Still Don't Think Obama Should Have Saved GM? (1 Viewer)

[bueno]

I'm not having it both ways. The union and GM share blame. There is more than one signature on that contract!

So GM willing entered into contractual obligations, figured they could get away with not funding the agreed upon obligation, and it is the unions fault when GM was wrong?

Both sides were greedy and short-sighted.

While it was in the best interest of the UAW to keep GM viable, it was the management of GM's responsibility. The UAW negotiated for their members, they didn't make the management decisions that did GM in.

The Unions are the reason GM was in the position they were in the first place. Anyone who denies that is insane...

There doesn't seem to be any room for "both sides" though, so you are still insane claiming such per the above.

Do you really think the UAW would have agreed to a reduction in wages and benefits? That would have been the better approach, but GM also knew that continued labor unrest would do them in.

 

[TwinTurbo]

Ford started making money again long before GM started making money again by refusing government intrusion.

Ford was a better run company, plain and simple. GM did a pretty good job at failing prior to "government intrusion".

I disagree. Ford was just as poorly run as GM and was actually in worse shape in 2006. But they survived because they made a single smart/lucky move by securing a massive $20 billion dollar loan at the end of 2006 before the economic meltdown happened. They leveraged almost every asset down to the blue oval to make this happen. It was literally the one last shot to save the company in its existing state and the timing could not have been better. At the time, with their existing cash burn rate, Ford would not have lasted long without this financing. They would have inevitably failed and would have been forced to take a bailout. GM failed because they were poorly run AND because they didn't borrow much larger amounts of money when they still could. They only borrowed around $1.5 billion in late 2006 which was not enough to carry them through the economic collapse. So to sum up, Ford survived in spite of the fact that they were a poorly run company because they were able to get a massive amount of secured financing when the getting was still good. GM didn't and was forced to take it from the taxpayers instead.

 

[Bottomfeeder Sports]

Do you really think the UAW would have agreed to a reduction in wages and benefits? That would have been the better approach, but GM also knew that continued labor unrest would do them in.

Oh, please! Did you suggest the same of upper management (lower end management got crushed during this time by the way), of shareholders?

 

[Big 'N Tasty]

Would be interesting to know how many small businesses that $50 billion could have saved, and how many employees/jobs those businesses had to let go.

I would take a guess that it was over 200,000 jobs. But, more than likely they wouldn't have been union jobs.

 

[Guest]

I suppose 4 pages is too few to hope that someone has pointed out by now that one of the reasons the goverment said it was saving GM (and why it bailed out AIG) was not only the direct consequences of who they employed but also the broader economic network at which they were the center of.

 

[Andy Dufresne]

I suppose 4 pages is too few to hope that someone has pointed out by now that one of the reasons the goverment said it was saving GM (and why it bailed out AIG) was not only the direct consequences of who they employed but also the broader economic network at which they were the center of.

No, none of us were smart enough to point that out.Good thing you decided to drop by.

 

[The Z Machine]

Link to celebrities and some companies that filed for bankruptcy:

http://www.angelfire.com/stars4/lists/bankruptcies.html

Toni Braxton filed twice....the second time in 2010.

Still hot.

 

[CletiusMaximus]

I suppose 4 pages is too few to hope that someone has pointed out by now that one of the reasons the goverment said it was saving GM (and why it bailed out AIG) was not only the direct consequences of who they employed but also the broader economic network at which they were the center of.

No, none of us were smart enough to point that out.Good thing you decided to drop by.

Some simple facts are so widely accepted and unquestionably true that one expects there is no need to state them. However, the post immediately preceeding Matthias' suggests this particular simple, unquestionably true fact may not quite make it into that category.

 

[Andy Dufresne]

I suppose 4 pages is too few to hope that someone has pointed out by now that one of the reasons the goverment said it was saving GM (and why it bailed out AIG) was not only the direct consequences of who they employed but also the broader economic network at which they were the center of.

No, none of us were smart enough to point that out.Good thing you decided to drop by.

Some simple facts are so widely accepted and unquestionably true that one expects there is no need to state them. However, the post immediately preceeding Matthias' suggests this particular simple, unquestionably true fact may not quite make it into that category.

I think those two thoughts are completely independent of each other. But...tomato/tomahto.

 

[KarmaPolice]

I suppose 4 pages is too few to hope that someone has pointed out by now that one of the reasons the goverment said it was saving GM (and why it bailed out AIG) was not only the direct consequences of who they employed but also the broader economic network at which they were the center of.

So the moral of the story is that once you get to a random # of X employees or have a decent influence on the broader economic network, you can run the company however you want because the government won't let you fail? Pretty sweet deal.

 

[Bottomfeeder Sports]

So the moral of the story is that once you get to a random # of X employees or have a decent influence on the broader economic network, you can run the company however you want because the government won't let you fail? Pretty sweet deal.

I don't think the financial sector had all that many employees. I believe that too big to fail means too big to exists, but that requires the crazy talk of government interference of industry.

 

[Socrates11]

George Will has a column out today discussing the Chevy Volt, with this blurb at the end about GM...

In April, in a television commercial and a Wall Street Journal column headlined "The GM Bailout: Paid Back in Full," GM's then-CEO Ed Whitacre said "we have repaid our government loan, in full, with interest, five years ahead of the original schedule." Rubbish.

GM, which has received almost $50 billion in government subventions, repaid a $6.7 billion loan using other federal funds, a TARP-funded escrow account. Sen. Charles Grassley (R-Iowa) called this a "TARP money shuffle." A commentator compared it to "paying off your Visa credit card with your MasterCard."

Meretricious accounting and deceptive marketing are inevitable when government and its misnamed "private sector" accomplices foist state capitalism on an appalled country. But those who thought the ethanol debacle defined outer limits of government foolishness pertaining to automobiles were, alas, mistaken.

http://www.jewishworldreview.com/cols/will111410.php3

 

[Guest]

I suppose 4 pages is too few to hope that someone has pointed out by now that one of the reasons the goverment said it was saving GM (and why it bailed out AIG) was not only the direct consequences of who they employed but also the broader economic network at which they were the center of.

So the moral of the story is that once you get to a random # of X employees or have a decent influence on the broader economic network, you can run the company however you want because the government won't let you fail? Pretty sweet deal.

It is, actually. There's a saying, "When you owe money to the bank, the bank owns you. When you owe enough money to the bank, you own the bank." Same kinda concept.

 

[Guest]

I suppose 4 pages is too few to hope that someone has pointed out by now that one of the reasons the goverment said it was saving GM (and why it bailed out AIG) was not only the direct consequences of who they employed but also the broader economic network at which they were the center of.

No, none of us were smart enough to point that out.Good thing you decided to drop by.

Some simple facts are so widely accepted and unquestionably true that one expects there is no need to state them. However, the post immediately preceeding Matthias' suggests this particular simple, unquestionably true fact may not quite make it into that category.

I think those two thoughts are completely independent of each other. But...tomato/tomahto.

Eh. Cletius had it correct. The post above mine was basically the one I was responding to. It carried twin currents of insinuating that the money used to save GM could have saved more jobs propping up small businesses and the insinuation that the motivation for saving GM was that GM had union jobs. I was just dropping in and commenting that the actual jobs saved by saving GM were much greater than GM's direct hires. I agree it's not a particularly new or insightful view however it does contradict the insinuations made by Big 'N Tasty.

 

[Statorama]

So I guess it'll just be a happy coincidence that every member of the UAW votes for Obama (twice) in 2012.

 

[Big 'N Tasty]

I suppose 4 pages is too few to hope that someone has pointed out by now that one of the reasons the goverment said it was saving GM (and why it bailed out AIG) was not only the direct consequences of who they employed but also the broader economic network at which they were the center of.

No, none of us were smart enough to point that out.Good thing you decided to drop by.

Some simple facts are so widely accepted and unquestionably true that one expects there is no need to state them. However, the post immediately preceeding Matthias' suggests this particular simple, unquestionably true fact may not quite make it into that category.

I think those two thoughts are completely independent of each other. But...tomato/tomahto.

Eh. Cletius had it correct. The post above mine was basically the one I was responding to. It carried twin currents of insinuating that the money used to save GM could have saved more jobs propping up small businesses and the insinuation that the motivation for saving GM was that GM had union jobs. I was just dropping in and commenting that the actual jobs saved by saving GM were much greater than GM's direct hires. I agree it's not a particularly new or insightful view however it does contradict the insinuations made by Big 'N Tasty.

I don't claim to be an expert in economics, but why couldn't the small businesses that could have been saved also saved a lot of other "trickle effect" jobs that you are talking about with GM? I bet the thousands and thousands of small businesses that could have been saved had/have just as much suppliers that depend/depended on them as GM has. Honestly, I don't think it's that much of a stretch.

 

[Guest]

Eh. Cletius had it correct. The post above mine was basically the one I was responding to. It carried twin currents of insinuating that the money used to save GM could have saved more jobs propping up small businesses and the insinuation that the motivation for saving GM was that GM had union jobs. I was just dropping in and commenting that the actual jobs saved by saving GM were much greater than GM's direct hires. I agree it's not a particularly new or insightful view however it does contradict the insinuations made by Big 'N Tasty.

I don't claim to be an expert in economics, but why couldn't the small businesses that could have been saved also saved a lot of other "trickle effect" jobs that you are talking about with GM? I bet the thousands and thousands of small businesses that could have been saved had/have just as much suppliers that depend/depended on them as GM has. Honestly, I don't think it's that much of a stretch.

They could but you're already starting out fairly speculatively when hypothesizing how many small business jobs could be saved with $X. You become very attenuated once you start putting hard #s on what their trickle-down effect would be. With GM it was a pretty straight-forward calculation as their first-order suppliers were definite and known.And I don't know what the research is on it, but intuitively it seems to me that it's easier for 100,000 communities to absorb the loss of 1 small business that employs 2 people each than 5 communities each losing 40,000 jobs.

 

[Big 'N Tasty]

Eh. Cletius had it correct. The post above mine was basically the one I was responding to. It carried twin currents of insinuating that the money used to save GM could have saved more jobs propping up small businesses and the insinuation that the motivation for saving GM was that GM had union jobs. I was just dropping in and commenting that the actual jobs saved by saving GM were much greater than GM's direct hires. I agree it's not a particularly new or insightful view however it does contradict the insinuations made by Big 'N Tasty.

I don't claim to be an expert in economics, but why couldn't the small businesses that could have been saved also saved a lot of other "trickle effect" jobs that you are talking about with GM? I bet the thousands and thousands of small businesses that could have been saved had/have just as much suppliers that depend/depended on them as GM has. Honestly, I don't think it's that much of a stretch.

They could but you're already starting out fairly speculatively when hypothesizing how many small business jobs could be saved with $X. You become very attenuated once you start putting hard #s on what their trickle-down effect would be. With GM it was a pretty straight-forward calculation as their first-order suppliers were definite and known.And I don't know what the research is on it, but intuitively it seems to me that it's easier for 100,000 communities to absorb the loss of 1 small business that employs 2 people each than 5 communities each losing 40,000 jobs.

You are talking in hypotheticals, too. There's no way to tell for sure what suppliers what have gone under. In fact, this whole entire thread and topic is based on HYPOTHETICAL situations and ideas. Guess what, GM did get bailed out. So a conversation about if that was a good idea or not is based upon hypothetical situations of what could have happened if he didn't. And your comment about communities may be correct, but that doesn't change the number of families and individuals that would have been effected.

 

[rolyaTy]

IPO offering is looking pretty strong. Wonder what the financial situation will look like after this gets sorted out.

 

[Jayrod]

I suppose 4 pages is too few to hope that someone has pointed out by now that one of the reasons the goverment said it was saving GM (and why it bailed out AIG) was not only the direct consequences of who they employed but also the broader economic network at which they were the center of.

So the moral of the story is that once you get to a random # of X employees or have a decent influence on the broader economic network, you can run the company however you want because the government won't let you fail? Pretty sweet deal.

It is, actually. There's a saying, "When you owe money to the bank, the bank owns you. When you owe enough money to the bank, you own the bank." Same kinda concept.

I've never heard this, but it is very true.Know a couple of guys who have a TON of pull at banks due to the volume of loans they carry there.

 

[Statorama]

Still Don't Think Obama Should Have Saved GM?

Yep.

 

[Orange Crush]

Eh. Cletius had it correct. The post above mine was basically the one I was responding to. It carried twin currents of insinuating that the money used to save GM could have saved more jobs propping up small businesses and the insinuation that the motivation for saving GM was that GM had union jobs. I was just dropping in and commenting that the actual jobs saved by saving GM were much greater than GM's direct hires. I agree it's not a particularly new or insightful view however it does contradict the insinuations made by Big 'N Tasty.

I don't claim to be an expert in economics, but why couldn't the small businesses that could have been saved also saved a lot of other "trickle effect" jobs that you are talking about with GM? I bet the thousands and thousands of small businesses that could have been saved had/have just as much suppliers that depend/depended on them as GM has. Honestly, I don't think it's that much of a stretch.

Just think what kind of massive and inefficient government bureaucracy would have been created to determine which small businesses should be saved, whether the small business was legitimately failing or was trying to scam the government out of free money, the new forms and documentation that would be created, the time spent collecting and analyzing all the info for those forms. Gah! In the end it may have saved but half the private sector jobs, but created just as many new government jobs.

 

[Statorama]

Steering wheel falls off Chevy Cruze, recalls ensue

Hey, remember when the "sticking gas pedal" of the Toyota was on the front page of every newspaper and congressional hearings were necessary? Chevy is in the process of recalling the Chevy Cruze because the steering wheel can come off while you're driving. Interesting that the Chevy story isn't getting much national play at all. Hey, wait a minute. Isn't Chevy part of the company that the Obama Administration bought? Yeah, I think so. Could that be the reason the story has been buried?

Imagine turning your car’s steering wheel, or giving it a gentle tug, and having it break away from the steering column. Now you’re speeding along holding the suddenly useless wheel.

It sounds like a vision from a cartoon, or every driver’s nightmare. And it happened to at least one driver of a 2011 Chevrolet Cruze compact car last month, and General Motors Corp. is recalling 2,100 of the cars as a result.

While the recall affects a relatively small number of vehicles, it is an unpleasant development for Chevrolet, which has been riding high on the success of its new small car. Chevrolet sold 50,205 Cruzes through the end of March. That’s well short of the 76,821 units Toyota sold of the Cruze’s main rival, the Corolla, but it is ahead of the 37,379 Cobalts Chevy sold in the same period. The Cruze replaced the Cobalt and is supposed to be a departure from that uninspired model.

In documents filed with the National Highway Traffic Safety Administration, the car maker said it traced the problem with that particular car to a case in which the wrong wheel was put in a car and replaced later in the assembly process with the correct one. But the new wheel wasn’t attached properly, the car maker says.

When the wheel separated from the steering column, the driver was able to get the car to the side of the road safely, and the company says it has tested other cars from the production run and found no similar problems. General Motors says it believes this was an isolated incident.

Chevrolet says it has changed the production process to make sure the machine used to attach the steering wheel can accommodate only the correct one. The company is recalling cars that were built before it made the change.

Under the recall, dealers will inspect the steering wheel to make sure it is properly attached. This service is free of charge and the recall is expected to begin on or before April 8, 2011. Owners may contact Chevrolet at 1-800-630-2438.

 

[Al Czervik]

Steering wheel falls off Chevy Cruze, recalls ensue

Hey, remember when the "sticking gas pedal" of the Toyota was on the front page of every newspaper and congressional hearings were necessary? Chevy is in the process of recalling the Chevy Cruze because the steering wheel can come off while you're driving. Interesting that the Chevy story isn't getting much national play at all. Hey, wait a minute. Isn't Chevy part of the company that the Obama Administration bought? Yeah, I think so. Could that be the reason the story has been buried?

Imagine turning your car’s steering wheel, or giving it a gentle tug, and having it break away from the steering column. Now you’re speeding along holding the suddenly useless wheel.

It sounds like a vision from a cartoon, or every driver’s nightmare. And it happened to at least one driver of a 2011 Chevrolet Cruze compact car last month, and General Motors Corp. is recalling 2,100 of the cars as a result.

While the recall affects a relatively small number of vehicles, it is an unpleasant development for Chevrolet, which has been riding high on the success of its new small car. Chevrolet sold 50,205 Cruzes through the end of March. That’s well short of the 76,821 units Toyota sold of the Cruze’s main rival, the Corolla, but it is ahead of the 37,379 Cobalts Chevy sold in the same period. The Cruze replaced the Cobalt and is supposed to be a departure from that uninspired model.

In documents filed with the National Highway Traffic Safety Administration, the car maker said it traced the problem with that particular car to a case in which the wrong wheel was put in a car and replaced later in the assembly process with the correct one. But the new wheel wasn’t attached properly, the car maker says.

When the wheel separated from the steering column, the driver was able to get the car to the side of the road safely, and the company says it has tested other cars from the production run and found no similar problems. General Motors says it believes this was an isolated incident.

Chevrolet says it has changed the production process to make sure the machine used to attach the steering wheel can accommodate only the correct one. The company is recalling cars that were built before it made the change.

Under the recall, dealers will inspect the steering wheel to make sure it is properly attached. This service is free of charge and the recall is expected to begin on or before April 8, 2011. Owners may contact Chevrolet at 1-800-630-2438.

And it happened to at least one driver of a 2011 Chevrolet Cruze compact car last month, and General Motors Corp. is recalling 2,100 of the cars as a result.

Chevrolet sold 50,205 Cruzes through the end of March.

...the company says it has tested other cars from the production run and found no similar problems. General Motors says it believes this was an isolated incident.

...and nobody died. Yeah, this is just like the Toyota sticking gas pedal problem.

 

[eoMMan]

Steering wheel falls off Chevy Cruze, recalls ensue

Hey, remember when the "sticking gas pedal" of the Toyota was on the front page of every newspaper and congressional hearings were necessary? Chevy is in the process of recalling the Chevy Cruze because the steering wheel can come off while you're driving. Interesting that the Chevy story isn't getting much national play at all. Hey, wait a minute. Isn't Chevy part of the company that the Obama Administration bought? Yeah, I think so. Could that be the reason the story has been buried?

Imagine turning your car’s steering wheel, or giving it a gentle tug, and having it break away from the steering column. Now you’re speeding along holding the suddenly useless wheel.

It sounds like a vision from a cartoon, or every driver’s nightmare. And it happened to at least one driver of a 2011 Chevrolet Cruze compact car last month, and General Motors Corp. is recalling 2,100 of the cars as a result.

While the recall affects a relatively small number of vehicles, it is an unpleasant development for Chevrolet, which has been riding high on the success of its new small car. Chevrolet sold 50,205 Cruzes through the end of March. That’s well short of the 76,821 units Toyota sold of the Cruze’s main rival, the Corolla, but it is ahead of the 37,379 Cobalts Chevy sold in the same period. The Cruze replaced the Cobalt and is supposed to be a departure from that uninspired model.

In documents filed with the National Highway Traffic Safety Administration, the car maker said it traced the problem with that particular car to a case in which the wrong wheel was put in a car and replaced later in the assembly process with the correct one. But the new wheel wasn’t attached properly, the car maker says.

When the wheel separated from the steering column, the driver was able to get the car to the side of the road safely, and the company says it has tested other cars from the production run and found no similar problems. General Motors says it believes this was an isolated incident.

Chevrolet says it has changed the production process to make sure the machine used to attach the steering wheel can accommodate only the correct one. The company is recalling cars that were built before it made the change.

Under the recall, dealers will inspect the steering wheel to make sure it is properly attached. This service is free of charge and the recall is expected to begin on or before April 8, 2011. Owners may contact Chevrolet at 1-800-630-2438.

And it happened to at least one driver of a 2011 Chevrolet Cruze compact car last month, and General Motors Corp. is recalling 2,100 of the cars as a result.

Chevrolet sold 50,205 Cruzes through the end of March.

...the company says it has tested other cars from the production run and found no similar problems. General Motors says it believes this was an isolated incident.

...and nobody died. Yeah, this is just like the Toyota sticking gas pedal problem.

To be fair, a lot of Toyota's sticking gas pedal issue was due to driver error.

 

[Sarnoff]

Share dilution on the horizon?

More problems are already in the pipeline. The company's probably going to have to dilute its shares again: It recently laid the groundwork for further dilution by raising the number of authorized shares from 2.5 billion to 5 billion. I don't see how GM can meet its UAW pension obligations without issuing more shares -- but that will inevitably push the stock price even further below the $54 price that's break-even for the taxpayers.

Creditors of the old GM (Motors Liquidation Co.) will soon distribute warrants and shares for "New GM" that equal about 25 percent of outstanding shares -- further diluting the stock. And when they finally get their equity, the bondholders who were forced to wait when the feds bailed out the company are very likely to flood the market with sell orders. Even more selling will come from other major stockholders like investment banks, the US and Canadian governments and the UAW when the IPO lockup period expires on May 13.

Neither current management nor its government masters dare admit it, but the truth is obvious: The bailout's been a disaster for taxpayers and GM's pre-bailout stock- and bondholders -- and for GM itself.

IPO was $33. Current share price is $30. Breakeven is $54, it's not going the right way just yet.

 

[bueno]

Share dilution on the horizon?

More problems are already in the pipeline. The company's probably going to have to dilute its shares again: It recently laid the groundwork for further dilution by raising the number of authorized shares from 2.5 billion to 5 billion. I don't see how GM can meet its UAW pension obligations without issuing more shares -- but that will inevitably push the stock price even further below the $54 price that's break-even for the taxpayers.

Creditors of the old GM (Motors Liquidation Co.) will soon distribute warrants and shares for "New GM" that equal about 25 percent of outstanding shares -- further diluting the stock. And when they finally get their equity, the bondholders who were forced to wait when the feds bailed out the company are very likely to flood the market with sell orders. Even more selling will come from other major stockholders like investment banks, the US and Canadian governments and the UAW when the IPO lockup period expires on May 13.

Neither current management nor its government masters dare admit it, but the truth is obvious: The bailout's been a disaster for taxpayers and GM's pre-bailout stock- and bondholders -- and for GM itself.

IPO was $33. Current share price is $30. Breakeven is $54, it's not going the right way just yet.

Hasn't been for three months. Don't see a turnaround in the cards yet. Several analysts (at least 8) rate it a strong buy, but I don't see what they are basing that on.

 

[Sarnoff]

US Gov't getting ready to dump its stake?

U.S. Hurries to Sell GM Stake

By SHARON TERLEP

The U.S. government plans to sell a significant share of its remaining stake in General Motors Co. this summer despite the disappointing performance of the auto maker's stock, people familiar with the matter said.

A sale within the next several months would almost certainly mean U.S. taxpayers will take a loss on their $50 billion rescue of the Detroit auto maker in 2009.

To break even, the U.S. Treasury would need to sell its remaining stake—about 500 million shares—at $53 apiece. GM closed off 27 cents a share at $29.97 in 4 p.m. trading Monday on the New York Stock Exchange, hitting a new low since its $33-a-share November initial public offering.

"Planning for the sale of our remaining GM stock is still at an early stage, and the IPO lock-up does not expire until late May," a Treasury spokesperson said. "At that point, we will consider all of our options, based on our twin goals of protecting taxpayers' interests and exiting as soon as practicable."

Shares have been hurt by rising fuel prices, industry production disruptions and management turnover. At Monday's price, and taking into account shares sold during the IPO, taxpayers would lose more than $11 billion on the rescue if the government dumped the rest of its stake now.

Government officials are willing to take the loss because the Obama administration would like to sever its last ties to the auto maker, the people familiar with the matter said. A summer sale makes it more likely Treasury could sell all of its stake in GM by year's end, avoiding a potentially controversial sale in the 2012 presidential election year.

GM also would like an early exit in large part because it faces tight restrictions on executive pay as long as the U.S. government is a part owner.

GM's successful $23.1 billion IPO in November reduced the U.S. government's stake in GM to 26.5% from 61%. As a condition of the IPO, the Treasury isn't able to sell additional holdings before May 22.

At the time of the IPO, Treasury officials and banks underwriting the deal believed the price would climb through the winter, enabling the government to sell most or all of its remaining stake within weeks of the lifting of the sales restriction at a narrower loss to taxpayers, the people familiar said.

Shares have fallen by recent events that have undermined investor confidence in GM. Those include the rise in gas prices, which hurt sales of big, highly profitable trucks. Wall Street also is fretting over recent management moves such as the unexpected departure of Chief Financial Officer Chris Liddell.

Investors also were spooked by GM's sales-incentive blitz in January and February, which could temper the auto maker's first-quarter earnings. GM is expected to report next month that it made money in the first quarter and generated cash from operations, people familiar with the matter said.

The size and form of a summer share offering is under discussion at Treasury. A final decision hasn't been made by Treasury Secretary Timothy Geithner, who would need to sign off on a big sale. If GM shares dive, Treasury could decide to hold off longer. Unlike in the IPO, when the government, banks and GM worked closely together on the deal, the government has more leeway to decide how to proceed because GM has already gone public.

GM share price could become further depressed after investors holding bonds of the now-bankrupt "old-GM" receive warrants and stock for existing GM shares. That will happen April 21.

Treasury officials haven't contacted GM about a target date for the sale, a person familiar with the matter said. A sale in May is unlikely because Treasury would need time to put together a deal once the May share sales restriction lifts. July is unlikely because investors would likely want to see results from GM's quarter ending June 30. That leaves the months of June, August and September as the prime targets for an offering.

 

[Statorama]

You haven't seen anything yet, Sarnoff. Just wait until the union purchases a voting majority of the stock at $14.97 a share using a no-interest loan from the government.

 

[Statorama]

The benefits of keeping the UAW out of your auto company: Zero layoffs. Zero strikes. Zero health care premiums. Zero pay cuts.

In its 22-year history—a period that has spanned three recessions, a global financial crisis, massive U.S. auto bankruptcies, and the departure of Isuzu, a founding partner, from the operation—SIA has rolled out more than 3 million vehicles and has never resorted to layoffs. Instead, it's given workers a wage increase every year of its operation. Staffers also enjoy premium-free health care, abundant overtime ($15,000 each, on average, in 2010), paid volunteer time, financial counseling, and the ability to earn a Purdue University degree on-site—all in a state that has lost 46,000 auto jobs and suffered multiple plant foreclosures in the past decade.

 

[Orange Crush]

US Gov't getting ready to dump its stake?

U.S. Hurries to Sell GM Stake

By SHARON TERLEP

The U.S. government plans to sell a significant share of its remaining stake in General Motors Co. this summer despite the disappointing performance of the auto maker's stock, people familiar with the matter said.

A sale within the next several months would almost certainly mean U.S. taxpayers will take a loss on their $50 billion rescue of the Detroit auto maker in 2009.

To break even, the U.S. Treasury would need to sell its remaining stake—about 500 million shares—at $53 apiece. GM closed off 27 cents a share at $29.97 in 4 p.m. trading Monday on the New York Stock Exchange, hitting a new low since its $33-a-share November initial public offering.

"Planning for the sale of our remaining GM stock is still at an early stage, and the IPO lock-up does not expire until late May," a Treasury spokesperson said. "At that point, we will consider all of our options, based on our twin goals of protecting taxpayers' interests and exiting as soon as practicable."

Shares have been hurt by rising fuel prices, industry production disruptions and management turnover. At Monday's price, and taking into account shares sold during the IPO, taxpayers would lose more than $11 billion on the rescue if the government dumped the rest of its stake now.

Government officials are willing to take the loss because the Obama administration would like to sever its last ties to the auto maker, the people familiar with the matter said. A summer sale makes it more likely Treasury could sell all of its stake in GM by year's end, avoiding a potentially controversial sale in the 2012 presidential election year.

GM also would like an early exit in large part because it faces tight restrictions on executive pay as long as the U.S. government is a part owner.

GM's successful $23.1 billion IPO in November reduced the U.S. government's stake in GM to 26.5% from 61%. As a condition of the IPO, the Treasury isn't able to sell additional holdings before May 22.

At the time of the IPO, Treasury officials and banks underwriting the deal believed the price would climb through the winter, enabling the government to sell most or all of its remaining stake within weeks of the lifting of the sales restriction at a narrower loss to taxpayers, the people familiar said.

Shares have fallen by recent events that have undermined investor confidence in GM. Those include the rise in gas prices, which hurt sales of big, highly profitable trucks. Wall Street also is fretting over recent management moves such as the unexpected departure of Chief Financial Officer Chris Liddell.

Investors also were spooked by GM's sales-incentive blitz in January and February, which could temper the auto maker's first-quarter earnings. GM is expected to report next month that it made money in the first quarter and generated cash from operations, people familiar with the matter said.

The size and form of a summer share offering is under discussion at Treasury. A final decision hasn't been made by Treasury Secretary Timothy Geithner, who would need to sign off on a big sale. If GM shares dive, Treasury could decide to hold off longer. Unlike in the IPO, when the government, banks and GM worked closely together on the deal, the government has more leeway to decide how to proceed because GM has already gone public.

GM share price could become further depressed after investors holding bonds of the now-bankrupt "old-GM" receive warrants and stock for existing GM shares. That will happen April 21.

Treasury officials haven't contacted GM about a target date for the sale, a person familiar with the matter said. A sale in May is unlikely because Treasury would need time to put together a deal once the May share sales restriction lifts. July is unlikely because investors would likely want to see results from GM's quarter ending June 30. That leaves the months of June, August and September as the prime targets for an offering.

So the government owning a huge portion of a "should-be" private enterprise isn't the greatest evil. Doing so and not making a profit is an even greater evil. I mean, if the feds are going to step in to bail out an industry because not doing so would send the economy into a depression while throwing thousands of people out of work, the should make sure that they earn a profit. That way, there will be a strong political reason for the government to keep doing this again and again and we can lower our tax bills as a result!

 

[saintfool]

The benefits of keeping the UAW out of your auto company: Zero layoffs. Zero strikes. Zero health care premiums. Zero pay cuts.

In its 22-year history—a period that has spanned three recessions, a global financial crisis, massive U.S. auto bankruptcies, and the departure of Isuzu, a founding partner, from the operation—SIA has rolled out more than 3 million vehicles and has never resorted to layoffs. Instead, it's given workers a wage increase every year of its operation. Staffers also enjoy premium-free health care, abundant overtime ($15,000 each, on average, in 2010), paid volunteer time, financial counseling, and the ability to earn a Purdue University degree on-site—all in a state that has lost 46,000 auto jobs and suffered multiple plant foreclosures in the past decade.

in the interest of full disclosure:

There's always a catch, and at SIA it's this: All that ultra-efficiency—when applied to employees—can lead to unforgiving schedules. SIA workers, who start at just over $14 an hour and peak at about $25 an hour, put in 47-hour workweeks that include two Saturdays a month at time and a half—good for $50,000 to $60,000 a year in per-employee salary. (That means roughly 100 employee salaries were protected by the aforementioned $5.3 million zero-landfill rebate.) The upside? When the Japan earthquake interrupted the supply of parts in March, slowing down the plant's breakneck output, SIA was able to keep paying its workers in full to volunteer in town. The downside: "Everyone's burned out here," says Kay Tavana, a 48-year-old who installs airbags and headlights. Not that she isn't grateful for the work and the SIA perks. Working while on chemotherapy for a blood disease, Tavana avails herself of SIA's free gym to rev up for her shift from 4:30 p.m. to 3:30 a.m.

The cost savings and social programs at SIA wouldn't amount to much if Subaru's cars weren't in demand. From 2008 to 2010, unit sales jumped 41 percent, while last year the company's 22 percent rise in vehicle sales was double the broader car market's increase. "You get worker commitment to productivity by offering job security," says Kristin Dziczek, who studies labor issues at the Center for Automotive Research in Ann Arbor, Mich. "But the best job security is still a product people will buy."

 

[Sarnoff]

47 hours a week burns you out? I worked 60-hour weeks for a decade.

 

[jonboltz]

GM Is No. 1 In The World Again In Auto Sales

http://www.forbes.com/sites/michelinemaynard/2012/01/19/gm-is-back-in-the-auto-sales-drivers-seat/

 

[Sarnoff]

Right Left-wing pundit Mickey Kaus is confused.

MAYHEM AT GM

This wasn’t supposed to happen until Nov. 7: It’s like the last act of Titus Andronicus over at GM corporate headquarters.

Two weeks ago, Opel chief Karl-Friedrich Strackepresented numbers to Dan Akerson. Akerson fires him. Opel gets two interim chiefs in a week. Last Thursday, Opel’s new design chief Dave Lyon doesn’t even start his job. Today, media in the U.S. and Germany report that Lyon had been escorted from the building and to a waiting car by GM’s head of personnel. A day later, global marketing chief Joel Ewanick suddenly leaves. Instead of wishing him all the best for his future endeavors, GM spokesman Greg Martin puts a knife in Ewanick’s back: “He failed to meet the expectations the company has of an employee.”

I’m having trouble understanding all this. I’ve been told that after its Rattnerized bailout GM is “back,” a dramatic ”success story.” The president himself has boasted “General Motors is back on top.” Yet now a few weeks later Bloomberg says the company is in a “slump”–it’s right there, in the headline: “slump.” How can the bailed out, comebacked, turned around success story GM be in a slump when the U.S. auto market as a whole is growing rapidly? It’s almost as if an easily spun media wildly underestimated the problems at GM (and the inadequacy of the administration’s fixes) in a way that helped President Obama’s favored narrative (and pleased a major advertiser at the same time!) …P.S.: Why is all this executive turmoil happening now? It’s very hard for an outsider to know exactly what is going on, but there are three theories. 1) GM CEO Akerson is panicking (Truth About Cars’ theory); 2) Akerson is kind of incompetent and hires people he then chases away or has to fire; 3) … I’m thinking of a third. … What’s the third? I know there’s a third. …

P.P.S.: I’d forgotten that in April, 2010 President Obama told the nation (in his weekly radio address)

“It won’t be too long before the stock the Treasury is holding in GM could be sold ….”

Two years later, the Treasury still owns more than 26% of GM. The stock price of the dramatic administration success story is too low to sell without taking gigantic, embarrassing losses.

 

[Socrates11]

Right Left-wing pundit Mickey Kaus is confused.

MAYHEM AT GM

This wasn’t supposed to happen until Nov. 7: It’s like the last act of Titus Andronicus over at GM corporate headquarters.

Two weeks ago, Opel chief Karl-Friedrich Strackepresented numbers to Dan Akerson. Akerson fires him. Opel gets two interim chiefs in a week. Last Thursday, Opel’s new design chief Dave Lyon doesn’t even start his job. Today, media in the U.S. and Germany report that Lyon had been escorted from the building and to a waiting car by GM’s head of personnel. A day later, global marketing chief Joel Ewanick suddenly leaves. Instead of wishing him all the best for his future endeavors, GM spokesman Greg Martin puts a knife in Ewanick’s back: “He failed to meet the expectations the company has of an employee.”

I’m having trouble understanding all this. I’ve been told that after its Rattnerized bailout GM is “back,” a dramatic ”success story.” The president himself has boasted “General Motors is back on top.” Yet now a few weeks later Bloomberg says the company is in a “slump”–it’s right there, in the headline: “slump.” How can the bailed out, comebacked, turned around success story GM be in a slump when the U.S. auto market as a whole is growing rapidly? It’s almost as if an easily spun media wildly underestimated the problems at GM (and the inadequacy of the administration’s fixes) in a way that helped President Obama’s favored narrative (and pleased a major advertiser at the same time!) …P.S.: Why is all this executive turmoil happening now? It’s very hard for an outsider to know exactly what is going on, but there are three theories. 1) GM CEO Akerson is panicking (Truth About Cars’ theory); 2) Akerson is kind of incompetent and hires people he then chases away or has to fire; 3) … I’m thinking of a third. … What’s the third? I know there’s a third. …

P.P.S.: I’d forgotten that in April, 2010 President Obama told the nation (in his weekly radio address)

“It won’t be too long before the stock the Treasury is holding in GM could be sold ….”

Two years later, the Treasury still owns more than 26% of GM. The stock price of the dramatic administration success story is too low to sell without taking gigantic, embarrassing losses.

The Government got involved in something and things didn't go as expected? Unpossible!

 

[StrikeS2k]

Feds: Auto bailout loss $25BTreasury raises estimate by 15% based on lower GM stock prices By David Shepardson Detroit News Washington BureauWashington —The Treasury Department says in a new report the government expects to lose more than $25 billion on the $85 billion auto bailout. That's 15 percent higher than its previous forecast.In a monthly report sent to Congress on Friday, the Obama administration boosted its forecast of expected losses by more than $3.3 billion to almost $25.1 billion, up from $21.7 billion in the last quarterly update.The report may still underestimate the losses. The report covers predicted losses through May 31, when GM's stock price was $22.20 a share.On Monday, GM stock closed down 7 cents, or 0.3 percent, at $20.47. At that price, the government would lose another $850 million on its GM bailout.The government still holds 500 million shares of GM stock and needs to sell them for about $53 each to recover its entire $49.5 billion bailout.Treasury spokesman Matt Anderson said the costs were still far less than some predicted."The auto industry rescue helped save more than 1 million jobs throughout our nation's industrial heartland and is expected to cost far less than many had feared during the height of the crisis," Anderson said.The Obama administration initially estimated it would lose $44 billion on the bailout but reduced the forecast to $30 billion in December 2009.Republican presidential candidate Mitt Romney has decried the losses on the auto bailout and insisted that forcing GM and Chrysler Group LLC to go through bankruptcy first would have saved taxpayers money. But President George W. Bush — who gave the automakers and their finance arms about $25 billion in his final weeks in office in bailout funds — said there wasn't time.Taxpayers incurred a $1.3 billion loss on the $12.5 billion bailout of Chrysler.The Treasury also has put on hold an initial public offering initially planned for last year in Ally Financial Inc. because of market weakness.The government holds a 74 percent majority stake in the Detroit auto finance company as part of its $17.2 billion bailout and has recovered $5.7 billion.GM CEO Dan Akerson told employees at a town hall meeting Thursday that the company was working to take actions to boost the automaker's sagging price.

http://www.detroitnews.com/article/20120814/AUTO01/208140323/Feds-Auto-bailout-loss-25B?odyssey=mod|newswell|text|FRONTPAGE|s

 

[SaintsInDome2006]

G.M. Recalls 2.7 Million Vehicles, Bringing Its Total for Year to 11.2 MillionIt seems that no car, truck or sport utility vehicle in General Motors’ vast product lineup is immune to the automaker’s blitz of safety recalls.

The company on Thursday announced its latest round, for 2.7 million vehicles, bringing to nearly 11.2 million the number of vehicles recalled this year by G.M. in the United States and 12.8 million worldwide. Last year, it recalled almost 758,000 in the United States.

...

http://www.nytimes.com/2014/05/16/automobiles/gm-recalls-another-2-7-million-vehicles.html?_r=1