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http://money.cnn.com/2008/11/03/new...d_taylor.fortune/index.htm?source=yahoo_quote

NEW YORK (Fortune) -- With an optimism that verged on foolishness, the African hunter stood his ground, aimed his rifle at the charging elephant and declared, "Now I have you just where I want you."

In that way, the stampede of bad news bearing down on General Motors may be just what the automaker wants as it struggles to stay in business. Perhaps Charles ****ens and P.T. Barnum best expressed the sentiment: every cloud has a silver lining.

First, the cloud:

The Treasury Department was reported Monday to have turned down a request for up to $10 billion in additional financial aid to help GM finance a hookup with Chrysler.

GM has apparently been arguing that it needs to merge with Chrysler to gain additional economies of scale and get access to Chrysler's cash. It needed the government money to stay liquid until the deal closed.

But Treasury decided that, at least for now, its $700 billion rescue program only applies to financial institutions, not metal benders like GM.

On Monday afternoon, GM (GM, Fortune 500) confessed to its worst month in memory. Car and truck sales in October plunged an almost unimaginable 45% from a year earlier.

The gloom emanating from the GM conference call was palpable, with market analyst Mike DiGiovanni calling the situation "very dire," "horrific," and something "we can't sustain."

GM blamed the collapse on plummeting consumer confidence in the wake of the credit crisis, and the inability of its finance arm, GMAC, to underwrite loans to any but the most financially respectable customers.

Dems may be friendlier to Detroit
So where's the silver lining? How do these events play into GM's hands?

On Tuesday, barring an unforeseen event, a Democrat will be elected president, along with a Democratic Congress. Both are likely to be more receptive to a GM bailout than a Republican president-elect and a lame-duck administration. And GM's abysmal sales of late - worse than Ford's or Chrysler's and almost any foreign automaker - make it appear to be a true charity case.

Like President Franklin D. Roosevelt in 1932, the new president will want to make a big splash to restore confidence and create a sense of forward progress. What could be more dramatic than coming up with a rescue plan for the fading icon of American industry?

Then there's the influence of the United Auto Workers, a traditional pillar of Democratic politics. While the union doesn't have the size or the muscle it once did, it will certainly be able to make its voice - and its interests - felt.

Don't touch Chrysler
One of the conditions of a government deal, however, ought to be that GM keep its hands off Chrysler.
 

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If the next president, whether Obama or McCain, really wants to make a statement, he would allow GM to file for bankruptcy. Ford (F, Fortune 500) and Chrysler would quickly follow so that they, too, could share in the cost savings and leaner operating profile that would result.
Of course I hope they realize that there's a chance that GM may not come back. I mean if you cant get the import driver to your dealer now, how are you going to do it when people think that youre going out of business and the car they purchase will not be serviced should anything happen?

Technically it should be Chrysler, GM, Ford (in that order) that line up for bankruptcy should anything go wrong.

No one company would be forced to suffer undue public shame, and they could all emerge as stronger and potentially profitable entities. Tired old brands, and with them tired old dealers, would disappear, so that the companies' remaining resources could be focused on those products and dealers with the greatest strength and staying power.
This has been thrown around a lot here. File for bankruptcy, dump underperformed brands and dealers and come back leaner. Does CNN get it or do they want to get rid of GM?

Bankruptcy appears to have worked for the airlines. Why not try it for the auto companies too?
Because American Airlines did not try to buy Delta at a cheap price. I bet if Chrysler goes to bankruptcy, Nissan would be there to buy their truck division at a cheap price. Another thing, theres more car brands than there is Airline companies. I think some people have to use a bankrupt airline since thats the only airline flying in a certain destination.
 

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Government Credit does not mean GM will not pay. If you take all the jobs that relate to GM, it would be a shame for the US government not to avail them a credit line, with favorable terms.

How are things in Japan, especially for the smaller automakers, like Suzuki, Isuzu, etc?
 

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I was reading a report this month that if obama gets elected it will result in 800,000 fewer cars sold per year as the higher wage earner won't be buying their 16 year old a new Mustang or CTS. It's what happens when the trickle down faucet gets turned off. Lay offs increase.
 

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If the government decides to do that, they should have the top executives in GM removed and replaced. They really need fresh management in order to run the company in times like today. Also, GM needs not merge with Chrysler. That should be killed ASAP. GM already has too many brands as it is. GM needs to learn to function with less brands:
Chevrolet
Pontiac/Buick
Cadillac

Hummer/Saab are sold
GMC is for only professional trucks
Saturn is killed and absorbed by Pontiac/Buick
 

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I was reading a report this month that if obama gets elected it will result in 800,000 fewer cars sold per year as the higher wage earner won't be buying their 16 year old a new Mustang or CTS. It's what happens when the trickle down faucet gets turned off. Lay offs increase.
Last time I checked:
The local high school parking lot is filled with compacts and small SUVs. Maybe a few used Mustangs and no CTSs. I really dont think Caddy is targeting the freshly permitted 16 year old as their savior.
Trickle down only works when banks are willing to loan money. Right now they're not.

Cheers
Brett
 

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Last time I checked:

.
The local high school parking lot is filled with compacts and small SUVs. Maybe a few used Mustangs and no CTSs. I really dont think Caddy is targeting the freshly permitted 16 year old as their savior.
Trickle down only works when banks are willing to loan money. Right now they're not.

Cheers
Brett


Does anyone have a resource to estimate overall US industry contraction? As new car sales decline, used car prices are declining which makes a more compelling offer (Would you take an 07 Malibu for a $8000 discount from new? I would.) GM new sales went down 45% but that do not necessarily guarantee that the market is gone.

Thoughts?
 

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the country is pretty much screwed no matter how you look at it. Obama or McCain won't make a lick of difference. And the last time there was both a democratic congress and president, everyone payed through their teeth.

You want taxation out the ying yang... your gonna get it. Be careful what you all wish for.
 

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If the government decides to do that, they should have the top executives in GM removed and replaced. They really need fresh management in order to run the company in times like today.
That or amazingly enough, all the management teams are doing a great job, just you cant see it because of the legacy costs still hanging around from the 40s & 50s & 60s & 70s. Because we all know people like Buickman & Bokl believe that Wagoner etc have been responsible for every single decision GM has ever made.
 

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That or amazingly enough, all the management teams are doing a great job, just you cant see it because of the legacy costs still hanging around from the 40s & 50s & 60s & 70s. Because we all know people like Buickman & Bokl believe that Wagoner etc have been responsible for every single decision GM has ever made.
Ok did somebody from 60 made decision to invest all of their money in SUVS and Trucks and Big heavy crossovers and ignore cars, make fun of hybrids saying that americans will not buy economy car unless price of fuel is at $8 per gallon. Or was that rick????? Is quality #1 priority under rick???? NO. This is why gm is losing customers. Wake up and face reality.
 

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I just hope GM has enough cash to sustain itself until things like the cruze and volt are on sale. Hopefully the traverse will make them some money and they'll sell a lot of it. Oil prices being down might net a few more truck sales too.
 

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Let's keep the partisan political crap clear of this thread please. otherwise it will be locked and users will be infracted...


GMCSonoma/GMI Staff
Thank you!
 

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I"m just waiting on the second coming of Harley Earl and Bunkie Knudsen to save GM...
 

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I guess the part I'm missing is why do we think that giving GM a bailout would help anything ?
GM has been in the midst of a "turnaround plan" for years. The results have only gotten worse, not better.
Turnaround plans have not, and will not work for GM. GM doesn't need a diet. They need a whole new body.

Right now, GM is not configured to be profitable business entity. Throwing bailout cash at GM will not fix this.

Bankrupcty would allow the leadership of GM to recast the company from the ground-up to be a profitable business proposition.
 

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Ok did somebody from 60 made decision to invest all of their money in SUVS and Trucks and Big heavy crossovers and ignore cars, make fun of hybrids saying that americans will not buy economy car unless price of fuel is at $8 per gallon. Or was that rick????? Is quality #1 priority under rick???? NO. This is why gm is losing customers. Wake up and face reality.
Nope, but they did offer pensions and health care for life. Until either GM offloads those pension/healthcare expenses or all the recipients of said benefits pass away GM is going to be stuck with these additional costs.

Try running a marathon with an extra 20lbs on your back, doesn't matter how good a physical shape you are in you are not going to be able to perform as well as any comprable competitor. GM's obligations decided upon many decades ago before most people on this site were even born do nothing to help make GM a strong nimble company.

GM loses the excess baggage of these expenses and they could pretty quickly up the ante on Toyota, Honda etc in regards to lowering their vehicles prices, increasing the content etc or a combination of the lot.
 

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Nope, but they did offer pensions and health care for life. Until either GM offloads those pension/healthcare expenses or all the recipients of said benefits pass away GM is going to be stuck with these additional costs.

Try running a marathon with an extra 20lbs on your back, doesn't matter how good a physical shape you are in you are not going to be able to perform as well as any comprable competitor. GM's obligations decided upon many decades ago before most people on this site were even born do nothing to help make GM a strong nimble company.

GM loses the excess baggage of these expenses and they could pretty quickly up the ante on Toyota, Honda etc in regards to lowering their vehicles prices, increasing the content etc or a combination of the lot.
And Toyota/Honda built profitable car companies while having to ship cars here from half way around the world.

No offense, but I think everybody has grown tired of the same old GM excuses...
 
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