GM Inside News Forum banner
1 - 20 of 24 Posts

·
Registered
Joined
·
3,557 Posts
Discussion Starter · #1 ·
GM, Ford gain after analyst says bankruptcy worries to ease

By Shawn Langlois
Last update: 2:25 p.m. EDT Sept. 11, 2008Comments: 10
SAN FRANCISCO (MarketWatch)
4:01pm 09/11/2008

GM and Ford Motor Co. both saw their stocks buck early market weakness Thursday after J.P. Morgan said an expected $25 billion in loans would dramatically ease concerns of potential bankruptcies. Analyst Himanshu Patel said it is becoming more likely that the troubled auto industry will receive significant federal loans in the near future, with both presidential candidates supporting at least $25 billion in funding. Patel said GM's risk profile, in particular, should improve markedly. GM's stock jumped 8.3% while Ford's gained 5.1%

More here: http://www.marketwatch.com/News/Story/Story.aspx?guid={58D2AF2C-5602-4C8F-80BB-79D9FE8B7848**&siteid=yhoof2
 

·
Registered
Joined
·
3,557 Posts
Discussion Starter · #2 ·
GM and Ford shares rise on federal loan optimism
Thursday September 11, 3:16 pm ET
Shares of GM and Ford get a boost from expectations of government loans

NEW YORK (AP) -- Shares of General Motors Corp. and Ford Motor Co. soared Thursday on investor optimism about the cash boost they could get from a proposed $25 billion in federal loans.
In afternoon trading, GM shares rose $1.23, or 10.8 percent, to $12.65. Ford shares added 22 cents, or 4.9 percent, to $4.69.

JPMorgan's Himanshu Patel said the proposed federal loan program to help the U.S. auto industry modernize its plants would reduce the risk of bankruptcy at the former "Big Three" companies.

Patel said it is becoming increasingly likely that the industry will receive significant federal loans in the near future, with both presidential candidates supporting at least $25 billion in funding.

The analyst said the proposed $25 billion would be of particular help to General Motors Corp., because the loans would reduce its dependance on the capital markets.

More here: http://biz.yahoo.com/ap/080911/autos_mover.html?.v=1
 

·
Banned
Joined
·
6,540 Posts
Dear Ford and GM,

The Constitution does not permit the US Federal Government to lend you one dime. Save your own selves. I know, Ford, you've got your act together and have a leader who inspires and does what he says he does. GM, I know you have leadership that is self-absorbed, delusional, lying, and hasn't produced a result worth spit since cashing their first paycheck.

The American industry should seek private capital infusion. There is no Constitutional basis which gives Congress the power to lend them money - our money.

Signed, American Taxpayer
 

·
Registered
Joined
·
131 Posts
When was the last time that anyone of the Big 3 turned a profit? That's what makes it a joke.

So how much has the Japanese Government given Toyota and Honda over the years in loans, grants and other indirect subsidies as well as tax breaks? As well as keeping the Yen artificially low to encourage other countries to import their products?

Eventually the Big 3 will be profitable, high fuel costs and a huge drop in truck sales hopefully was the wake-up call.
 

·
Premium Member
Joined
·
9,366 Posts
The whole "loan" term is a joke. We're talking about $50 billion as a gift, the Big 3 have no capacity to pay "loans" back.


Kind of like the "gift" the government gave to Chrysler? :confused:
 

·
Registered
Joined
·
3,438 Posts
The whole "loan" term is a joke. We're talking about $50 billion as a gift, the Big 3 have no capacity to pay "loans" back.
The loan will define the terms of repayment. You're delusional if you think the feds are going to give billions to the auto industry and not ask for it back.
 

·
Registered
Joined
·
667 Posts
So how much has the Japanese Government given Toyota and Honda over the years in loans, grants and other indirect subsidies as well as tax breaks? As well as keeping the Yen artificially low to encourage other countries to import their products?
Too right!

The Japanese government has used every trick in the book - and written a lot of new ones - to help their auto industry expand since WWII. The Koreans have basically copied their play-book.

What the heck is wrong with the federal government helping out the US industry in the hour of its greatest need?? This is the most important industry in America, for crying out loud, and one on which many communities, especially in Michigan and the Midwest utterly depend?

I mean, that amount of money, large as it is, is only a few weeks funding for that terrible, illegal and pointless folly in Iraq. That costly tragedy is wholly counter-productive, whereas a loan to stabilise the Big Three can only help America's long term interest.

Let's try a little bit of Japanese-style pragmatism, shall we, or we will soon wind up as a Third World country, albeit one with a lot of weapons.
 

·
Registered
Joined
·
2,667 Posts
Apparently, all that GM and Ford are capable of right now is of restructuring debt, continuing to downsize in North America, and hope for better days... I'm not as optimistic as I was a couple of years ago...
 

·
Registered
Joined
·
620 Posts
So how much has the Japanese Government given Toyota and Honda over the years in loans, grants and other indirect subsidies as well as tax breaks? As well as keeping the Yen artificially low to encourage other countries to import their products?
I agree, but that is expected, what I do not like is our government giving foreign companies subsidies to move factories, ship parts to tariff free zones, discounted land (or free), tax abatements, etc....the US government's job is to ensure that our companies are supported, and I am not talking "bail outs" (to the layman they are loans) which american company haters call them. I am talking about all of the mandates, pollution, healthcare, unions, etc...GM FORD and Chrysler saved our bacon in WWII, I expect us to return the favor and stop giving tax dollars or advantages to foreign companies!
 

·
Registered
Joined
·
8,869 Posts
GM, Ford gain after analyst says bankruptcy worries to ease

By Shawn Langlois
Last update: 2:25 p.m. EDT Sept. 11, 2008Comments: 10
SAN FRANCISCO (MarketWatch)
4:01pm 09/11/2008

GM and Ford Motor Co. both saw their stocks buck early market weakness Thursday after J.P. Morgan said an expected $25 billion in loans would dramatically ease concerns of potential bankruptcies. Analyst Himanshu Patel said it is becoming more likely that the troubled auto industry will receive significant federal loans in the near future, with both presidential candidates supporting at least $25 billion in funding. Patel said GM's risk profile, in particular, should improve markedly. GM's stock jumped 8.3% while Ford's gained 5.1%

More here: http://www.marketwatch.com/News/Story/Story.aspx?guid={58D2AF2C-5602-4C8F-80BB-79D9FE8B7848**&siteid=yhoof2
So much for our candidates being for free markets as opposed to big government. Let's see, I can expand government under Obama/Biden, or I can expand government under McCain/Palin. Oh joy!

And I do love the "America First" arguments that the Japanese government helps out its auto industry so the U.S. should follow suit with duplicate measures. I do think U.S. government can very substantively aid American companies (and it should), but I think it would be better done in the form of less taxation and less burdensome legislation combined with a true commitment to education of our citizenry (to lift us from just one slot above Mexico's educational standards!). That would be a fantastic start. And it would mean much more than a tired, uninspired tax break or loan.

It's interesting and simultaneously frustrating to watch the whole mentality of America change. There seems to be a mindshift from working hard, proftting from long-term investment to one where you should be able to take all the risk you want, and the government should take the responsibility of providing a safety net. The number one reason by far for the failure of Detroit is Detroit itself. The number one way in which Detroit will return to greatness is Detroit itself. When you look at cars with great promise, the ones that stand right up against their import competition (the CTS and Corvette come to mind), you will readily see that the government had absolutely nothing to do with the design, engineering, manufacturing or marketing [and subsequent success] of these great vehicles. It came all from within Detroit. There's a lesson in there that America keeps forgetting.

The message to the auto industry (and Lehman, Bear Stearns, Fannie and Freddie, and poor-credit borrowers) is very simple: mismanage yourself, take absolutely stupid risks, and the government-by way of taxpayers-will come and clean up the mess.

You can tell that lessons that would otherwise be learned in a real free market are completely lost with the "America First" approach to problems. I was listening to talk radio last night on the way home from work, and I heard of a new mortgage product where you bet against the future equity of your home! Absolutely priceless. Again, the message was simple: continue to use your house as an ATM, ignore the current meltdown, and continue to borrow to spend on all things material, and you know there will be another nifty $300 billion home bailout bill from Congress in the future to save you. Might be another $165 billion "wealth redistribution check" (borrowed from China to buy Chinese products) to stimulate the economy as icing on the cake.

So, please, U.S. government, continue to "save" American industry with your interventions. After all, you've got a lot of "America First" citizens (i.e., supporters of big government and social/corporate welfare) supporting you.
 

·
Registered
Joined
·
8,869 Posts
So how much has the Japanese Government given Toyota and Honda over the years in loans, grants and other indirect subsidies as well as tax breaks? As well as keeping the Yen artificially low to encourage other countries to import their products?...
Too right!

The Japanese government has used every trick in the book - and written a lot of new ones - to help their auto industry expand since WWII. The Koreans have basically copied their play-book.

What the heck is wrong with the federal government helping out the US industry in the hour of its greatest need?? This is the most important industry in America, for crying out loud, and one on which many communities, especially in Michigan and the Midwest utterly depend?

I mean, that amount of money, large as it is, is only a few weeks funding for that terrible, illegal and pointless folly in Iraq. That costly tragedy is wholly counter-productive, whereas a loan to stabilise the Big Three can only help America's long term interest.

Let's try a little bit of Japanese-style pragmatism, shall we, or we will soon wind up as a Third World country, albeit one with a lot of weapons.
...GM FORD and Chrysler saved our bacon in WWII, I expect us to return the favor and stop giving tax dollars or advantages to foreign companies!
So, what you all are saying, since you're suggesting that the U.S. government is obligated and needed to save the auto industry, is that Americans cannot run their own companies? That we need the U.S. government to save industry because industry cannot save itself? You have no faith that GM is capable all on its own of truly competitive products like the soon-to-be game-changing Volt?

Hmmm, and here I thought this would be a site of people who believed in GM/Detroit. But if you think Detroit needs the government to run its operations, that the U.S. government is an essential ingredient for success to occur in Detroit, you think Americans can't do it. Interesting.

See, I've always believed that when push comes to shove, when America has its back pressed against the wall, it will always rise to the occasion. I guess I have more faith in American ingenuity-absent the government-to find success in the bleakest of hours.

I think I am successful in life not because of the U.S. government but despite the U.S. government. When the government leaves me to my own devices, I am left to take advantage of opportunity. The risk is failure, the reward is success. I happen to prefer that scenario to one in which the government is omnipresent and simply gets in my way. I think limited government was a principle embedded in the Constitution. You can see how far from that principle-both on paper an in ideology-our nation has come. We've shifted from a state of mind where government is used to promote liberty and opportunity to one where it essentially wipes our asses. What we're left with is a lesser form of government, like those in Europe and Japan. A sad development, indeed. Ugh, the new America is pretty pathetic.
 

·
Registered
Joined
·
965 Posts
When was the last time that anyone of the Big 3 turned a profit? That's what makes it a joke.
Based on your comments, it seems like you don't think GM, Ford, or Chrysler should receive these loans. Why shouldn't the Big 2.5 receive any federal help when Toyota, the largest auto company, Honda, and Nissan still do from the Japanese government?

Yeah, Toyota, Honda, and Nissan turn a profit due to strong product portfolios, but they've also had significant assistance from Japan to help wipe out the competition in Asia, Europe, and North America. Nothing wrong with that, it's capitalism. But GM, Ford, and Chrysler should be offered assistance as well to create a more level playing field and to offset the costs of paying massive amounts of money to the health care of retired workers. (something Toyota, Honda, and Nissan really don't have to worry about since most of their workers are in countries where health care is funded and controlled by their governments.)

Now, I don't think the government should just hand out money without any expectations on getting some return. There should, and there most likely would be some serious strings attached in order assure them that the big 2.5 will turn a profit again in the US and pay off their debts.

I do think that any loan will only make the situation more serious for the companies. It will lead to more intense scrutiny to cut back redundancies within each company, seriously cut back the production of vehicles that produce 25mpg or less (GMT-900s, Ford trucks and SUVs, and a lot of the Chrysler product line) Now that tax payer money is involved, they can't keep the slow pace of change anymore. Some serious restructuring has to happen and mostly with the executives.

Hopefully, this would be serious kick in the butt rather then a pat on the head for a job poorly done.
 

·
Registered
Joined
·
667 Posts
So, what you all are saying, since you're suggesting that the U.S. government is obligated and needed to save the auto industry, is that Americans cannot run their own companies? That we need the U.S. government to save industry because industry cannot save itself? You have no faith that GM is capable all on its own of truly competitive products like the soon-to-be game-changing Volt?

Hmmm, and here I thought this would be a site of people who believed in GM/Detroit. But if you think Detroit needs the government to run its operations, that the U.S. government is an essential ingredient for success to occur in Detroit, you think Americans can't do it. Interesting.

See, I've always believed that when push comes to shove, when America has its back pressed against the wall, it will always rise to the occasion. I guess I have more faith in American ingenuity-absent the government-to find success in the bleakest of hours.

I think I am successful in life not because of the U.S. government but despite the U.S. government. When the government leaves me to my own devices, I am left to take advantage of opportunity. The risk is failure, the reward is success. I happen to prefer that scenario to one in which the government is omnipresent and simply gets in my way. I think limited government was a principle embedded in the Constitution. You can see how far from that principle-both on paper an in ideology-our nation has come. We've shifted from a state of mind where government is used to promote liberty and opportunity to one where it essentially wipes our asses. What we're left with is a lesser form of government, like those in Europe and Japan. A sad development, indeed. Ugh, the new America is pretty pathetic.
Quick, sound the "hysterical overreaction" alarm.

I have never advocated the federal government running the American car industry. NEVER.

I am first in the line to denounce the laughably inept management that has plagued Detroit - and large sections of American industry - for decades. I, too, would like to see American makers fight back on their own. But the situation now, today, is that GM, Ford and Chrysler are in serious and possibly terminal crisis.

What I do advocate is the government helping out when that help is needed, because if it doesn't, there is going to be an almighty industrial catastrophe in this country.

Japan, Korea, Germany, et al, (you know, successful manufacturing countries) would never allow that to happen to their own auto industries. They would do anything necessary to ensure the survival of such strategic industries. So should we.

Also, check the calendar, it's not 1955 anymore. All that laissez-faire businesss school theory sounds great . . . . if you are in the convenience store or ice-cream parlour business, let's say. But this is automaking, not merely a strategic industry, but the strategic industry.

America's opponents know this, and they play hardball. They'll do whatever it takes to win, believe me, and that will certainly involve some form of government assistance or backing, be it either covert or overt.

Why do you think we are the ones running a titanic trade deficit -far and away the world's worst - and have been for decades? Why is it us losing the high-quality jobs and replacing them with crappy no-future McJobs? It is because this is no longer a productive economy that can pay its way in the world. It is chronically overstretched in all kinds of ways. We need to get productive again, and rebuilding our manufacturing base is absolutely essential.

I am advocating that, if the worst comes to the worst, the government guarantee loans - loans, which are fully repayable, not gifts - to help the industry restructure and survive, then that is a good thing.

Hell, the (world-leading) American defence industry is highly protected by the US government - its main customer. Oddly, though, nobody seems to take issue with the government helping Raytheon, or Lockheed-Martin, or Boeing, or Northrop Grumman, do they?

I don't see anything "pathetic" about wanting America to win.
 
1 - 20 of 24 Posts
Top