Do US auto makers deserve $25B taxpayers for new mpg goals?

[rickoff]

Interesting video...

Hi folks,

Take a look at this short video showing Ford's most advanced and efficient auto manufacturing facility. Of course it is not located in Dearborn, Michigan. It's not even located in the USA, and the closing statement in this video clip explains the reason why no such facility will be built here by Ford, or any other US automaker.

Check it out here: detnews.com | Webvideo | Ford's most advanced assembly plant operates in rural Brazil

Best regards,

Rick

[handyandy]

Re: Renewable Energy > Do US auto makers deserve $25B taxpayers for new mpg goals?

Hi just found this post and while the point is moot...

Before Bush acted against Congress' wishes and provided the auto makers what they wanted, I had posted elsewhere that if the automakers were in so much trouble they should've went to the oil companies help since they both appear to be in collusion. That being said, I fear that the poorly written bailout package for the banks may have been expressly written with this purpose in mind to begin with IMO.

I'd like to thank all for their views who posted to this thread.

Andy

[broli]

Hi just found this post and while the point is moot...

Same as him .

There's one group that truly deserves this money and in the end will benefit the world. That is us!!!!

Could you imagine what billions could do. Build institutions all over the world. Everyone who's interested could join regardless of status or knowledge. An "alternative technology institute" could let the people in it be as much hands on as possible and only hit the books when knowledge is needed in certain things. People helping each other, being open minded to every view, sharing experiences, encouraging each other, treating everyone with equal respect...

That would be truly and evolution for mankind. But we all know we're stuck in this fake reality that we're forced in, making us believe we're sheep. But the breakthrough will come, where the whole world will revolt against these few individuals who are trying to control everything. Even the great perfect Rome fell and burned to ashes.

[wpage]

World Machine

Tax revenues from gas sales to low mpg vehicle are huge to State and Fed coffers.

Oil companies support thru lobbyists and payola for both politicians and corporate leaders. To do their bidding

Grass root groups of alternate energy solutions are the only hope to break this loop of corruption.

The best inventions were built in private garages not corporate labs. So dont stop thinking free. Its up to you

[dutchdivco]

Man the lifeboats!

"It doesn't matter anymore--this is all just rearranging deck chairs on the Titanic." So true! Its as if someone accidentally left the P.A. microphone on, in the wheelhouse.So we hear the Captain told "Sir, we've just struck an iceberg!" And his responce, "FULL Speed ahead!" The first mate says "Sir, shouldn't we reverse engines?" and then 2 other crew members are argueing over whether we should reverse and port or starboard.We, the passengers are hearing all of this, and now we're starting to argue about which coarse is the right one.All of us want for this "Not to be happening".Or, make things back the way they were.Truth is, argueing about whether or not to bail out the big 3 is like argueing about whether or not we should open or close the drapes on the portholes! The ship is going down, either way.Deal with it!

[rickoff]

Just thought I would revive this thread to include an end note. The thread began by asking if automakers deserved a bailout at taxpayer expense, and I think the general consensus of opinion was that they did not. The government rushed in and took over General Motors, which came to be known as "Government Motors," with $50 Billion of taxpayer money. To reduce that stake, they issued an Initial Public Offering (IPO) of GM stock last November at $33 per share. Currently, GM stock is selling for $30 and under on the NY Stock Echange, and may soon take a steeper dive as investors line up to sell their positions and look for safer investments.

The Wall Street Journal just came out with an article stating that the government plans to sell their remaining stake in GM in the months following late May, when the IPO lock-up expires. To break even, the government would have to sell their shares at $53 apiece, which isn't going to happen, and when they do start selling in large quantities then other GM investors will see that as a strong sell signal and the share price will plummet. Even at current prices, the Wall Street Journal article states that taxpayers will end up losing at least $11 Billion on this GM bailout fiasco, a plan which two-thirds of the public loudly opposed. This will surely come back, in 2012, to bite every legislator who voted to approve the use of taxpayer money to fund this asinine bailout.

Rick

[phi1.62]

If GM had any balls then they would make a contract with Cyclone Power Technologies to fit all future vehicles with their steam engine. Not only would their share price rise but they'd probably earn enough profits to pay back Americans.

Cyclone Power Technologies - Cyclone Engine

[mikrovolt]

China finally raised the price of gasoline to $2.00 dollars a gallon.

Airline companies have been smashed to the ground.
would you hold stock in a airlines when fuel goes up and transportation goes down. force oil companies to own good % of the airlines and see how much they charge the airlines for jet fuel. Problem is they would get together and
illegally undermine the competitive structure. oil is to big needs to be broken up and become competitive.

automakers well, I drive an economy car. but I need to drive.
so I have to pay and I want automakers to go back to work.
deserve, we deserve better.

[rickoff]

An update on the continuing GM bailout saga



GM has announced it is recalling at least 38,000 of its vehicles due to crash risk, and the Treasury Department said in a new report that it now expects to lose $25 billion on the auto bailout, which is $3.3 billion more than was previously forecast.

Note that, as the title of this thread implies, the original bailout amount was specified at $25 billion, which equals the loss the Treasury Department is now reporting. That would seem to indicate a 100% loss on the taxpayer funded bailout, however it is actually a 50% loss because the "government" was forced to throw another $25 billion of bailout money into Government Motors. Thus, the actual loss is currently 50% of the "investment." Of course if we take another look in a year or two we will probably see that the value of our "investment" is far less even than the 50% figure of today.

In actuality, the situation is even worse than reported, because the government still has 500 million shares of GM and needs to sell those shares at $53 a share for the government to break even on the GM bailout. This seems highly unlikely, though, as the current stock price is only $22.01 per share. In a move obviously designed to fend off negative public reaction to the losses which could severely impact B.O.'s chances for reelection, officials say no sale will take place before the November election.

Does anyone here still think the auto bailout was a good idea?

[Regster]

Initially you talk of a $25B loss on a total $50B bailout, then go on to say that to "break even on the GM bailout" would require a share price of $53 for the 500M shares they hold, as opposed to the "recent" "fall" to $22.xx. Apart from the fact that the last time GM shares were at $22.xx was back in mid-June, 500M @ (roughly) $30 (the difference) is only $15B, which would equate to less than 1/3 of your projected possible/probable loss of $50B.

In the meantime (since the bailouts) around $130B of salaries (based on median income) have been paid by GM to your fellow citizens. What percentage of that would have continued to be paid without the bailouts is the number we are after.

Do you have that number?

[rickoff]

Initially you talk of a $25B loss on a total $50B bailout, then go on to say that to "break even on the GM bailout" would require a share price of $53 for the 500M shares they hold, as opposed to the "recent" "fall" to $22.xx. Apart from the fact that the last time GM shares were at $22.xx was back in mid-June, 500M @ (roughly) $30 (the difference) is only $15B, which would equate to less than 1/3 of your projected possible/probable loss of $50B.

In the meantime (since the bailouts) around $130B of salaries (based on median income) have been paid by GM to your fellow citizens. What percentage of that would have continued to be paid without the bailouts is the number we are after.

Do you have that number?

Would I be correct in assuming that you think the GM bailout was a good idea, and that the reason you think this way is because you are a liberal and an Obama supporter?

Without the bailouts, which 2/3 of the American public did not want, there is no telling what amount would have been paid out to GM autoworkers.
What we can be certain of, though, is that both the GM autoworkers and GM management would have had to take some sizable pay cuts in order to keep their jobs without the bailout money, and this is precisely what should have been the case. Lower pay and benefits, while still making a good living by most people's standards, would have equated to lower operating expense, plus an opportunity to sell far more vehicles by lowering their sale prices. More demand by consumers equates to more available work hours and more hiring. Bailouts using taxpayer money, on the other hand, are never a good idea. Yes, the autoworkers benefited from it, but at great cost to the rest of us taxpayers. Redistribution of wealth by taking from one group of people without their consent (rightfully resentful taxpayers in this instance) and giving to another group (the autoworkers) amounts to nothing less than government approved and facilitated theft. You might look at it as a temporary loan, but the rest of us can see that this "loan" will likely never be paid back to us.

Now, as to the other figures that you seem to have problems with:

• The $25 billion loss I reported was not just something I pulled out of thin air. That figure came from the US Treasury report, which appeared in the Detroit news, and represents what the Treasury says they "expect" the loss to come to, but that is no doubt optimistic.
• The 500 million shares of GM which the "government" still holds would have to sell at $53 a share, as I stated earlier, in order for the taxpayers to break even on the bailout. The $53 figure came from current research. If you do the math, $53 x 500M shares = $26.5 billion, not 50 billion. The reason for the discrepancy is that the shares which remain are not the total amount that the government has held, so we haven't taken into account the amount that has already been lost in stock sales and paid out in bailout administrative costs, etc. ($23.5 billion would appear to be correct).
• You state it is "fact that the last time GM shares were at $22.xx was back in mid-June," but the share price actually closed at $22.01 yesterday, so your research is a bit flawed. Granted, until yesterday you would have been correct, as the GM share price had fallen to $19.24 by June 29th, and $18.72 by July 25th. A falling stock moves in dips and rises, rather than a straight line, and the dips happen to be deeper than the amount of rise. That's why the last dip (in July) was lower than the previous dip. The current rise cycle is very likely to turn back lower again as it retests the July dip, and there is no reason to expect the stock price to do anything but plummet even lower than before. Trend lines of the 50 and 100 day moving averages are still falling lower, and anyone who bets against the trend is a fool. Until these trend lines are rising, which hasn't happened yet and isn't likely to, investors will continue to buy on dips and sell on any rise, which of course facilitates the next dip.

So there you have it - the facts of the matter. Like I said, the situation is worse than what is being reported, and can be expected to grow even worse with time. The administration doesn't want to sell any stock before the November election, but that tactic is only likely to result in an even lower sale price later. Of course if Barry wins reelection then he won't care because he won't have to worry about another election. And if Willard wins then things can't be expected to be much better. Keep in mind that it is really difficult to dump 500,000,000 shares of stock without causing an immediate and sharp drop in the stock price, and that the average daily volume for GM stock is just 7.5 million shares trading hands. At that rate, even dumping as little as 2 million shares per day is enough to cause a panic sell off, so there is no way to come out of this stinking mess in a timely manner and smelling like a rose.

Rick

[Regster]

Would I be correct in assuming that you think the GM bailout was a good idea, and that the reason you think this way is because you are a liberal and an Obama supporter?

No.

[*]You state it is "fact that the last time GM shares were at $22.xx was back in mid-June, but the share price actually closed at $22.01 yesterday, so your research is a bit flawed.

No, I said....

..as opposed to the "recent" "fall" to $22.xx. Apart from the fact that the last time GM shares were at $22.xx was back in mid-June

....which was in response to your original (slightly paraphrased from memory) statement of....

This seems highly unlikely, though, as the stock price has recently fallen to $22.xx per share.

... before you edited it. Based on closing prices, the last time it was possible to fall to $22 was in mid-June and before that, the end of May. It has just climbed to $22.

Don't you know that every time somebody sneakily edits a post to try and win an internet argument that a unicorn dies? It's tragic on so many levels.

[rickoff]

Based on closing prices, the last time it was possible [for GM stock] to fall to $22 was in mid-June and before that, the end of May. It has just climbed to $22.

Yes, that is correct when based upon daily closing prices. When I said the price had fallen to the $22 range, I was actually basing that as a fall from the original stock price of our taxpayer "investment," which is what we should all be concerned about, rather than the daily fluctuations. I noted in my last post that the price had risen to $22.01 yesterday after falling to $18.72 on July 25th, so of course the current price reflects a climb. I also showed why the price is most likely to fall to further consecutive lows from rises such as the current one. You might also find it of interest that Forbes magazine is now predicting that GM is heading for another bankruptcy.

Don't you know that every time somebody sneakily edits a post to try and win an internet argument that a unicorn dies? It's tragic on so many levels.

Hmmm, no I didn't know that, and would highly suspect is is just another myth, somewhat similar to the ones about taxpayer bailouts being a good idea. I never supposed that we were having an Internet argument. What is it that you think we are arguing about? As I stated above, I am in agreement with your daily closing figures and the fact that the stock is currently in a rising pattern, so what's there to argue about? I'm not even sure where you stand on the matter, as you haven't actually said whether you thought (or still think) the bailout was a good idea or not. Unlike you, I've made my position very clear and have explained why I take this position. When I post something, it is based upon reliable research. I often end up going back in and editing a post to correct a spelling error, or to rephrase something to make it more clear or concise. The fact that I have done an edit is openly stated at the bottom of an edited post, so there is nothing "sneaky" about it. Furthermore, neither the facts which I originally stated, nor the figures supporting those facts, have changed. I'm not saying that I'm infallible. When an occasion arises where I become aware that I have misstated something, I am quick to acknowledge the error and point it out myself, as you will note by looking at the first post at the top of this page. I'll do the same again if you can show me that I have made an error in what I have stated, but so far I see nothing in conflict with the facts. As I have said here before, my aim is not to start, enter, or prolong an argument. My aim is to present verifiable truths. If you don't agree with my views on the GM taxpayer funded bailouts then I would be interested in hearing why, and would also enter into a polite debate on the topic if you would care to, even though I don't know what more could be stated or made any clearer at the moment. As it stands, I really don't know what you think, other than what you thought I meant was not what I intended to convey. Perhaps you would shed some light on this. Don't be surprised if I don't reply right away to any of your thoughts or questions, though, as I'll be going away to my cottage for a couple of days and don't have Internet access there.

Rick

[Regster]

I often end up going back in and editing a post to correct a spelling error, or to rephrase something to make it more clear or concise. The fact that I have done an edit is openly stated at the bottom of an edited post, so there is nothing "sneaky" about it. Furthermore, neither the facts which I originally stated, nor the figures supporting those facts, have changed.

The meaning of the sentence has changed from when I responded to it. The edit notes did not highlight which part you edited, but still you went on to respond to me as if I had replied to the edited text... a part so important that I took words from it and you partially quoted my reply. If you think that's entirely transparent and acceptable then you reply to something I write and I'll go back and change the meaning of what you've responded to.

Anyway the real issue is about how we perceive our economies and the role of government. I'm from the UK, with free health care for all and a higher life expectancy than places like Africa and the US. In Africa and the US, people without adequate finances are essentially left to their own devices and when any limited social support runs out they need to beg, borrow or steal to stay well. All whilst the local warlords ransack the national kitty to further their own petty squabbles and destructive ambition.

I don't think that's right. In African countries with their limited resources, lack of real growth therein due in no small part to Western manipulation during modern times, it's understandable... tragic but understandable. In the US there are no excuses, and I have no time for anyone who worships money over the health of poor people.

So, how does that relate to GM and the bailouts in general?

Where your perspective and mine differ is that you focus on the unfair renumeration of upper-level management, whilst I look at the ordinary working man. For every CEO getting paid 250x the median salary in a large organisation, there are many, many more staff that depend on that business for their livelihoods. And guess what... when downsizing and cost-cutting it's not the upper-echelons that go... it's the little guys.

Should the little guys be thrown onto the slagheap because a bubble bursts, or should perhaps a tiny fraction of... say... the defense budget be used to prop things up until they (hopefully) get better?

[rickoff]

The meaning of the sentence has changed from when I responded to it. The edit notes did not highlight which part you edited, but still you went on to respond to me as if I had replied to the edited text... a part so important that I took words from it and you partially quoted my reply.

No, my intended meaning has not changed. It is just that you did not understand what I intended to convey, and that is why I both changed my wording and explained to you the reason for changing it. You thought I had incorrectly stated that the closing price of GM stock had just fallen to the $22 range, when I had actually said nothing about closing price at that time. What I had said was that the stock had "just fallen" to around $22. If you defiantly want to insist that my statement could not possibly be true then you would be incorrect even if you take closing price into account, since the stock actually climbed to $22.14 last Friday before falling back to $22.01 at closing. Therefore, the price did rise as you claimed, but also fell, and fell after it rose, if you want to talk about facts. It was you who brought up closing price as a rebuttal to my statement about the stock price falling, and I then explained in my last post that I was referring to the current stock price as a fall in relation to the price at which the government had originally purchased the stock, which is what should be important to us rather than whatever the daily closing price fluctuation happens to be. Sorry I didn't make that absolutely clear to you in my original post (#84), but it has certainly been made abundantly clear since that time. Any stock investor's concern over price is based almost entirely upon purchase price vs current price, as that difference represents their potential loss if they were to sell the stock. And as a US taxpayer, that is my concern, while as a British citizen it is of no concern to you since it neither leaves you nor your children or grandchildren indebted.

My intent is not to bamboozle you or anyone else. Rather, it is to present clear and concise facts. I have reported those facts, and will have to assume that you are either in agreement with them or are unable to comprehend or rebut them since you do not offer any facts as a counter argument.

Anyway the real issue is about how we perceive our economies and the role of government. I'm from the UK, with free health care for all and a higher life expectancy than places like Africa and the US.

Now it appears that you are changing the topic in order to throw in more of your personal views, rather than debate the topic at hand, but okay - just this once I will play along. I would not disagree with the fact that people in the UK statistically have a slightly higher life expectancy (80.5 years) than people in the US (78.2), but life expectancy has a lot more to do with personal choices (such as not smoking, nor drinking liquor, nor doing drugs, along with regular exercise and a healthy diet) than it has to do with the quality of healthcare that is available. Generations of my own ancestors, for example, have lived considerably longer than the average US life expectancy, and they didn't achieve that by being fat and inactive, or by smoking and drinking their way to an early grave. My mom lived to the age of 90, which is 9.5 years more than the average life expectancy in the UK, and she never had free government run healthcare provided to her, so what does that tell you?

Just because you get free healthcare while I pay for mine does not mean that your healthcare quality is higher. In fact it is far more likely to be the other way around, and I have had several people from the UK tell me that free universal healthcare has resulted in longer waiting times to see a physician, and rationed healthcare which is based upon what the British government believes is right for you. I don't want to leave decisions about my healthcare up to government bureaucrats, as would be the case unless ObamaCare is repealed, and most US citizens would agree with me, just as they agreed that the banking and GM bailouts were a bad idea. The actual reasons why the life expectancy statistics which you tout are not very meaningful are explained in this article, which you owe it to yourself to read if you want to have a clearer understanding.

In Africa and the US, people without adequate finances are essentially left to their own devices and when any limited social support runs out they need to beg, borrow or steal to stay well. All whilst the local warlords ransack the national kitty to further their own petty squabbles and destructive ambition.

Sorry, but you are only presenting a vision of the way you think things are for poor people in the US, rather than how things actually are. Your vision is distorted, no doubt, by the slanted kind of propaganda you have been reading on Marxist/Socialist Internet websites or viewing on New World Order controlled TV, newspaper, and magazine media. In the US, people without adequate income and/or insurance to pay for healthcare have long been guaranteed free healthcare at medical clinics and hospitals, which by law cannot refuse to treat them. And America's poor are the recipients of numerous welfare programs that bring food to their tables, free or low cost housing, free educational and work training opportunities, etc. Your distorted idea that America's poor are entirely left to fend for themselves, and must therefore resort to begging, borrowing, and stealing in order to survive, is as far apart from fact as anything I have ever heard. Those in America who steal from others do not do so to survive - they do it for personal gain at the cost of others, and to obtain drugs and other items which have nothing to do with a quest for a healthy lifestyle.

I do agree that America has far too many military commitments which are not justified, and if you knew anything about me you would know that I am all for shutting down every American military base that is in a foreign country, bringing our troops home, and not getting involved in disputes between foreign nations. If we had taken that stance during World War II, though, you and your countrymen would very likely be living under Nazi rule today, so don't be too harsh on us.

In African countries with their limited resources, lack of real growth therein due in no small part to Western manipulation during modern times, it's understandable... tragic but understandable. In the US there are no excuses, and I have no time for anyone who worships money over the health of poor people.

Again you wrongly accuse the United States. Are you aware that the United States is by far the largest contributor to the needs and development of poor countries? In 2009, for example, the US contributed $28.8 billion to the 23 nation Development Assistance Committee fund, while the UK contributed $11.5 billion. And this is just the level of contributions made by the US government using funds provided by taxpayers. The American people, through personal, civic, and church organizations, go well beyond this to raise and donate more funds to assist the poor and needy than the people of any other nation on this earth. In fairness, you should first have pointed out that your own nation has a long and unsavory record of having seized and manipulated the people and natural resources of less fortunate and less powerful nations in order to plunder the wealth of those nations without regard to the adverse effects suffered by their inhabitants. But no, you attack America as the villain.

So, how does that relate to GM and the bailouts in general? Where your perspective and mine differ is that you focus on the unfair renumeration of upper-level management, whilst I look at the ordinary working man.

I think you probably meant remuneration, rather than renumeration, which is not really a word, but where in the world did you arrive at this nonsensical assumption? It would appear you are saying that I go all out to promote and defend the enormous and unjustified salaries of corporate CEO's and other upper level management. The fact is, however, that I write nearly every day concerning the abuses heaped upon us by the Ruling Class elite and the political puppets who do their bidding. You can read my posts in The American Ruling Class thread. I have worked hard at manual labor jobs all my life and have paid a lot in taxes. In the nearly 20 years that I worked as a postal clerk before retiring, I regularly stood up against unfair management tactics and unsafe working conditions, putting my head on the veritable "chopping block" while taking it upon myself to go up against authority on behalf of my fellow workers when even the postal union representatives would fail to act on these matters. So don't pretend to know where I'm coming from, or that you know what I am about.