GM Inside News Forum banner
1 - 20 of 26 Posts

·
Registered
Joined
·
2,341 Posts
Discussion Starter · #1 ·
There are several statements in this article that illustrate why government involvement/regulation results in never ending costs to taxpayers.

General Motors Corp.'s top executive was on Capitol Hill Friday urging Congress to back $25 billion in low-cost government loans to help the auto industry build more fuel-efficient vehicles, but he faced skepticism from some legislators and the White House.

GM chairman and CEO Rick Wagoner denied that automakers were seeking a bailout as some critics have claimed, and urged Congress to "very quickly" approve the loan package.

"It's certainly in the interest of everybody to get the funding done," Wagoner said, calling the loans "tremendously helpful" to the company's future. "We're signed up to do what we committed to do as an industry and hope the $25 billion is funded."

"I'm not here today ... asking for any bailouts," he told members of Congress.

Automakers have slightly shifted tactics, saying they don't need the money to avoid bankruptcy, but rather Congress needs to live up to its end of the deal when it created the program by including it in the energy bill passed in December, but not funding it. They've also moved away from asking for $50 billion in loans.

"There's a strong case," said Sen. Carl Levin, D-Detroit. "There was a recognition you had to have support in order to achieve" the fuel efficiency increases. "This was part of a package."

http://www.detnews.com/apps/pbcs.dll/article?AID=/20080913/AUTO01/809130334/1148
 

·
Registered
Joined
·
7,394 Posts
"I'm not here today ... asking for any bailouts," he told members of Congress.
That's a load of BS! I hope Congress has the balls to tell him that the loans will be contingent on his resignation. The Big 3 need to address their inept management before the Government throws a penny their way.
 

·
Banned
Joined
·
2,364 Posts
That's a load of BS! I hope Congress has the balls to tell him that the loans will be contingent on his resignation. The Big 3 need to address their inept management before the Government throws a penny their way.
couldn't agree more. there is to be no end to the financial bleeding and irresponsibility until change is made at the top. Red Ink Rick has had way more than ample time to "turnaround" GM. he has failed miserably and made to suffer are the retirees losing benefits, workers receiving reduced wages, suppliers going bankrupt, dealers forced out of business, and communities across America with lower tax revenues and fewer jobs. enough is enough.
 

·
Registered
Joined
·
7,798 Posts
There are several statements in this article that illustrate why government involvement/regulation results in never ending costs to taxpayers.
Agree, more proof that when government tries to "design" cars it results in failure and more money out of taxpayers pockets.

At least these will be loans and other than the insurance to "gaurantee" the loan won't cost us too much (if anything) in the end.

Just hope the Big three puts this money where it needs to go; GM needs to fund the Alpha with some of this after it pays for the programs already started like the Volt and Cruze.
 

·
Registered
Joined
·
2,341 Posts
Discussion Starter · #5 ·
Agree, more proof that when government tries to "design" cars it results in failure and more money out of taxpayers pockets.
I would argue this is true when government tries to design anything. I can't think of any government program that has ever met its stated objective and certainly not within its stated budget

At least these will be loans and other than the insurance to "gaurantee" the loan won't cost us too much (if anything) in the end.
The way this was originally explained, this program was loans of taxpayers money.

"The Detroit Three are expected to go into overdrive to push Washington to fund these loans. On Friday, for example, General Motors Corp. CEO Rick Wagoner is scheduled to participate in an energy summit in Washington, and it's likely he will address those direct government loans, as well."

Link to article:http://www.freep.com/apps/pbcs.dll/article?AID=/20080909/COL07/809090377

As to cost, even if it turns out to be a guarantee the government is still borrowing the money and paying interest on it. Several billion dollars for 25 years at 4+% is a lot of money ($3.5B for 25 years is $1.5B in interest).

"The Congressional Budget Office said the initial cost of the loans to taxpayers over the next decade would be $3.75 billion. If the loans are paid back in full over their 25-year term, however, the Treasury could end up with a profit."

Link to article:http://online.wsj.com/article/SB122124521106329063.html?mod=googlenews_wsj

Just hope the Big three puts this money where it needs to go; GM needs to fund the Alpha with some of this after it pays for the programs already started like the Volt and Cruze.
The original requirements were:

Terms of a federal loan program for factory retooling, if Congress funds it
Who is eligible: Automakers, suppliers
What they must do: Re-equip, expand or build a plant for advanced technology vehicles or components; or engineer such facilities, vehicles and parts
Which vehicles qualify: Those that get at least 25 percent better fuel economy than the average of similar vehicles and also meet emissions standards
How much is available: As much as 30 percent of a project's cost
Other conditions: Subject to rules the U.S. Energy Department is writing
Source: Energy Independence and Security Act of 2007

Now what they are asking for is to use the money any way they want. If that's what they want to do they should do it on their own nickel. In general I don't believe they should get the loans. Of course, I don't believe the government should be dictating product mix either!
 

·
Registered
Joined
·
7,798 Posts
The original requirements were:

Terms of a federal loan program for factory retooling, if Congress funds it
Who is eligible: Automakers, suppliers
What they must do: Re-equip, expand or build a plant for advanced technology vehicles or components; or engineer such facilities, vehicles and parts
Which vehicles qualify: Those that get at least 25 percent better fuel economy than the average of similar vehicles and also meet emissions standards
How much is available: As much as 30 percent of a project's cost
Other conditions: Subject to rules the U.S. Energy Department is writing
Source: Energy Independence and Security Act of 2007

Now what they are asking for is to use the money any way they want. If that's what they want to do they should do it on their own nickel. In general I don't believe they should get the loans. Of course, I don't believe the government should be dictating product mix either!
Thanks for the update on the loans

Looks like the Cruze and Volt would qualify as would a RWD Alpha with a base 2.0-2.4L I-4 since it would get 25% better than a Mustang V6 or BMW 3-series.

Same would go for a 4.5L Turbo Diesel GMT900 vs the gasoline version.

This could work out well for GM!!

No excuse now for GM not to build the RWD Alpha - this is THE gamechanger for GM since very exciting (and efficient) vehicles can be derived from this platform, now if GM gets it's head out of you know where and offers Alpha models for at least 3 brands if not all brands (yes even ones for GMC).

I do agree that neither the Big 3 or the U.S. government should be in this position but both can also be blamed for putting themselves there - the Big 3 with mismanagement and the government with overzealous/misguided regulation.
 

·
Registered
Joined
·
2,341 Posts
Discussion Starter · #7 · (Edited)
Thanks for the update on the loans

Looks like the Cruze and Volt would qualify as would a RWD Alpha with a base 2.0-2.4L I-4 since it would get 25% better than a Mustang V6 or BMW 3-series.

Same would go for a 4.5L Turbo Diesel GMT900 vs the gasoline version.

This could work out well for GM!!

No excuse now for GM not to build the RWD Alpha - this is THE gamechanger for GM since very exciting (and efficient) vehicles can be derived from this platform, now if GM gets it's head out of you know where and offers Alpha models for at least 3 brands if not all brands (yes even ones for GMC).

I do agree that neither the Big 3 or the U.S. government should be in this position but both can also be blamed for putting themselves there - the Big 3 with mismanagement and the government with overzealous/misguided regulation.
I'm not sure the Cruze and Volt would qualify as they are done. The Alphas probably would. How much is known about the Alpha platform?
 

·
Registered
Joined
·
666 Posts
Red Ink Rick . . . has failed miserably and made to suffer are the retirees losing benefits, workers receiving reduced wages, suppliers going bankrupt, dealers forced out of business, and communities across America with lower tax revenues and fewer jobs. enough is enough.
I'd like to add the customers have suffered, too, with mediocre or disappointing product. Did you hear that they said there's no money for a new Buick Riviera? And what year will Buick NA product be aligned with Buick China? 20-never?
 

·
Registered
Joined
·
8,861 Posts
What an embarassing display on Wagoner's part. Can you imagine successful corporate leaders like Buffett or Welch going before Congress begging for money? I would be so embarassed going to Washington and doing such a thing. How shameful!

Wagoner rejected suggestions that GM caused its own woes by focusing too much on trucks and SUVs. "I think's it silly to say we should be punished for having done the best trucks," he said.
On so many levels this is absolutely perfect insight into why GM continues to struggle.

...White House spokesman Tony Fratto told reporters that Congress should be "very careful" before approving the loans.

"Obviously, we want to be very, very careful about the government's role with private enterprise out there," he said. "There are lots of industries that are dealing with challenging economic conditions, and it's always important to be very cautious about the federal government's role."
Yup.

Of course, the White House has not taken anywhere near a similar approach with Stearns and Fannie and Freddie. We'll see what happens with Lehman.
 

·
Registered
Joined
·
8,904 Posts
Of course, the White House has not taken anywhere near a similar approach with Stearns and Fannie and Freddie. We'll see what happens with Lehman.
:lmao::lmao: And Washington Mutual, and National City and Goldman Sachs and Citygroup and and...
 

·
Registered
Joined
·
4,883 Posts
That's a load of BS! I hope Congress has the balls to tell him that the loans will be contingent on his resignation. The Big 3 need to address their inept management before the Government throws a penny their way.
I totally agree with 2 additional provisos: 1. That General Motors will not pay one dime in severance pay to TOP Executives. 2. That new management demonstrate a workable model /business plan to turn around the company and re-pay the loans . Most of us have to show the ability to re-pay, in order to obtain a low interest (prime) loan. We already know that the sub-prime loan, means you lose everything!

I am so tired of the bailouts working as "Golden Parachutes" to inept or even corrupt management. Prosecutions should be initiated on Directors for: Stock manipulation, Fraud, and collusion to defraud, with appropriate Civil/Criminal Penalties and compensatory (punitive) jail Time. If no agreement to that, let the businesses fail, and open the option for the stockholders to go after the assets of the culpable directors.

No citizen in this country should ever be liable for the debts of others of which they can have no voice, or contact with.

Sidebar: The Architects that were shown to be negligent in that earthquake a few years ago in a Russian province, where all those fairly new buildings came down (costing thousands of lives, and billions in damages), paid the consequences: The were publicly disgraced, and then executed!

:drive:
 

·
Registered
Joined
·
8,904 Posts
I totally agree with 2 additional provisos: 1. That General Motors will not pay one dime in severance pay to TOP Executives. 2. That new management demonstrate a workable model /business plan to turn around the company and re-pay the loans . Most of us have to show the ability to re-pay, in order to obtain a low interest (prime) loan. We already know that the sub-prime loan, means you lose everything!
As someone who is ANTI-bailout of ANYTHING... even I could vote for a deal like that!
 

·
Registered
Joined
·
7,798 Posts
I'm not sure the Cruze and Volt would qualify as they are done. The Alphas probably would. How much is known about the Alpha platform?
Based on specs from the Torana concept the Alpha is about the same size as the current 9-3 (183" L and 70" W) but may be as long as the current Malibu since it has the same 112" WB so it can be projected that a properly engineered Alpha would be about the same weight as the Malibu (which is a bit heavy itself).

If the Alpha is close to the weight and size of the Malibu and given that the CTS and Malibu have the same EPA MPG ratings for 3.6L powered models that an Alpha with a 2.0 - 2.4L engine and 6-speed auto should be able to achieve 32-34 MPG making it the required 25% better than competitive models.

Remember higher performance models should have to achieve the same 25% over cars like the M3 so there is room for some great cars here.
 

·
Registered
Joined
·
92 Posts
One thing to consider with the bear sterns bailout is that Bear Sterns was taken over by JP Morgan in the process, and I read 2/3rds of Bear employees are getting fired essentially. With Bear share holders losing over 90% of the value of their stock from a year previous.

JPM was given a sweet deal with the cushion from the fed, but JPM is also the strongest of the banks and is profitable, it didn't make the bad bets.


That said I support the loans for the auto companies, because it was the government who changed the rules with the CAFE legislation.
 

·
Registered
Joined
·
2,341 Posts
Discussion Starter · #16 ·
Based on specs from the Torana concept the Alpha is about the same size as the current 9-3 (183" L and 70" W) but may be as long as the current Malibu since it has the same 112" WB so it can be projected that a properly engineered Alpha would be about the same weight as the Malibu (which is a bit heavy itself).

If the Alpha is close to the weight and size of the Malibu and given that the CTS and Malibu have the same EPA MPG ratings for 3.6L powered models that an Alpha with a 2.0 - 2.4L engine and 6-speed auto should be able to achieve 32-34 MPG making it the required 25% better than competitive models.

Remember higher performance models should have to achieve the same 25% over cars like the M3 so there is room for some great cars here.
It sounds as if Alpha is Delta II size or larger. If so whats the point? Wouldn't it over lap both Delta II and Epi II? What is GM's plan for a "B" class car and/or a super mini?
 

·
Registered
Joined
·
336 Posts
Getting rid of the franchise laws that won't allow gm to close dealerships as needed to meet market conditions or any laws that have made US automotive un-competitive should be considered. If this is a bail out then tax payers should expect something in return.
 

·
Registered
Joined
·
7,356 Posts
That's a load of BS! I hope Congress has the balls to tell him that the loans will be contingent on his resignation. The Big 3 need to address their inept management before the Government throws a penny their way.
I agree when it comes to GM and Chrysler, but I certainly wouldn't want to see Ford have to get rid of Mullaley, who is basically doing everything right and who will save Ford.
Wagoner, however, needed to be fired yesterday.
These loans are important and are needed, however, and I feel should be given.
We are the only country that does not actively help their companies. In a Global economy, which the Feds forced upon us, it is necessary to compete with other countries. It's not only about companies competing with other companies anymore.
 
1 - 20 of 26 Posts
Top