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Thread: weekend commentary - Pelosi and Reid (as well as Obama) support gov't bailout of GM

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    Default Re: weekend commentary - Pelosi and Reid (as well as Obama) support gov't bailout of

    ^^^ I don't agree with your last assessment re the UAW. With an AIG like ongoing stream of federal bailout money, it would indeed be possible for the gov't and GM to serve as a 'make work' jobs program for overpaid UAW workers indefinitely ... with those oversized paychecks being funded by taxes collected from other (non-union) workers earning far less money per hour !

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    Default Re: weekend commentary - Pelosi and Reid (as well as Obama) support gov't bailout of

    Quote Originally Posted by Melonie View Post
    ^^^ I don't agree with your last assessment re the UAW. With an AIG like ongoing stream of federal bailout money, it would indeed be possible for the gov't and GM to serve as a 'make work' jobs program for overpaid UAW workers indefinitely ... with those oversized paychecks being funded by taxes collected from other (non-union) workers earning far less money per hour !
    Unless GM goes through a radical restructuring then they will eventually fail.
    Assuming Congress is dumb enought to prop them up for now ( not a bad bet considering how beholden many Dems are to the unions ) at some point it's going to be clear that it is not working and is not going to work and that GM is terminal.
    In the meantime,the Dems will get scorched by both the public and the media for trying to prop up a dying company. And then there will be total lay-offs and any unfunded health and pension obligations will also go "poof".
    Last edited by Eric Stoner; 11-14-2008 at 10:41 AM.

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    Default Re: weekend commentary - Pelosi and Reid (as well as Obama) support gov't bailout of

    while this isn't getting much mainstream media play ...




    (snip)""I'd want to be careful about bringing up a proposition that might fail," given that a rescue plan would likely fare better under a President-elect Barack Obama administration, Sen. Dodd (D., Conn.) told reporters on Capitol Hill. "There's some political considerations that need to be made over the next few days."

    Prominent Republicans have questioned bailing out Detroit's long-struggling auto makers, and partisan differences threatened to derail the Democrats' plans. House Minority Leader John Boehner of Ohio said Thursday that a multibillion-dollar rescue of Detroit auto makers would be "neither fair to taxpayers nor sound fiscal policy" without requiring dramatic reforms of the companies.

    "What assurances will Democrats give taxpayers about their chances of getting their bailout money back?" Mr. Boehner asked in a statement, questioning why Democratic leaders haven't insisted that auto makers produce a "credible plan to strengthen their financial health."(snip)


    ... thus it would appear that the Democrats are likely to decide that they must wait until they 'hold all the cards' in next year's congressional session before attempting to float a successful GM bailout package. However, GM may not be able to avoid declaring bankruptcy for that long.

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    Default Re: weekend commentary - Pelosi and Reid (as well as Obama) support gov't bailout of

    Quote Originally Posted by Melonie View Post
    while this isn't getting much mainstream media play ...


    http://online.wsj.com/article/SB122660438304425269.html

    (snip)""I'd want to be careful about bringing up a proposition that might fail," given that a rescue plan would likely fare better under a President-elect Barack Obama administration, Sen. Dodd (D., Conn.) told reporters on Capitol Hill. "There's some political considerations that need to be made over the next few days."

    Prominent Republicans have questioned bailing out Detroit's long-struggling auto makers, and partisan differences threatened to derail the Democrats' plans. House Minority Leader John Boehner of Ohio said Thursday that a multibillion-dollar rescue of Detroit auto makers would be "neither fair to taxpayers nor sound fiscal policy" without requiring dramatic reforms of the companies.

    "What assurances will Democrats give taxpayers about their chances of getting their bailout money back?" Mr. Boehner asked in a statement, questioning why Democratic leaders haven't insisted that auto makers produce a "credible plan to strengthen their financial health."(snip)


    ... thus it would appear that the Democrats are likely to decide that they must wait until they 'hold all the cards' in next year's congressional session before attempting to float a successful GM bailout package. However, GM may not be able to avoid declaring bankruptcy for that long.
    It's 50 - 50 whether GM can hang on until the Dems are in full control. They have a monthly overhead of at least $11 billion a month and their cash reserves are almost exhausted. The Dems realize this which is why they are desperately trying to sucker Bush and the Republicans to rescue GM sooner rather than later. BUT and this is key, NONE of the current bail-out proposals require ANY structural changes in either management or union contracts. At best they just try to fund re-tooling GM factories to build more fuel efficient cars which will take at least 18 months.

    Personally, I hope and pray that GM is forced into Chapter 11 BEFORE Obama is inaugurated. In fact, GM's major secured creditors could force it into Chapter 11.

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    Default Re: weekend commentary - Pelosi and Reid (as well as Obama) support gov't bailout of

    Quote Originally Posted by Melonie View Post
    because by leaving I am able to exempt the earnings and dividends on foreign stocks, foreign bonds, foreign CD's etc. from US taxes
    Unless you give up you US citizenship, ALL income derived anywhere in the world is subject to US income tax. If you are a citizen of a foriegn country and/or are out of the US for 330 days or more in a calendar year you are entitled to a roughly $87,000 exemption on foriegn income, but not capital gains.

    As to your previous point about leaving the US for the $50,000 in taxes extra under an Obama tax plan you will have to pay, I don't think it's that easily calculated. What if, Obama is able to run things well and gets the enonomy going again and get the housing market going again and even though your taxes %wise are higher but but so is you income, rents, capital gains etc. and that even with the higher % rate you wind up with more money. That's what happened under Clinton, everyone was doing pretty well, and I don't remember anyone complaining about taxes being too high under him. Also, our infrastructure was being maintained and our debt was being paid down.

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    Default Re: weekend commentary - Pelosi and Reid (as well as Obama) support gov't bailout of

    Unless you give up you US citizenship, ALL income derived anywhere in the world is subject to US income tax. If you are a citizen of a foriegn country and/or are out of the US for 330 days or more in a calendar year you are entitled to a roughly $87,000 exemption on foriegn income, but not capital gains.
    hint hint ... capital gains earned by a foreign corporation and paid out to corporate shareholders residing in foreign countries (including a single shareholder who happens to be a US citizen) count as foreign income for that single shareholder under IRS rules ... thus eligible for the $87,000 US tax exemption as long as that single shareholder doesn't spend more than 35 days per year within US borders ! Then to avoid 'domestic income tax' by the foreign country of residence (i.e. Costa Rica), all that need occur is that the foreign corporation be registered in a different foreign country (i.e. Belize).


    They have a monthly overhead of at least $11 billion a month and their cash reserves are almost exhausted. The Dems realize this which is why they are desperately trying to sucker Bush and the Republicans to rescue GM sooner rather than later. BUT and this is key, NONE of the current bail-out proposals require ANY structural changes in either management or union contracts.
    This is now starting to attract a whole bunch of mainstream media speculation / criticism. However, it would appear that Nancy Pelosi is going to try and force a GM bailout vote in a 'lame duck' congressional session anyhow. She better have extra staff standing by to receive phone calls and e-mails from millions of non-union workers who aren't thrilled about the idea of their tax money being used to 'subsidize' union jobs paying twice as much as they themselves are being paid !

    ~
    Last edited by Melonie; 11-14-2008 at 03:51 PM.

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    Default Re: weekend commentary - Pelosi and Reid (as well as Obama) support gov't bailout of

    Quote Originally Posted by Melonie View Post
    hint hint ... capital gains earned by a foreign corporation and paid out to corporate shareholders (including a single shareholder who happens to be a US citizen) count as foreign income for that single shareholder ... thus eligible for the $87,000 US tax exemption as long as that single shareholder doesn't spend more than 35 days per year within US borders !
    That's great, but when you do it that way you will then be liable for income taxes in the foreign country that you earned the proceeds in. There are some places where this can be avoided but I wouldn't want to live in any of them. Where I am it winds up being about 40% in addition to $1,100 that was necessary to form the corporation and the $500 a year fee to maintain it (gov't tax and registered agent fee). Besides that from your previous post of having Obama's proposed changes costing you $50,000 you should far exceed the $87,000 deduction. Where I am you can form a Foundation and recieve the income proceeds tax free but if and when they hit your personal account they are taxable. There are of course ways around all of this but your gambling whether you get caught or not. Sometimes getting caught being evasive with taxes can also mean forfeiting your residency which is a big risk if you really like where you are.

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    Default Re: weekend commentary - Pelosi and Reid (as well as Obama) support gov't bailout of

    I watched as much of the Senate hearings on the Auto bailout as I could and it was breathtaking. Wagoner, Mullaly and Nardelli and the UAW rep appeared to be living on a different planet. I listened incredulously as Wagoner rattled off all the "changes" GM has instituted. What he couldn't explain is WHY GM was losing billions per month BEFORE the economic slowdown.

    Nardelli is the guy who got kicked out of Home Depot and now runs Chrysler. He wisely tried to stay in the background. Ford's CEO Mulally seemed to be the only one with his head screwed on straight BUT even he whistled past the graveyard on such things as brand reductions. The UAW rep was a joke claiming that the workers have given up enough.

    The only voice of sanity was Professor Peter Morici of the University of Maryland, an expert on the auto industry. He made it clear that the DEMAND just does not exist for the number of cars the Big Three would have to sell just to survive even if EVERYTHING else breaks their way. Cars last a lot longer because they are much better made. He had a lot of other things to say about how defective their business model is and how and why any loan would just be good money after bad. It was kind of amusing the way the 3 Auto execs and union hump all sat at the same table peaceably with Morici while he detailed how ridiculously unrealistic they are being.

    It just gets clearer by the day that Chapter 11 is really the only option for GM.
    Toyota has two brands, Toyota and Lexus. GM has Chevy, Buick , Hummer,Cadillac,Saab,Pontiac, Saturn and GMC most of which duplicate each others cars. Toyota sells more cars with less than half the dealerships that GM has.

    Both the Dems and UAW are desperate to save jobs, pay and benefits at their current levels when those are the things strangling ALL our major car makers. The management wants to stay in place and effectively go on as before. Wagoner, especially has been amazing. He has run GM into the ground but the other day said it would be terrible if he and his team are canned because there isn't anyone else who is knowledgable enough to properly run GM. Even Carl Levin has grudgingly admitted that new management will be part of the price for any Federal help.

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    Default Re: weekend commentary - Pelosi and Reid (as well as Obama) support gov't bailout of

    I didn't watch the whole thing, but was stunned at the parts that I did catch. I sat in awed silence while the UAW rep spoke ... that guy is insane in the worst kind of way.

    I was also startled to hear the list of changes they had planned which would pull them out of their current hemorrhaging state. Wow.

    I just pray that chapter 11 arrives before they can get this bailout passed. I mean that quite literally ...

    Narcissus

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    Default Re: weekend commentary - Pelosi and Reid (as well as Obama) support gov't bailout of

    No bail-out for now. The Senate shelved it and won't take it up again until the new term. Of all things, it was apparently the 3 execs flying to D.C. on private jets that turned off enough Senators. As one said, "I can't believe you guys flew here on private jets to hold out tin cups."

    It also appeared to dawn on enough lawmakers that the Big 3 do NOT have a plan with or without a bail-out to go forward. That was immediately apparent in their testimony. They KNOW what has to be done but just refuse to do it. It costs GM $105, 000 in severance just to lay off one worker. IF that worker takes the money. If not, he or she can sit home and collect 90% of their salary for doing nothing.

    All the stakeholders in a potential bankruptcy do a LOT better if they continue to make cars than if one or more is liquidated. So does the UAW. What none of those nit-wits could even bring themselves to acknowledge is the finite DEMAND for cars. From a high of 17 million sold per year, it's down to 11 million and is unlikely to EVER go above 14 million even during a roaring boom. It's astounding that those nit-wits have to be told by Professor Morici (and others) that they cannot possibly be profitable unless and until they radically downsize and streamline regardless of whether or not Americans are buying their products.

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    Default Re: weekend commentary - Pelosi and Reid (as well as Obama) support gov't bailout of

    I'm happy about this. I was against a bail-out for them and the whole private jet thing was just the icing on the cake for me. I think chapter 11 would be a really good thing now. Along with a massive restructuring (including UAW contracts and dealership contracts) as well as getting rid of redundant brands and lines, they could come back. If not, then I guess they didn't deserve to stay in business in the first place.

    I'm loathe to see people lose their jobs and I wish a bailout would actually help but as a realist, I can see that there really is no other way to do things at this point. We can't bail-out every goddamn industry that couldn't control itself for the past few years without some huge strings attached and as it stands, I haven't seen any real strings. Maybe if we agreed to help with loans after Ch.11 that may work better but just giving them money? I don't think so. And by help I mean very limited help that will supplement traditional loans. I'm assuming they will be able to get loans because the whole $700 billion bail-out was so that banks could/would lend money again, right? So that's working out perfectly, right? No? You don't say!

    Bailouts suck (unless I can get one for my student loans).
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    Default Re: weekend commentary - Pelosi and Reid (as well as Obama) support gov't bailout of

    Quote Originally Posted by Miss_Luscious View Post
    I'm happy about this. I was against a bail-out for them and the whole private jet thing was just the icing on the cake for me. I think chapter 11 would be a really good thing now. Along with a massive restructuring (including UAW contracts and dealership contracts) as well as getting rid of redundant brands and lines, they could come back. If not, then I guess they didn't deserve to stay in business in the first place.

    I'm loathe to see people lose their jobs and I wish a bailout would actually help but as a realist, I can see that there really is no other way to do things at this point. We can't bail-out every goddamn industry that couldn't control itself for the past few years without some huge strings attached and as it stands, I haven't seen any real strings. Maybe if we agreed to help with loans after Ch.11 that may work better but just giving them money? I don't think so. And by help I mean very limited help that will supplement traditional loans. I'm assuming they will be able to get loans because the whole $700 billion bail-out was so that banks could/would lend money again, right? So that's working out perfectly, right? No? You don't say!

    Bailouts suck (unless I can get one for my student loans).
    We're much better off having the Government being a lender of last resort to DIP's and being a 3rd party guarantor of new car warranties.

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    Default Re: weekend commentary - Pelosi and Reid (as well as Obama) support gov't bailout of

    I truthfully wish (it will never happen) that they would all go chapter 11 and make some serious internal changes. Some of those changes (that I dream of, but know will never happen) would be the eviction/removal/dismissal of all the union contracts and agreements.

    Shit ... knock those out and then set the new wage (+ benefits) at an average of $43 I believe that was the recent estimate of competitors ... regardless ... Let them 'refuse to work' and picket the factories. Within days, there would be a mass exodus of disgruntled workers (I can't help but feel sorry for them as individually ... none of this was their fault) and a mass influx of extremely excited workers willing to replace them.

    Bleh ... it will never happen, but a man can dream.

    Narcissus

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    Default Re: weekend commentary - Pelosi and Reid (as well as Obama) support gov't bailout of

    ^^^ If I'm not mistaken, the $43 per hour aggregate figure for Hyundai, Subaru, Toyota, Honda, BMW etc for their US auto assembly plant workers also includes employee benefit costs ! I know for a fact that worker wage rates at Subaru (Indiana) are in the high 20's and that worker wages at BMW (North Carolina) are in the low 20's per hour.

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    Default Re: weekend commentary - Pelosi and Reid (as well as Obama) support gov't bailout of

    Quote Originally Posted by Melonie View Post
    ^^^ If I'm not mistaken, the $43 per hour aggregate figure for Hyundai, Subaru, Toyota, Honda, BMW etc for their US auto assembly plant workers also includes employee benefit costs ! I know for a fact that worker wage rates at Subaru (Indiana) are in the high 20's and that worker wages at BMW (North Carolina) are in the low 20's per hour.
    Labor costs are a BIG problem for the Big 3. Not their only problem but the biggest.

    Essentially, Carl Levin and the other bailout advocates want to redistribute wealth from the successful to the failed. They also say that bankruptcy must be staved off until GM perfects the batteries for it's "Volt". To date, it has flunked every road test. GM came up with it to curry favor with hundreds of automotive engineers currently serving in the U.S. Congress. There is already a tax credit of $7500 per electric car i.e. consumers are unwilling to pay a price that truly reflects cost. Btw, Toyota has yet to make a dime from sales of the "Prius". That's right. Toyota sells them at a loss.

    Congress could help the Big 3 by letting them count fuel efficient cars they produce at their overseas factories to meet CAFE ( corporate average fuel economy ) standards but Nooooooooo ! The Dems in Congress won't have it because those imports were not made by the UAW. It's becoming clear that Levin, Frank et. al. care most about the UAW to which "saving energy" takes a back seat and their last afterthought is the ultimate health and very survival of the automakers themselves.

    Another reason put forth for a bailout is that if GM and the others fold there are thousands of UAW retirees who would lose their health care and are TOO YOUNG FOR MEDICARE ! This is one of several reasons why the UAW is failing to generate sympathy among fellow members of the working class, even other union members. It's hard to feel sorry for able bodied middle aged RETIREES ! Anyone willing to buy a ticket for the next benefit for the UAW ?

    In 2005, Americans bought more cars than China, India, Russia and Brazil COMBINED. In 2008, those four are buying more cars than we are. Buick is the best selling brand in China with Chevy close behind. Cadillac Escalades and Hummers are selling briskly in Russia so long term prospects are actually good. In the next ten years world car ownership will DOUBLE. This is why valuable time is being wasted by delaying the inevitable and essential bankruptcy for the BIG 3.

    Based on their recent performance; their total lack of a plan for going forward and not even having a contingency plan for Chapter 11, the management of GM, Chrysler and maybe Ford simply must go. In the WSJ it was reported that all three were advised by both their in house and outside P.R. forms NOT to take their private jets to D.C. Their stubborn refusal to carry out the simplest and most basic P.R. ploy speaks volumes about their arrogance, detachment and overall incompetence.

    Last week GM's board confirmed its support for GM's management saying : " Nothing has changed. " It is not unfair to question the sanity of such people when almost all shareholder value has been wiped out under Mr. Wagoner. It was only a few years ago that GM sold for $90 a share. Where did they get these people ? They're like the last holdouts in the Fuhrerbunker in Berlin during April, 1945 telling Germany that "Victory is just over the horizon." I think using the term "bunker mentality" is actually rather charitable. I think some of these people are borderline psychotic.

    Currently a GM worker averages $73 per hour in wages and benefits. A Toyota worker, $48. To the average American worker, the latter figure looks pretty damn good and they can't understand why the UAW does not agree. AIG is turning into a sinkhole for Federal TARP funds - over $100 billion and counting. Citicorp is next on line. The American public already feels bamboozled by Paulson and the financial industry and is overwhelmingly AGAINST bailing out Detroit. Why should they ? Who wants to subsidize $105, 000 severance packages for high school drop - outs ? Or paying six figure salaries to drivers whose SOLE job is driving cars off the assembly line to parking lots to await shipment ? Or MANAGEMENT that fails to see anything wrong with that and a dozen other similarly bizarre pictures in a failed industry.

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    Default Re: weekend commentary - Pelosi and Reid (as well as Obama) support gov't bailout of

    well, under a Democratic super-majority, the facts about union autoworker contract wage rates aren't going to matter much ...

    (snip)"Barney Frank favors bailing out the Detroit automakers over letting them go into bankruptcy. Chief among his concerns is that bankruptcy might "bust" the unions. You know, those organizations whose contract demands have put Detroit on the brink of extinction.

    The Massachusetts Dem, chairman of the House Financial Services Committee, was interviewed by Maggie Rodriguez on today's Early Show. He appeared alongside Sen. Richard Shelby (R-Al.), ranking Republican on the Senate Banking Committee, who favors letting the automakers reorganize under Chapter 11.

    BARNEY FRANK: Bankruptcy would be very disruptive. Bankruptcy is a favorite spectator sport for politicians and experts who don't have to engage in it. You have a whole network of suppliers--small businesses and others--who would get "stiffed," to use the legal term, in a bankruptcy.

    There is also an assumption that if you do bankruptcy, you could undo labor contracts. Now the unions to their credit have negotiated some concessions. But you know, we already have too much union-busting and too much income inequality for the average worker in this country for us to now say by the way, if you're a company and you haven't been able to totally get rid of the unions, then go bankrupt and rewrite, write down the contracts."(snip)

    from

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    Default Re: weekend commentary - Pelosi and Reid (as well as Obama) support gov't bailout of

    of course, the rest of the world seems to have immediately abandoned their newly found post-election 'love' of America in light of the Big 3 Bailout ...

    (snip)"Nov. 21 (Bloomberg) -- A U.S.-triggered spate of global carmaker-bailout proposals may spark trade disputes over whether the Americans are unfairly trying to subsidize their industry or just making up for state aid foreign rivals already enjoy.

    As the U.S. considers a lifeline for its automakers, officials in Europe, Canada and Asia are considering their own aid packages -- even as the European Union threatens to lodge a complaint against any U.S. bailout to protect manufacturers from Renault SA in France to Fiat SpA in Italy.

    China also may complain, though the government is considering helping SAIC Motor Corp. and Guangzhou Automobile Group Co.

    Any World Trade Organization complaints may open a Pandora's Box, bringing to a head a long-simmering dispute over policies that U.S.-based General Motors Corp., Ford Motor Co. and Chrysler LLC say unfairly aid rivals, including state- financed health-care and retirement benefits, and currency policies.

    ``Frankly, it's stones and glass houses,'' said Garel Rhys, professor of automotive economics at Cardiff Business School in Wales. ``Everybody has been at this game for their own interests; nobody is pure.''

    Neelie Kroes, the European Union's antitrust chief, weighed in on the debate today, urging the bloc's 27 nations to avoid the ``costly trap of a subsidy race'' that would give some countries unfair advantages.

    Greater `Temptation'

    ``The temptation may be greater now for member states to give subsidies that can result in their economic problems being exported to their neighbors, but that would only worsen the economic difficulties,'' Kroes said at a conference in Brussels. "(snip)

    from

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    Default Re: weekend commentary - Pelosi and Reid (as well as Obama) support gov't bailout of

    It's not just GM who is hurting for sales. Here is a local Toyota ad posted today offering substantial discounts and 0% financing. This was unheard of just a few months ago.

    http://media.coxohiopublishing.com/W...008/index.html

    Of course Toyota is in much better shape financially than GM but aside from the Prius they aren't moving iron anywhere near like they used to. And using Melonies term, the tin foil hat crowd says Toyota is losing money on every Prius they sell.

    FBR
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    Default Re: weekend commentary - Pelosi and Reid (as well as Obama) support gov't bailout of

    ^^^^^^^^^^All the auto makers are sulfuring losses in sales.

    You should see Ferrari, where the 599 sold for 100-150+ above msrp, used, they can be had for under msrp (270ish -), Ferrari fucked itself with it's crap practices of intentionally limiting supplies, and the dealers screwed themselves by selling ony to people who would sell back the car at msrp (not losing money on the car). The dealers are in the cars for more than they are now worth. lol And their dealer inventory is at an all time high. haha karma, or is it carma. lol

    (EDIT:: those prices reflect a sudden loss of the floor, and not a gradual drop.)
    Last edited by glambman; 11-23-2008 at 10:24 PM.
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    Default Re: weekend commentary - Pelosi and Reid (as well as Obama) support gov't bailout of

    It is long past time to compare and contrast two auto bailouts that occurred around the same time- British Leyland and Chrysler. The British government bailed out British Leyland ( remember the "Triumph" ? ) without any serious downsizing or labor reforms. After a few years, it collapsed anyway despite billions of pounds poured down the drain. Chrysler in 1979 got Federal loan guarantees in exchange for warrants. They cut costs; reworked their union contract and came out with new product lines that consumers WANTED- e.g. the mini-van; Jeep Cherokees. Where is GM's plan ?

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    Default Re: weekend commentary - Pelosi and Reid (as well as Obama) support gov't bailout of

    Check out my post, #69 above. ^^^^^^^^^^^^^

    Now, read..........http://www.autoblog.com/2008/12/08/f...ffs-this-week/
    Quote Originally Posted by The Snark View Post
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    Default Re: weekend commentary - Pelosi and Reid (as well as Obama) support gov't bailout of

    International backlash growing re US auto bailout ...

    (snip)"But it is a strategy fraught with risks.

    The first, of course, is the one the president-elect himself highlighted. Government's record as a corporate manager is miserable, which is why the world has been on a three-decade-long privatization kick, turning national railroads, national airlines and national defense industries into private companies.

    The second risk is that if the effort fails, and the American car companies collapse or are auctioned off in pieces to foreign competitors, taxpayers may lose the billions about to be spent.

    And the third risk — one barely discussed so far — is that in trying to save the nation's carmakers, the United States is violating at least the spirit of what it has preached around the world for two decades. The United States has demanded that nations treat American companies on their soil the same way they treat their home-grown industries, a concept called "national treatment."

    Yet so far, there is no talk of offering aid to Toyota, Honda, BMW or the other foreign automakers that have built factories on American soil, employed American workers and managed to make a profit doing so.

    "If Japan was doing this, we'd be threatening billions of dollars in retaliation," said Jeffrey Garten, a professor at the Yale School of Management, who as under secretary of commerce in the 1990s was one of many government officials who tried in vain to get Detroit prepared for a world of international competition. "In fact, when they did something a lot more subtle, we threatened exactly that," referring to calls for import restrictions.


    Garten said he was stunned by the scope of the intervention that Washington was now considering. "I don't know that we've seen anything like this since the government told the automakers what kind of tanks to make during World War II," he said. "And that was just for the duration of the war — this could be for much, much longer."

    It is hard to measure just what kind of chances Obama may be taking with this plan, in part because so many parts of it are still in motion.

    In the short term, Democrats are floating the idea of linking $15 billion in immediate loans to the designation of a "car czar" who, in doling out the money, could require or veto big transactions or investments — essentially a one-man board of directors. The White House indicates that President George W. Bush, who has spent his entire presidency proclaiming that the government's role is to create an environment that spurs free enterprise and minimizes government regulation, would very likely sign the rescue plan.

    The first $15 billion and the car czar who oversees it, however, are only the beginning. "After that, we're in uncharted water," said Malcolm Salter, a professor emeritus at Harvard Business School who has studied the auto industry for two decades and, until a few years ago, was an adviser to General Motors and Ford. "Think about this: Who in the federal government would have the tremendous insight needed to fix this industry?""(snip)

    from

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    Default Re: weekend commentary - Pelosi and Reid (as well as Obama) support gov't bailout of

    Quote Originally Posted by Melonie View Post
    International backlash growing re US auto bailout ...
    I wonder how many of the nations complaining are aiding their own auto industry.
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    Default Re: weekend commentary - Pelosi and Reid (as well as Obama) support gov't bailout of

    ^^^ well the larger issue is that, while this US gov't 'subsidy' invoives the auto industry, the 'national treatment'' issue involves potential retaliation against all sorts of US industries with facilities located in foreign countries !!! In other words, if other countries see the US gov't treating its own US owned auto manufacturers in a manner that is different from the US gov'ts treatment of foreign owned auto manufacturers with facilities in the USA, it invites those foreign countries to start treating their own 'domestic' industries differently from American owned facilities in those foreign countries.

    This raises the spectre of a US bailout of the Detroit Three potentially resulting in massive 'foreign' earnings reductions for US companies involved in everything from banking to mining to manufacturing to food production to construction work in foreign countries - due to the fact that the foreign countries could impose unequal regulations on US owned facilities in their countries.

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