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Thread: US Lost Ten Billion Dollars on GM Bailout

  1. #151
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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by upsideguy View Post
    There were many people on this Board that advocated it and supported it.....
    Sure they did.
    "It's always reassuring to find you've made the right enemies." -- William J. Donovan

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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by Lutherf View Post
    A million employees?

    Really?

    At the time GM employed maybe 250k. There is no way in hell that parts of the operation wouldn't be picked up so the loss there might have been 100k jobs if things went really bad. They also had 6k dealerships. If the average dealership employed 100 people that would be 600k jobs but a lot of those dealerships would have simply switched brands so, again, the loss would be far less than "all".

    On top of that if the whole thing burned to the ground we STILL wouldn't see all those people go on unemployment. Some would retire and most would move to another job. Inside of 2 months you'd likely have 80% of the employees that got bounced in a new job.
    1.0 was the conservative estimate.... try maybe as many as 2.6 million. Do you understand what the supply chain is? GM goes under, so do a lot of its suppliers. There is a multiplier effect to everything that happens in an economy. My numbers were crude and very conservative. If you take the Center of Automotive Research with some degree of credence, not saving GM would have cost 2.6 million jobs and the US government over $100B.

    GM, Chrysler bailouts saved 2.6 million jobs - Autoblog

    Retire and move to other jobs??? what other jobs were there in Detroit in 2008 / 2009? With the GM bailout, they had unemployment approaching 15%.... with the Dow at 6000, not many were retiring.

    Yes, in the long-run, things might have shaken out... but the long-run would have been much longer (look at how slow the economy is recovering with GM in tact)... and, of course, in the long-run, we are all dead. Meanwhile, in the short-run, we would have had no auto industry, US unemployment in the 12-15% range and a US debt of $20T right now.
    Last edited by upsideguy; 12-10-13 at 11:58 PM.

  3. #153
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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by upsideguy View Post
    1.0 was the conservative estimate.... try maybe as many as 2.6 million. Do you understand what the supply chain is? GM goes under, so do a lot of its suppliers.

    GM, Chrysler bailouts saved 2.6 million jobs - Autoblog

    Retire and move to other jobs??? what other jobs were there in Detroit in 2008 / 2009? With the GM bailout, they had unemployment approaching 15%.... with the Dow at 6000, not many were retiring.

    Yes, in the long-run, things might have shaken out... but the long-run would have been much longer (look at how slow the economy is recovering with GM in tact)... and, of course, in the long-run, we are all dead.
    A real bankruptcy would have saved most of the jobs and led to a faster recovery.
    "It's always reassuring to find you've made the right enemies." -- William J. Donovan

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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by Jack Hays View Post
    Sure they did.
    Appreciate your concession on that point

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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by Jack Hays View Post
    A real bankruptcy would have saved most of the jobs and led to a faster recovery.
    No history is more interesting than revisionist history....

    And who was to provide the $60B debtor-in-possession financing in 2008?

    ...Da Plane, Da Plane!

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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by upsideguy View Post
    Appreciate your concession on that point
    Your Sarcasm Warning Indicator Panel must have malfunctioned. In fairness, I know some people looked positively on the shutdown early, but I think most thought better of that pretty soon.
    "It's always reassuring to find you've made the right enemies." -- William J. Donovan

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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by upsideguy View Post
    No history is more interesting than revisionist history....

    And who was to provide the $60B debtor-in-possession financing in 2008?

    ...Da Plane, Da Plane!

    That's the good thing about bankruptcy: the price falls until a buyer steps forward.
    "It's always reassuring to find you've made the right enemies." -- William J. Donovan

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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by upsideguy View Post
    1.0 was the conservative estimate.... try maybe as many as 2.6 million. Do you understand what the supply chain is? GM goes under, so do a lot of its suppliers. There is a multiplier effect to everything that happens in an economy. My numbers were crude and very conservative. If you take the Center of Automotive Research with some degree of credence, not saving GM would have cost 2.6 million jobs and the US government over $100B.

    GM, Chrysler bailouts saved 2.6 million jobs - Autoblog

    Retire and move to other jobs??? what other jobs were there in Detroit in 2008 / 2009? With the GM bailout, they had unemployment approaching 15%.... with the Dow at 6000, not many were retiring.

    Yes, in the long-run, things might have shaken out... but the long-run would have been much longer (look at how slow the economy is recovering with GM in tact)... and, of course, in the long-run, we are all dead. Meanwhile, in the short-run, we would have had no auto industry, US unemployment in the 12-15% range and a US debt of $20T right now.
    The bankruptcy doesn't happen in a vacuum. Different components of the business get picked up and continue under new ownership. The parts that don't get picked up shed employees but those employees don't generally sit around wringing their hands. They find new jobs or retire. The article you are citing presents an unrealistic scenario.

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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by Born Free View Post
    you have no idea that "doing nothing" would plunge the nation into anything.
    Yes, we do pretty much know it.

    All the big car companies rely on the same suppliers. If 2 of the Big 3 collapsed (as would surely have happened without government support), it would have taken out the suppliers, which in turn would have taken out Ford, and the American auto industry would basically be crippled. You'd have around 1.2 million more people unemployed, with non-transferrable skills -- which in turn could have hit $28 billion in higher benefit spending and lost revenues.

    Nothing you've said changes this. Actually, you've said nothing. So...


    Further we're not talking about Asian governments. Last, can you post up a few times the Big Daddy has purchased stock in a structured bankruptcy.
    I'm talking about Asian governments, because this is the kind of thing they do, and they're who US companies compete against. And yes, it makes sense for the government to hold a bunch of stock when bailing out a big company like GM or AIG.


    A normal bankruptcy was an option. period.
    If that was the case, the auto execs (including Ford's CEO Alan Mulally) wouldn't have debased themselves by driving to DC in a hybrid, to beg for government help.

    It's also a little bit tough to have a "normal" bankruptcy at a time when the credit markets are frozen rock-solid, when no one wants to invest in anything, and when inventories were plummeting. Oh, and I'm sure Americans would be thrilled if the tattered remains of GM were bought out by, let's say... a bunch of Chinese companies. Yeah, that'll work.


    Creditors would not have gotten screwed as much in a normal bankruptcy. Bond holder in a bankruptcy take a hit but don't lose everything....
    Uh huh. Well, in a normal bankruptcy, it would've been the employees and the pension fund who got screwed. Bondholders got 10% of the new company, currently worth $6 billion; they also got options for another 273 million shares at $18, for another $6 billion. 50 cents on the dollar, with more upside if the stock price goes up? Plus creditors collecting on credit default swaps? Yeah, I'm not broken up over it.


    Last GM has also posted profits for the last 15 quarters, do you know why, a big clue. Their bond debt is gone....
    Is it? Is that why they have $62 billion in liabilities on their books?

    Most of their losses weren't because of debt. It was because they couldn't sell cars.


    And lets not forget the tax payer lost over 10 billion bailing out GM. Yes that is 10 Billion of some of my taxes went to bail out GM, actually my tax dollars went to bailout the unions. Period.
    If it hadn't gotten a bailout, not only would we have lost a premier industry, but the government would have lost nearly $30 billion in benefits and lost revenues.

    The funny thing is, you read the critics complain about it last summer, and they were talking about "$25 billion losses" and "GM can't make a profit." 18 months later, the losses were cut to $10 billion, and GM has actually had years of profits.

    Considering that we paid out $418 billion for TARP, and got back all of it except for $12 billion, and basically kept the US economy from crashing into a telephone poll, I'm OK with it.

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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by Lutherf View Post
    A million employees?
    1.2 million.


    Really?
    Really. Report: GM bailout saved 1.2 million jobs

    Some estimates go as high as 2.6 million jobs. GM, Chrysler bailouts saved 2.6 million jobs - Autoblog

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