Note that in the process of developing these plans over two
weeks, the projected "bridge loans" needed increased from 25
billion to 38 billion.

If you are interested in what the car makers said, and not in
what the talking heads and "spin meisters" said they said, click
on

http://banking.senate.gov/public/_fi... ateFinal_.pdf
http://banking.senate.gov/public/_fi...onAppendix.pdf

http://banking.senate.gov/public/_fi...heGMPlan.pd f
http://banking.senate.gov/public/_fi...ssionFinal.pdf

http://banking.senate.gov/public/_fi...elby000000.pdf
http://banking.senate.gov/public/_fi...ablityPlan.pdf
http://banking.senate.gov/public/_fi...sofInquiry.pdf

IMNSHO the only company that appears to have their head where
sunshine can reach, based on their plan, is FoMoCo. Even here,
it appears that technical solutions of non-technical problems are
stressed, which are sure to fail. Increasing complexity does not
add value to the product, and increases the life cycle costs, if
not the initial purchase price. They also continue to toe-dance
around Diesels.

Note that the provision "Protect taxpayers by granting the most
senior status for any government loans provided, ensuring that
taxpayers get paid back first" means that the existing creditors
[including vendors] are being ripped off in that their chance of
recovery is diminished.

GM seems to be dreaming in that they assume their bond holders
will line up to exchange c. 32 billion in GM bonds [now yielding
50% per year based on current prices] for GM stock. [the old
debt for equity offer -- note that at current stock prices, 32
billion is ==about 11X the entire current GM market cap.==]
http://finance.yahoo.com/q?s=gm


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

F. George McDuffee wrote:
Note that in the process of developing these plans over two
weeks, the projected "bridge loans" needed increased from 25
billion to 38 billion.

Now if this were most any other company, they
would default on their loans and pension plan,
go into receivership, be sold off for a fraction
of their current worth, and start producing product
with a labor rate of $40/hr instead of $75/hr.
Which, of course, would be the best thing for
the majority of the country.

Instead, the government, i.e. us, will continue
to flush money down the gopher hole without fixing
the problem.

If you are interested in what the car makers said, and not in
what the talking heads and "spin meisters" said they said, click
on

http://banking.senate.gov/public/_fi... ateFinal_.pdf
http://banking.senate.gov/public/_fi...onAppendix.pdf

http://banking.senate.gov/public/_fi...heGMPlan.pd f
http://banking.senate.gov/public/_fi...ssionFinal.pdf

http://banking.senate.gov/public/_fi...elby000000.pdf
http://banking.senate.gov/public/_fi...ablityPlan.pdf
http://banking.senate.gov/public/_fi...sofInquiry.pdf

IMNSHO the only company that appears to have their head where
sunshine can reach, based on their plan, is FoMoCo. Even here,
it appears that technical solutions of non-technical problems are
stressed, which are sure to fail. Increasing complexity does not
add value to the product, and increases the life cycle costs, if
not the initial purchase price. They also continue to toe-dance
around Diesels.

Note that the provision "Protect taxpayers by granting the most
senior status for any government loans provided, ensuring that
taxpayers get paid back first" means that the existing creditors
[including vendors] are being ripped off in that their chance of
recovery is diminished.

GM seems to be dreaming in that they assume their bond holders
will line up to exchange c. 32 billion in GM bonds [now yielding
50% per year based on current prices] for GM stock. [the old
debt for equity offer -- note that at current stock prices, 32
billion is ==about 11X the entire current GM market cap.==]
http://finance.yahoo.com/q?s=gm


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

On Wed, 03 Dec 2008 13:53:21 -0800, Jim Stewart
wrote:

Note that in the process of developing these plans over two
weeks, the projected "bridge loans" needed increased from 25
billion to 38 billion.

Now if this were most any other company, they
would default on their loans and pension plan,
go into receivership, be sold off for a fraction
of their current worth, and start producing product
with a labor rate of $40/hr instead of $75/hr.
Which, of course, would be the best thing for
the majority of the country.

Instead, the government, i.e. us, will continue
to flush money down the gopher hole without fixing
the problem.
--------------
Indeed!!

While her field is literature, linguistics and radical
feminist/anti-colonial politics, Gayatri Spivack correctly
observed, "at some point the quantitative becomes the
qualitative."
http://en.wikipedia.org/wiki/Gayatri_Chakravorty_Spivak

In this respect the Detroit Poobahs are correct when they suggest
a bankruptcy of one, will is almost certain to result in the
bankruptcy of the other two, because of their highly convoluted
finances and supplier base, which in turn will greatly intensify
the recession and possibly result in a depression, and thus there
is a qualitative difference, because of their size and importance
to the economy, justifying tax payer funding of private
corporations.

This is yet an example of the truth of the observation "when you
gott'em by the balls, their hearts and minds will follow,"
regardless if they are radical, liberal, conservative,
reactionary, Republican or Democrat, Washington insider or
political maverick.

Looking beyond the immediate problem of a possible Detroit
collapse, it appears that the new administration *MUST* take
steps to either reduce the size of corporations so they are NOT
too big or too important to fail, or if this is not practical, to
impose some sort of "public utility" regulation with an oversight
board, and possible citizen representatives on their boards
including the "executive" and "compensation" committees. It is
unconscionable that *ANY* private company or individual should be
in the position of holding the taxpayers to ransom.

As indicated in another post, while Detroit corporate management
may not consider bankruptcy to be an option, it only takes three
"major" creditors to file a bankruptcy petition with the courts,
and there are far more than three p***ed off vendors, franchise
dealers, and other creditors that will be determined to take the
corporations down with them, if they are forced into bankruptcy
through "deferred/extended payments," price "re-negotiations," or
additional/continued abuse of the warranty "charge back"
provisions. An involuntary bankruptcy petition for any of the
Detroit three, with 50 or 100 "major" creditors, would be a
"stake in the heart," if they can't/won't come up with the cash.


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

In article ,
"Ed Huntress" wrote:

"Joseph Gwinn" wrote in message
...
In article ,
F. George McDuffee wrote:

On Sat, 29 Nov 2008 12:06:47 -0500, Joseph Gwinn
wrote:

Holman Jenkins asks a very good question: Why is it that the Big Three
automakers can make cars profitably everywhere in the world but the US?

http://online.wsj.com/article/SB122765959966358461.html

The Wall Street Journal, 28 November 2008.

Joe Gwinn
--------------
Everything but the real problem is discussed.

In point of fact, every man, woman and child in the US now
owns/registers slightly more than one vehicle [1.05], a vehicle
being a car or light truck, not counting motorcycles/scooters.

You can see the estimated 2007 per capita car and truck ownership
by state at http://www.swivel.com/data_sets/spreadsheet/1003554
I have sorted and analyzed this data and would be pleased to
supply you a copy in M/S xls format.

Several points:

(1) To put it bluntly, THE REASON DETROIT AND THE TRANSPLANT
CAR COMPANIES CAN'T SELL MORE VEHICLES IN THE UNITED STATES IS
BECAUSE WE ALREADY HAVE MORE VEHICLES THAN WE NEED.

Umm. Please stop shouting. We can hear you.


Individuals
and families in highly congested urban areas (with higher
incomes) such as New Jersey, New York, and Washington D.C. don't
have [multiple] vehicles because these are not particularly
useful. ==It would make just as much sense to "rescue"
agriculture by attempting to get everyone to eat more.==

[rest snipped]

Cars wear out. Cars last something like seven years on average, maybe
ten years for some kinds, and are replaced. (Yes there are cars that
can be babied to last forever, but very few people really do that, or
even want to.) So all car companies in the west (where essentially
everybody has a car) are fighting over the replacement stream. They are
not waiting for the population to suddenly double, and never were.

Joe Gwinn

What George describes is the reason that every major car manufacturer is in
China. It's the really big growth market. The US market is a replacement
market, and the only way to grow is to grab a bigger market share or to
create a new product category.

This is alien territory for US car makers. Like all oligopolies, they
succeeded in the past by holding onto a percentage of the market, or a
market share, and only competing at the margins. They grew because
everybody's market slice got bigger, not because they grabbed a bigger
market share.

I recall that the big three said that their non-US operations remained
profitable.


The SUV market is (was?) a case of opening a new product category and
battling over market share once again, like they did in earlier days with
cars. It cannibalized the car market but it was OK because SUVs were much
more profitable.

With that product category on the ropes, and with foreign competitors each
battling for a share of the car market in the US (what do they think this
is, a real market or something?), the Big Three are unequipped to cope. The
Chebby Volt is an attempt to create another new product category. It's
either that, or move to China.

The big 3 are already there. And the foreigners are making cars at a
nice profit in the US South. The key question is why the big 3 cannot
make a profit in Detroit.


The smart money says "move to China."

Nah. They already speak from China.

Joe Gwinn

Add this to the [toxic] mix.

*****
Rep. John Dingell's (D-MI) current financial disclosure filed in
May lists GM stock worth up to $350,000, options worth up to $1
million more, and a GM pension fund. In 2000, among the Dingells'
GM assets were stock options worth up to $5 million.
*****

see video click on http://www.breitbart.tv/?p=234293

If you don't follow US politics Dingell is the Chairman of the
Committee on Energy and Commerce, although replaced in the new
Congress by Waxman of California.
http://firstread.msnbc.msn.com/archi...0/1683552.aspx
http://www.house.gov/dingell/
http://energycommerce.house.gov/

Question: How many more members of Congress have significant and
direct "conflicts of interests" in the domestic auto industry?


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

"F. George McDuffee" wrote in message
...
Add this to the [toxic] mix.

*****
Rep. John Dingell's (D-MI) current financial disclosure filed in
May lists GM stock worth up to $350,000, options worth up to $1
million more, and a GM pension fund. In 2000, among the Dingells'
GM assets were stock options worth up to $5 million.
*****

see video click on http://www.breitbart.tv/?p=234293

If you don't follow US politics Dingell is the Chairman of the
Committee on Energy and Commerce, although replaced in the new
Congress by Waxman of California.
http://firstread.msnbc.msn.com/archi...0/1683552.aspx
http://www.house.gov/dingell/
http://energycommerce.house.gov/

Question: How many more members of Congress have significant and
direct "conflicts of interests" in the domestic auto industry?


Unless I'm mistaken, Dingell's wife served as an outside director at GM for
years.
She was also on officer at one time as well. The stock and options very
likely came into the family through her.
That isn't really all that important. The conflict is pretty obvious.

JC

On Sat, 29 Nov 2008 12:06:47 -0500, Joseph Gwinn
wrote:

Holman Jenkins asks a very good question: Why is it that the Big Three
automakers can make cars profitably everywhere in the world but the US?

http://online.wsj.com/article/SB122765959966358461.html

The Wall Street Journal, 28 November 2008.

Joe Gwinn
-----------------
if you have a highspeed internet connection click on
http://online.wsj.com/video/how-leve...A48D736DC.html
for more than 15 sec. sound bites. Several good videos 2-3
minutes each.
Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

"Jim Stewart" wrote in message
.. .
F. George McDuffee wrote:
Note that in the process of developing these plans over two
weeks, the projected "bridge loans" needed increased from 25
billion to 38 billion.

Now if this were most any other company, they
would default on their loans and pension plan,
go into receivership, be sold off for a fraction
of their current worth, and start producing product
with a labor rate of $40/hr instead of $75/hr.
Which, of course, would be the best thing for
the majority of the country.

Instead, the government, i.e. us, will continue
to flush money down the gopher hole without fixing
the problem.


Right, the solution to the problems facing the economy is simply more free
market capitalism. Of course, we first have to pretend that system isn't
what got us in trouble to begin with. Then we let the market decide who
survives and who fails. The only problem with that, and why the government
is doing everything but that, is because if we let the companies fail the
cost to the country will be so high as to make the numbers we see now seem
like peanuts.

Take the 30 or 40 billion or is it 75 to 100 billion needed to keep the
"big" three auto makers in business. If you let them all fail, which they
would without bailout loans, the price to the country in lost tax revenue,
raised unemployment benefits, and numerous other related losses would wind
up costing ten times that. The majority of the country would have to pay for
that, which I doubt it would like. So take your pick. Help the companies
out, which will cost billions. Or let them go bust and pay ten times that
much and toss millions of people out of work, which will send the economy
spiraling down like nothing seen since the 1930s. To a rational person the
choice is easy. Why else do you think the government is willing to pony up
so much dough? Because they feel sorry for the big three? Hardly. It's just
that they know it will cost far less to the economy and the taxpayers to
keep the auto makers in business than for them to go broke and pay that
cost. That's why they are going to bail them out. The choices are both bad
but one is a lot worse than the other.

Hawke