F Wall Street - Give GM the money
At least GM has something to offerI've not been a big fan of an automaker bailout, unless used to make the Big 3 significantly more efficient. Earlier today, I even argued the bailout MUST include strings.
Well, I've changed my mind. Give GM the money.
Does GM deserve it? I don't care. If not for the Wall Street-created financial crisis GM wouldn't need any bailout money. Instead, we could just be angry at them for not making enough fuel efficient vehicles.
Still, if GM was selling two hybrid cars as successful as the Toyota Prius - for as long as Toyota has been selling hybrids - GM would STILL be facing bankruptcy.
GM is facing bankruptcy because of Wall Street. Yet, Wall Street is leading the charge to bankrupt the US auto industry? Please. The automaker bailout isn't even chump change compared to the money being spent on the chaos caused by Wall Street. At least GM sells a real product, unlike the expensive lies Wall Street sells.
Labels: bailout, GM, Hybrid Vehicles
posted by Dahcredyns at
2:20 PM
7 Comments:
ehhhhhhhh... OK.
You're right.
I'll toast to that.
Fox Business channel. sent to me these comments by Former Treasury Secretary Paul O’Neill re: an automaker bailout.
On Nancy Pelosi’s call to aid the auto industry:
“I see Nancy Pelosi is now saying we need to provide some kind of financial assistance to the automobile industry.”
“They have a failed business model. I think that’s a really important set of questions policy makers need to answer as to should we take our money, the taxpayers’ money and give it to institutions that have a failed business model? That’s an important question.”
On the problems in the auto industry:
“You know, last year in the automobile industry we had final sales between 15 and 16 million units. The sales rate last month was 10.9 million units. Think about helping the auto industry, the hole that needs to be filled is 5 million units of automobiles and light trucks that aren’t being demanded.”
“I think the automobile industry is very important to our country….But if you dimension the problem correctly, it’s 4.5 or 5 million units short of demand this year and probably next year going forward. Then we have a secondary problem, the big three, especially General Motors and Chrysler, were in difficulty before we started seeing this decline in demand.”
“If they’re going to put a lot of taxpayers’ money in the institutions, we should insist they finally come to grips with the fact that they have a failed business model. Getting them to make hybrid cars or more energy cars is not going to solve the basic business model…I think they’ve got to renegotiate all their contracts.”
On why the auto industry is not competitive:
“What are the current average total compensation costs for people who work on the assembly lines? When I knew what the facts were, a few years ago, it was $145,000 a year. Now the companies that are paying that level of compensation are competing with people making great cars and the all-in compensation is $80,000 or $90,000 a year. Unless they tend to that issue, putting money in there is really a way of overcompensating people beyond what the market is demanding, that they meet as competition.”
re: O'Neills comments.
I largely agree with these comments, but I think it is extremely important to point out that O'Neill was absolutely against the Wall Street Bailout. My point is that if you're going to bailout Wall Street, then GM is just as worthy - even more worthy.
Yes, i agree that two wrongs don't make a right, but bailing out GM helps Main Street far more than bailing out Wall Street. And with Wall Street leading the charge against a bailout of automakers, I suddenly find myself warming up to GM's plight - especially the Main Street employees at GM.
More to the point, however, renegotiating contracts is something GM has largely addressed, but the new contracts don't go into effect until 2010. So, GM and the Big 3 have largely resolved the major issue O'Neill suggests. So those compensation numbers will be resolved.
Has Wall Street resolved the ridiculous compensation of Wall Street? I mean how exactly do hedge funds and traders trading on momentum, rather than long term value, really help average Americans?
Again I digress. The Big 3's real contractual issues are regarding legacy costs. If GM goes under, whom secures these legacy costs? Tax payers?
Oh great! We can just let Wall Street manage these costs for a profit!
Had Wall Street not been bailed out I would probably agree with O'Neill, but we did, and to continue to slap Main Street in the face yet again is simply too much for me to tolerate.
Why is a nearly bankrupt government giving anyone money? Let GM's workers take it up with management. Why is this a government problem? Overpaid-underskilled execs drove the company into the ground. PERIOD!!!!!
Subsidies only make the handicapped more handicapped.
What ever happened to ownership of your own problems. I don't like Wall Street, but this is GM's own doing.
kp -
here's a different way to spin it.
Obama was quite clear, before being elected President, that he would bail out the US auto industry. he won, and the bailout shouldn't come as a surprise.
ultimately, i would have preferred no bailouts, starting with the 700 b for Wall Street - some of which will end up ensuring that Wall Street execs are payed tens of millions of dollars in bonuses each.
my neighbor is going into foreclosure, yet he's already bought another house after taking out every bit of equity in the bankrupt house. some how he funneled this money to a family member.
he stole, i'm gonna lose. so i understand your bailout anger. i'm living right next to it, still....
we spent $150 b to bailout AIG, but we can't spend $50 billion on the US auto industry? execs at AIG make far more than execs at GM.
i'm tired of this country doing everything for rich people and corporations. supporting a bailout of gm isn't about rich people, it's about the 3 millions Main Street workers that Wall Street seems to hate.
well f Wall Street
Unless the union makes concessions to make a successful business model, they will either fail again or need further bailouts.
i think it will take more than just union concessions, although, in 2010 a lot of new union concessions go into effect.
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