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Thread: US Lost Ten Billion Dollars on GM Bailout

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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by Visbek View Post
    1.2 million.



    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
    Of course some estimates go as high as 2.6M. Hell, I'll bet that by Friday there are reports out there that the GM "save" prevented the loss of 6.8 Billion jobs and $147T.

    The fact of the matter, as I've already said, is that a bankruptcy doesn't happen in a vacuum. Hell in September of 2008 both Lehman Brothers and Washington Mutual went BK. Those two banks had combined assets of more than ONE TRILLION dollars compared to GM's $90B. You might have noticed that the world didn't end in 2008 even though all that money got sucked out of the financial sector.

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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by Lutherf View Post
    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.
    I produced a study that told us that a GM shutdown would cost 2.6 million jobs and the US government $100B. You offered your pedestrian conjecture. If you want credibility on this issue, kindly show us something that supports your position... come up with something of sufficient authority that actually refutes.... ..

    http://www.cargroup.org/?module=Publ...View&pubID=102 .. see .pdf which is the actual study.
    Last edited by upsideguy; 12-11-13 at 01:08 AM.

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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by Jack Hays View Post
    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 functioned fine... check yours.

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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by Jack Hays View Post
    That's the good thing about bankruptcy: the price falls until a buyer steps forward.
    Do you remember the investment environment of 2008/09... I sure do, we closed on the sale of our company just as the markets were falling. There was almost no risk capital available q3 '08 to q3 '09. There was not sufficient capital to finance a GM bankruptcy.

    Look, the GM/Chrysler/AIG/Bank bailouts, which may have been the last bi-partisan work of Washington (short of naming a post office in Montana) of our generation worked. Can't you concede one item of success?



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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by Lutherf View Post
    Of course some estimates go as high as 2.6M. Hell, I'll bet that by Friday there are reports out there that the GM "save" prevented the loss of 6.8 Billion jobs and $147T.

    The fact of the matter, as I've already said, is that a bankruptcy doesn't happen in a vacuum. Hell in September of 2008 both Lehman Brothers and Washington Mutual went BK. Those two banks had combined assets of more than ONE TRILLION dollars compared to GM's $90B. You might have noticed that the world didn't end in 2008 even though all that money got sucked out of the financial sector.
    Comparing bank assets to a manufacturing companies assets are comparing apples and oranges. The Fed Res knows how to deal with a bank insolvency. It can be done fluidly; not so much with a company like GM. In fact, an auto industry bankruptcy that manifested itself as it did, might be the most impactful type of bankruptcy possible...

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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by upsideguy View Post
    I produced a study that told us that a GM shutdown would cost 2.6 million jobs and the US government $100B. You offered your pedestrian conjecture. If you want credibility on this issue, kindly show us something that supports your position... come up with something of sufficient authority that actually refutes.... ..

    CAR Research Publications | Center for Automotive Research .. see .pdf which is the actual study.
    The study you presented was put together by the Center for Automotive Research and the Anderson Economic Group, neither of whom are disinterested parties. Furthermore, the study completely neglects to so much as contemplate outside acquisition of any of the distressed assets involved. That's a gross omission and makes the entire study little more than propaganda.

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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by Lutherf View Post
    In most bankruptcies the employees hardly notice the difference at all. There's a new name on their check stub and benefits might change but for most people they hardly notice the change at all.
    Depends on the type of bankruptcy...... that is the "fun" of the US, bankruptcy for companies does not mean death, which it does most other places. It usually means screwing over someone and then going on until next bankruptcy.

    Had they gone Chapter 11 then yea they could have continued while raping their employees.

    But had they gone Chapter 7... that is a whole other ball of wax.
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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by Lord Tammerlain View Post
    The demand for cars dropped from just under 17 million per year to around 10.5 million per year in the US. Chrysler was going under at the time and Ford was on the brink of it as well (Recall Fiat was pretty much given Chrysler). Had GM went under the parts suppliers that survived were going to go as well. Those suppliers also supply Ford, no suppliers no Ford.

    It would have taken years if GM was shut down for the auto industry to recover,
    The idea that the government should supplement a company's bottom line when its sales tank is patently absurd.
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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by upsideguy View Post
    I produced a study that told us that a GM shutdown would cost 2.6 million jobs and the US government $100B. You offered your pedestrian conjecture. If you want credibility on this issue, kindly show us something that supports your position... come up with something of sufficient authority that actually refutes.... ..

    CAR Research Publications | Center for Automotive Research .. see .pdf which is the actual study.

    Subtitle should be "Or Why You Should Send Us Billion of Dollars"
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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by Visbek View Post
    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...
    So, as the companies are broken up and purchase by other these suppliers are still in business. Further there XX cars needed to be supplied and if makes no difference if GM's name is on the office door or not. The cars that are needed will be made as before but under new ownership.



    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.
    No. They should have been allowed to go bankrupt. Big Daddy has not business picking winners and losers. Period.

    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.
    You make assumptions that have no basis of fact.

    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.
    Of course, protect the unions and screw the bond holders. Typical liberal ideals.

    Is it? Is that why they have $62 billion in liabilities on their books?
    Where did all the bond holder debt go? It's gone, without having to make bond payments that money goes to the bottom line. You can't eyewash how Obama structured this bailout that the Tax Payer lost over 10 billion and the unions were made whole and the bond holders got screwed.

    Most of their losses weren't because of debt. It was because they couldn't sell cars.
    And who's fault is that? Ford had no problem. Again you pick winners and losers.

    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.
    What are you talking about, we would have lost a premier industry. How so. I repeat the need for cars is still there, the production would continue but under a different name or names.

    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.
    At the expense of the bond holders and the tax payer.

    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.[/QUOTE]

    Picking winners and losers. Sure that is OK with you. Again those companies would have been broken up and restructured and the needs of those companies would have been provided under a new ownership. One thing you continue to ignore is the need for these protects are still in demand, it AIG is not producing that need it will be under a different name. The need for products does not diminish because a company goes broke. If a restaurant goes out of business you go to a another restaurant, or the restaurant that went broke is taken over by a new owner and you continue to go to that same restaurant. Get real, if GM goes out of business you don't say "now we'll won't be able to buy a new car the car industry is no longer"
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