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Metalworking (rec.crafts.metalworking) Discuss various aspects of working with metal, such as machining, welding, metal joining, screwing, casting, hardening/tempering, blacksmithing/forging, spinning and hammer work, sheet metal work. |
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#1
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GM Failure
Well, I guess most folks don't really care to much if the US auto
companies fold, judging by the internet postings. If one or more does fold, who has the capital in the US right now buy up any of the assets? The cost of admission for new vehicle design is very high. Consider the crash, emission control and fuel economy regs that have to be met. Some US auto startups have made it for a few years, but none have ever been sustainable. Will Tesla Motors break the mold? It would seem that perhaps a Chinese or other foreign company may want some of the assets, but maybe not. Meanwhile a huge loss of jobs in the US, for steel, semiconductor, plastics, software etc etc. I doubt many US consumers realize how many of their own jobs could be affected by supply chain fallout. One last consideration, during WII, many auto plants and suppliers were leaned on to mass produce items needed for the war effort. With one of our last major manufacturing industries potentially going belly up, what does that say about our emergency manufacturing capabilities in the USA? Seems like a $35Bn loan to the car companies would be a better investment than AIG etc, especially if the unions provide some concessions to help. We don't have much history to go on other than Chrysler's loan in the K car era, which they paid back with interest. Will the Banks pay back their $700Bn in loans any time soon? |
#2
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GM Failure
"oldjag" wrote in message ... Well, I guess most folks don't really care to much if the US auto companies fold, judging by the internet postings. If one or more does fold, who has the capital in the US right now buy up any of the assets? Toyota Honda Nissan ect..... The cost of admission for new vehicle design is very high. Consider the crash, emission control and fuel economy regs that have to be met. Some US auto startups have made it for a few years, but none have ever been sustainable. Will Tesla Motors break the mold? It would seem that perhaps a Chinese or other foreign company may want some of the assets, but maybe not. Meanwhile a huge loss of jobs in the US, for steel, semiconductor, plastics, software etc etc. I doubt many US consumers realize how many of their own jobs could be affected by supply chain fallout. The remaining manufacturers will pick up the slack. They will all be hiring. One last consideration, during WII, many auto plants and suppliers were leaned on to mass produce items needed for the war effort. With one of our last major manufacturing industries potentially going belly up, what does that say about our emergency manufacturing capabilities in the USA? Seems like a $35Bn loan to the car companies would be a better investment than AIG etc, Ok but they want 60Bn not 35. A month ago the wanted 25Bn. Did they really not know what it would take? Are they that stupid? And they want money? LMAO Good riddance............. JC |
#3
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GM Failure
oldjag wrote:
Seems like a $35Bn loan to the car companies would be a better investment than AIG etc, especially if the unions provide some concessions to help. Oh the UAW is going to provide a lot of help if they expect to get a bailout. Retirees, dust off your resume, that retiring at 48 deal is over. 30 years and out, worked when there was no competition. That cabin up north you drive your SUV up to is going to be a thing of the past. Us locals are going to like our part of the state w/o you looking down your nose at us that work for a living inside the constraints of market reality. We will not miss you. That is the Republican and Redneck Agenda. Oh the front office is going to get their pay and bonuses cut hard. Be glad you have a job and be sure you are doing something that is essential. White collar is a target since we all know they make too much for what they do. The brightest amongst the staff will run off and do something else further contributing to Detroit's decline. That is the Democratic Agenda. Hope they don't force out the bright guys and gals with talent that go in another direction working for their selves. Until labor and management get a dose of reality, the former big three are doomed. And likely they are going to take my employer with them. I hope against hope there are sane leaders exist in both the front office and the UAW. Wes |
#4
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GM Failure
"John R. Carroll" wrote:
Ok but they want 60Bn not 35. A month ago the wanted 25Bn. Did they really not know what it would take? Are they that stupid? And they want money? LMAO Good riddance............. Wow, we are on the same page for a change. GM needs to root hog or die. Their choice. Wes |
#5
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GM Failure
"Wes" wrote in message ... "John R. Carroll" wrote: Ok but they want 60Bn not 35. A month ago the wanted 25Bn. Did they really not know what it would take? Are they that stupid? And they want money? LMAO Good riddance............. Wow, we are on the same page for a change. GM needs to root hog or die. Their choice. They wouldn't be begging for money if they had a choice Wes and you and I have always been on the same page. We just disagree on which one we ought to turn to next. LOL JC |
#6
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GM Failure
"John R. Carroll" wrote:
We just disagree on which one we ought to turn to next. LOL ROTFLMAO. Have a good night John, I'm going to. Morning comes too early for me. Wes |
#7
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GM Failure
"Wes" wrote in message ... oldjag wrote: Seems like a $35Bn loan to the car companies would be a better investment than AIG etc, especially if the unions provide some concessions to help. Oh the UAW is going to provide a lot of help if they expect to get a bailout. Retirees, dust off your resume, that retiring at 48 deal is over. 30 years and out, worked when there was no competition. That cabin up north you drive your SUV up to is going to be a thing of the past. Us locals are going to like our part of the state w/o you looking down your nose at us that work for a living inside the constraints of market reality. We will not miss you. That is the Republican and Redneck Agenda. Oh the front office is going to get their pay and bonuses cut hard. Be glad you have a job and be sure you are doing something that is essential. White collar is a target since we all know they make too much for what they do. The brightest amongst the staff will run off and do something else further contributing to Detroit's decline. That is the Democratic Agenda. Hope they don't force out the bright guys and gals with talent that go in another direction working for their selves. Until labor and management get a dose of reality, the former big three are doomed. And likely they are going to take my employer with them. I hope against hope there are sane leaders exist in both the front office and the UAW. I could deal with alladat (barely), iffin they put management in public housing, made them ride bicycles in winter, and made *them* work 30 years, with a minimal pension, and half-assed health care, and half-assed public schools for their silver-spooned urchins. Seems, tho, that chevy might could pull it out/off iffin they got dat Volt going. I'd be first on line for that one, even tho I'd rather buy the equiv from someone who deserves it. Inything to **** Big Oil. And over here, electric cars would do just that, as I think most of NYS's power is hydroelectric. -- PV'd Wes |
#8
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GM Failure
"oldjag" wrote in message ... Well, I guess most folks don't really care to much if the US auto companies fold, judging by the internet postings. If one or more does fold, who has the capital in the US right now buy up any of the assets? The cost of admission for new vehicle design is very high. They need to go bankrupt and reorganize. There will still be a US auto industry and it will be more competitive than ever without the UAW millstone around its neck. |
#9
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GM Failure
On Thu, 4 Dec 2008 16:18:46 -0800 (PST), oldjag
wrote: Well, I guess most folks don't really care to much if the US auto companies fold, judging by the internet postings. If one or more does fold, who has the capital in the US right now buy up any of the assets? The cost of admission for new vehicle design is very high. I think everyone does care, the problem is that it is by no means clear that dumping tens of billions into the car companies will do more than buy a few weeks to a few months of existence. ---------------- Consider the crash, emission control and fuel economy regs that have to be met. Some US auto startups have made it for a few years, but none have ever been sustainable. Will Tesla Motors break the mold? It would seem that perhaps a Chinese or other foreign company may want some of the assets, but maybe not. Why would anyone want to buy into this mess? Much of the problem is that many of the "assets" are grossly overvalued, obsolescent, located in high tax areas, located in high labor cost areas with a "history," located in the wrong locations for the current traffic patterns, etc. ................... Meanwhile a huge loss of jobs in the US, for steel, semiconductor, plastics, software etc etc. I doubt many US consumers realize how many of their own jobs could be affected by supply chain fallout. While the US job fall-out could be substantial, the impact will be greater on the import suppliers of the higher valued components such as electronics, engines, transmissions, etc. ............. One last consideration, during WII, many auto plants and suppliers were leaned on to mass produce items needed for the war effort. With one of our last major manufacturing industries potentially going belly up, what does that say about our emergency manufacturing capabilities in the USA? We are all screwed, glued and tattooed!!! Unfortunately this is *NOT* strictly an automotive related problem, but is the result of a generation of de-industrialization under NAFTA and other "trade" pacts. In many cases the US "manufacturing" organizations are now shells, packing and shipping products [or assembling major high value components/sub-assemblies] manufactured off-shore. In too many cases the only thing made in USA is the label and the box. Currently the US would be unable to supply even uniforms and boots for a major military build-up from domestic sources. ............... Seems like a $35Bn loan to the car companies would be a better investment than AIG etc, especially if the unions provide some concessions to help. We don't have much history to go on other than Chrysler's loan in the K car era, which they paid back with interest. Will the Banks pay back their $700Bn in loans any time soon? ----------- If this was a liquidity/cash-flow problem, possibly. Unfortunately the primary problem is one of solvency, i.e. the companies/individuals involved are "busted," and the "liquidity" problem is only a major symptom of this. Based on independent outside evaluation, the 25/34 billion to "save" the domestic automotive industry is a low-ball down payment. I don't have the link, but just saw one estimate about 5X this amount [150-175 billion] by an independent economist/accountant, and even this huge "investment" does *NOT* guarantee survival, only the continued existence of the domestic auto industry into the start of the next up cycle. The continued existence of domestically owned/controlled automotive production at this point [start of the next up cycle] will depend on product design [looking good is far from enough]; build quality, durability/maintainability, value for money, and response to customer requirements such as fuel economy. This is far from assured. FWIW -- it is doubtful that any non-subsidized organization could exist with the excessive blue collar, white collar, and management labor costs/benies/perks, exhibited by the "big three," in comparison to the equivalent positions in the rest of the economy. Indeed, even with the inflated blue collar wages, the management wage multiplier is still many times that of the transplants, so while the UAW may have been better negotiators than the companies, they are not *THE* cause of the problem. 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). |
#10
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GM Failure
On Thu, 04 Dec 2008 19:51:11 -0500, Wes wrote:
snip GM needs to root hog or die. snip They should be so lucky. GM is gone by any rational standard. The currently have *NEGATIVE* 58 billion stockholder equity. http://www.businessweek.com/lifestyl...573_page_3.htm A major "plank" in the GM "recovery" plan is getting their unsecured bond holders to swap 32 billion in debt for equity [stock]. see page 11 http://banking.senate.gov/public/_fi...ssionFinal.pdf The current market cap for the GMC is 2.5 billion, so the proposed debt for equity swap is about 13X current market cap. [Dream on -- I am surprised they didn't ask Wagner to pee in a bottle to see what he is on -- must be some really bad stuff] http://finance.yahoo.com/q?s=gm Ford appears to have a real chance of survival, possibly with taxpayer loan guarantees, and Chrysler *MAY* have a chance as a niche player [minivans] and contract producer for VW, *IF* they can pick up some of the GM business, and with considerable help from the taxpayers. 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). |
#11
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GM Failure
"ATP*" wrote in message ... "oldjag" wrote in message ... Well, I guess most folks don't really care to much if the US auto companies fold, judging by the internet postings. If one or more does fold, who has the capital in the US right now buy up any of the assets? The cost of admission for new vehicle design is very high. They need to go bankrupt and reorganize. There will still be a US auto industry and it will be more competitive than ever without the UAW millstone around its neck. Most of the industry experts I've heard over the past few days say there will be no receivership and no reorganization. People don't buy cars from bankrupt manufacturers. (Studebaker is an example; once it became known they were thinking about getting out of the car business, they were.) They'll go straight to liquidation, possibly with a few months of receivership in order to handle the selloffs. The brands have very little goodwill equity so most of the remaining value will be real estate and hardware. The Chinese are already sniffing around, looking for possible bargains. -- Ed Huntress |
#12
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GM Failure
On Thu, 04 Dec 2008 20:20:00 -0600, F. George McDuffee
wrote: snip Based on independent outside evaluation, the 25/34 billion to "save" the domestic automotive industry is a low-ball down payment. I don't have the link, but just saw one estimate about 5X this amount [150-175 billion] by an independent economist/accountant, and even this huge "investment" does *NOT* guarantee survival, only the continued existence of the domestic auto industry into the start of the next up cycle. snip Found some links, it was Mark Zandi of Moody's [and it was "only" 125 billion not 150-175 billion -- my bad] http://www.usnews.com/blogs/the-tick...for-automakers http://www.cnbc.com/id/28055208 http://www.wallstrip.com/2008/12/04/...-think-bigger/ 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). |
#13
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GM Failure
Chapter 11, reorganize and come out lean and profitable. Or not---maybe
they are too close to it to figure it out. If they do go TU, they wouldn't be the first. Let's make a list---real manufacturers that didn't make it. Studebaker Packard Kaiser-Frazier Reo Diamond T Rambler/AMC Crosley Feel free to add to the list, these are just the most recent ones I can think of quickly. Anybody seen the footage about the Ford plant in Brazil? Vendors under the same roof, very lean and agile line. |
#14
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GM Failure
On Fri, 05 Dec 2008 03:33:26 GMT, "Bill Marrs"
wrote: Chapter 11, reorganize and come out lean and profitable. Or not---maybe they are too close to it to figure it out. If they do go TU, they wouldn't be the first. Let's make a list---real manufacturers that didn't make it. Studebaker Packard Kaiser-Frazier Reo Diamond T Rambler/AMC Crosley Feel free to add to the list, these are just the most recent ones I can think of quickly. Anybody seen the footage about the Ford plant in Brazil? Vendors under the same roof, very lean and agile line. ----------- One of the best was Hudson. At one time a real power on the stock car circuit dominating NASCAR in the early 50s. Had several innovations such as the "step-down" design that were widely copied. http://en.wikipedia.org/wiki/Hudson_Motor_Car_Company http://wapedia.mobi/en/Hudson_Motor_Car_Company also see http://images.businessweek.com/ss/08...o_brands/1.htm 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). |
#15
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GM Failure
"oldjag" wrote in message ... Well, I guess most folks don't really care to much if the US auto companies fold, judging by the internet postings. If one or more does fold, who has the capital in the US right now buy up any of the assets? The cost of admission for new vehicle design is very high. (etc.) That's a good summary of a legitimate point of view. I don't know if it's right (nobody really does, I think), but it's good sense. I think that most of the people who object to a bailout are frustrated. They aren't in a mood to be pragmatically analytical. It *is* frustrating. It is tempting to say "I'll take a hit myself, rather than bail those *******s out." And the *******s are the UAW, car company management, and the rest of the voodoo dolls they keep in the dark places they store their resentments. It's hard to keep one's head while something like this is going on, and I think it's pressing Congress and the rest of the government really hard, trying to rise above the politics and to focus on what's good for the country. IMO, they've looked pretty good on stage, expressing their own frustrations fairly openly while trying to come to a sensible resolution. But that's no assurance they'll stick to it. There are some easy outs, and there are plenty of other people to blame. My fear is that they may wind up doing nothing because they don't want to wrestle with all of the conflicts and the political risks, and doing nothing looks like it could establish a new equilibrium for our economy, in which shining each other's shoes looks like economic growth. -- Ed Huntress |
#16
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GM Failure
"John R. Carroll" wrote in message ... "oldjag" wrote in message ... Well, I guess most folks don't really care to much if the US auto companies fold, judging by the internet postings. If one or more does fold, who has the capital in the US right now buy up any of the assets? Toyota Honda Nissan ect..... The cost of admission for new vehicle design is very high. Consider the crash, emission control and fuel economy regs that have to be met. Some US auto startups have made it for a few years, but none have ever been sustainable. Will Tesla Motors break the mold? It would seem that perhaps a Chinese or other foreign company may want some of the assets, but maybe not. Meanwhile a huge loss of jobs in the US, for steel, semiconductor, plastics, software etc etc. I doubt many US consumers realize how many of their own jobs could be affected by supply chain fallout. The remaining manufacturers will pick up the slack. They will all be hiring. Are you sure? A sell off of the Big Three would result in so much displacement that car sales for the whole country are likely to tank, IMO. The multiplier effect throughout the economy will cause many more to be laid off or fired. And then there will be no reason to hire most of the fired workers, because nobody's buying. Welcome to the new equilibrium. Would you like to buy one of my apples? One last consideration, during WII, many auto plants and suppliers were leaned on to mass produce items needed for the war effort. With one of our last major manufacturing industries potentially going belly up, what does that say about our emergency manufacturing capabilities in the USA? Seems like a $35Bn loan to the car companies would be a better investment than AIG etc, Ok but they want 60Bn not 35. A month ago the wanted 25Bn. Did they really not know what it would take? Are they that stupid? And they want money? LMAO Good riddance............. JC |
#17
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GM Failure
"Wes" wrote in message ... "John R. Carroll" wrote: Ok but they want 60Bn not 35. A month ago the wanted 25Bn. Did they really not know what it would take? Are they that stupid? And they want money? LMAO Good riddance............. Wow, we are on the same page for a change. GM needs to root hog or die. Their choice. Wes Make sure you aren't sawing off the limb you're sitting on. -- Ed Huntress |
#18
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GM Failure
On Fri, 5 Dec 2008 00:01:02 -0500, "Ed Huntress"
wrote: snip The remaining manufacturers will pick up the slack. They will all be hiring. Are you sure? A sell off of the Big Three would result in so much displacement that car sales for the whole country are likely to tank, IMO. The multiplier effect throughout the economy will cause many more to be laid off or fired. And then there will be no reason to hire most of the fired workers, because nobody's buying. Welcome to the new equilibrium. Would you like to buy one of my apples? snip ------------- The problem is that no one knows, even if we turn the taxpayer money tap full on, if "Detroit" *CAN* survive as a commercially viable operation. Of course with enough taxpayer subsidy per car, say 20 or 30 thousand $US per vehicle, Detroit can "survive," but then the question becomes "can the US economy survive?" We would do well to remember that the US taxpayers are *ALREADY* supplying considerable subsidies for Detroit by picking up their retiree medical costs through Medicare, and at the state level, very considerable tax abatements on real estate, buildings, machinery, inventory, etc. and even direct funding through Economic Development Grants, OJ training, etc. The automotive transplants, because they are making a profit, are paying a reasonable share of the cost of running the government at various levels through their *INCOME* taxes, while "Detroit," because they are producing cars at a loss, are not paying any income tax, and indeed are generating large carry forward tax losses which will offset future income tax payments (assuming they ever earn any income). Given that any business operated at a loss is a drain on the macro/aggregate economy, just how long should major, for-profit corporation be allowed to operate at a loss before they are forced into chapter 11 or even chapter 7? The only thing that GM appears to have accomplished over the last 10 years is to dig the hole deeper, deeper, deeper, deeper… which the US taxpayers are now being asked to back-fill with 100$ bills. 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). |
#19
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GM Failure
oldjag writes:
Seems like a $35Bn loan to the car companies would be a better investment than AIG etc, especially if the unions provide some concessions to help. That one act of socialist force is better or worse than another, does not in the least justify either. The industry needs a destructive shakeout. Auction off automakers 1 and 2, and declare all stock, management, and union assets as worthless as they are. Use the auction proceeds to bail out automaker 3. Make one good one out of three broken ones. That at least has a chance to produce a healthy and competitive surviving auto industry. The politicians can earn their keep by choosing who is 1, 2, and 3. |
#20
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GM Failure
If you have highspeed internet you may find these videos of
interest if you are following the Detroit soap opera. Senate Banking Hearing: Panel 1 http://www.cspan.org/Watch/watch.asp...aId=HP-R-13101 Senate Banking Hearing: Panel 2 http://www.cspan.org/Watch/watch.asp...aId=HP-R-13100 Press Conference: Sen. Chris Dodd (D-CT) http://www.cspan.org/Watch/watch.asp...aId=HP-R-13126 also see http://www.opensecrets.org/industrie....php?ind=T2100 for table of detroit political contributions you can see the Detroit proposals here http://banking.senate.gov/public/ind...h=12&Year=2008 Its your money..... 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). |
#21
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GM Failure
On Fri, 05 Dec 2008 00:11:00 -0600, F. George McDuffee
wrote: The automotive transplants, because they are making a profit, are paying a reasonable share of the cost of running the government at various levels through their *INCOME* taxes, while "Detroit," because they are producing cars at a loss, are not paying any income tax, and indeed are generating large carry forward tax losses which will offset future income tax payments (assuming they ever earn any income). Just let me step in here and make a comment. I have spent my entire "career" (if you can call it that) working for various automotive components suppliers......INCLUDING a stint at a tier 1 supplier to the Honda, Toyota, Nissan "kiretsu" (might be spelled wrong...damn Japanese translations). If you think these assholes are over here paying income taxes, you are sadly mistaken. While the actual end item suppliers may be paying taxes, they have a whole supply chain they brought with them doing some extremely underhanded stuff. The company I worked for (which shall remain nameless because I have LITIGATION pending against them) was doing this: Purchase components at jacked up prices from the parent company in Japan, assembly them with American workers here, sell the end item to Honda, Toyota, Nissan "at cost" or often times below cost, PROFITS TRANSFERRED HOME TO JAPAN IN COMPONENT PRICE.....report little or no income to Uncle Sam. Yeah....and the Big Three are competing on a "level playing field". Give me a break. Until the IRS can actually figure out what these clowns are up to and legally kick their asses, all you are doing when buying a Japanese transplant car is subsidizing "social stability" i.e., the "life time" employment practices of the Japanese corporate structures. Trust me on this...I've seen it in action. They keep two sets of books and give "face" to Uncle Sam. Unless you understand something about Japanese culture, you may or may not be able to comprehend this stuff. "Social stability", the existing corporate order and their life time employment relationships (although some of this is starting to change as a result of the "lost decade") are job one in Japan. This maintains the "face" of the employee. Loss of face leads to suicide over there....so firings and layoffs are a huge social no-no. (as I said this appears to be changing somewhat). The Big Three are going to take this opportunity to file for bankruptcy after the government (backed by the mostly stupid American public which has no idea as to how the playing field has been stacked against them) refuses any bailout aid. In bankruptcy, the Big Three are going to disburse themselves of the vast majority of pension obligations outstanding. In short, if you did your thirty years at GM and expected a pension....YOU'RE ****ED....so sorry. About this time is when you are going to see GM retirees in the streets with guns. You mess with auto workers money and there WILL be a problem. Dave |
#22
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GM Failure
"F. George McDuffee" wrote in message ... On Fri, 5 Dec 2008 00:01:02 -0500, "Ed Huntress" wrote: snip The remaining manufacturers will pick up the slack. They will all be hiring. Are you sure? A sell off of the Big Three would result in so much displacement that car sales for the whole country are likely to tank, IMO. The multiplier effect throughout the economy will cause many more to be laid off or fired. And then there will be no reason to hire most of the fired workers, because nobody's buying. Welcome to the new equilibrium. Would you like to buy one of my apples? snip ------------- The problem is that no one knows, even if we turn the taxpayer money tap full on, if "Detroit" *CAN* survive as a commercially viable operation. I don't think that's the key question. The question, IMO, is whether our economy can take a hit that large right now, amidst all the other economic problems, without sinking into a full-blown depression. It's a question with two possible answers, one of which is a risk we can't afford to take. Of course with enough taxpayer subsidy per car, say 20 or 30 thousand $US per vehicle, Detroit can "survive," but then the question becomes "can the US economy survive?" A reasonable guess is that a delayed unraveling would be a lot better than a quick dip in a bath of acid. A cost of $100 billion, which is on the order of 1% of our GDP, would look like a missed bargain if the alternative turned out to be a large, persistent, and intractable level of unemployment. And there's always a chance that the Big Three, or the Big Two, could recover. I don't give that much probability but, again, the alternative is a lot uglier than sinking one or two percent of GDP into giving it a try. We would do well to remember that the US taxpayers are *ALREADY* supplying considerable subsidies for Detroit by picking up their retiree medical costs through Medicare, and at the state level, very considerable tax abatements on real estate, buildings, machinery, inventory, etc. and even direct funding through Economic Development Grants, OJ training, etc. Right now, it doesn't matter. Detroit's long-term viability is a question for some leisure time when the recession is over. The automotive transplants, because they are making a profit, are paying a reasonable share of the cost of running the government at various levels through their *INCOME* taxes, while "Detroit," because they are producing cars at a loss, are not paying any income tax, and indeed are generating large carry forward tax losses which will offset future income tax payments (assuming they ever earn any income). Given that any business operated at a loss is a drain on the macro/aggregate economy, just how long should major, for-profit corporation be allowed to operate at a loss before they are forced into chapter 11 or even chapter 7? The only thing that GM appears to have accomplished over the last 10 years is to dig the hole deeper, deeper, deeper, deeper. which the US taxpayers are now being asked to back-fill with 100$ bills. You can argue management decisions when we can put our feet up. Right now, we're trying to keep our feet out of wet concrete. George, we already know we're about to sink hundreds of billions into infrastructure projects, which will be inefficient because there's no market discipline to control them, but which most agree is a hell of a lot more productive than having people sit on their butts and collect unemployment while we wait for the cycle to bottom out and recover. Providing make-work for Detroit by having people build cars, even if the car makers can't restore competitiveness and profitability, is better than ripping the heart out of the upper Midwest and counting the bodies that bleed out and die. -- Ed Huntress |
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GM Failure
wrote in message ... On Fri, 05 Dec 2008 00:11:00 -0600, F. George McDuffee wrote: The automotive transplants, because they are making a profit, are paying a reasonable share of the cost of running the government at various levels through their *INCOME* taxes, while "Detroit," because they are producing cars at a loss, are not paying any income tax, and indeed are generating large carry forward tax losses which will offset future income tax payments (assuming they ever earn any income). Just let me step in here and make a comment. I have spent my entire "career" (if you can call it that) working for various automotive components suppliers......INCLUDING a stint at a tier 1 supplier to the Honda, Toyota, Nissan "kiretsu" (might be spelled wrong...damn Japanese translations). If you think these assholes are over here paying income taxes, you are sadly mistaken. While the actual end item suppliers may be paying taxes, they have a whole supply chain they brought with them doing some extremely underhanded stuff. The company I worked for (which shall remain nameless because I have LITIGATION pending against them) was doing this: Purchase components at jacked up prices from the parent company in Japan, assembly them with American workers here, sell the end item to Honda, Toyota, Nissan "at cost" or often times below cost, PROFITS TRANSFERRED HOME TO JAPAN IN COMPONENT PRICE.....report little or no income to Uncle Sam. You're quite right, and it's so common in world trade that economists even have a name for it, which I forget at this late hour. Every manufacturer who assembles in other countries does the same thing. That's how the world's car manufacturers, and other manufacturers, get their profits out of China, for example. They all do it. It's not playing nice but it's not the biggest problem we face, either. -- Ed Huntress |
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GM Failure
"Ed Huntress" wrote in message ... "John R. Carroll" wrote in message ... "oldjag" wrote in message ... Well, I guess most folks don't really care to much if the US auto companies fold, judging by the internet postings. If one or more does fold, who has the capital in the US right now buy up any of the assets? The remaining manufacturers will pick up the slack. They will all be hiring. Are you sure? A sell off of the Big Three would result in so much displacement that car sales for the whole country are likely to tank, IMO. The multiplier effect throughout the economy will cause many more to be laid off or fired. And then there will be no reason to hire most of the fired workers, because nobody's buying. This is happening/has happened already Ed. The real problem is that the plans being proposed won't work, They don't go far enough to convince the American people to get behind them and that is what it is really going to take. The example - step by step - that the Big Three needs to follow has been written in history. All of these guys are familiar with that example and if they aren't they should be. Had Rick Waggoner stood up and told Chris Dodd that if Congress would provide the financing GM had delivered it's last gas only vehicle, he would have stunned the room and then gotten a standing ovation AND the money, as much as was required, from the assembled. GM could be out taking orders for a vehicle to be named later this very day and Congress could agree to have the Treasury Dept. securitize those orders to provide the cash back to GM. It would be a self licking ice cream cone. The examples of BK'd automakers that bit the dust won't wash either. This is a very viable possibility today because none of the examples cited represented the end of home grown auto manufacturing in the US. It also ignores the Chrysler turn around. People bought K Cars by the thousands at a time when both GM, Ford, and the media were braying publicly about orphaned vehicles built and sold by a company that wouldn't survive. Lee Iaccoca sold the press and public. The rest is now history. See if your wife doesn't think these guys don't remind her a little of "small ball" Palin. Especially Gettlefinger. Where in hell did they find that ignorant bumpkin? I wouldn't buy a car, new OR used, from that cracker. JC |
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GM Failure
On Fri, 5 Dec 2008 00:10:32 -0800, "John R. Carroll"
wrote: Had Rick Waggoner stood up and told Chris Dodd that if Congress would provide the financing GM had delivered it's last gas only vehicle, he would have stunned the room and then gotten a standing ovation AND the money, as much as was required, from the assembled. GM could be out taking orders for a vehicle to be named later this very day and Congress could agree to have the Treasury Dept. securitize those orders to provide the cash back to GM. It would be a self licking ice cream cone. Let's point out another governmental fault: At one time there was a plan to build the Super Conducting Super Collider (SCSC) in Texas. This basic research into particle physics is the missing part in eventually changing the world over to nuclear fusion power (NOT fission...which we already have). The funding for the SCSC was cancelled after some Senate dumb**** asked one of the physicists on the team requesting funding for the project, "Will this help us find God?" No ****. The physicist didn't know how to answer and the funding got cancelled. We now have a consortium at CERN building the Large Hadron Collider (it's done...they're working out some kinks). Apparently all the research data will be shared amongst the international consortium members. So instead of being the sole world leader in the field of power creation through nuclear fusion, the US will be an "also ran" and all because the lawyer classes that end up in the Senate are scientifically RETARDED!!! So much for the product lead in electric vehicle technology in Detroit also. If there had been a major push to fusion, they would have been completely on board with it and once again the Big Three would be on TOP of the market. So is the US government made of of a completely blind collection of coke head pedophiles that pontificate that they are important people? Hell yes it is. If you've ever had any dealing with Federal officials, you can spot a stupid incompetent asshole everywhere you look. They have totally departed from reality. Dave |
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GM Failure
"Ed Huntress" wrote:
Wow, we are on the same page for a change. GM needs to root hog or die. Their choice. Wes Make sure you aren't sawing off the limb you're sitting on. I'm being pragmatic. I can divorce what is personally good for me from what is good for the country. |
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GM Failure
Wes wrote:
"Ed Huntress" wrote: Wow, we are on the same page for a change. GM needs to root hog or die. Their choice. Wes Make sure you aren't sawing off the limb you're sitting on. I'm being pragmatic. I can divorce what is personally good for me from what is good for the country. It's too bad the CEOs of the auto co. can't or WONT. :-( ...lew... |
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GM Failure
Ed Huntress wrote:
And then there will be no reason to hire most of the fired workers, because nobody's buying. People will still be buying cars they will just be the ones still being made. ?? fired workers. Just how many of them were "working"? :-) ...lew... |
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GM Failure
Ed Huntress wrote:
Right now, it doesn't matter. Detroit's long-term viability is a question for some leisure time when the recession is over. - Ed Huntress But Ed it's like the old leaky roof problem. When it's raining we can't fix it and when it's not raining it dosen't need fixing. ...lew... |
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GM Failure
On Thu, 4 Dec 2008 21:46:29 -0500, the infamous "Ed Huntress"
scrawled the following: "ATP*" wrote in message ... "oldjag" wrote in message ... Well, I guess most folks don't really care to much if the US auto companies fold, judging by the internet postings. If one or more does fold, who has the capital in the US right now buy up any of the assets? The cost of admission for new vehicle design is very high. They need to go bankrupt and reorganize. There will still be a US auto industry and it will be more competitive than ever without the UAW millstone around its neck. Most of the industry experts I've heard over the past few days say there will be no receivership and no reorganization. People don't buy cars from bankrupt manufacturers. (Studebaker is an example; once it became known they were thinking about getting out of the car business, they were.) I'm another perfect example. I saw the writing on the wall, with Ford probably not being solvent during my ownership of another of their vehicles, so I bought a Toyota Tundra instead of another Ford pickup. I was -very- happily surprised when I saw the near $15k price differential, too. All the F-150s were going for $40k+ around here and I got the Toyota for $26k. Then they tossed in $3k of discount for buying off the lot (even though they bought the truck at another dealer in Portland and drove it down. I didn't get exactly the truck I ordered, but I think I'm happier with the gold paint than I would have been with white. It doesn't show dirt.) They'll go straight to liquidation, possibly with a few months of receivership in order to handle the selloffs. The brands have very little goodwill equity so most of the remaining value will be real estate and hardware. The Chinese are already sniffing around, looking for possible bargains. Will the purchasers be doomed to inherit the UAW, or can that 'little problem' be removed during takeover, too? -- Smell is a potent wizard that transports you across thousands of miles and all the years you have lived. -- Helen Keller |
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GM Failure
On Fri, 05 Dec 2008 00:57:10 -0600, the infamous Richard J Kinch
scrawled the following: oldjag writes: Seems like a $35Bn loan to the car companies would be a better investment than AIG etc, especially if the unions provide some concessions to help. That one act of socialist force is better or worse than another, does not in the least justify either. The industry needs a destructive shakeout. Agreed. Auction off automakers 1 and 2, and declare all stock, management, and union assets as worthless as they are. Use the auction proceeds to bail out automaker 3. Make one good one out of three broken ones. That at least has a chance to produce a healthy and competitive surviving auto industry. The politicians can earn their keep by choosing who is 1, 2, and 3. Hey, that's the best idea I've heard yet. -- Smell is a potent wizard that transports you across thousands of miles and all the years you have lived. -- Helen Keller |
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GM Failure
On Fri, 5 Dec 2008 02:58:29 -0500, "Ed Huntress"
wrote: You're quite right, and it's so common in world trade that economists even have a name for it, which I forget at this late hour. Transfer Pricing. Common not only internationally but also interstate in the US for multistate corporations. "Profit" flows to lowest tax area. Internationally there are "divisions" established in tax haven countries such as Aruba, that take legal title but not physical possession of goods in international transit. Buy low, sell high and any "profit" winds-up in the tax haven, possibly with tax "losses" on each end. Every manufacturer who assembles in other countries does the same thing. That's how the world's car manufacturers, and other manufacturers, get their profits out of China, for example. They all do it. It's not playing nice but it's not the biggest problem we face, either. Like Leona Helmsley said "We don't pay taxes. Only the little people pay taxes ..." http://en.wikipedia.org/wiki/Leona_Helmsley also see http://www.money-rx.com/blog/2008/05...-american.html http://www.nytimes.com/2008/06/20/business/20tax.html Note the use of international credit cards. If the execs have international company credit cards billed to a tax haven account, they get "tax free" money to spend in the US. -- Ed Huntress 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). |
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GM Failure
On Fri, 05 Dec 2008 02:30:59 -0500, wrote:
In bankruptcy, the Big Three are going to disburse themselves of the vast majority of pension obligations outstanding. In short, if you did your thirty years at GM and expected a pension....YOU'RE ****ED....so sorry. ---------- In effect the Detroit management at the time the pensions were agreed to during the 60s, 70s, and 80s issued high interest zero coupon bonds for much of their labor costs. They knew they would be long gone when these "bonds" matured. http://www.sec.gov/answers/zero.htm It is becoming increasingly apparent [to me at least] that much, if not all, of the vaunted American "progress" of the last generation has been a gigantic fraud, with most of the "assets/profits" generated now exposed as "cobwebs and moon beams" for the vast majority of citizens. 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). |
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GM Failure
On Fri, 5 Dec 2008 02:41:01 -0500, "Ed Huntress"
wrote: snip And there's always a chance that the Big Three, or the Big Two, could recover. I don't give that much probability but, again, the alternative is a lot uglier than sinking one or two percent of GDP into giving it a try. snip -------- Most likely Ford can make it, especially with some additional credit and if GM goes. Chrysler with additional credit and if GM goes should also make it as a niche player [mini vans] and contract assembler/manufacturer for other car companies [AFAIK they are currently assembling VWs vans in the US] With the current management GM is doomed, and even if the management is replaced their financial structure is so bad that it is a "zombie" corporation. e.g. *NEGATIVE* 58 billion in stockholder equity http://www.businessweek.com/lifestyl...73_page_3.htm] and total book equity of *NEGATIVE* 65.1 billion with a total market cap of about 2.5 billion, or a ratio of -26:1 This appears to be an example of infinite leverage as there are huge liabilities/debts with no assets, and division by zero results in infinity. http://finance.yahoo.com/q?s=gm http://banking.senate.gov/public/_fi...ssionFinal.pdf {page 11} Chapter 11 does not appear a viable solution for GM, but rather Chapter 7, possibly with one or two select niche brands purchased by another company. Corvette by Tata anyone? 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). |
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GM Failure
"Lew Hartswick" wrote in message ... Ed Huntress wrote: And then there will be no reason to hire most of the fired workers, because nobody's buying. People will still be buying cars they will just be the ones still being made. ?? fired workers. Just how many of them were "working"? :-) ...lew... The important question is how many of them were bringing home a paycheck. The nice thing about someone else being overpaid is that they spend the money into the same economy the rest of us swim in. It becomes a bad thing when they make so much money that they invest it overseas to avoid taxes and high wages. -- Ed Huntress |
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GM Failure
"Lew Hartswick" wrote in message news Ed Huntress wrote: Right now, it doesn't matter. Detroit's long-term viability is a question for some leisure time when the recession is over. - Ed Huntress But Ed it's like the old leaky roof problem. When it's raining we can't fix it and when it's not raining it dosen't need fixing. ...lew... We can fix it even when it's raining. Whether a democratic government will ever be good at fixing roofs when it isn't raining is the real dilemma of democratic government itself. -- Ed Huntress |
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GM Failure
"Larry Jaques" wrote in message ... On Thu, 4 Dec 2008 21:46:29 -0500, the infamous "Ed Huntress" scrawled the following: "ATP*" wrote in message ... "oldjag" wrote in message ... Well, I guess most folks don't really care to much if the US auto companies fold, judging by the internet postings. If one or more does fold, who has the capital in the US right now buy up any of the assets? The cost of admission for new vehicle design is very high. They need to go bankrupt and reorganize. There will still be a US auto industry and it will be more competitive than ever without the UAW millstone around its neck. Most of the industry experts I've heard over the past few days say there will be no receivership and no reorganization. People don't buy cars from bankrupt manufacturers. (Studebaker is an example; once it became known they were thinking about getting out of the car business, they were.) I'm another perfect example. I saw the writing on the wall, with Ford probably not being solvent during my ownership of another of their vehicles, so I bought a Toyota Tundra instead of another Ford pickup. I was -very- happily surprised when I saw the near $15k price differential, too. All the F-150s were going for $40k+ around here and I got the Toyota for $26k. Then they tossed in $3k of discount for buying off the lot (even though they bought the truck at another dealer in Portland and drove it down. I didn't get exactly the truck I ordered, but I think I'm happier with the gold paint than I would have been with white. It doesn't show dirt.) They'll go straight to liquidation, possibly with a few months of receivership in order to handle the selloffs. The brands have very little goodwill equity so most of the remaining value will be real estate and hardware. The Chinese are already sniffing around, looking for possible bargains. Will the purchasers be doomed to inherit the UAW, or can that 'little problem' be removed during takeover, too? With a takeover, it varies with the contracts. And the courts set the rules in a bankrupcy. If they liquidate, though, it's no problem. The buyers would be purshasing buildings and machine tools, not people. -- Ed Huntress |
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GM Failure
On Fri, 5 Dec 2008 02:41:01 -0500, "Ed Huntress"
wrote: snip George, we already know we're about to sink hundreds of billions into infrastructure projects, which will be inefficient because there's no market discipline to control them, but which most agree is a hell of a lot more productive than having people sit on their butts and collect unemployment while we wait for the cycle to bottom out and recover. Providing make-work for Detroit by having people build cars, even if the car makers can't restore competitiveness and profitability, is better than ripping the heart out of the upper Midwest and counting the bodies that bleed out and die. snip ------------ You may be right on this. After watching the two congressional hearings, [see other posting on urls to watch on your computer] it now appears the smartest move will be to provide 8-10 billion from TARP funds to get GM and Chrysler through the next 2 months until the new administration takes over, ==with the understanding that the GAO/IRS/SEC goes over their books to determine the actual situation using FASB/GAAS accounting, and if possibly a quick law enforcement/IRS check to see if there has been any gross kickbacks== [for our UK posters "hidden commissions"] and/or other flim-flam deals bleeding the companies by senior management. Then, based on the GAO/IRS/SEC report, a firm data-based decision can be made to "rescue," or to place under "conservatorship" and orderly liquidate, one or more of the companies. FWIW -- this is begriming to smell more and more like a classic long-con "bust-out scam." In any event the Directors of these corporations have considerable civil and quite likely criminal liability for their gross negligence [and possible acquiescence] in allowing the situation to develop to this extent. Win, lose or draw on the bail-out, a criminal investigation of the corporate governance seems fully justified here. 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). |
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GM Failure
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