Gutierrez: 'dangerous to have Washington tell these companies how to run their bus'

[paddyk]

"We don't want to get into prescriptions, and I think it would be dangerous to have Washington tell these companies how to run their businesses," Mr. Gutierrez said. "But there are areas that we understand come up as opportunity areas [for the companies] to get more competitive and to ensure they are viable . . . Everything we read and have studied in the industry suggests in some cases that [their dealer networks] could represent a cost level that makes them not competitive and that requires more working capital than their competitors. But they need to be the ones that come back and prove whether we are right or wrong."

http://online.wsj.com/article/SB1228...oo_hs&ru=yahoo

[johnny smallblock]

"I think it would be dangerous to have Washington tell these companies how to run their businesses," Mr. Gutierrez said.

But Washington has that right when you need to borrow $25b from them.

[61BelAir]

The economy is already helping with the closure or dealerships. There are quite a few of them around here that are closed and there are more to follow.
The other day I was on the freeway and I noticed a relatively new Ford Dealership located next to the freeway was closed.

[K-1]

Originally Posted by johnny smallblock

But Washington has that right when you need to borrow $25b from them.

Does your mortgage lender have a right to tell you how to run your "business" (i.e. family)? Unless the gubmint is taking a majority stake in the company, all they have a right to is repayment of the loan in cash or secured assets.

[GMusa]

Well "these companies" cant run them in the first place!

[joemac]

These elected officials act like they can run a business. A quick peek into government financials, every year they spend more than than collect in revenue, their debt has been increasing year after year after year, currently at at $10 trillion. There's not another business alive who operates with that much debt or that bad of a balance sheet. Now what's that about you were telling me about a successful business model.

It was the government and their greedy fat cat wall street buddies who had some grand idea to keep relaxing qualifications for home mortages, this really hit home after Katrina, suddenly every vicitim qualifies under a NINJA (No Income, No Job, No Assets) noooo problem, everyone qualifies for a $350k mortage. Then shockingly the homeowner can't pay the mortage and disappears like a ninja never to be seen again. Duh!

This tumble locks up credit markets, effects companies and economiies of all scales, then the same people that started this mess seem to know how to run everything. Lord help us if we're relying on these people to help correct the ships course, yes the same people that ran it to ground, are now the going to be the heros that get us back on course.

[NMCarNut]

Right on! How can we possibly expect congress and the administration (both present and new) to "guide" us out of this mess. The same pack of liars, cheats, and buffoons (sorry, as a current Senator, Obama is included) that helped us in our current mess?
While GM management and the Unions should share their part of the blame one important fact is being overlooked. Until the recent spike in fuel prices the US was buying, even demanding, every gross-pig truck and SUV the manufacturers could belch out. Heck, even Toyota and Nissan had started the madness because the market was so good. Not to mention the bigger and bigger SUVs from Honda and even Porsche(!), for goodness sake. So certainly part of the blame goes to the good old American consumer and to a greater extent our wonderful bunch of elected officials.
Every administration (republican and democrat alike) have been hopelessly remiss for not developing a semblance of an energy policy going back at least to the energy crisis in the early 70s. Instead we get CAFE and other drivel that puts demands on the manufacturer with little or no change in consumer demand. A simple gasoline tax (much as I hate taxes) if it were phased in back in the 70s as some suggested would have done more to prevent the problems we have today than all the other crud passed, combined, since.
Then to top it off the US has safety and emission regulations that are inconsistent with the rest of the world resulting that some of the good stuff sold elsewhere having a costly path or no prayer of ever making it here. And adding to the madness some are suggesting that each state should be free to set any standard they desire?!?
Yea, with Washington more in command, Lord help us.

[baloo]

Why is it dangerous, because the companies could go bankrupt? Oh wait...

Originally Posted by K-1

Does your mortgage lender have a right to tell you how to run your "business" (i.e. family)?

No, but he can specify under which conditions you will get a loan, and the government is doing the same thing. The government could tell GM to paint their headquarters yellow if they felt like it, GM can take the deal or not.

[paul8488]

This is why I hope Ford can make it through without loans... if they do I'd love to see them say "Thanks for the memories" and pack up and move all of their operations to Canada.

[King Riffle]

Lol, I thought this would be about Greyhound.

[Carver]

Originally Posted by K-1

Does your mortgage lender have a right to tell you how to run your "business" (i.e. family)? Unless the gubmint is taking a majority stake in the company, all they have a right to is repayment of the loan in cash or secured assets.

That's how it is with businesses. If you are desperate for a loan, or for an equity infusion, the people providing the capital can, and often do, make certain stipulations; they want some assurances as to how the business is being run and what they're going to do with the money. So the public has every right to make certain demands of GM, Citigroup, etc.

[ksr]

Washington can only make it worse if they start telling them how to run the industry.

They've already been telling them how to run it with things like CAFE, which by itself has had an incredibly destructive impact by destroying the Big 3's bargaining power with the UAW off at the knees.

Why do a lot of people think government is the answer to things? Their track record, basically hurting everything they touch, is pretty horrendous.

You have Congress talking down to these CEOs about running their companies into the ground. Has anyone checked the government's balance sheet recently?

[ksr]

The loan repayment by 2012 or 2013 of this money would be great. Maybe the government can actually make some money off this deal.

If the economy turns around, I think that's very possible. With the new UAW contract and possible further concessions, GM could make a ton of money if they can get past the current situation.

There's going to be a lot of pent-up demand.

[zete]

I had to laugh at that. Why, isn't CAFE telling them how to run their business instead of letting the market drive their business?

Hee hee. I needed a good laugh this AM.

[paul8488]

Originally Posted by ksr

If the economy turns around...

I was thinking about this today. In the best case just how fast could the economy recover? What would have to happen? Even if things don't get worse, I'm curious how long it would take before they get better. House prices won't jump right up, gas prices are already low compared to this past summer, people are still drowning in debt... what on earth is it going to take to get world economies back into shape? I see this crisis lasting a very long time, even if it stabilises and doesn't get worse. Hate to be pessimist, but I don't see it going any other way.