General Motors demands $15b bailout

GM is in trouble because they made a bunch of (in hindsight) bad gambles, have been painfully slow to respond to market trends, and have inefficient manufacturing and distribution. Also, they make horrible, horrible vehicles. Only Chrysler is worse in quality and reliability. How exactly would bailing them out change any of this? At least with some of the bank bailouts there is a possibility of taxpayers getting back some of the money, with GM that is highly unlikely.

The CTS, Malibu, and Aura have all been voted car of the year. In fact GM is making some very goods cars. The corvette is probably America's best vehicle. Unfortunately, the also produce mediocrities like the Colbalt and G6.

Carnivore 69 wrote:

Pension liabilities killed the Big Three.

That, and unions.

And lack of creativity.

You forgot Detroit's ridiculous tax policy. GM should consider offshoring to Panama, where the City of Knowledge has a 0% corporate tax rate to attract investment. No joke.

Why is everyone expecting a government handjob now?

Why should the gov give out handjobs when you can get one from the private sector for much less.

this is the ridiculous attitude that keeps the bad shit rolling.

if GM were a great company "leading in technology" they wouldn't need a bailout. You're right--the US was great because we led in many tech-oriented industries. But we're losing that lead quickly, and bailing out shitty companies only tells everyone, "Hey, it doesn't matter if you make shitty shit, just put 'Made in America' on there and in the worst case, uncle sam will buy it all!"

this idea that the bailout is really helping us all is unbelievably near-sited. now there is less incentive to make good, safe investment decisions and to deliver products that people will consistently buy at competitive prices.

where do people like you think the money is coming from? do you think as soon as the government prints some green paper it has any intrinsic value?

for f**ks sake...

Carnivore 69 wrote:

Pension liabilities killed the Big Three.

That, and unions.

And lack of creativity.

Japanese auto makers also deal with unions and pensions. The big difference is that they don't have to provide health care.

The real reason the Big 3 are dying is corporate culture. In the US, executives are driven to deliver big profits fast or they are sent packing. Thus, the Big 3 built cheap crappy cars to make big short term profits. The Japanese took a long term approach. They built quality cars that last a long time. The Big 3 lost brand loyalty by selling junk (and by betting on the SUV) and the Japanese won over loyal customers by building reliable and fuel efficient cars.

The problem is that the Big 3 are too big to fail. If they go down, so will all their dealerships, service departments, parts manufacturers and finance wings. So, practically speaking, you can give them a bailout now, or be on the hook for much more in terms of pension guaranty liability, unemployment insurance payments, loss of tax dollars and a massive widening of the trade imbalance, which would crash the dollar, spike inflation and send everything into the crapper.

It is a choice between principles and pragmaticism.

Without an Auto industry America will follow England into former-power status.

A British motoring correspondent hired a GM car - a Sebring.

These are his comments - justified?

“Let us look, first of all, at the car’s only good point. The boot is bigger than the hangar deck of a Nimitz class aircraft carrier. However, the drawback of driving a car with an aircraft carrier on the back is that it doesn’t look very good. No. That doesn’t cover it. It looks terrible. Hysterically awful. Anyone thinking of drawing up a list of the ugliest cars ever made will be forced to put this one at the top. I have seen more attractive boils.

And disappointingly, if you push the button that lowers the roof - and then push it again because it isn’t working properly - you will find that a) all of the carrying capacity is lost, and that b) with no roof in place, everyone can see you at the wheel. This is very bad. Some, for sure, give you pitying looks. Mostly, though, they point and laugh.

So how much do you have to pay for the privilege of being a laughing stock? Well in the US, it’s around $29,000 (£16,400). You could buy a clown suit for less and achieve much the same effect. Here, however, a 2.7 litre drop-top Sebring is £25,100 and at that price, I simply don’t know how the salesman keeps a straight face.

Power? There isn’t any. Spec sheets show that in Britain, a 2.7 litre V6 will do 121mph and 0-62mph in 10.8.

But 10.8 what? Years? Let me put it this way. It develops 185bhp, which is pretty much what Volvo can get these days from a 2.4 litre diesel.

I’m afraid I have no idea which engine was fitted to my rental but I can tell you that all it did was convert fuel into noise. Put your foot down hard and after a while of nothing happening, the gearbox would lurch down a cog and the volume would increase. That was it.

Sadly, there’s more bad news. Turning petrol into motion, as we know, is an expensive business, but turning it into sound is even worse. We managed just 18mpg. Quite why anyone would buy this rather than, say, a Volkswagen Eos, I simply do not know. You’d have to be so window-lickingly insane that you’d be banned from handling anything other than crayons.

A Sebring can do nothing well. It was hopeless in crosswinds and the only option you need on a twisty road are sick bags. I n t e r e s t i n g l y , however, while the ride is very soft, the suspension still manages to crash about like a drawer full of cutlery when it is asked to deal with a small pothole.

And of course, being an American rental car, it came with a warped disc brake and steering that was so out of whack it kept making a beeline for Wyoming. But the worst thing was the overwhelming sense from everything you touched that it had been built by someone who was being deliberately stupid or who was four years old. Life inside that bag of crap plastic gave me some idea of what it might be like to be a boiled sweet.

We see this with so many American cars. Dynamically, some of them are pretty good these days. One or two are even a match for what the Chinese are doing. And by and large they are still extremely cheap. But there’s a very good reason for this. They are simply not built to last.

I spent most of my time in America this time in a new Corvette ZR1. It is a fabulous car. Mesmerisingly fast, good looking and amazing value. But after three days the damn thing was beginning to disintegrate. It made me growl with annoyance and despair.

But I think I know the problem. Because America is a new country, the people who live there have no sense of history. And if you have no concept of “the past”, it is extremely difficult to grapple with the idea of “the future”.

If you think a bar established in 1956 is “old” then you will not understand the idea of next week. So why bother building for it?

We see this short-termism in everything from the average American house, which falls over whenever the wind gets up, to the way chief executives are treated. In Japan, you are given 25 years before you are judged on whether you’ve turned the company around. In America, bosses are given two months. And if there’s been no financial about-turn, they are fired."

Are you seriously that uninformed that you think a Sebring is made by GM?

Okay, rather than address some of the ridiculous comments, I'll ask the following questions.

1. If GM is so poorly managed, then why are they profitable in Asia (#1 in market share in China) and Latin America? If they lack the capacity to design a decent vehicle, shouldn't they be getting destroyed in those markets as well?

2. Please explain how the Big 3 are all struggling mightily at the same time despite being independently managed, with two out of the three being managed by auto industry outsiders. Is everyone in upper management at these companies automatically an idiot when they walk through the door? Is it something in the Detroit-area water? Or could they all be facing a common set of circumstances that place them at a huge disadvantage in the largest auto market in the world?

Yes, they have made poor decisions. Yes, the cars were terrible until fairly recently. Yes, they relied on SUVs and pick-ups to boost profits. But they are beset with the same deep structural problems (health care and retiree costs) that loom for our federal government.

1. China and Latin America are tiny markets compared to the US and Europe. And the cars they sell abroad are not the same as those sold in the US.

2. Corporate culture isn't changed overnight with a new CEO. The Big 3 have problems going from the assembly line to the corporate office that will take years to change.

Toyota and Honda have made massive gains in the US market by selling better cars. Toyota and Honda do not compete with the American car makers on price. They are consistently more expensive and have incredible price discipline. So, it is crocodile tears to complain about losing money because of employee benefits obligations. The big 3 lose money because they are losing market share to more expensive vehicles. Toyota and Honda have American plants and pay competitive wages and provide benefits. UAW has trouble organizing Toyota and Honda plants because the workers are treated well.

Big 3 cars do not last a long time because it is an intentional business decision on the part of the manufacturer. They know exactly how long parts will last and design their vehicles to start coming unglued after 60-70k mi. Toyota and Honda have taken the exact opposite approach and are winning over market share as a result. Big 3 cars have improved, but still don't hold a candle to the Japanese car.

Does it really matter what a British journalist says about Chrysler's weakest car. Besides the British don't even have a car industry to call their own. The writer is bitter because the British no longer have an auto industry.

Sometimes I feel sorry for the British

GM has never made any Jeep vehicles.

gm is nor #1 in china, they are the #1 selling u.s. car mfg in china, small in comparison to others.

You’re right - though we do still have some excellent motor mechanics as most of the Formula One cars are designed and prepared in Britain and there are some thriving small independent and successful car manufacturers around.

I don’t know enough about American cars to know who manufactured the Sebring - who makes the Dodge?

Because that model, Avenger SXT 2.4i saloon is on a ‘two for one’ offer here in Britain.

Buy one - get one free.

I’ve seen that offer in supermarkets - but I’ve never seen a car manufacturer use that sales device.

The Americans also have some independent car companies. The Saleem is world's fastest production sports car (217mph).

Why did the British give up their aviation industry as well.

1939 - Spitfire - the plane that won the battle of britain.

1951 Comet - the world's first jetliner (490mph)

1962-89 - Lighting fighter. Most agile fighter jet until the F-16 came along.

we need an immediate congressional resolution that states NO state may receive more in federal tax $$ than they pay out.

Right now it is the red states that receive significantly more back in fed aid than they pay in taxes.

Isn't this socialism on a gigantic scale? Isn't this an enormous redistribution of wealth?

we need an immediate congressional resolution that states NO state may receive more in federal tax $$ than they pay out.

That goes for U.S. territories (Puerto Rico, Virgin Islands, Guam), foreign colonies (Israel), and military occupied territories (Iraq, Afghanistan) too. No more money than we get back in taxes !