Automotive News, Media & Press - World markets plunge on US auto bailout failure

http://finance.yahoo.com/news/World-markets-plunge-on-US-apf-13816464.html

This is kind of prophetic. I knew that Toyota, Honda and the other Foreign OEMs would be hurt with our big 3 going down, but I didn't realize that the global market would react so drastically. Seamingly the entire world market realizes the effect that our Auto makers will have on "our economy" and therfore our ability to buy their products with the loss of so many American jobs.

Theres many people that post here and elsewhere that think it is kind of simple and say "let the big 3 fail". As you are seeing this play out now, it is not an option!! The big 3 go down we are going into a world wide Depression. You don't have to believe me or others that share my view, just watch it unfold in the news!

Good luck out there, it could get worse.

http://finance.yahoo.com/news/World-markets-plunge-on-US-apf-13816464.html

This is kind I prophetic. I knew that Toyota, Honda and the other Foreign OEMs would be hurt with our big 3 going down, but I didn't realize that the global market would react so drastically. Seamingly the entire world market realizes the effect that our Auto makers will have on "our economy" and therfore our ability to buy their products with the loss of so many American jobs.

Theres many people that post here and elsewhere that think it is kind of simple and say "let the big 3 fail". As you are seeing this play out now, it is not an option!! The big 3 go down we are going into a world wide Depression. You don't have to believe me or others that share my view, just watch it unfold in the news!

Good luck out there, it could get worse.:werd: I agree 100%.
It seems that some are so hell bent on seeing the automakers fails just to maintain some basic, old world principles that have now been proven to not work anyway that they haven't seen/realized the negative fallout/effects on the BIG picture.
They fail...we ALL fail.

People, please don't welcome or applaud the demise of the entire U.S. (world?) economy as we know it based merely on a few principles.

The new world credit system is what got us into this mess as it is completely based off confidence. Many times there are few firm assets that can back up the large credit accounts that business use today. EG: GM buying millions of dollars of parts from company X on credit and paying later.

It is not a good situation for anyone.

The new world credit system is what got us into this mess as it is completely based off confidence. Many times there are few firm assets that can back up the large credit accounts that business use today. EG: GM buying millions of dollars of parts from company X on credit and paying later.

It is not a good situation for anyone.Credit (and/or lack thereof), on all levels, plays a big role in all of this no doubt.

Any reasonable American should want the American auto industry to survive and prosper. We need the infrastructure and the jobs.

Having said that, I will also say that if they can only survive by being permanently propped up the extent that the companies just become another agency of the federal government like the post office, then I don't want my taxes increased to support them. Nor will I support them with my car buying dollars.

If the government builds it, I will NOT come.

Credit is a huge issue. GMAC is in a lot of trouble. We all know that GM doesn't sell to the public, but to the dealers. And a lot of the dealers finance most or all of the cars they buy from GM thru GMAC. Without the financing, GM won't have any customers. And they already have a big inventory of cars so where will they put new cars that they build.

P.S. I use and respect the post office. In my opinion, the services that they provide are a natural part of a governmental structure but manufacturing cars is not.

Don't count them down yet

http://www.msnbc.msn.com/id/28166218

If the bailout fails we can just all start making Yugos. :)

If the bailout fails we can just all start making Yugos. :)An even better yet, we can all start driving them too! :fluffy: :lol: :D

They will just file for bankruptcy and find a way to survive. This will force them to make drastic cuts and stop paying high school grads $80 an hour.

Bankruptcy will be the end of them.
I hate all these new article and post the fail to mention the amount of the stuff the Big 3 and their suppliers make for the Defense industry.

Bankruptcy will be the end of them.
I hate all these new article and post the fail to mention the amount of the stuff the Big 3 and their suppliers make for the Defense industry.

Bankruptcy will not be the End of GM. It will be the Chpt 11 Wake up call that will force them to operate more efficently with or with out the UAW.

Bankruptcy will not be the End of GM. It will be the Chpt 11 Wake up call that will force them to operate more efficently with or with out the UAW.

Personally, I believe going into bankruptcy at this time will further erode the confidence in our automakers and cause additional market loss, which would in turn lose more jobs that are not taken up by the Foreign OEMs.

Ideally, I would tie conditions for the loans on the CEOs to tie their pay to how profittable the companies are, and get the UAW to have similar wages and benefits that other equivalent US jobs have. Internally, GM should take the team that reinvented the new Malibu and use them as an example of how to design and develop their other car lines. The truck lines need no help as they have been leading their sector in mileage for years and the new diesel will only add to that.

Bankruptcy will be the end of them.

I know you heard the UAW leader say the same thing yesterday, but he's full of shit. He knows the majority of citizens do not want this bail out and he is playing the fear factor. It would be the end only if they did not make sure all the vehicles kept a warranty and parts available. And of course they can do that.

Personally, I believe going into bankruptcy at this time will further erode the confidence in our automakers and cause additional market loss, which would in turn lose more jobs that are not taken up by the Foreign OEMs.

Further erode? Doubt it. Our idiotic sheeple here in the States already seem brainwashed into thinking imports are better quality and more reliable. Look at what you see mostly driving on the roads. Hondas, Toyotas, Nissans. Any of you that bought one of those fell for the same brainwashing. The fact is that American autos have caught up in terms of quality, exceed in performance and safety, and have caught up in terms of reliability. The confidence in American autos is already eroded, otherwise there wouldn't be this financial issue while Toyota and Honda show a profit.

I'd rather see the big three go bankrupt and be forced to start clean. New management, less overhead costs, reduced UAW costs. I'd rather see a profiting company that runs lean and mean, we already know that they have the talent to produce some good products now. We just need to have them operated by better people, without union interference.

Further erode? Doubt it. Our idiotic sheeple here in the States already seem brainwashed into thinking imports are better quality and more reliable. Look at what you see mostly driving on the roads. Hondas, Toyotas, Nissans. Any of you that bought one of those fell for the same brainwashing. The fact is that American autos have caught up in terms of quality, exceed in performance and safety, and have caught up in terms of reliability. The confidence in American autos is already eroded, otherwise there wouldn't be this financial issue while Toyota and Honda show a profit.

I'd rather see the big three go bankrupt and be forced to start clean. New management, less overhead costs, reduced UAW costs. I'd rather see a profiting company that runs lean and mean, we already know that they have the talent to produce some good products now. We just need to have them operated by better people, without union interference.Tony, I totally agree! That's biggest problem I see with the situation. The fact that they (UAW) wouldn't agree to labor cuts until 2011 shows the arrogance of the union still. This isn't 1935 when unions were needed to project employees. We now have labor laws to do that. The whole reason we are in this mess is because of the legacy costs for retired employees. Now, I don't think it's fair to cut those retirement and healthcare benefits to those no longer working - they can't go out and get another job. But, to those currently employed, they need to be paid what other auto workers at Toyota, Honda, and Nissan are earning. Don't like it - go get another job! My preference would be the removal of the UAW entirely. I think they control too much. I love hearing in the past how they "plan to strike" at GM/Ford/Chrysler until the get there benefits approved. That's the kind of shit that bugs me!! How a union can shutdown part of an organization until it gets it's own way. Wrong!!!

But, the thing that is really bothersome is that they are sticking to their guns on the labor costs, not realizing that the company might not even be around until 2011!!! This is probably more directed at Chrysler rather than GM, but I'd still like to see Chrysler around. What I envision happening with Chrysler is Renault/Nissan will buy from Cerebus, then kick the UAW out of it's factories. Chrysler then becomes profitable again! Then I might consider buying Challenger!

I know you heard the UAW leader say the same thing yesterday, but he's full of shit. He knows the majority of citizens do not want this bail out and he is playing the fear factor. It would be the end only if they did not make sure all the vehicles kept a warranty and parts available. And of course they can do that.

Nope, I didn't hear that dumb ass yesterday, his reason's are most likely different then mine anyway, but here is why I think it won't work.

Bankruptcy is not a vialbe option here. Too many jobs will be lost. Restructuring of a big company like has never happened and it isnt possible like it with the airline bankruptcies. There are no cleaning houses here, just too big and intertwined in the economy. Some sources say if GM fails, The Dow could easily go below 4000 or put the world in a depression.

Shit we gave the banks which produce nothing tangible and some were overseas over 800 billion. We should give GM what they ask for times 2. They cant sell their product because the banks we gave the money to wont free up the credit for financing of their cars. You can't let one of the largest companies in the world go belly up. It would be catastrophic to the world economy.

Having said that I have my own, no so logical, but good reasons why we shold do it. Just more of my gut feeling.

I don't mind shelling out the cash to keep them going, maybe they made some poor choices and made some crappy cars here and there, but they have always been there to support the defense industry with parts in times of need, something no Korean, Japanese or German company has done and will not do.
Maybe it is time to help them out incase we ever need them again.
We helped put them there, it isn't just one persons fault.
I guess most people have forgotten that and only really care about "ME"

Nope, I didn't hear that dumb ass yesterday, his reason's are most likely different then mine anyway, but here is why I think it won't work.

Bankruptcy is not a vialbe option here. Too many jobs will be lost. Restructuring of a big company like has never happened and it isnt possible like it with the airline bankruptcies. There are no cleaning houses here, just too big and intertwined in the economy. Some sources say if GM fails, The Dow could easily go below 4000 or put the world in a depression.
Shit we gave the banks which produce nothing tangible and some were overseas over 800 billion. We should give GM what they ask for times 2. They cant sell their product because the banks we gave the money to wont free up the credit for financing of their cars. You can't let one of the largest companies in the world go belly up. It would be catastrophic to the world economy.

Having said that I have my own, no so logical, but good reasons why we shold do it. Just more of my gut feeling.

I don't mind shelling out the cash to keep them going, maybe they made some poor choices and made some crappy cars here and there, but they have always been there to support the defense industry with parts in times of need, something no Korean, Japanese or German company has done and will not do.
Maybe it is time to help them out incase we ever need them again.
We helped put them there, it isn't just one persons fault.
I guess most people have forgotten that and only really care about "ME"

There you go..... if Bush hadn't announced that he was ready to use TARP funding early on Friday you would have seen the US market dive like the overseas markets did after the bailout failed.

The reason bankruptcy is NOT an option is that the economy is too fragile to handle the failure of the us auto industry and other related job losses.

Bare in mind.... even without failure of the US auto industry.... major job losses are coming in months ahead from major corporations.

I have been split on the bailout issue... however I could support it with certain requirements.... and under the "too big to fail" guise somewhat similar to AIG.... maybe more so.

However..... I am convenience that the bailout(s) [yes.... there will be more than 1] will become little more than subsidies to the US auto industry and will NEVER be repaid. Simply too much debt.


Long term.... the bailout(s) could still be a lot cheaper than the price of failure. :usa:

Nope, I didn't hear that dumb ass yesterday, his reason's are most likely different then mine anyway, but here is why I think it won't work.


Bankruptcy is not a vialbe option here. Too many jobs will be lost. Restructuring of a big company like has never happened and it isnt possible like it with the airline bankruptcies. There are no cleaning houses here, just too big and intertwined in the economy. Some sources say if GM fails, The Dow could easily go below 4000 or put the world in a depression.

You didn't show a reason why bankruptcy would be the end of GM. We all know jobs will be lost. That's going to happen anyway. That's just reality. People seem to think that if they get a bail out everyone will keep their jobs and everything will be fine and dandy. You don't even know if the bail out would work. Bankruptcy would not be the end of GM. It would be the end of the UAW. Which is a good thing. Then they could start making a profit like Toyota, who is selling the same amount of vehicles.

we could ask china for the 2.5 trillion in us cash they have of ours on trade for low quality dollar store items back.

we could ask china for the 2.5 trillion in us cash they have of ours on trade for low quality dollar store items back.

Word!

Additionally! I will throw up if I hear one more Lexus buyer tell me he'll never buy another American car based on some POS 74 Cherokee or an 81 Chevette. The typical person who makes such a statement hasn't supported American products in decades if ever at all. Some sort of weird pyscology based on self hate for being a sell out or denial that buying a foreign car actually hurts us all financially.

I have had nothing but good luck with my new GM and even a late model Ford (Go figure!) over the last 10years. And as long as the New Camaro comes into production next year I will be buying one.

As I have stated before, our Automakers go down so will the Foreign cars. Just watch the world market and Toyota and Honda stock go down as the big 3 are run through the ringer.



Here's an example of the reason why we do not want GM to going into bankruptcy. Failure is not an option:

NEW YORK (CNNMoney.com) -- General Motors has repeatedly said that "bankruptcy is not an option," largely because it's afraid no one will want to buy from a carmaker that might go under, leaving customers with a worthless warranty.

Bankruptcy fear was the single biggest reason car shoppers avoided buying GM cars, according to a survey conduced in the fall by CNW Market Research.

Among GM owners who bought their next car from another manufacturer, 32% cited a potential bankruptcy as the reason. The next biggest reason - dealership or pricing issues - pushed away only 11% of shoppers.

If GM (GM, Fortune 500) were to go bankrupt, 97% shoppers intending to buy a car within six months said they would stay away from the automaker, according to a different CNW survey. The figure for Chrysler was even higher at 98%.


http://money.cnn.com/2008/12/12/autos/gm_death_consumers/index.htm?postversion=2008121216&eref=rss_topstories

Word!

Here's an example of the reason why we do not want GM to going into bankruptcy. Failure is not an option:

NEW YORK (CNNMoney.com) -- General Motors has repeatedly said that "bankruptcy is not an option," largely because it's afraid no one will want to buy from a carmaker that might go under, leaving customers with a worthless warranty.

Bankruptcy fear was the single biggest reason car shoppers avoided buying GM cars, according to a survey conduced in the fall by CNW Market Research.

Among GM owners who bought their next car from another manufacturer, 32% cited a potential bankruptcy as the reason. The next biggest reason - dealership or pricing issues - pushed away only 11% of shoppers.

If GM (GM, Fortune 500) were to go bankrupt, 97% shoppers intending to buy a car within six months said they would stay away from the automaker, according to a different CNW survey. The figure for Chrysler was even higher at 98%.


http://money.cnn.com/2008/12/12/autos/gm_death_consumers/index.htm?postversion=2008121216&eref=rss_topstories


Not surprising.... people normally don't like to do business with any company with the "bankruptcy" stigma.... especially when buying what is a fairly expensive purchase. Bankruptcy would also destroy the re-sale value of cars.... again due to the stigma and the cars warranty becoming worthless. (This value destruction would also apply to current used cars still under their OEM warranties.)

Additionally! I will throw up if I hear one more Lexus buyer tell me he'll never buy another American car based on some POS 74 Cherokee or an 81 Chevette. The typical person who makes such a statement hasn't supported American products in decades if ever at all. Some sort of weird pyscology based on self hate for being a sell out or denial that buying a foreign car actually hurts us all financially.:werd:Exactly!
I hear that one all of the time as well and when I do I give it right back to them.
Japan sent/sold some serious shit over here in the '50s, '60s and even early '70s...rusting, oil burning pieces of crap yet somehow that history is conveniently forgiven/forgotten while too many people today seem all too happy to remind us about the bad era of GM/Ford/Chrysler vehicles.





I have had nothing but good luck with my new GM and even a late model Ford (Go figure!) over the last 10years.Same here. :usa:




As I have stated before, our Automakers go down so will the Foreign cars. Just watch the world market and Toyota and Honda stock go down as the big 3 are run through the ringer.True.

so is GM going to be dropping the prices of cars dramatically like the gas bubble and the housing bubble popping?

Here's an example of the reason why we do not want GM to going into bankruptcy. Failure is not an option:

NEW YORK (CNNMoney.com) -- General Motors has repeatedly said that "bankruptcy is not an option," largely because it's afraid no one will want to buy from a carmaker that might go under, leaving customers with a worthless warranty.


We have already addressed that. GM can ensure warranties and parts under Chapter 11. Anything that GM and the UAW says today is crap because they're trying to say anything they can to get my money. They are acting like a teenager who is mad because their parents won't give them any money after they showed they can't spend it wisely.

^^^^ Chapter 11 ..... GM can ensure warranties and parts under Chapter 11

Chapter 7.... liquidation.... NO WARRANTY.

Problem is.... people are turned off by the bankruptcy stigma alone..... and most don't even know the difference between a 7 and 11.... and for the ones that do know the difference... they know a chapter 11 can turn into a 7.

All that aside.... buyers simply won't buy a car from a bankrupt manufacturer.... Bankruptcy is NOT an option due to this alone.

GM's sales are down in part just due to the threat of bankruptcy.... if GM actually files... GM sales will PLUMMET!!!!!

Rather you are for or against the bailout.... President Bush is going to approve using TARP funding for the $15B in loans that will carry them through till Obama takes office. Obama and with House and Senate being controlled by the Democrats will no doubt approve more loans/bailouts.

However... I think these loans will NEVER be repaid.... the debt will simply be too much to ever to do so.... or IF they are.... it will take them FOREVER to do so.... especially if the estimated $100B is correct.

Still.... the price of the bailouts could well be less than the cost of failure. :usa:

so is GM going to be dropping the prices of cars dramatically like the gas bubble and the housing bubble popping?They already have.
Some of their cars were excellent values even before the latest discounts/rebates.
Now some of these deals are simply AMAZING. :nod:
I only wish I was in the market for a new G8 GT or pick up truck right now.

Still.... the price of the bailouts could well be less than the cost of failure. :usa::werd: It is still quite unfortunate that it even has to be this way :nono: but I do agree with you.

Problem is.... people are turned off by the bankruptcy stigma alone..... and most don't even know the difference between a 7 and 11.... and for the ones that do know the difference... they know a chapter 11 can turn into a 7.

All that aside.... buyers simply won't buy a car from a bankrupt manufacturer.... Bankruptcy is NOT an option due to this alone.

GM's sales are down in part just due to the threat of bankruptcy.... if GM actually files... GM sales will PLUMMET!!!!!


“But no one will buy a car from a bankrupt automaker.” Excuse the profanity, but who the fuck cares? GM is bankrupt. Its liabilities currently outweigh its assets by a factor of ten. A government loan will simply add another creditor to a long list. Head of the line, back of the line, big whoop. The fed’s $13b will keep GM on life support for what? A month? Three? And then what?

As there’s nothing GM can do to generate the profits it needs to cover its overheads, as any real turnaround would take over $100b and at least five years, sooner or later, GM is headed for more public humiliation. How much more of that can GM take?

http://www.thetruthaboutcars.com/gm-death-watch-223-pianos-and-pinheads/

If the economy wasn't as bad as it is..... the Bush administration would not even be considering a loan/bailout. I doubt even AIG would have got a bailout without our current economic situation. The idea here.... is NOT GM.... the idea is to prevent the disaster that a collapsible of GM could potentially cause, or hence the "Too Big To Fail" issues/debate.

As for paying the loans/bailouts back.... I really don't see that one happening... simply too much debt.... I suspect they loans/bailouts will NEVER be repaid.

Point is... even if the loan(s)/bailout(s) are never repaid.... the price of the bailouts could well be less than the cost of failure.

That $100B and 5 or even 10 years will seem like a drop in the bucket if the economy fails and sends the country into a depression which will cost Trillions and take an untold number of years to recover from.

Bush won't let GM go under... and Obama and Democrats will provide even more bailout money in the coming months.

I suspect the Obama administration will spend a lot more than $100B on programs that will be more controversial than the auto bailout and they will cost a lot more.

They will just file for bankruptcy and find a way to survive. This will force them to make drastic cuts and stop paying high school grads $80 an hour.

I agree to a point on this comment..... If I am not mistaken the BIG THREE will not be the first companies in the us to file Chapter 11, and have to find find a way to restructure ... They didn't need a multi BILLION dollar bail out. The answer is not to throw money at a problem. Which is what has been done for the last 20 yrs.It is a band aid.People need to be held accountable for poor business practices.I do feel for the workers loseing there jobs. I see it in the paper every day about our local GM plant. My job is related to the auto industry. This is not the first item the U.S. has been in an economic slump and will not bee the last......

This whole situation is unfortunate for many, practically all.
Most of us have tunnel vision right now, were not looking at all the things that got us into this situation, only the last couple of straws before the back of the camel breaks.

I believe that alot of people are looking for excuses. Do you honestly believe the UAW is the culprit? I certainly do not.. A multi-billion dollar industry does not fold because of labor cost. And please dont think that those guys are making 80+ Hr either...


The cost of raw materials increasing.... The sole dependency upon foreign products.....
The increasing rate of bad credit upon our citizens..

The foreign Automakers have it made... Foreign companies develop the machines and technology used in the industry.. They get materials cheaper because of new chemical plants over seas. Most of all they have the support of the US citizens to buy their products.

Yes, keeping alive the BIG 3 will let people keep their jobs and keep some chemical plants from cutting back but it will just be a band-aid.
You cant make money if you spend more than you take in, its that simple.

You know this country is in bad shape when you see pay day loan businesses being opened on every street corner.

Hang on for the ride guys, Its going to take more (alot more) than the Big 3 staying alive for this country to survive.

The words that people have been hearing are Chapter 11, Chapter 7, bankruptcy, bailout, etc... Now they may not know exactly what those terms mean but most people do know that's it's not good. The term "bailout" alone suggests that a company was about to go under and had to have emergency funding to keep going.

Most people associate "bailout" with the recent financial "boondoggle" that the majority of Americans opposed. Ask those people if that "bailout" worked for them. And now there's going to be another.

Maybe people are more optimistic than I would expect them to be about the American auto companies chances and would be willing to consider buying one of their cars. Sadly, at this point, they probably couldn't get financing anyway since GMAC is in the ditch as well.

The American auto companies will get bailed out and will just die a slow death with periodic infusions of more money until they just disappear like the American TV manufacters did in the late 60's and early 70's when people started buying Sonys and Panasonics.

“But no one will buy a car from a bankrupt automaker.” Excuse the profanity, but who the fuck cares? GM is bankrupt. Its liabilities currently outweigh its assets by a factor of ten. A government loan will simply add another creditor to a long list. Head of the line, back of the line, big whoop. The fed’s $13b will keep GM on life support for what? A month? Three? And then what?

As there’s nothing GM can do to generate the profits it needs to cover its overheads, as any real turnaround would take over $100b and at least five years, sooner or later, GM is headed for more public humiliation. How much more of that can GM take?

http://www.thetruthaboutcars.com/gm-death-watch-223-pianos-and-pinheads/
I would have to agree with you.



-----

Aside from that let's look at some other negative effects.

In all rationality, the courts are going to have to state that GM doesn't have to honor all of its debts. What I feel this will do is put a lot of the small GM suppliers into a crippling position. Good old small American Companies that make the boxes, bolts, timing sets, stickers, ect ect. hmmmmm these suppliers aren't in the package are they? they arent going to get any help.

Either way this goes it is going to put someone in a bad position. It all started with GM asking for more credit than it could handle from its suppliers.

If the govt orders a restructure of GM and order them to auction off many of their assets some of those debits will be paid off but no where close to all of it. Then, all of the supplier will have to find new customers and hope they can pay the bills.

The tricky part is CAN the supplier of GM survive to be there for GM?
.

But I digress, as I know much of everything we are talking about isn't firm facts. We just don't 100% know what will happen.

They will just file for bankruptcy and find a way to survive. This will force them to make drastic cuts and stop paying high school grads $80 an hour.

Your right because the guys who went to college are doing such a fine job running this country and these companies, obviously they derserve the money the make.:eyes:

Yes I went to college. I won't fault anyone who who tries to make more money no matter what their education level is. That is just good sense

I would have to agree with you.

The tricky part is CAN the supplier of GM survive to be there for GM?

.

Absolutely. The loss of American suppliers, big and small are what makes GM's survival so critical!