM has some great vehicles and more on the way. As Obama has said, he has no intention of running the company. This is more about the government providing financial assistance so GM can survive. I just hope he also tackles some of the issues that are hurt GM's ability to compete.

[Igel]

28. No?

True, they won't be designing specs for a given strut, or the curvature of the fender.

But do you really think the government won't have something to say about how fuel efficient each car has to be? How many of each car is needed in order to micromanage how CAFE standards are achieved and even exceeded? That some bureaucrat, somewhere, won't look at some car design and say that he doesn't like it so choose another?

Obama has no intention of running the company. However, he will stipulate who the CEO should be and who should be on the board. He will stipulate UAW contract details and other such niceties. When I helped "run" a company I didn't have quite as much power or make some of these kinds of changes.

He's already hurt. By requiring that secured debt be treated as less than unsecured debt and basically calling those who believed in a contract that they're greedy for expecting the contract to be honored, he's probably raised the interest rate on non-government loans (unless he's going to run the banks and them them what interest rate to charge). He's already stipulated that the largest cost have beefed up representation at the negotiating table.

Now the question is, How does he manage all the conflicts of interest? The largest business cost is also a political supporter and donates beaucoup bucks to him and his party. The business would make political contributions as well--but do they contribute to the man who fired the last CEO and board or against him? The business might be profitable if taxes are loosened--so does the taxer in chief make this call to help GM or the budget, and is there a difference? And on it goes. During trade negotatiations, does he protect the company that the US mostly owns or not? How does he deal with WTO terms that involve government ownership and subsidy of companies? It's gonna be a joy, esp. when things hit the courts--we've already seen the reaction to that, and many of us applauded having government power brought to bear to squelch individual dissent and due process.

Note that TARP was originally set up to avoid nearly every one of these (and other) problems.

[Dirk_H]

31. health insurance

What exactly do you mean by "BMW doesn't have to pay health care for their workers"? As far as their US based plants are concerned, they have to follow the same laws and regulations as their American competitors, haven't they? So this should be a quite fair competition. And with regard to their German plants, be aware, that a rather luxurious health insurance (by American standards) is mandatory (by federal law) and is paid for as part of the wages.

[OhioChick]

9. ...........

GM to import China-made vehicles by 2011

Chinese automakers like Chery and BYD have been trying to break into the U.S. market for years, but General Motors could become the first automaker to sell China-made vehicles in America. A new document reveals GM is planning to sell China-made cars in the U.S. by 2011.

According to the document acquired by Automotive News, General Motors plans on selling about 17,300 China-made vehicles in the U.S. in 2011. The number is expected to blossom to 51,500 units by the year 2014.

The document also reveals GM expects its U.S. sales to grow by 50 percent by the year 2014.

Automotive News suggests the China-made vehicles will be small cars similar to the upcoming Chevrolet Spark, but we wouldn’t completely rule out the possibility of a compact sedan for Buick. China is Buick’s largest market and an inside source has revealed GM is planning a smaller, Delta-based sedan for its U.S. Buick division. GM’s expected sales figures would also seem to fall in line with an entry-level Buick sedan.

http://www.leftlanenews.com/gm-to-import-china-made-vehicles-by-2011.html

[blue_onyx]

12. Yes, I've seen this

As the article said, "China-made vehicles will be small cars." GM currently sells some small cars at a loss to meet CAFE standards. If we made it affordable for GM to produce small vehicles here (changing trade policies/health care), this wouldn't be an issue.

[DJ13]

3. I find it funny that the same admin that wont nationalize banks

because they claim not to want to be even temporary "owners" has no problem taking over GM.

[DuaneBidoux]

4. And I would bet that a bank is one hell of a lot easier to manage than a car co.

[DJ13]

6. I bet you're right

And a bank would be easier to part with within a few months after all the crap was written off by the government too.

[Psephos]

15. Simple - there is a political bonus in the acquisition of GM that isn't present in the banks

This is going to be British Leyland II.

Think about it: the UAW will be a major equity holder, junior only to Uncle Sam.

So what kind of lean, mean global competitor is going to emerge from future labor/management contract negotiations? They'll be negotiating with themselves.

What kind of cutting-edge machines will be designed and engineered by serfs working to not upset the Car Czar and endanger their government pension?

What chance is there that similarly-skilled people who don't work for Govt. Motors will be paid half as well as those who do? The have-nots, through their income taxes, will support the haves, who will be voting their own paychecks and bennies.

No? Read up on how things worked out at UAL, and then let's talk.

What they ought to do is stop making cars and open a chain of buffet restaurants. Uncle Sam's Grande Messhall - where U Are Welcome. Eat all you want, pay what you want...and let someone else pick up the rest of the tab.

[Name removed]

17. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Kolesar]

18. That was a horrible thing to say...eom

[Blue_Tires]

24. not cool, Wally

[flvegan]

10. All taxpaying citizens to get free Corvettes, please.

Make mine a ZR1 in red, thanks.

[demosincebirth]

13. At least at a big discount!

[alcibiades_mystery]

22. Do you get a free driveway when you pay for the roads?

We're trying to have a society here.

[Blue_Tires]

25. make my ZR-1 in black

and a Camaro for a daily driver, please

[Downwinder]

11. Has to be someone to make military vehicles. n/t

[tomreedtoon]

14. I just can't help but remember "The BBC Micro."

It was a computer basically sponsored by the British Government, and people were taught how to use it in a BBC television series. The thing was a kludge.

I'm almost afraid that a car designed by the government would run on goats, have a lifespan of three hours and there'd be a fifty percent chance that the driver would catch fire every time it was used. However, that'd still make it better than anything GM has made in the last twenty years.

And honestly, maybe they can use the factories to build something useful, like new passenger cars and locomotives for cross-continental passenger trains.

[Kolesar]

19. You must think the management of Toyota is going to fund your social services when you are past 65

Out of the goodness of the kindness of their hearts.

[madrchsod]

20. toyota`s u s profit`s fund the japanese workers social services

they are required by law to fund their share of social security and unemployment insurance.

[tomreedtoon]

23. Dude, you know who funded the UAW's benefits?

The American people. When they bought cars, under the mistaken belief that buying American rattletraps was better than buying competitive foreign cars, they were funding all the things that the UAW is losing.

As I've often said, it wasn't the UAW that destroyed the company; it was the stupid schemes and bad engineering of management, SUPPORTED by the UAW without protest, that did it. But both management and labor believed that the American consumer was enough of a sucker that the shell game could go on forever.

Now the real challenge is, can GM and its workers produce a car that the world is willing to buy over Toyota and Honda products? Can they compete on a level playing ground? I'd like to think the answer is yes, but I can't do anything about how well they are doing their jobs. They will have to decide.

[PassingFair]

26. Conservative low wage policies killed the auto makers.

Even Honda is down 32%.

No one can afford to buy a new car
on $12.00/hour.

No one can afford to stay in their house
on $12.00/hour.

No one can afford to take a vacation
on $12.00/hour.

Zip-A-Dee-Do-Dah, the stock market
went up as wages and employment
went DOWN...people were lulled into
re-mortgaging and 0% credit cards
to make up the difference.

Now we are left to deal with the debt,
while the swindlers snap assets up
at a quarter of their previous value.

:cry:

[blue_onyx]

27. Another clueless person

claiming that GM vehicles are poor quality. Seriously, this is getting old.



"Now the real challenge is, can GM and its workers produce a car that the world is willing to buy over Toyota and Honda products?"

GM sells about the same amount as Toyota worldwide and more than Toyota in the US. GM sells more than Honda. Yep...the world just hates GM :eyes:

[MilesColtrane]

16. Now that I own a piece of the company maybe they'll start sending me $$ to pay...

...for the new engine and transmissions I had to put in my '85 Blazer.

Yeah, that's gonna happen.

[alcibiades_mystery]

21. Good

Maybe it's not about what YOU want.

[w4rma]

29. Fine with me. The previous owners ran the company into the ground.

The banksters just want to liquidate it's assets and sell them to foreign firms.

[ohio2007]

30. China will buy up that penny stock.....and then take another hit when it drops LOL

[shadowknows69]

32. Can I sell my stock back to them. I could use the cash

And I drive a Ford.

[jpak]

33. What's good for GM is good for America

now with more gooder...

:evilgrin:

[liberalpragmatist]

34. Personally, if we're going to provide financing, I see no problem with equity

It's obviously not a perfect arrangement and ideally, the shares will be sold to private shareholders within the next few years once the economy picks up. But so long as we're bailing out the company, it makes perfect sense to take an equity stake - which, IMO, is what they should have done to the banks.

[liberalpragmatist]

35. Personally, if we're going to provide financing, I see no problem with equity

It's obviously not a perfect arrangement and ideally, the shares will be sold to private shareholders within the next few years once the economy picks up. But so long as we're bailing out the company, it makes perfect sense to take an equity stake - which, IMO, is what they should have done to the banks.