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Thread: The GM "Comeback" Fraud

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    Default The GM "Comeback" Fraud

    The U.S. taxpayer still owns 26% of "Government Motors" and it is less and less likely that we will ever get our money back. The share price would have to rise well over $50 a share. GM is currently stuck in the low 30's. There is no stability in upper management at GM. Chris Liddell, the CFO just left and GM is on its fourth CEO in less than TWO YEARS !

    GM 's current CEO Dan Akerson is still touting the Volt. Consumer Reports says it "just doesn't make a lot of sense" and only about 1200 have been sold so far this year. Akerson also touts China as GM's "crown jewel". Not only is China LESS profitable than North America but GM has lost both market share and profitability as of the 4th Quarter of 2010. GM reports its First Quarter next month.

    Despite a weak dollar ( EAGLE ? Are you READING this ? ) Opel is still in the red in Europe.

    For only the second time in the last 13 years, Ford sold more vehicles than GM in March. GM did have sales growth in February BUT they needed sales incentives $1000 HIGHER than the industry average to do it.

    GM is still on the hook to the UAW for pensions and health benefits.

    GM does not have an in-house financing arm. No more GMAC.

    Old GM's creditors will soon get warrants and shares in the "new" GM equal to about 25 % of the outstanding stock.

    And the old GM's bondholders ( remember them ? ) will finally get THEIR equity which they are likely to SELL . So too are investment banks and the U.S. and Canadian governments. When everyone is selling what happens to the share price ?

    Who's left holding the bag ? The taxpayer.

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    Default Re: The GM "Comeback" Fraud

    How did all those old union/pension contracts survive bankruptcy?

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    Default Re: The GM "Comeback" Fraud

    Quote Originally Posted by Eric Stoner View Post
    The U.S. taxpayer still owns 26% of "Government Motors" and it is less and less likely that we will ever get our money back. The share price would have to rise well over $50 a share. GM is currently stuck in the low 30's. There is no stability in upper management at GM. Chris Liddell, the CFO just left and GM is on its fourth CEO in less than TWO YEARS !

    GM 's current CEO Dan Akerson is still touting the Volt. Consumer Reports says it "just doesn't make a lot of sense" and only about 1200 have been sold so far this year. Akerson also touts China as GM's "crown jewel". Not only is China LESS profitable than North America but GM has lost both market share and profitability as of the 4th Quarter of 2010. GM reports its First Quarter next month.

    Despite a weak dollar ( EAGLE ? Are you READING this ? ) Opel is still in the red in Europe.

    For only the second time in the last 13 years, Ford sold more vehicles than GM in March. GM did have sales growth in February BUT they needed sales incentives $1000 HIGHER than the industry average to do it.

    GM is still on the hook to the UAW for pensions and health benefits.

    GM does not have an in-house financing arm. No more GMAC.

    Old GM's creditors will soon get warrants and shares in the "new" GM equal to about 25 % of the outstanding stock.

    And the old GM's bondholders ( remember them ? ) will finally get THEIR equity which they are likely to SELL . So too are investment banks and the U.S. and Canadian governments. When everyone is selling what happens to the share price ?

    Who's left holding the bag ? The taxpayer.
    The whole basis of your criticism is, bailing out GM goes against your ideology. The US government would have lost far more money in tax revenue if GM were to go out of business. It doesn't matter to you whether or not the bailout is successful. You're always going to criticize it because it goes against against your ideology.

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    Default Re: The GM "Comeback" Fraud

    Quote Originally Posted by Eric Stoner View Post

    Despite a weak dollar ( EAGLE ? Are you READING this ? ) Opel is still in the red in Europe.
    Opel manufactures their vehicles in Europe. The value of the dollar has no effect on their business.

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    Default Re: The GM "Comeback" Fraud

    Quote Originally Posted by eagle2 View Post
    Opel manufactures their vehicles in Europe. The value of the dollar has no effect on their business.
    And the parts that Opel uses to ASSEMBLE GM cars in Europe are made where ?

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    Default Re: The GM "Comeback" Fraud

    Quote Originally Posted by eagle2 View Post
    The whole basis of your criticism is, bailing out GM goes against your ideology. The US government would have lost far more money in tax revenue if GM were to go out of business. It doesn't matter to you whether or not the bailout is successful. You're always going to criticize it because it goes against against your ideology.
    My critique is based on the FACTS of the case. Nonetheless there is something to what you say. I remember when Chrysler was bailed out for the FIRST time some 30 years ago, a prominent economist at the time was asked what he thought about it and he said that he was more afraid of it succeeding than failing. That economist was Alan Greenspan and history since has proved him more right than wrong. "Too big to fail" ; "TARP" ; "TALF" ; Federalization of Student Loans ; QE I, II and probably III etc. etc. All to what end ? The only "success" has been in growing the National Debt.

    I supported Bankruptcy for GM. A REAL bankruptcy. The Chrysler bail-out of 1980 was little more than Federal loan guarantees of $4 billion if memory serves. Malcolm Fraser and the UAW made painful, REAL concessions to preserve jobs while Chrysler re-tooled. Lee Iacocca was a much different animal than the current revolving door management ot GM.

    My point was really a very simple one : Let's call the GM bailout what it REALLY was - a taxpayer subsidy NOT an "investment". To date it has been a FAILURE. Contrast GM's performance to that of Ford which did NOT take Federal bail-out money.

    Capitalism is the most successful economic system ever devised because it is based on profit and LOSS. Profits are the incentive to invest and take risks. Losses are the discipline factor that tempers risk taking. The major reason we had an economic meltdown was because risk was removed from the equation. It used to be that a bank would decide whether to lend or not after weighing the risk of default. The Wall St. Whiz Kids thought they had perfected a system where everyone from borrower to lender was able to pass the risk along to someone else. With GM, decisions were made that put GM where it found itself before the bailout. The government effectively removed risk as a factor in thiose decisions.

    Remember Pan Am, Eastern, Braniff, Gimbels, Linens and Things, Zenith, Sylvania and a host of other companies ? All were permitted to fail. Their experiences were cautionary tales for their competitors and the economy as a whole.
    Last edited by Eric Stoner; 04-19-2011 at 08:12 AM.

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    Default Re: The GM "Comeback" Fraud

    update from WSJ at

    Basically, US taxpayers are already heavily underwater in regard to the GM shares they hold versus the cumulative price paid per share in 'bailout' money. Estimated break even ( not counting losses to inflation ) would require the US gov't to be able to sell its shares at $53 ... versus a present value of less than $30. To make matters worse for US taxpayers, at long last on April 21st 'new' GM will finally issue equity to the bondholders of 'old' GM in the form of new stock shares and warrants. And just like printing US dollars out of thin air, printing GM stock shares will reduce the value of all previously existing GM shares - guaranteeing an even larger loss for US taxpayers !!!

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    Default Re: The GM "Comeback" Fraud

    Quote Originally Posted by Eric Stoner View Post
    My critique is based on the FACTS of the case. Nonetheless there is something to what you say. I remember when Chrysler was bailed out for the FIRST time some 30 years ago, a prominent economist at the time was asked what he thought about it and he said that he was more afraid of it succeeding than failing. That economist was Alan Greenspan and history since has proved him more right than wrong. "Too big to fail" ; "TARP" ; "TALF" ; Federalization of Student Loans ; QE I, II and probably III etc. etc. All to what end ? The only "success" has been in growing the National Debt.
    and Alan Greenspan was one of the people most responsible for the worst financial crisis in 75 years. I hardly consider him someone who's opinion we should take seriously.

    Quote Originally Posted by Eric Stoner View Post
    I supported Bankruptcy for GM. A REAL bankruptcy. The Chrysler bail-out of 1980 was little more than Federal loan guarantees of $4 billion if memory serves. Malcolm Fraser and the UAW made painful, REAL concessions to preserve jobs while Chrysler re-tooled. Lee Iacocca was a much different animal than the current revolving door management ot GM.
    A REAL bankruptcy might have meant GM going out of business. A lot of people aren't going to buy cars from a manufacturer that looks like it won't be around much longer.

    Quote Originally Posted by Eric Stoner View Post
    My point was really a very simple one : Let's call the GM bailout what it REALLY was - a taxpayer subsidy NOT an "investment". To date it has been a FAILURE. Contrast GM's performance to that of Ford which did NOT take Federal bail-out money.
    No, it was a success. GM didn't go out of business and probably over a million people didn't lose their job as a result.


    Quote Originally Posted by Eric Stoner View Post
    Capitalism is the most successful economic system ever devised because it is based on profit and LOSS.
    As I said before, your view is based on your ideology rather than the results. In your mind, it would have been better for GM to go out of business, have possibly over a million people lose their job during a major recession, and the government lose hundreds of billions of dollars in lost tax revenue and unemployment benefits, than it would have been for the government to spend $50 billion to help GM, and have the company survive, because that goes against your ideology.

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    Default Re: The GM "Comeback" Fraud

    ^^^ the special conditions created by the gov't for the GM "bankruptcy" very simply amounts to a case of the gov't picking 'winners' and 'losers' ... with the obvious winners being the UAW, the GMAC bankers, and subprime new auto buyers ... and the obvious losers being US Taxpayers and US workers with money invested via US Pension Funds. If there is a point of 'ideological' disagreement here this is clearly it !!!

    As to the other attempted argument that GM's 'bankruptcy' was the 'least of the evils' situation, that certainly remains to be seen. I'll start paying attention if and when GMAC = Ally Bank pays back TARP 'loans', if and when US produced GM vehicles actually start selling in volume and at a profit based on their own merits ( as opposed to selling due to Ally Bank subprime financing availability and/or GM sacrificing all profit margin in order to make sales ), etc. Arguably, unless and until that happens, GM and its UAW workers are still dependent on an ongoing flow of financial 'life support' courtesy of the US Taxpayer.


    (snip)"Washington — Chevy Volt Sales Slump, GM Asks for Government Handout

    By Robert Romano – Recent reports find that General Motors (GM) is lobbying for the passage of legislation by Michigan Senator Debbie Stabenow that would turn a $7,500 electric vehicle tax credit into a rebate that will be available to all consumers at the point of sale. It’s been dubbed “Cash for Clunkers II”.

    Right now, the $7,500 tax credit can only be redeemed at the end of the year when taxes are filed, and are applicable to purchases of the Chevrolet Volt. Apparently, Chevy is not pleased with its sales — 321 units sold in January and 281 in February — out of 30,000 cars made for 2011, and a planned 45,000 to be made in 2012.

    At that rate, just 3,600 of the cars will be sold this year, 12 percent of the supply. Will the additional 45,000 even run off the assembly line?

    The asking price of $41,000 for the Volt, or $33,500 even with the tax credit is the likely culprit for the poor sales. Plus the fact that the car can only go 100 miles before needing to be recharged hardly makes it an attractive investment. Put simply, consumers are being asked to pay more for something that is of less quality.

    That alone might explain why GM thinks the current tax credit is insufficient. But it’s only half the story.

    Since GM’s initial public offering in November, the government sponsored automaker has been desperate to boost overall sales on a monthly basis. As such, GM boosted buyer incentives for the past four months. GM’s incentive spending averaged about $3,663 per vehicle in January, and $3,732 in February, more than $1,100 over the industry average.

    According to the CarConnection.com, “That’s increased GM’s market share — albeit at the expense of image, resale value, and even company profits — oddly, at a time when most other automakers have admitted that such a strategy doesn’t make long-term business sense.”

    So, in March the additional spending incentives came to an end, with GM announcing that it would be returning buyer incentives to the industry average. Unfortunately, according to MSNBC’s Dan Carney, “the word in the industry is that sales slumped in March once the incentives expired.”

    That does not bode well for GM. Apparently, the only thing keeping sales figures up has been massive buyer incentives — which, considering the U.S. Treasury’s 33 percent stake in the company, are effectively another form of government subsidy.

    So, they can’t keep giving the incentives out because they are destroying what it left of the GM brands and it is becoming increasingly hard to hide the fact that they are losing on each car because they are, in effect, rebating back their profits to consumers in order to move the metal.

    So, they have had to cut the incentives, tank the sales and now are throwing the ball back into Barack Obama and Congress’ court with Cash for Clunkers II to boost sales of the Volt. They are hoping that Uncle Sam cutting a $7,500 check at the point of sale will make a difference.

    Whether it would or not, this just another bailout for GM "(snip)

    from

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    Default Re: The GM "Comeback" Fraud

    Quote Originally Posted by eagle2 View Post
    and Alan Greenspan was one of the people most responsible for the worst financial crisis in 75 years. I hardly consider him someone who's opinion we should take seriously.



    A REAL bankruptcy might have meant GM going out of business. A lot of people aren't going to buy cars from a manufacturer that looks like it won't be around much longer.



    No, it was a success. GM didn't go out of business and probably over a million people didn't lose their job as a result.




    As I said before, your view is based on your ideology rather than the results. In your mind, it would have been better for GM to go out of business, have possibly over a million people lose their job during a major recession, and the government lose hundreds of billions of dollars in lost tax revenue and unemployment benefits, than it would have been for the government to spend $50 billion to help GM, and have the company survive, because that goes against your ideology.
    The bloom is certainly off the rose as far as Mr. Greenspan is concerned. He made several serious errors that helped create the current mess. There is no doubt about that. Nonetheless his point was a valid one and the bailouts of first Lockheed, then NYC and then Chrysler helped give rise to this whole "too big to fail " nonsense that has proven to be robbery of the taxpayers to bail out fat cats.

    GM would have survived in some way , shape or form. At the time there were no less than two prominent turnaround specialists standing by to pick up the pieces and take over GM. That ought to have been permitted to happen. Along with all the other real benefits of a real bankruptcy. Wasn't it Obama's "ideology" that had him think it was a proper Federal function to pick a "winner" ? That it was a proper use of taxpayer money to bail out a private company ? That secured creditors who were supposed to be first in line got shunted to the rear ?

    Now who's ideological slip is showing ? GM a "success" ? Based on WHAT ? First of all, it ought not be up to the taxpayers to bail out a private company and its UNIONS for foolish, shortsighted decisions they made over the years. For instance, over the past 20 years or so, GM sold off every profitable division and operation that Roger Smith had built up during his tenure as CEO. Despite being a horse's ass, Smith left GM profitable and diversified. The proceeds from those asset sales did NOT go into new plant and equipment and/or better product development, but instead were used to fund health and pension benefits and to pay GM workers for NOT working. Why should the taxpayer have to bail out a company like that ?

    What if all this "help" does not work ? What if the Volt proves to be the lemony sinkhole that I and many other analysts think it to be ? The sales figures certainly say that it is . As Mel and I have pointed out, the reality is that GM has NOT repaid its government loans. Call us "nitpicky" but using proceeds from one government loan to pay back another still leaves GM as a net debtor to the taxpayers. What if GM never returns to real profitability ? Without stable management how do they seriously construct a long term plan and business model that works ? Then what ? Another bail- out ?
    Last edited by Eric Stoner; 04-22-2011 at 07:23 AM.

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    Default Re: The GM "Comeback" Fraud

    According to GM, there was 'Substantial doubt' about survival at the time.

    http://money.cnn.com/2009/03/05/news..._10K/index.htm

    If they would have gone out of business, it would have been a major blow to our economy, at a time when our economy was already in dire straits.

    GM's bailout was a success in that GM did not go out of business and is now operating profitably.

    The whole basis for your opinion of the Volt is because it goes against your ideology. I'm sure that 15 years ago you would have said the same thing about Toyota's program to develop the Prius. So far the Chevy Volt program is on schedule to build and sell 10,000 this year.

    http://green.autoblog.com/2011/03/07...bers-rise-may/

    If the Volt, or a similar type vehicle, turns out to be successful, our country will greatly benefit. It will greatly reduce our need for oil, and it will greatly hurt our enemies whose economies are dependent on the sale of oil. It will also greatly reduce air pollution. Eventually all of our electricity will come from emission-free sources, such as wind and solar. While this probably won't be happening for a few decades, it will also be a few decades before most of the vehicles on our roads are electric. If we're not willing to make investments in new technologies, none of this will ever happen. Again, your opposition to the Volt is based entirely on ideological reasons. No matter how much potential benefit there is in building a vehicle of this type, you're going to oppose it because it goes against your ideology.

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    Default Re: The GM "Comeback" Fraud

    Quote Originally Posted by eagle2 View Post
    According to GM, there was 'Substantial doubt' about survival at the time.

    http://money.cnn.com/2009/03/05/news..._10K/index.htm

    If they would have gone out of business, it would have been a major blow to our economy, at a time when our economy was already in dire straits.

    GM's bailout was a success in that GM did not go out of business and is now operating profitably.

    The whole basis for your opinion of the Volt is because it goes against your ideology. I'm sure that 15 years ago you would have said the same thing about Toyota's program to develop the Prius. So far the Chevy Volt program is on schedule to build and sell 10,000 this year.

    http://green.autoblog.com/2011/03/07...bers-rise-may/

    If the Volt, or a similar type vehicle, turns out to be successful, our country will greatly benefit. It will greatly reduce our need for oil, and it will greatly hurt our enemies whose economies are dependent on the sale of oil. It will also greatly reduce air pollution. Eventually all of our electricity will come from emission-free sources, such as wind and solar. While this probably won't be happening for a few decades, it will also be a few decades before most of the vehicles on our roads are electric. If we're not willing to make investments in new technologies, none of this will ever happen. Again, your opposition to the Volt is based entirely on ideological reasons. No matter how much potential benefit there is in building a vehicle of this type, you're going to oppose it because it goes against your ideology.
    What did you think GM was going to say when they were running hat in hand to Washington ? That if there were no bailout that they would find some way to just muddle through ? Are you seriously that naive ?

    A bankruptcy does not necessarily mean a company goes out of business. You've heard of "debtor in possession " ? RESTRUCTURING ? That was what had the UAW having every sort of conniption possible.

    My "ideology " has nothing to do with my view of the Volt. All I have done is join many analysts ( who get paid good money to do this sort of thing ) and analyze the costs , marketing history, DEMAND and SALES for the Volt. To date it has been a failure. They haven't sold close to 10,000 units and you know it. I have yet to see a single one on the road and I drive a lot. Have you ? Unlikely because as of the end of January, 2011 GM had sold a whopping 647 units !

    "Eventually all our electricity will come from wind and solar " ? When ? At what cost ? Right now it's a pittance and the near future looks no better. Excluding hydropower , we get about 1 % of our electricity from wind, solar, geothermal and other renewable sources.

    I am all for new technology and alternative energy. But until those things are both practical and affordable, what are we supposed to do in the meantime ?
    Last edited by Eric Stoner; 04-22-2011 at 07:45 AM.

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    Default Re: The GM "Comeback" Fraud

    Quote Originally Posted by eagle2 View Post
    According to GM, there was 'Substantial doubt' about survival at the time.
    Whenever top management tells you there is substantial doubt about survival, you have to do a little interpreting. What they are really saying is there is substantial doubt that top management will keep their jobs. That's how they define survival. Beyond that, everything else is secondary. That's why I went into top management. Being a chief is far better than being an indian.

    If they would have gone out of business, it would have been a major blow to our economy, at a time when our economy was already in dire straits.
    Therein lies the only real reason to for bailing out GM. A failure and the economy of the nation and the world takes too big a hit.

    GM's bailout was a success in that GM did not go out of business and is now operating profitably.
    GM is earning a tiny operating profit. Most of their Net income before taxes is from interest income. Unless GM is going to become a financial services company (and many think it should as it is most definitely an inept automobile manufacturer) that is sustainable. However, if GM remains in the car business, it will have to earn more operating profits or trim the size of the company.

    The whole basis for your opinion of the Volt is because it goes against your ideology.
    So true.

    HTH
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    Default Re: The GM "Comeback" Fraud

    GM is earning a tiny operating profit. Most of their Net income before taxes is from interest income. Unless GM is going to become a financial services company (and many think it should as it is most definitely an inept automobile manufacturer) that is sustainable. However, if GM remains in the car business, it will have to earn more operating profits or trim the size of the company.
    ^^^ the earlier point about GM being ( overly ) dependent on Ally Bank definitely bears a bit of additional commentary ...

    - Ally Bank is able to offer above market rates of interest to CD buyers and other capital investors because it has access to 'zero interest rate' TARP funds courtesy of the US taxpayer. Arguably this gives GM ( and Chrysler ) a 'leg up' versus Ford and foreign owned American assembled car companies who must pay higher spreads on interest for access to funds with which to make car loans.

    - as a matter of lending policy, Ally Bank is able to approve new auto loans for the purchase of new GM ( and to a small degree Chrysler ) vehicles by 'subprime' borrowers that carry interest rates which are far below the expected true 'cost' of said loans after delinquencies and repossessions. This provides another huge 'leg up' for GM i.e. 'subprime' buyers faced with a choice of getting approved for a loan to purchase a new GM vehicle, versus being denied a loan to purchase any other brand of vehicle, are going to 'prefer' GM vehicles !!! Of course the true risk of future losses on these 'subprime' auto loans is ( partially ) borne by the US FED ( thus US taxpayer ) who owns toxic Ally Bank paper backed by these 'subprime' Ally Bank auto loans.


    The whole basis for your opinion of the Volt is because it goes against your ideology
    Nope the 'opinion' on the Chevy Volt boils down to hard sales volume numbers ( or shocking lack thereof ) versus the R & D investment made by GM ( and to a large degree US Taxpayers via EPA and other grants to GM ) to come up with the Volt's design in the first place. And those ( shockingly low ) sales numbers are taking place AFTER federal and state taxpayers have involunatarily kicked in up to $12,500 per vehicle worth of direct subsidy money to 'buy down' the actual net price paid by the Chevy Volt purchaser.

    The 'opinion' on the Chevy Volt also boils down to the hard fact that 54% of the 'fuel' powering Chevy Volts comes from the burning of COAL. Granted that the Chevy Volt's 'tailpipe' is actually attached to a coal fired power plant that is located far from a downtown city street, but that 'tailpipe' does exist and does belch out emissions !!!

    ~
    Last edited by Melonie; 04-23-2011 at 03:35 PM.

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    Default Re: The GM "Comeback" Fraud

    Quote Originally Posted by Zofia View Post
    Whenever top management tells you there is substantial doubt about survival, you have to do a little interpreting. What they are really saying is there is substantial doubt that top management will keep their jobs. That's how they define survival. Beyond that, everything else is secondary. That's why I went into top management. Being a chief is far better than being an indian.
    From what I remember, the CEO of GM, Rick Wagoner, resigned his position as part of the bailout deal.

    That's great that you were able to make it into top management.

    Quote Originally Posted by Zofia View Post
    Therein lies the only real reason to for bailing out GM. A failure and the economy of the nation and the world takes too big a hit.
    I agree. In general, I'm opposed to government bailing out failing businesses, but there are some circumstances where the harm to the economy would be so great, that bailing out the business is the least worse option, rather than allowing it to fail, and have hundreds of thousands of workers lose their jobs during a severe economic downturn.

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    Default Re: The GM "Comeback" Fraud

    Quote Originally Posted by Melonie View Post
    Nope the 'opinion' on the Chevy Volt boils down to hard sales volume numbers ( or shocking lack thereof ) versus the R & D investment made by GM ( and to a large degree US Taxpayers via EPA and other grants to GM ) to come up with the Volt's design in the first place. And those ( shockingly low ) sales numbers are taking place AFTER federal and state taxpayers have involunatarily kicked in up to $12,500 per vehicle worth of direct subsidy money to 'buy down' the actual net price paid by the Chevy Volt purchaser.
    You don't seem to understand the concept that when new technology comes out, it is more expensive, but over time, the technology becomes cheaper and more efficient.

    The first year the Prius was sold in the US, less than 6,000 of them were sold here. This year, Toyota is on track to sell over 150,000.

    Quote Originally Posted by Melonie View Post
    The 'opinion' on the Chevy Volt also boils down to the hard fact that 54% of the 'fuel' powering Chevy Volts comes from the burning of COAL. Granted that the Chevy Volt's 'tailpipe' is actually attached to a coal fired power plant that is located far from a downtown city street, but that 'tailpipe' does exist and does belch out emissions !!!
    ~
    and just because 54% of our electricity comes from coal today doesn't mean it always will. Electric vehicles probably won't become widely used for another 10-20 years. By then, we will be getting a lot more energy from wind, solar, and natural gas, and a lot less from coal.

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    Default Re: The GM "Comeback" Fraud

    Quote Originally Posted by eagle2 View Post
    You don't seem to understand the concept that when new technology comes out, it is more expensive, but over time, the technology becomes cheaper and more efficient.

    The first year the Prius was sold in the US, less than 6,000 of them were sold here. This year, Toyota is on track to sell over 150,000.



    and just because 54% of our electricity comes from coal today doesn't mean it always will. Electric vehicles probably won't become widely used for another 10-20 years. By then, we will be getting a lot more energy from wind, solar, and natural gas, and a lot less from coal.
    You don't KNOW that. Neither does anyone else. We hope that we will be getting a lot more electricity from wind, solar and natural gas. That is little more than a statement of aspiration.

    Have you listened to Obama lately ? Very little talk about "green" jobs or "jobs of the future" etc. Maybe someone finally got him to look at the job numbers from Spain where for every "green " job created , two traditional jobs were destroyed.

    Usually new technologies become less expensive and more efficient. Usually but not always. And with electric cars we are still in the ridiculous position of trading auto carbon emissions for coal generated carbon emissions. At least for the forseeable future.

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    Default Re: The GM "Comeback" Fraud

    Quote Originally Posted by Eric Stoner View Post
    You don't KNOW that. Neither does anyone else. We hope that we will be getting a lot more electricity from wind, solar and natural gas. That is little more than a statement of aspiration.
    No, it's based on trends. The cost of solar and wind energy has been decreasing from one year to the next and the amount of electricity being generated from these sources has been increasing. I read in one article that the amount of electricity being generated from solar power has been doubling every two years. If these trends continue, eventually we will be getting a significant amount of energy from these sources.

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    Default Re: The GM "Comeback" Fraud

    Quote Originally Posted by eagle2 View Post
    No, it's based on trends. The cost of solar and wind energy has been decreasing from one year to the next and the amount of electricity being generated from these sources has been increasing. I read in one article that the amount of electricity being generated from solar power has been doubling every two years. If these trends continue, eventually we will be getting a significant amount of energy from these sources.
    The jury is OUT on the economic viability and practicality of SOME of these much ballyhooed modalities. I have no problem with private industry and homeowners deciding to use wind or solar. I question the wisdom of letting government decide who gets the tax credits.

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    Default Re: The GM "Comeback" Fraud

    I have no problem with private industry and homeowners deciding to use wind or solar
    Actually I DO have a problem when the decision by private industry and homeowners is driven by a higher than market price 'feed in tariff' paid for solar and wind power they generate, that is subsidized by charging higher than necessary electric rates to ALL private industries and homeowners ! But this whole aspect is off topic !!!


    Circling back to the main topic, GM just released a blurb about their 1Q sales being up 27%. However, GM doesn't actually count vehicle sales to consumers !!! It counts new vehicles as 'sold' when they are shipped from the factory to a dealer ( or storage facility ). Thus a significant amount of GM's claim is based on the fact that 60,000+ vehicles were added to dealer / storage inventory during the first quarter, not actually sold to consumers !!!

    from

    (snip)"There is a reason Zero Hedge has been on GM's derriere over the past year in disclosing the firm's not so covert channel stuffing mandate. Just released is the validation:

    •GM MAY REDUCE PICKUP PRODUCTION, REUSS SAYS

    •GM TRUCK INVENTORIES ROSE TO MORE THAN 275,000 AT END OF APRIL

    Translation: more furloughs, less tax receipts by Tim Jeethner.

    As a reminder from yesterday:

    GM Channel Stuffing Hits Record In April

    Earlier today, GM posted better than expected April car sales, with total US sales up 26.4% on expectations of 14%. How much of this is due to a Toyota impairment is unclear. What is clear is that channel stuffing at Government Motors, whose Chinese sales are far more important than US sales these days, just hit a new all time record of 577,000, higher than the previous record of 574,000 from March, and 149,000 higher compared to a year ago. The good thing is that GM will never be able to complain about lack of inventory: it now has two and a half months worth of sales equivalent parked on warehouse financed dealer storefronts, in the form of rapidly depreciating autos."(snip)


    And of the GM vehicles that WERE sold to consumers, it remains to be seen how many 'subprime' buyers wind up actually paying off their ALLY BANK financed zero down low interest auto loans which enabled them to buy a GM car after Ford and other lenders turned down their auto loan application. Again, these ALLY BANK subprime auto loans are made possible via US Taxpayer TARP funds, with much of the default risk also shifted to the US taxpayer via US Fed packaged auto loan bond purchases.

    ~
    Last edited by Melonie; 05-04-2011 at 01:56 PM.

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    Default Re: The GM "Comeback" Fraud

    Very interesting information Melonie and Eric.

    Guess I take a much simpler look at it.

    -The UAW has made huge concessions on compensation and benefits to bring labor cost close to non-union plants in southern right to work states. It doesn't seem fair to blame all the pre-bankruptcy problems on unions when management spent a decade letting problems ride on high margin light trucks. Completely different situation now with Ford and GM both having a full spectrum of competitive vehicles and at the top in build quality. Please don't forget that end of the day auto workers are among the most productive in the world.

    -Would we have been better off with a full bankruptcy and fire sale liquidation of GM and Chrysler assets? Chinese interest could have bought all the tooling, technology and brands of those companies for pennies on the dollar while 2 million+ jobs were instantly vaporized. China grabbing the remnants of our heavy industry is about the last thing this country needs.

    -Regardless of accounting gimmicks it seems realistic in the long run that the government will be made whole, with interest on the emergency loans. I'd think differently if GM in particular was still selling crap vehicles nobody wants but they have a whole line of quality products and are sitting on the Volt tech golden egg.

    In sum I simply don't agree that unrestricted capitalism is the solution to every problem. Mistakes were made on all fronts @ GM and Chrysler but they are more deserving of help than the financial sector grifters who produce nothing but misery.

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    Default Re: The GM "Comeback" Fraud

    Quote Originally Posted by Melonie View Post
    Actually I DO have a problem when the decision by private industry and homeowners is driven by a higher than market price 'feed in tariff' paid for solar and wind power they generate, that is subsidized by charging higher than necessary electric rates to ALL private industries and homeowners ! But this whole aspect is off topic !!!
    Why do you have a problem when you don't live here?

    Like everything else, the whole basis of your opposition is that it goes against your ideology. You don't have a problem when people have to pay more for coal powered electricity in terms of health problems from all the poisons emitted from them, but spending any extra money for clean energy is out of the question for you.

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    Default Re: The GM "Comeback" Fraud

    Quote Originally Posted by Krill_ View Post
    Very interesting information Melonie and Eric.

    Guess I take a much simpler look at it.

    -The UAW has made huge concessions on compensation and benefits to bring labor cost close to non-union plants in southern right to work states. It doesn't seem fair to blame all the pre-bankruptcy problems on unions when management spent a decade letting problems ride on high margin light trucks. Completely different situation now with Ford and GM both having a full spectrum of competitive vehicles and at the top in build quality. Please don't forget that end of the day auto workers are among the most productive in the world.

    -Would we have been better off with a full bankruptcy and fire sale liquidation of GM and Chrysler assets? Chinese interest could have bought all the tooling, technology and brands of those companies for pennies on the dollar while 2 million+ jobs were instantly vaporized. China grabbing the remnants of our heavy industry is about the last thing this country needs.

    -Regardless of accounting gimmicks it seems realistic in the long run that the government will be made whole, with interest on the emergency loans. I'd think differently if GM in particular was still selling crap vehicles nobody wants but they have a whole line of quality products and are sitting on the Volt tech golden egg.

    In sum I simply don't agree that unrestricted capitalism is the solution to every problem. Mistakes were made on all fronts @ GM and Chrysler but they are more deserving of help than the financial sector grifters who produce nothing but misery.
    Considering the shape in which they helped leave GM, the UAW did just fine.
    Yes, GM management was inept and deserves AT LEAST an equal share of the blame.

    The auto workers who actually worked were fairly productive. Don't forget the Job Banks GM agreed to and all the "workers" who were getting paid six figures to sit at home.

    A REAL bankruptcy would not have been a "fire sale" by any stretch. It would have involved a more equal and fair sharing of the burdens and pain with less playing of favorites than actually took place.

    The jury is out on whether the government will ever be paid back in full.

    Likewise on whether the Volt has long term viability. To date it has been a white elephant.

    I agree with you about financial sector "grifters". But who has benefitted most under Obama ? Wall St. firms and investment banks.

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    Default Re: The GM "Comeback" Fraud

    Why do you have a problem when you don't live here?
    ... because I still pay a significant amount of US taxes ... some of which have made me an involuntary 'shareholder' of GM and an involuntary 'underwriter' of subprime ALLY BANK auto loans !!! Because I still own property in NY with ensuing utility bills.


    You don't have a problem when people have to pay more for coal powered electricity in terms of health problems from all the poisons emitted from them, but spending any extra money for clean energy is out of the question for you.
    This is very ironic given that the Chevy Volt's 'tailpipe' can actually be found at the ( 53% odds ) COAL FIRED POWER PLANT that supplies the energy to charge the Chevy Volt's batteries !!!


    Regardless of accounting gimmicks it seems realistic in the long run that the government will be made whole, with interest on the emergency loans. I'd think differently if GM in particular was still selling crap vehicles nobody wants but they have a whole line of quality products and are sitting on the Volt tech golden egg.
    ^^^ well, as Eric Stoner already pointed out, the degree of 'realisticness' regarding the US taxpayers being 'made whole' is highly speculative at this point in time. And this becomes even less 'realistic' if one goes beyond 'fixed dollars' and looks at the associated 'stealth' costs to US taxpayers of borrowing money from the Chinese / Arab Oil Shieks etc. at 3-4% and then 'loaning' it to GM at zero interest via TARP - if one counts the billions in outright grant money provided to GM by the DOE and gov't agencies - if one counts the 'inflated' prices paid to GM for fleet vehicle purchases by gov't agencies etc.

    As to GM selling quality products, this by itself is not enough - those quality products must also be sold at a sustainable profit level versus total input costs, something which is not happening at this particular moment ( i.e. recent GM sales volume has required GM to boost 'incentives' at the expense of profit margin). Those quality products must also be sold at a profit EXCLUSIVE of ongoing US taxpayer financial subsidies ( i.e. billions in 'free' TARP loans, research grant money from the DOE, etc. ). Granted that GM has been effective at using US taxpayer money to decrease it's input costs and thus increase future profit margins ... through construction of new subassembly manufacturing plants in Brazil and Asia !!!.

    (snip)General Motors to Invest $1 Billion in Brazil Operations -- Money to Come from U.S. Rescue Program
    from

    General Motors plans to invest $1 billion in Brazil to avoid the kind of problems the U.S. automaker is facing in its home market, said the beleaguered car maker.

    According to the president of GM Brazil-Mercosur, Jaime Ardila, the funding will come from the package of financial aid that the manufacturer will receive from the U.S. government and will be used to "complete the renovation of the line of products up to 2012."

    "It wouldn't be logical to withdraw the investment from where we're growing, and our goal is to protect investments in emerging markets," he said in a statement published by the business daily Gazeta Mercantil."(snip)


    And in regard to the technology 'value' of the Chevy Volt's electrical propulsion, arguably this isn't anything that differs significantly from Toyota. And ironically, it's nearly 100% dependent on low cost ( more specifically, low environmental and worker safety cost ) rare earth element mining, refining, and component manufacture in China for electric motors and batteries, dependent on low cost ( more specifically low worker pay rate ) electronics from Asia etc. From the point of pure technology, Tesla Motors of California is far and away the leader ... but the 'cash value' of this technology is apparently of limited value ... see


    The first year the Prius was sold in the US, less than 6,000 of them were sold here. This year, Toyota is on track to sell over 150,000.
    True on the surface. However, the REAL relevant question is how may would have been sold in the absence of large US taxpayer funded tax credits against the purchase price of hybrid / electric vehicles. How many would have been sold in the absence of 'stealth' road tax subsidies ( i.e. charging hybrid / vehicle owners road tax based on miles drive as opposed to the present mechanism of a gasoline surtax ). How many would have been sold in the absence of 'stealth' auto insurance rate subsidies ( i.e. cost shifting to conventional vehicle insurance rates ), in the absence of 'stealth' warrantee repair cost subsidies ( i.e. cost shifting to conventional vehicle warrantee repair costs thus conventional vehicle retail prices) etc.

    Contrary to popular belief, I have absolutely no problem whatsoever with any new technology ... providing that it is actually an economically viable alternative. My problems start when NON enconomically viable technologies are heavily subsidized by US taxpayer dollars in order to maintain the 'appearance' of economic viability. My problems get worse when many of these subsidies are actually being conducted by 'stealth' !


    ~
    Last edited by Melonie; 05-07-2011 at 06:04 AM.

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    Default Re: The GM "Comeback" Fraud

    Quote Originally Posted by eagle2 View Post
    Why do you have a problem when you don't live here?

    Like everything else, the whole basis of your opposition is that it goes against your ideology. You don't have a problem when people have to pay more for coal powered electricity in terms of health problems from all the poisons emitted from them, but spending any extra money for clean energy is out of the question for you.
    When are you going to stop with your "Ideology ! Ideology ! " silliness ? All it does it detract from your arguments and it unnecessarily personalizes the discussion.

    If Socialism had EVER been shown to be a viable, effective, workable system, then I would be a socialist. History has proven it to be failure. Nothing has been as remotely successful as free market capitalism .Not for generating wealth. Not for alleviating poverty. Not for promoting progress and achievement. Not even for keeping the air and water clean. Some of the "dirtiest" countries in the world are current or former communist and socialist regimes like China and Eastern Europe.

    As Melonie and I repeatedly point out, the problems with capitalism often occur when government bureaucrats try to subsitute their judgements for those best left to a free market. Failure is part of capitalism. A VERY necessary part becuase it punishes stupidity, stubbornness, failure to adapt and all sorts of other negative things.

    As Mel and I have repeatedly pointed out the juice for the Volt and the Leaf has to come from somewhere. At present, more than 50% comes from burning COAL. The emissions from such plants are much dirtier and more toxic than anything coming out the tailpipes of gasoline burning cars. We ALL hope that coal burning plants get replaced ASAP by cleaner ways of generating electricity but by WHAT ?

    Nuclear ? Very out of favor now thanks to Japan.

    Wind ? We'd need thousands of more turbines installed and it would help if certain Llibs stopped their NIMBY opposition to wind farms located where they might have to look at them.

    Solar ? I've heard and read that we'd need a solar farm the size of the state of Ohio to provide all of our electrical needs. There is only so much usable space in sunny states like Southern Nevada and Arizona and then you still have to get it from there to L.A. , Miami, Chicago ,N.Y.C. and thousands of other places with enough concentrated consumers of same.

    Geothermal ? Not very practical beyond a few locations where there are existing and exploitable geothermal vents.

    Like it or not, based on current and reasonably forseeable REALITY , regardless of anyone's "ideology", gasoline powered cars are here to stay. Likewise, within the same discernible and practical window of time, electric cars make little economic sense. To date, and for the next decade or so, they will do little more than make their owners feel better about themsleves while NOT having any practical positive impact on either the environment or our oil dependence.

    The clincher is that if they really were so practical, then the government would never have to offer any kind of incentive or subsidy for buying one. To date, the effort to create a demand for the Volt via government incentives has been a miserable failure.
    Last edited by Eric Stoner; 05-10-2011 at 09:01 AM.

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