General Motors

[Holiday]

I'm worried about all the jobs that our going to be lost if GM goes under but damn, those losers just can't compete with that.

I still think they'll get some sort of bailout though. Hopefully not the 25 billion they wanted and maybe they'll actually have a plan on how to use what they get.

 

[dnno1]

This made me lolt: Getting to that point with bad business is irresponsible. Allowing one auto company to either get in shape or die is not going to destroy unions...WTF If people keep handing out money in a bailout then a)people will just keep asking for it and b)it will not solve the situation. The bailout was designed for the housing market and it hasn't even succeeded so doing the same thing with the auto makers won't do ****. Giving them money isn't going to help them sell more cars??? Are you serious? It will just delay the innevitable.

Actually in the game of business there are winners and there are losers. In addition, there is such a thing as forces beyond your control. This is the case in the automobile industry. I you will notice a similar thing is happening in other countries and their govenments have a plan to either recover of bailout those home-grown industries. As far as the unions go, bankruptcy could be used to leverage the unions out of the picture. Even the representatives in Congress are aware of that. Asside from that bankruptcy is out of the question here since it has been already accepted by legislators that it would hurt the U.S. economy severly. Sure, the money allocated for the mortgage industry has not been as successful as planed, but blame that on Paulson. Apparently he really didn't know what he was doing and he will be replaced next year. Once again, history has shown that bailing out a company can prove to help them turn around and avoid going under (see Chrysler in 1979) and it definitely can happen again. I am serious and you can not guarantee that it would only be delaying bankruptcy. There is not proof of that.

 

[dnno1]

Because the banking and financial industries are filled with unions?

Sure... Credit Unions .

This conservative opposes bailouts--period. I don't care what industry, what company, or which political party they or their employees contribute money or support to. Businesses should be allowed to fail, not to be rewarded for bad business practices.

Well I am glad you are not in Congress and whatever you say or belive doesn't matter. They are going to get bailed out wheather you like it or not.

 

[The Senator]

Well I am glad you are not in Congress and whatever you say or belive doesn't matter. They are going to get bailed out wheather you like it or not.

I don't know how it's going to pass consider most Republicans and a quarter of the Democrats in the House have said they're against such a plan

 

[dnno1]

I don't know how it's going to pass consider most Republicans and a quarter of the Democrats in the House have said they're against such a plan

I don't know about that. According to this article from CNNMoney.com, there were at least two Republicans who had publically voiced their support for the $25 billion proposal that was floated by the White House (there were some Democrats who opposed it, but that was more than likely because they didn't like the Bush Administration's proposal) and several others, including Minnesota Sen. Norm Coleman, that had indicated they might accept a rescue under strict conditions. Last I heard was that Congress wanted the Big 3 to present their plan before any bailout would be considered. That sounds to me like they are willing persue bailing them out. The truth of the matter is that nobody in Congress in their right mind is going to allow the American auto industry to go down and hurt the U.S. economy in the process. It is going to pass, but not this year. You will see some time before the end of the first quarter that things will start happening.

 

[Spider-Bite]

If we had a FairTax, GM and the auto-Industry wouldn't be seeking a Bailout, because the could sell more product, with no worries of Tax Consequence. They Wouldn't have the Tax Burden, the Burden of Cost in Tax Preperation. The Product would be cheaper to produce because they wouldn't have the Tax Component. They would be able to be more Competitive in the World Market. The Employees would be able to Save their Money instead of paying out nearly 1/3rd in Taxes before they even see their Pay Check.

Everyone knows American Workers are the most skilled and most productive in the world, but how are they expected to keep jobs here with the insane tax code we have? It's the Tax Code that forcing jobs away.

but then the government wouldn't get any tax revenue from these guys and regular guys like you and me would have to pick up the slack, which would leave us without the ability to buy any cars which would leave these corporations bankrupt anyways.

 

[Spider-Bite]

I'm worried about all the jobs that our going to be lost if GM goes under but damn, those losers just can't compete with that.

I still think they'll get some sort of bailout though. Hopefully not the 25 billion they wanted and maybe they'll actually have a plan on how to use what they get.

I support a bail out so long as the government passes strict energy efficency standards. It will help these guys compete while keeping jobs in America.

Plus I worry if all three U.S. automakers go under, will foreign companies charge us an arm and a leg for a car due to the lack of competition?

 

[SuBe]

but then the government wouldn't get any tax revenue from these guys and regular guys like you and me would have to pick up the slack, which would leave us without the ability to buy any cars which would leave these corporations bankrupt anyways.

Spider, let's pretend you have a business. You make and sell Widgets. Wonderful Spider-Bite Brand Widgets. You produce these out of your house. They are amazing Widgets. It costs your $50 to make each widget, which you sell for $100 (called Key-stone Margin), you keep $50, and you get to re-invest the other $50 to build a new widget.

Now, the government comes along and tells you from now on, you have to pay 10% of your profits in taxes. What do you do?

Do you increase the price of your Widgets, to collect the extra tax? Which would mean that your Consumers would have to pay more for your widgets.

Do you just skim it off the top of your profits? Well, that's a 10% reduction in your annual Net Income.

Do you purchase cheaper parts to make your widget? That would mean that your Original Vendor loses out of your purchase, AND your consumers are getting inferior products.

So, when a Manufacturer has to pay taxes, where does the Money come from?

It comes from the Consumer or the Employees of your Vendors, or from your Employees itself. If you had any. Corporations DON'T pay taxes, they forward it from the Consumer.

So, this bull about the Government making us pick up the slack? We already are stuck with it.

Everytime we purchase ANYTHING, from Candy Bars to Hybrid Cars, Eggs to Xboxes, we pay the Manufacturer's Tax Bill. That's you and me and everyone else in this country.

Now, if you reduce GM's Tax Bill, they can sell their vehicles at a reduced price, they can sell more vehicles overseas. They can be more competitive in the Market. THAT is a way to keep them in business, not just handing them Billions upon Billions of dollars, they didn't earn, to keep following a Failed Business Plan, so they can be in the same boat in a few years, but where EVERY taxpayers is just further and further in debt.

 

[Addendum]

I'm not going to buy a GM car just because they drop their prices.

 

[The Senator]

I don't know about that. According to this article from CNNMoney.com, there were at least two Republicans who had publically voiced their support for the $25 billion proposal that was floated by the White House (there were some Democrats who opposed it, but that was more than likely because they didn't like the Bush Administration's proposal) and several others, including Minnesota Sen. Norm Coleman, that had indicated they might accept a rescue under strict conditions. Last I heard was that Congress wanted the Big 3 to present their plan before any bailout would be considered. That sounds to me like they are willing persue bailing them out. The truth of the matter is that nobody in Congress in their right mind is going to allow the American auto industry to go down and hurt the U.S. economy in the process. It is going to pass, but not this year. You will see some time before the end of the first quarter that things will start happening.

Yeah, this article explicitly talks about the Senate.

The House is where this bailout plan will begin its long voyage through the legislative branch.

And from what I've read, it doesn't look like the bailout will survive in the House. If it doesn't pass the House, it won't go to the Senate. Which is a good thing...

 

[The Senator]

I'm not going to buy a GM car just because they drop their prices.

Exactly. Because while the MSRP may be less, the costs to fill up the tank and make excessive repairs won't be worth my patience.

 

[The Senator]

I support a bail out so long as the government passes strict energy efficency standards. It will help these guys compete while keeping jobs in America.

Correction: It will help these guys compete for about six months until they are forced to declare bankruptcy anyway, since no amount of money can repair flawed business strategies if the guys at the top aren't.

Plus I worry if all three U.S. automakers go under, will foreign companies charge us an arm and a leg for a car due to the lack of competition?

That won't happen.

 

[BlackLantern]

most Americans are buying foreign right now anyway....so I don't see foreign automakers increasing prices...my next car will probably be a foreign car...

 

[dnno1]

most Americans are buying foreign right now anyway....so I don't see foreign automakers increasing prices...my next car will probably be a foreign car...

That is not necessarily true. According to statistical data from the U.S. Bureau of Transportation and Statistics, as of 2006, the number of domestic cars purchased by Americans have always outnumberd foriegn cars, and I doubt that statistic will change anytime soon. So far this year (at least as of October) the Big 3 have more than a 66% market share in North America. I could walk outside my house right now and count more American cars parked in driveways and on the street than foriegn cars. Most Americans are not buying foriegn cars. As far as increasing prices, all automakers will sell their cars at a competetive price based on what the market will bear, so if the demand is up you should expect to see a price increase (the average price of a car went up by $1200 since the second quarter of this year according to Comerica Bank). I think you should check your facts before you start making erroneous statements.

 

[dnno1]

Yeah, this article explicitly talks about the Senate.

The House is where this bailout plan will begin its long voyage through the legislative branch.

And from what I've read, it doesn't look like the bailout will survive in the House. If it doesn't pass the House, it won't go to the Senate. Which is a good thing...

It also talks about congress (read it again). If the amount of the emergency rescue funding was decreased there would be more backing in Congress. The specific statement in the article that I was reffering to said that tow Republicans (it didn't indicate whether they were senators or congressmen) were in support and specifically identified Republican Senator Norm Coleman (who could still lose to Al Franken) as on of several other Republicans (once again no indication if they were also senators) who would "accept a resuce under strict conditions". In any case, all that is needed is 12 Republican senators to buy into this for it to pass.

 

[BlackLantern]

so if the big 3 have a 66 percent market share and one of those companies went out of business, the market share probably wouldn't dip that much.....the longer this thing stays tied up in the House, the smaller the odds are of it passing....especially if the market starts to perform better in the coming weeks....

 

[dnno1]

so if the big 3 have a 66 percent market share and one of those companies went out of business, the market share probably wouldn't dip that much.....the longer this thing stays tied up in the House, the smaller the odds are of it passing....especially if the market starts to perform better in the coming weeks....

I kind of have some respect for you, BL, but I don't exactly know what you mean by that first statement. Sure, if one of the Big 3 were to be lost, it would be expected that the remaining automakers would pick up the shares, but we should not be looking or be focused at that. It is the over all impact to the industry, and the economies of the U.S. and the rest of the world. Once again, we are talking about the loss of millions of jobs and over $150 billion in revenue to the United States. This will affect other markets since that type of loss will affect consumer spending and confidence. I think that Congress is aware of the ungency and ramifications of this bailout plan. I predict that someting will happen before the end of the first quarter of next year.

 

[Kelly]

Well I am glad you are not in Congress and whatever you say or belive doesn't matter. They are going to get bailed out wheather you like it or not.

Not according to the majority of the senate at the moment.....


Now mind you, they may come back with hat in hand and a "whatever" plan and the Democrats that are speaking against this bailout may buckle (just like the wimp Republicans did in the other bailouts)....but if they don't buckle, theres no bailout.


This has been discussed in great detail in other threads.....but my thoughts are.........let them file Chapter 11, look at their CEO and Union member packages, bring them into reality......and maybe they can get through this..

If they can't, then they can join TWA, and we can get a Southwest Airline type of company out of this deal........

 

[dnno1]

Not according to the majority of the senate at the moment.....


Now mind you, they may come back with hat in hand and a "whatever" plan and the Democrats that are speaking against this bailout may buckle (just like the wimp Republicans did in the other bailouts)....but if they don't buckle, theres no bailout.


This has been discussed in great detail in other threads.....but my thoughts are.........let them file Chapter 11, look at their CEO and Union member packages, bring them into reality......and maybe they can get through this..

If they can't, then they can join TWA, and we can get a Southwest Airline type of company out of this deal........

It will be a differnt story next year as there will be a different make-up in the senate and as I have said before Chapter 11 is not an option since nobody is giving out loans. I suggest you watch this video for an explanation.

[YT]xn_255e7ldA[/YT]

 

[BlackLantern]

I think the leadership of all 3 companies don't truly understand the reality of the situation, as evidenced by their appearances on the Hill recently....I think they won't really get it unless one of these companies goes under....maybe then we'll get some efficient auto making in the USA

 

[Kelly]

It will be a differnt story next year as there will be a different make-up in the senate and as I have said before Chapter 11 is not an option since nobody is giving out loans. I suggest you watch this video for an explanation.

White box.....very interesting......

 

[dnno1]

If we had a FairTax, GM and the auto-Industry wouldn't be seeking a Bailout, because the could sell more product, with no worries of Tax Consequence. They Wouldn't have the Tax Burden, the Burden of Cost in Tax Preperation. The Product would be cheaper to produce because they wouldn't have the Tax Component. They would be able to be more Competitive in the World Market. The Employees would be able to Save their Money instead of paying out nearly 1/3rd in Taxes before they even see their Pay Check.

Everyone knows American Workers are the most skilled and most productive in the world, but how are they expected to keep jobs here with the insane tax code we have? It's the Tax Code that forcing jobs away.

but then the government wouldn't get any tax revenue from these guys and regular guys like you and me would have to pick up the slack, which would leave us without the ability to buy any cars which would leave these corporations bankrupt anyways.

Spider, let's pretend you have a business. You make and sell Widgets. Wonderful Spider-Bite Brand Widgets. You produce these out of your house. They are amazing Widgets. It costs your $50 to make each widget, which you sell for $100 (called Key-stone Margin), you keep $50, and you get to re-invest the other $50 to build a new widget.

Now, the government comes along and tells you from now on, you have to pay 10% of your profits in taxes. What do you do?

Do you increase the price of your Widgets, to collect the extra tax? Which would mean that your Consumers would have to pay more for your widgets.

Do you just skim it off the top of your profits? Well, that's a 10% reduction in your annual Net Income.

Do you purchase cheaper parts to make your widget? That would mean that your Original Vendor loses out of your purchase, AND your consumers are getting inferior products.

So, when a Manufacturer has to pay taxes, where does the Money come from?

It comes from the Consumer or the Employees of your Vendors, or from your Employees itself. If you had any. Corporations DON'T pay taxes, they forward it from the Consumer.

So, this bull about the Government making us pick up the slack? We already are stuck with it.

Everytime we purchase ANYTHING, from Candy Bars to Hybrid Cars, Eggs to Xboxes, we pay the Manufacturer's Tax Bill. That's you and me and everyone else in this country.

Now, if you reduce GM's Tax Bill, they can sell their vehicles at a reduced price, they can sell more vehicles overseas. They can be more competitive in the Market. THAT is a way to keep them in business, not just handing them Billions upon Billions of dollars, they didn't earn, to keep following a Failed Business Plan, so they can be in the same boat in a few years, but where EVERY taxpayers is just further and further in debt.

The Consumer Confidence Index (which fluctuates) would dictate the amount of revenue that the government takes in with a Fair Tax/consumption tax scheme. I don't think that is a good idea. In addition, GM et. al. would still have a hefty tax bill since they would be paying 40% of the $186 billion in costs and expenses that they paid last year (for example). Under the current tax system, GM only paid a little more than $37 billion. I would stay with the current tax system. There is no really good reason to change it. As for SupermanBeyond's senario about the widgets, it is true that a business would just transfer the tax on to the consumer, but should we really care? The consumer got something for his money and if he was willing to pay the extra expense, then it was wourth it to him/her. Furthermore, you also need to consider the fact that some of those purchases did not necessarily come from an American taxpaying citizen, but from a foriegner. In a Fair-Tax/consumption tax scheme there may be an exception made to the foriegner for that value added tax (or VAT as some would call it), which would allow them to get their money back for it. Like I said before, I dont't think that is a good Idea and in certain circumstances Spider-Bite would be right in that the Government may get less in revenue.

 

[Spider-Bite]

Correction: It will help these guys compete for about six months until they are forced to declare bankruptcy anyway, since no amount of money can repair flawed business strategies if the guys at the top aren't.

I should have been more specific. The government could come up with a good business strategy for them and say it comes with the deal. You get the money so long as you agree to this. They also might choose to do it themselves out of a desire to not go bankrupt.

That won't happen.

they might not be able to since they still have to compete with somebody even if it's not us. But foreign japanese automakers could merge for all we know.

I'm not saying it will happen. Just the possiblity. I could be wrong. I'm going to ask my economics professor tomorrow and try to get more insight. He personally supports bail outs but he says only if they are done right.

And this guy isn't a far left liberal. He's voted republican many times, although not for McCain or Bush, but like other economists he knows that if too many corporations go bankrupt we could end up with a 75% unemployment rate.

 

[The Senator]

I should have been more specific. The government could come up with a good business strategy for them and say it comes with the deal. You get the money so long as you agree to this. They also might choose to do it themselves out of a desire to not go bankrupt.

The problem is, though, there is no guarantee these companies will actually abide by the regulations set forth by Congress. Nor is there any guarantee they will adhere to those standards soon enough to make much of a financial impact. It's like betting a Bentley on whether Mr. Jenkins's 1962 jalopy will make it up Mount McKinley without falling to pieces; it doesn't make sense business-wise for the government to pour money into a failing business when it is most likely going to fail regardless of the bailout.

they might not be able to since they still have to compete with somebody even if it's not us. But foreign japanese automakers could merge for all we know.

Doubtful. The Japanese automobile companies are not going to merge because then there would be little competition in Japan. Japan, by the way, has similar monopoly laws as the United States and forbids a single company from dominating the market, so that makes such integration legally impossible.

 

[Spider-Bite]

Spider, let's pretend you have a business. You make and sell Widgets. Wonderful Spider-Bite Brand Widgets. You produce these out of your house. They are amazing Widgets. It costs your $50 to make each widget, which you sell for $100 (called Key-stone Margin), you keep $50, and you get to re-invest the other $50 to build a new widget.

Now, the government comes along and tells you from now on, you have to pay 10% of your profits in taxes. What do you do?

Do you increase the price of your Widgets, to collect the extra tax? Which would mean that your Consumers would have to pay more for your widgets.

maybe, maybe not. My consumers are only willing to pay so much before it's not worth it. I also have to compete with other widget manufactures.

Do you just skim it off the top of your profits? Well, that's a 10% reduction in your annual Net Income.

I might.

Do you purchase cheaper parts to make your widget? That would mean that your Original Vendor loses out of your purchase, AND your consumers are getting inferior products.

So, when a Manufacturer has to pay taxes, where does the Money come from?

It comes from the Consumer or the Employees of your Vendors, or from your Employees itself. If you had any. Corporations DON'T pay taxes, they forward it from the Consumer.

So, this bull about the Government making us pick up the slack? We already are stuck with it.

Everytime we purchase ANYTHING, from Candy Bars to Hybrid Cars, Eggs to Xboxes, we pay the Manufacturer's Tax Bill. That's you and me and everyone else in this country.

Now, if you reduce GM's Tax Bill, they can sell their vehicles at a reduced price, they can sell more vehicles overseas. They can be more competitive in the Market. THAT is a way to keep them in business, not just handing them Billions upon Billions of dollars, they didn't earn, to keep following a Failed Business Plan, so they can be in the same boat in a few years, but where EVERY taxpayers is just further and further in debt.

We did reduce their tax bill. They got a huge tax cut under George Bush. Their cars were still too expensive and they are still going bankrupt. Your theory about reducing their tax burded was already put into practice.

The truth is that under a fair tax plan I wont have to pay any taxes on the income I make. I'll get to go without paying taxes I otherwise would have to pay. Take into consideration that as a business man I don't spend every penny I earn. I invest it into the stock market or put it away. Consumers don't have that luxury. Basically, I would get away with not paying most of the taxes I pay now, and they would have to pay more than they do now.

Bill Clinton raised taxes on the wealthy and the economy was great. Bush lowered them and it didn't help the economy one bit.

Prices aren't based solely on taxes. They are based on consumer ability and willingness to pay as well as demand.

I don't claim to be an expert on the economy. That's why I look to what the experts have to say and take into consideration. It's like medical science. I don't ignorantly take it upon myslef to determine what causes cancer. I ask the experts and then make a judgement based on their findings. Economists largely agreed that Mike Huckabee's fair tax plan would shift the blance of wealth in this country in favor of the wealthy. Based on that I say it's a bad idea.

Your assuming that your right and the experts are wrong. These types of ignorance bubbles, where you reject outside information as false, even when it comes from people more qualifed than you, are what cost the republican party their power.