Can The Big-Three Survive A Bailout? - Page 2 - Mercedes-Benz Forum

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post #11 of 14 (permalink) Old 12-03-2008, 06:11 PM
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No kidding...

Please Check My Math
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post #12 of 14 (permalink) Old 12-04-2008, 12:28 AM
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MarketWatch denizens on the Big 3 Bailout

Originally Posted by oldgeezer

Their demise will enable a big increase in self-employment of shade-tree mechanics and Auto Zone to keep the old American cars running for the next decade.
Originally Posted by alnbny

Welcome to Havana.
Originally Posted by az1103

In Havana they kept those cars running for 40+ years. Do you really think our younger generation is capable of maintaining a car??!! LOL!!
They can't even mow the lawn! They have five thumbs on each hand, all of them adapted to texting worthless nonsense!! The only thing they were thought at school was sports and political correctness...
We are about to get hit with REALITY right in the face!!...And it's gonna hurt....
Originally Posted by Earthling

So the plan is for taxpayers to own the auto companies that sell us a car, and to own the banks that provide us the loan, and own the insurance company that insures the vehicle...but then to pay for it all as well??? Isn't that just paying double for everything?
Originally Posted by az1103

Are you aware that you just listed all the normal conditions in a communist country?!
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post #13 of 14 (permalink) Old 12-04-2008, 07:52 AM
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What? R & D needs another 50 million to develop a good product? Are you crazy man, we need that money to lobby the politicians.............

Big Three Spending Millions On Lobbying

Auto Makers Drowning In Red, But Still Give Nearly 50 Million Dollars To Politicians

(CBS) As Congress mulls over a bailout for U.S. automakers, some may be thinking about more than jobs and the economy.

The auto industry spent nearly $50 million lobbying Congress in the first nine months of this year.

And people tied to the auto industry gave another $15 million in campaign contributions, CBS News investigative correspondent Sharyl Attkisson reports.

It's not surprising that a lot of that money went to members of Congress from Michigan, where the auto industry is the biggest employer and politicians are passionate advocates for their constituents.

Take Sen. Carl Levin, who received $438,304 from the automotive industry. And in the House, Rep. Joe Knollenberg received $879,327. Rep. John Dingell got nearly a million from the industry. All have enjoyed generous support from the auto industry over their careers, with GM and Ford as their two top contributors. All support a bailout.

But nobody's been a bigger advocate for Motor City interests than Dingell. And for him, the stakes aren't just political, they're personal.

"There's an actual conflict," said Ryan Alexander of the nonprofit group Taxpayers for Common Sense. "His personal financial health, you know, the wealth of his family is tied up in the car industry."

Dingell's wife Debbie once worked as a lobbyist for GM.

When she married the congressman, she became a senior GM executive at an undisclosed salary. And we found the couple has extensive GM assets.

Dingell's current financial disclosure filed in May lists GM stock worth up to $350,000, options worth up to $1 million more, and a GM pension fund. In 2000, among the Dingells' GM assets were stock options worth up to $5 million.

And in 1998, the congressman reported selling GM stock options worth up to $1 million dollars.

Dingell wouldn't agree to an interview.

Taxpayer watchdog Alexander says the Dingell's personal ties to GM are something the public should know about when the congressman casts his votes.

"They stand to benefit if the company doesn't go under, if the company prospers," she said. "And they stand to lose a lot if the company goes bankrupt."

Nobody is placing bets on whether Congress will end up giving the car companies a bailout. But if investments in Washington politicians count as leverage, then the auto industry has plenty of clout.

Big Three Spending Millions On Lobbying, Auto Makers Drowning In Red, But Still Give Nearly 50 Million Dollars To Politicians - CBS News
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post #14 of 14 (permalink) Old 12-05-2008, 07:32 AM Thread Starter
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Here's an ugly, recurring theme:

Wall Street and Detroit's messy divorce - MarketWatch

If anything, the load of debt on investors' books suggests that investors, analysts and lenders had far more confidence in Detroit than appeared to be warranted. As early as 2005, GM was losing $2,331 on every car it sold. Toyota Motor Corp. was making more than $1,400 on its sales, according to the Harbour Report.

That year, Toyota was building reliable cars faster, cheaper and more profitably and the comparison wasn't even close. GM's average hourly wage was $73 an hour. Toyota's was $48. GM was spending nearly $1,600 in healthcare costs for every car sold, compared to $201 for Toyota. Too many brands, factories running under capacity, huge pension commitments -- inefficiencies were everywhere.

"Even in their (Ford and GM's) heyday when they were selling a lot of SUVs and trucks, they weren't particularly profitable," said Shelly Lombard, a debt analyst with bond research firm Gimme Credit. "They were barely able to cover their interest payments. It was the bare minimum. The auto operations were really not sustainable, but they had a lot of cash and profitable finance businesses."

Lombard said a few things kept investors' faith in GM. For one, the industry kept shedding jobs and subsidiaries like Jaguar, Hughes Electronics and part of GMAC. Detroit's numbers on the back of the napkin also worked. Had car-buying stayed at its 2005 levels, Lombard believes the auto divisions would have been profitable in a couple of years.

But probably the single biggest reason Wall Street kept backing Chrysler, Ford and GM was the triple-A ratings, Lombard said. Did they deserve them?

"Hindsight is always 20-20," she said.
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