Auto Bailout Could Be Tied to Gov't-Run Overhaul

[Goldtanker]

Auto Bailout Could Be Tied to Gov't-Run Overhaul

Friday, December 5, 2008 9:00 AM


WASHINGTON -- The government would order a major restructuring of Detroit's struggling Big Three auto companies in exchange for a multibillion-dollar bailout under a plan circulating in Congress.

Skeptical lawmakers are weighing whether to dole out as much as $34 billion in aid to the automakers as the once-mighty companies make their second round of pleas for government help to keep them from collapsing by year's end and potentially deepening the nation's already painful recession.

With several lawmakers in both parties pressing them to consider a pre-negotiated bankruptcy - something they have consistently shunned - members of Congress and the Big Three both were contemplating a government-run restructuring that would yield similar results, including massive downsizing and labor givebacks.

Story here.

----------------------

We are reaching a level of absolute insanity here.  A group of professional politicians, most of whom have never had a job in the private sector, let alone managed a company - and who are the root cause of all the current problems - are now proposing to take over the economy.

[Goldtanker]

Interesting article, relating to the nationalization of the auto industry, containing a discussion of socialism and fascism.

[Goldtanker]

Barney Frank On Auto Bailouts

(CBS) Propping up ailing car companies is not what the government’s bailout for Detroit’s car makers is really about, says the man in the middle of the controversial plan. Barney Frank (D-Ma.), chair of the House Financial Services Committee, insists it is about the individual - saying the government needs to help the people in the car companies and other firms tied to the failing industry.

The 14-term congressman from Massachusetts talks to 60 Minutes correspondent Lesley Stahl in a interview to be broadcast this Sunday, Dec. 14, at 7 p.m. ET/PT.

"No. We’re not propping up companies. That’s your mistake," he tells Stahl, who had asked him about taxpayer money going to prop up companies that had made bad decisions. "We’re propping up individuals. The world doesn't consist of companies. The world is people. The country is people."

Story here.

---------------------------------

Listing of jobs in the private sector held by 14-term congressman from Massachusetts Barney Frank (one of the guys who got us in this whole mess):

1.


(cough) term limits (cough)

[inyurhed]

(cough) assassination (cough) 

[Lunal_Tic]

GM could become leaner, government-owned company

Apr 27, 9:19 PM (ET)

By TOM KRISHER

DETROIT (AP) - General Motors, once the colossus of American capitalism, will become a leaner, government-owned company if the Obama administration goes along with the automaker's plan to slash jobs, close plants and eliminate the legendary Pontiac brand.

As GM laid out the proposal Monday, new agreements fell into place between Chrysler and its unions in the United States and Canada, making it apparent that the future of both companies now rests with their creditors.

General Motors CEO Fritz Henderson said the company would offer the Treasury Department more than 50 percent of its stock to absolve GM of $10 billion in government loans.

The automaker also proposed that the United Auto Workers take GM stock for at least half the $20 billion the company owes to a union-run trust that will assume retiree health care expenses starting next year.
 
Combined, the union and government would own 89 percent of the century-old automaker, which has been bleeding red ink and is saddled with more than $62 billion in debt.

"It is unprecedented, but it signifies the importance of the automobile industry," said David Lewis, a retired professor at the University of Michigan who taught business history for 43 years.

Although the government has loaned money to corporations in the past, including to Chrysler in the 1970s, Lewis could not recall a time when it had taken a majority stake in a company.

Ugh. 
-LT

[linksep]

Right now might be a good time to pick up some FoMoCo stock (that's Ford Motor Company to anyone that doesn't reside inside my head).

Ford has been on a steep decline since May 7th, 1999, from $37/share to $5.19 as of right now. They didn't take any bailout money so they'll be the only "domestic" maker that's not a state run car company, they also aren't having their company merely given over to the unions.

I think if Ford could axe Mercury and Volvo, and grow a pair of nads to stand up to the unions they'd be at $200/share inside of 12 years.

I have always considered myself to be a "Ford-Guy" (even though I've owned 4 GM vehicles to 2 Fords and 2 foreign cars).

Here's my action plan for Ford:
1) Create new (smaller, hipper, younger) brand. (Like BMW did with Mini, Mercedes with SMART, Toyota with Scion, GM with Saturn...) I'll call this fictional brand Drof.
2) Use partnership with Mazda to re-brand Mazda 3 and Mazda Miata as Drof cars to start. Bring European-spec Focus over from Ford to Drof, dump American focus, 2011 Ford Fiesta becomes Drof Fiesta.
3) Develop honestly unique, small, affordable, and above all FUN cars, have the Mazda 2.3L Turbo engine available in EVERY vehicle offered.. That gives a good idea of the size of vehicles I'm thinking they should develop. Just for Reference... Ford 4.6L V-8 Mustang made 215 HP and 285 lb*ft torque in 1996-1997... Mazda 2.3L Turbo makes 263 HP and 280 lb*ft torque.
4)
5) PROFIT!

[inyurhed]

you're assuming they can stand up to the obama-gov't.-backed unions. i think that's a tall order. is it possible? yes. likely? not so sure...especially once the cap-n-trade crap is in place.