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no more bailout for automakers ?

Posted by on Mar. 30, 2009 at 8:16 AM
  • 11 Replies

 

Obama denies bailout funds for automakers

White House says neither GM nor Chrysler submitted acceptable plans

updated 31 minutes ago

WASHINGTON - The White House says neither GM nor Chrysler submitted acceptable plans to receive more bailout money, setting the stage for a crisis in Detroit and putting in motion what could be the final two months of two American auto giants.

President Barack Obama and his top advisers have determined that neither company is viable and that taxpayers will not spend untold billions more to keep the pair of automakers open forever. In a last-ditch effort, the administration gave each company a brief deadline to try one last time to convince Washington it is worth saving, said senior administration officials who spoke on the condition of anonymity to more bluntly discuss the decision.

Obama was set to make the announcement at 11 a.m. (1500 GMT) Monday in the White House's foyer.

 

Fiat alliance?


Frustrated administration officials said Chrysler cannot function as an independent company under its current plan. They have given Chrysler a 30-day window to complete a proposed partnership with Italian automaker Fiat SpA, and will offer up to $6 billion to the companies if they can negotiate a deal before time runs out.

If a Chrysler-Fiat union cannot be completed, Washington plans to walk away, leave Chrysler destined for a complete sell-off. No other money is available.

For GM, the administration offered 60 days of operating money to restructure. A frantic top-to-bottom effort began Sunday after CEO Rick Wagoner resigned under pressure from the White House.One official said a majority of the GM board was expected to step down

Officials said GM had not made good on promises made in exchange for $13.4 billion in government loans, although there are no plans to call in those loans

http://www.msnbc.msn.com/id/29944834/

by on Mar. 30, 2009 at 8:16 AM
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Replies (1-10):
dr_m
by on Mar. 30, 2009 at 9:03 AM

I still have mixed feelings about this...  but kinda getting "bailout fatigue", however, I saw the Gov of Michigan on tv and I do feel so badly about loss of so many related jobs. My friend is there and her dh is in steel...

Madge1428
by Member on Mar. 30, 2009 at 9:07 AM

Woo Hoo!  They need to declare bankruptcy in order get the unions out of there and completely overhaul their business models.  Then they can restructure.  I'm so sick of bailouts.  They're not working.

sunglasses miniMadge

dr_m
by on Mar. 30, 2009 at 9:12 AM

 

Quoting Madge1428:

Woo Hoo!  They need to declare bankruptcy in order get the unions out of there and completely overhaul their business models.  Then they can restructure.  I'm so sick of bailouts.  They're not working.


i like your avatar.. it's so cute !

 

tgiamt
by Member on Mar. 30, 2009 at 9:16 AM
The way people are treating the automakers really irritates the shit out of me. Yes they've made some bad decisions over the years. But how do you expect these companies to recover in a time like this. The banks (even though they've received billions to do so) are not loaning, people either have no jobs or if they have jobs are choosing to not spend because they are afraid. Do you even realize the magnitude of job loss, and foreclosure that the workers and retirees will be forced into if they fail? We should just sell the state of Michigan to Canada now, be cause they're will be almost nothing left.

These two companies are paying this money back, this is a loan. NOT a bailout! The banks who were just given BILLIONS of dollars, and are still throwing lavish parties, and giving out bonuses that could feed all of freak China.They have to pay nothing back. It was handed to them no questions asked. How is that right?
T.G.I.A.M.T.. Get yours at bighugelabs.com/flickr
dr_m
by on Mar. 30, 2009 at 9:23 AM


Quoting tgiamt:

The way people are treating the automakers really irritates the shit out of me. Yes they've made some bad decisions over the years. But how do you expect these companies to recover in a time like this. The banks (even though they've received billions to do so) are not loaning, people either have no jobs or if they have jobs are choosing to not spend because they are afraid. Do you even realize the magnitude of job loss, and foreclosure that the workers and retirees will be forced into if they fail? We should just sell the state of Michigan to Canada now, be cause they're will be almost nothing left.

These two companies are paying this money back, this is a loan. NOT a bailout! The banks who were just given BILLIONS of dollars, and are still throwing lavish parties, and giving out bonuses that could feed all of freak China.They have to pay nothing back. It was handed to them no questions asked. How is that right?

no, i don't want to sell Michigan to Canada    crying mini


 

itsmesteph11
by Bronze Member on Mar. 30, 2009 at 10:10 AM

   Gee, I think I heard millions of "STUPID" Americans who knew exactly that this was going to happen.  Most did not want these bailouts for just the reason that they knew the companies were not viable and with the unions in the government pockets nothing was going to change. 

The govenment wants to sell a majority of Chrysler to a foreign company, Fiat.   How hypocritical is that?    Since we own much of that already falsely bailed out company shouldn't we get a vote on that?  They threw all that money into these companies and they will end up in bankruptcy any way.  I think it is time to let government know we STUPID Americans know exactly what we want and what is best for ourselves.

White House questions viability of GM, Chrysler

AP
    • By PHILIP ELLIOTT, Associated Press Writer Philip Elliott, Associated Press Writer - 2 mins ago

WASHINGTON - President Barack Obama is sending a blunt message to Detroit automakers: To survive - and win more government help - they must remake themselves top to bottom. Driving home the point, the White House ousted the General Motors chairman as it rejected GM and Chrysler's restructuring plans.

Obama is set to elaborate on that message Monday when he announces what his White House told reporters over the weekend: Neither GM nor Chrysler submitted acceptable plans to receive additional federal bailout money.

GM chairman Rick Wagoner became the most conspicuous casualty of that decision, forced out Sunday as the White House indicated Detroit must make management and other changes if it hopes to survive - and that the Obama administration will have a hands-on role in those changes.

Michigan Gov. Governor Jennifer Granholm said Wagoner "clearly is a sacrificial lamb" who stepped aside "for the future of the company and for the future of jobs." She spoke on NBC's "Today" show Monday.

Obama said the companies must do more to receive additional financial aid from the government.

"We think we can have a successful U.S. auto industry. But it's got to be one that's realistically designed to weather this storm and to emerge - at the other end - much more lean, mean and competitive than it currently is," Obama said on CBS' "Face the Nation" broadcast Sunday.

Fears of an automaker bankruptcy pushed stocks down more than 200 points in early trading on Wall Street.

Frustrated administration officials, speaking on condition of anonymity ahead of Obama's announcement, said Chrysler has been given a 30-day window to complete a proposed partnership with Italian automaker Fiat SpA. The government will offer up to $6 billion to the companies if they can negotiate a deal before time runs out. If a Chrysler-Fiat union cannot be completed, Washington plans to walk away, leaving Chrysler destined for a complete sell-off.

Shawn Morgan, a Chrysler spokeswoman, declined to comment ahead of Obama's announcement.

In Warren, Mich., Chrysler employees reacted with wariness to the Chrysler-Fiat pairing and anger toward the administration's moves.

"Right now it looks like our only hope," 37-year-old lineman Douglas Kozak said of the possible deal with the Italian automaker after arriving at the Warren Truck Assembly plant. "You've got to expect the worst and hope for the best."

Machine repairman Don Thompson, a nearly four-decade Chrysler veteran, said the automakers are being punished because of populist anger over the financial bailout.

"They're using us for the mistakes they've made in Washington," Thompson said.

For GM, the administration offered 60 days of operating money to restructure. Officials say they believe GM can put together a plan that will keep production lines moving in the coming years.

New directors will now make up the majority of GM's board. Fritz Henderson, GM's president and chief operating officer, became the new CEO. Board member Kent Kresa, the former chairman and CEO of defense contractor Northrop Grumman Corp., was named interim chairman of the GM board.

"The board has recognized for some time that the company's restructuring will likely cause a significant change in the stockholders of the company and create the need for new directors with additional skills and experience," Kresa said in a written statement.

The Obama administration move comes amid public outrage over bonuses paid to business leaders and American International Group executives - set against a severely ailing economy.

GM failed to make good on promises made in exchange for $13.4 billion in government loans. Chrysler, meanwhile, has survived on $4 billion in federal aid during this economic downturn and the worst decline in auto sales in 27 years. In progress reports filed with the government in February, GM asked for $16.6 billion more and Chrysler wanted $5 billion more. The White House balked and instead started a countdown clock.

Two people familiar with the plan said bankruptcy would still be possible if the automakers failed to restructure. Those officials spoke on condition of anonymity because they were not authorized to make details public.

An exasperated administration official noted that the companies had not done enough to reduce debt; in some cases, it actually increased during this restructuring and review process. GM owes roughly $28 billion to bondholders. Chrysler owes about $7 billion in first- and second-term debt, mainly to banks. GM owes about $20 billion to its retiree health care trust, while Chrysler owes $10.6 billion.

GM and Chrysler employ about 140,000 workers in the U.S. In February, GM said it intended to cut 47,000 jobs around the globe, or almost 20 percent of its work force, close hundreds of dealerships and focus on four core brands - Chevrolet, Cadillac, GMC and Buick.

___

dr_m
by on Mar. 30, 2009 at 10:38 AM

 

Quote:

Machine repairman Don Thompson, a nearly four-decade Chrysler veteran, said the automakers are being punished because of populist anger over the financial bailout.


I wonder if there is some truth in this ? 

 

cdgoldilocks
by Bronze Member on Mar. 30, 2009 at 10:51 AM

How many of you are in the new car market or know someone who is? I am just curious. If so, what car would you like to have?

I personally don't know anyone who is in the market for a new car. I know ONE person who is buying a car, but she is looking at buying a used Volvo.

For many Americans, the economy has effected our budgets. We cannot afford a new car, and if we could afford one, it would not be a GM or Chrysler. A brand new line worker makes over 30 bucks an hour.....in Michigan. The companies don't put out good cars. I could go on and on about the reasons these two automakers are failing. It just doesn't make good financial sense to keep bailing out a company that isn't viable and hasn't complied with congress in developing a working business plan that deliniates how they will recover.

2egbhgx.jpg Eleanor Roosevelt image by whatadollx3


A government big enough to give you everything you want is big enough to take everything you have. -Barry Goldwater

itsmesteph11
by Bronze Member on Mar. 30, 2009 at 10:59 AM

The fact is they are NOT paying it back and they are not dealing with the legend costs that are adding 1500 dollars to every car they build.  They are spending more money than before the bailout in some cases.  They are a hopeless cause. By the way, there are many non union auto companies that are doing ok and not asking for bailouts so whats their problem? The only difference is the legend costs and other benefits pushed by the unions.  The bailout was a real waste of money. Chrysler is going to be sold to a foreign company (Fiat) and GM may end up in Bankruptcy just where they should have been in the first palce. I think any smart person would move out of Michigan and leave it a shell.  Obama is right now telling us these auto makers getting assistance will be makig what the government wants them to make. Thats no gaurantee they will sell cars in the future. Obama just fired GMs CEO.  The government is going to give them a new business plan.  Good Greif!  When has the government ever run ANYTHING that is now profitable?   This situation has nowhere to go but down.

Quoting tgiamt:

The way people are treating the automakers really irritates the shit out of me. Yes they've made some bad decisions over the years. But how do you expect these companies to recover in a time like this. The banks (even though they've received billions to do so) are not loaning, people either have no jobs or if they have jobs are choosing to not spend because they are afraid. Do you even realize the magnitude of job loss, and foreclosure that the workers and retirees will be forced into if they fail? We should just sell the state of Michigan to Canada now, be cause they're will be almost nothing left.

These two companies are paying this money back, this is a loan. NOT a bailout! The banks who were just given BILLIONS of dollars, and are still throwing lavish parties, and giving out bonuses that could feed all of freak China.They have to pay nothing back. It was handed to them no questions asked. How is that right?


~There is no love like a cats love~



*RIP Whispers*



Steph

Junebug926
by Bronze Member on Mar. 30, 2009 at 1:35 PM

This is my huge concern as well. Not that think these companies have done anything to deserve a bailout, I'm just worried about the tragic fallout after they all fail. I really don't think many people are truly wrapping their brain around what will happen and just how BIG it is.

Quoting tgiamt:

The way people are treating the automakers really irritates the shit out of me. Yes they've made some bad decisions over the years. But how do you expect these companies to recover in a time like this. The banks (even though they've received billions to do so) are not loaning, people either have no jobs or if they have jobs are choosing to not spend because they are afraid. Do you even realize the magnitude of job loss, and foreclosure that the workers and retirees will be forced into if they fail? We should just sell the state of Michigan to Canada now, be cause they're will be almost nothing left.

These two companies are paying this money back, this is a loan. NOT a bailout! The banks who were just given BILLIONS of dollars, and are still throwing lavish parties, and giving out bonuses that could feed all of freak China.They have to pay nothing back. It was handed to them no questions asked. How is that right?


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