sigma pi

iTrader: (6)

http://www.autoblog.com/2008/11/12/t...to-reconsider/

LxJLthr

iTrader: (12)

I cannot disagree that demise of Detroit would have a profound impact on the economy. On the other hand, I am not sure how long I would want to support (if they do receive a bailout) one of more archaic and inefficient industries out there at expense to other programs my money can be going towards.

Using as AIG as an example, I highly doubt Detroit will need just one bail out (analysts say even $50 bil at this point will not be sufficient). They have had more time to get their act together and even right now I do not see them very concerned. They decided not to bring small/city cars to US market and are expecting the economy to turn around (presumably so they can get back to selling big cars).

Here is a specific example...During Clinton administration, these 3 companies split reported $7+ billion courtesy of federal entitlement program that paid them (at that point very profitable) to develop a 80-mpg hybrid/diesel car. However, they decided to quit shortly after getting the money saying it was impossible. Therefore, theoretically these companies could have brought a hybrid, diesel, electric, whatever car AGES before Toyota and Honda made the Prius and Insight...or at least had some technology available to adapt to the current situation if they chose to do ANYTHING useful with those billions.

To me personally, this would be an equivalent to industrial revolution where ripple effect of automation and machine-based manufacturing over manual-labour-based economy was also profound and far reaching, but in the end brought around a new age of society and technological advances. Time to do the same for Detroit, they had their chance, time to bite the bullet and deal with consequences now rather than elongate and continue to provide indefinite life support to industry that has constantly refused to change. To me personally, it would be no different if we chose to support the manual labour industry back than.

Here is one of my thoughts, how about instead of giving billions to Detroit auto makers (again, analysts say even $50 bil at this point will not be sufficient) that will burn through it trying to just survive hoping for a market turn around, let them fail and give that money to all the 2 million people affected by this...May be for better education and training incentives, so they can reinvent their careers and at least TRY to do something useful with that money.

joltdudeuc

iTrader: (6)

its a belief dude, get over it

no company as old as that should have massive debts on hand. nearly all companies have debt and borrow, but is it really smart to do so on a massive scale? i mean, people do this and **** up their lives, companies can meet the same fate. our government is the ultimate at doing this, wont it also feel the pain someday?

the whole point inbusiness is to make money. seems the corporate structure rules instead, so we have businesses looking to increase that share price through inflated numbers and accounting wizardry than to show pure profits as a basis of sound business.

to me, its just flawed. im starting a company. i know that should be making money eventually, overcoming my debts and start up costs sometime, maybe 5 years lets say. and im not about to borrow just to accelerate the growth, slow and steady is what many preach, its time someone actually do so.

RussB

iTrader: (2)

this will NOT end well.

the trickle down effect will haunt this country for years.



but on the topic of gm, this has come up before. http://www.businessweek.com/magazine...0/b3963114.htm

this was 3 years ago almost to the day.

RussB

iTrader: (2)

what kind of business are you starting?

Jabberwocky

iTrader: (3)

Just cause it is published, doesn't mean it should be taken as gospel. over the last decade or so, GM has been building factories in Mexico, Canada and overseas. I would caution people against assuming that GM will keep jobs in the US if we bailed them out.

joltdudeuc

iTrader: (6)

Going to start shooting weddings (Indian). Currently working out the video side, since I pretty much have the photo side on lock down. I've gotten much of my investment already, but am looking at about $2k to 3k more. My buddy has no investment (video) yet, so he will be putting in $3-5k total for equipment if we choose to buy (new).

Either way, still looking to start a business. Still have a lot to hash out, and plan... Long way to go. If this doesn't work jointly, I'm still pretty much going to do it freelance on the side.

I still plan to keep the day job.

Irrational X

iTrader: (1)

the basis of our economy isnt Popsicle stands... and if its your "belief" maybe you should keep it to yourself since this thread was pretty factual (by iclub standards).






speaking of facts. fact is:
you dont know what the **** your talking about.

SilverScoober02

http://www.reuters.com/article/marke...0081114?rpc=44

I actually agree with most of what is said in this article. I do think the Automakers (along with every other company that gets bailed out) should have to make major concessions if they want to get that money. ie. executive salary and bonus cuts, etc...

I just think that something creative needs to get done....The thing is GM was always hammered about quality by the Japanese automakers, now they have made great strides in that area, surpassing some of those automakers even in some areas.

Also they have taken some very large cost savings measures that will be going into effect in the next two years, as well as started to really focus on alternative energy vehicles. They are behind the 8 ball sure, but I think they can change their approach and really become a better company. They need to do something about the UAW though....

psoper

Good points, in fact we used to have anti-trust laws that were supposed to prevent companies from getting "too big to fail" but those seem to have been lost-(did someone put them in that box in the basement with the constitution?)

Also remember that GM could "fail" several different ways, any of which would probably be a lot less disastrous than the worst case everyone likes to point to.

For example- going into receivership, the court could order them to get broken up to their divisions, and give them each a chance to stand or fall on their own- while rolling all their bad debt into GMAC, having the FDIC grab that and selling it for pennies on the dollar to JP Morgan, -seemed to work OK for Wa Mu.

One of GM's biggest ongoing expenses are health care for active and retired workers, a national health care system could in itself remedy a lot of their insolvency-

BUT OOOHHH NOOOSS!!! THAT WOULD BE SOCIALISM!!!!!

Well I for one would much rather seen us put 700billion into health care for everyone than stuffing the pockets and offshore accounts of the criminals who are responsible for this whole CF.

psoper

That's pretty ripe coming from you- Mr. expert on everything Fox news tells me.

joltdudeuc

iTrader: (6)

Sweet, I struck a nerve with IRX!



C'mon Mr. Smartypants... You can do better than large font size and bold can't you?

RussB

iTrader: (2)

well, your comparison between your business needs and that of gm are not even close to "apples to apples".

you are starting a business with a modest ammount of up front costs, but your recurring costs are going to be very very small.

GM and the other auto manufacturers HAVE to get credit. why? because their customers BUY CARS on credit, and that credit is from the auto manufacturer a good deal of the time. it costs big money to tool up for a new car, or even a substantially facelifted car. it costs big money to buy materials to build the cars.

while it sounds like you've got a good business ethic going for a small business, don't try to apply that same logic to a multi-billion dollar industry that spreads across the globe.


BTW - these companies going belly up would have an impact around the globe. it's NOT going to be isolated to Detroit.

RussB

iTrader: (2)

he can and will, but will probably launch a volley of personal insults first.

joltdudeuc

iTrader: (6)

I'm not comparing myself to GM.

Also, I understand why they are in that situation, and why they borrow. I understand why many borrow and have credit.

I just don't agree with it. It's the norm, it has been for more than the last half century. I just don't feel it's the best way. In some ways I feel it to be a very dishonest way to do business. Profit should be just that, profit. We ignore debt on the books when looking at profits, if any company had to show where they stand in total, few would show real profits. Which is, again, understandable, but seriously, does anyone in these large companies even care about trying to over come the credit? Doesn't any one of them want to be completely positive one day? anyday?

I don't think they care. They will do as they have for decades, cause it puts massive $ into their accounts, and they don't really mind if the company suffers someday.

The same will happen to the US. We keeping throwing money at problems, we keep letting politicians wastefully spend and gorge themselves. One day, it's going to catch up. The day will come that infusing tons on billions into credit markets and bailing out poorly run companies isn't going to do ****. Could be happening now, we'll see after the year is over just how much we've lost in 2008.