• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

US Lost Ten Billion Dollars on GM Bailout

PeteEU said:
And you dont seem to understand that this does not happen overnight. In the mean time hundreds of thousands if not millions of people would be thrown into unemployment and effect of such a major event would cost far more than 11 billion dollars.
Click to expand...

Actually, most of that would happen pretty quickly. Companies go bankrupt all the time and we see these transitions dozens of times each year. GM would have been one of the bigger transitions but the process wouldn't have been much different. The ones who would get screwed would have been the pension beneficiaries. The pension plan would go to PBGC and benefits would get slashed but that would be nothing like an $11B hit.

The flip side is that the salvaged parts of the business would be set up to run without many of the encumbrances GM was subject to and thus would be able to produce at higher rates which would offset a lot of (if not all) the negative economic impact.
 
ttwtt78640 said:
You again, show lack of understanding of the US gov't. We choose the gov't, at least on paper, it is time for the sheeple to choose more wisely, IMHO.
Click to expand...

WE dont, others do. I sure wasnt consulted about social spending.
 
Threegoofs said:
That's an odd way to put it....but yes. That's an estimate from S&P, and probably an underestimate. We basically gave thousands of government workers a paid vacation while disrupting lots of ongoing projects. That's $2B right there. I know scientists who had ongoing experiments destroyed or delayed for a year. That's costly.
Click to expand...

So its not factual then. Thanks.
 
Jack Hays said:
The US lost $10 billion on the GM bailout. What do you think about that?

Treasury sells last shares in GM, posts a loss of $10 billion

Danielle Douglas DEC 9
The government will lose $10 billion on the deal, which kept the automaker from collapsing.

"The Treasury Department announced Monday the sale of its remaining shares in General Motors, closing the books on one of the most controversial government interventions of the financial crisis. The government will lose $10 billion on the deal, which kept the automaker from collapsing.":peace
Click to expand...

More hope and change-in the mean time, we support and prop up failing business models. What could go wrong?
 
Jack Hays said:
I suspect that we share the view that old fashioned bankruptcy would have been better.:cool:
Click to expand...
Where would the money come from, the credit markets were closed at the time. And what billionaire would invest in a failing automobile company?
 
Lutherf said:
Actually, most of that would happen pretty quickly. Companies go bankrupt all the time and we see these transitions dozens of times each year. GM would have been one of the bigger transitions but the process wouldn't have been much different. The ones who would get screwed would have been the pension beneficiaries. The pension plan would go to PBGC and benefits would get slashed but that would be nothing like an $11B hit.

The flip side is that the salvaged parts of the business would be set up to run without many of the encumbrances GM was subject to and thus would be able to produce at higher rates which would offset a lot of (if not all) the negative economic impact.
Click to expand...

So you are saying by "pretty fast".. a day or two, or a couple of months or several years?

This is one of the biggest companies in the US, so the complexity of such a bankruptcy would be massive. Alone figuring out the value of the different parts of the company would take a while, and add in time for the creditors get a claim in and so on. All in the while the workers are fired, unemployed and the burden is pushed on the state.

Now if you think that the other car manufactures will pick up the slack, then you forget the situation. Chrysler was also broke, and Ford was hurting. Had GM gone, and Chrysler also (took a long while and wheeling and dealing to allow FIAT to buy them), then the whole supply chain that also supplied Ford and other car companies.. well it could easily have collapsed.

People on the right seem to think that the free market in its current form is dynamic and quick... it aint and never has been. It is slow as hell to react.. else why did GM get into trouble in the first place?

Of course this depends on what kind of bankruptcy they would have done.. they could have done an "airline" bankruptcy, where they screwed over their workers and kept on functioning.
 
pbrauer said:
Where would the money come from, the credit markets were closed at the time. And what billionaire would invest in a failing automobile company?
Click to expand...

It would have been a good buy and there would have been no trouble with financing. Those are excuses. With bankruptcy, the price falls until a buyer steps forward.:peace
 
Jack Hays said:
It would have been a good buy and there would have been no trouble with financing. Those are excuses. With bankruptcy, the price falls until a buyer steps forward.:peace
Click to expand...
Oh well, today we have hundreds of thousands of people who have a decent job and are paying Federal Income taxes. Factor that in the 10 billion what is then? I say President made a wise decision. And the supply chains was a key reason why he won Ohio.
 
PeteEU said:
So you are saying by "pretty fast".. a day or two, or a couple of months or several years?

This is one of the biggest companies in the US, so the complexity of such a bankruptcy would be massive. Alone figuring out the value of the different parts of the company would take a while, and add in time for the creditors get a claim in and so on. All in the while the workers are fired, unemployed and the burden is pushed on the state.

Now if you think that the other car manufactures will pick up the slack, then you forget the situation. Chrysler was also broke, and Ford was hurting. Had GM gone, and Chrysler also (took a long while and wheeling and dealing to allow FIAT to buy them), then the whole supply chain that also supplied Ford and other car companies.. well it could easily have collapsed.

People on the right seem to think that the free market in its current form is dynamic and quick... it aint and never has been. It is slow as hell to react.. else why did GM get into trouble in the first place?

Of course this depends on what kind of bankruptcy they would have done.. they could have done an "airline" bankruptcy, where they screwed over their workers and kept on functioning.
Click to expand...

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.
 
pbrauer said:
Oh well, today we have hundreds of thousands of people who have a decent job and are paying Federal Income taxes. Factor that in the 10 billion what is then? I say President made a wise decision. And the supply chains was a key reason why he won Ohio.
Click to expand...

Many of the jobs would have survived bankruptcy. Notice any big layoffs from bankrupt American Airlines?:peace
 
pbrauer said:
Oh well, today we have hundreds of thousands of people who have a decent job and are paying Federal Income taxes. Factor that in the 10 billion what is then? I say President made a wise decision. And the supply chains was a key reason why he won Ohio.
Click to expand...

Right. However, because the Obama Administration never wanted to let a crisis go to waste, they paid off their Union masters, and left the new GM under a pile of debt and long term liability, which could place those hundreds of thousands right back where they were.


GM won't tackle pension talks with UAW until 2015: executive | Reuters

(Reuters) - General Motors Co (GM.N) will wait until its next round of labor talks in 2015 before negotiating with the United Auto Workers about the automaker's U.S. blue-collar pension obligation, GM's vice chairman said on Friday.

GM's pension obligation to UAW-represented workers in the United States was $71 billion at the end of 2011, the last time the Detroit company detailed its blue-collar pension obligation. That exceeds GM's current market value by about $20 billion.


Jaguar, Land Rover, Volvo, and others all changed hands in 2008. These companies were niche players and sold for billions. What do you think a manufacture with a capacity to produce millions of vehicles, along with an in-place global dealer and service network would be worth?
 
polgara said:
It's just one aggravation after another, isn't it? :yes:
Click to expand...

Gracie after a successful "mission" outside.

download
 
Lutherf said:
You're being REALLY short sighted.

Just because GM stopped making cars and trucks doesn't mean that the demand for these items disappeared. People would still want their vehicles and manufacturers would still find a way to deliver on that demand. The likely outcome would be that Ford and Chrysler would have picked up some of the premium line and other manufacturers would have picked up facilities and equipment for producing specialty products. It's even possible that we'd have seen a surge in alternative fuel vehicles since those manufacturers could have picked up important parts for their production on the cheap.
Click to expand...
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,
 
Lord Tammerlain said:
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,
Click to expand...

GM would not have shut down. American Airlines flew while bankrupt. This is just administration propaganda.:peace
 
Jack Hays said:
Gracie after a successful "mission" outside.

download
Click to expand...

Well, I must admit I'm a bit spoiled Jack. However, I also have to admit to a bit of jealousy towards other states while I toil away here in LaLa Land.

This...

Seal Beach Sunset.jpg

...is why I put up with this...

Immigration.jpg
 
Lord Tammerlain said:
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,
Click to expand...

So if there was no demand for cars and trucks GM should have been supported because.......why?

Quite often the best time to make capital investments is when demand is low due to short term economic conditions like the 2009 crash. The bulk of GM manufacturing could have been picked up cheap and the buyer wouldn't have the burden of an underfunded pension plan or a financing division that was a mess. Such a move would have also had an immediate positive effect on the economy because the way things played out it only added a bunch of uncertainty to the bond market where all of a sudden bondholders could no longer be confidant that they would be in first position in the case of a bankruptcy.
 
Jack Hays said:
GM would not have shut down. American Airlines flew while bankrupt. This is just administration propaganda.:peace
Click to expand...
There is noway you can compare a manufacturing company (GM) with a service company (AA). GM was dependent upon numerous supplies (tires, breaks, radios, ete. etc) while AA was dependent upon jet fuel.
 
pbrauer said:
There is noway you can compare a manufacturing company (GM) with a service company (AA). GM was dependent upon numerous supplies (tires, breaks, radios, ete. etc) while AA was dependent upon jet fuel.
Click to expand...

. . . and tires, and aircraft parts, and baggage handling equipment, and ground equipment, and aircraft, and . . . and . . . and . . .:peace

Try again.:roll:
 
Jack Hays said:
. . . and tires, and aircraft parts, and baggage handling equipment, and ground equipment, and aircraft, and . . . and . . . and . . .:peace

Try again.:roll:
Click to expand...
An airline doesn't produce a product, they don't need near the amount of supplies that an automobile manufacturer needs.
 
pbrauer said:
An airline doesn't produce a product, they don't need near the amount of supplies that an automobile manufacturer needs.
Click to expand...

The principles are the same. GM would have been snapped up quickly and production lines likely would not have missed a beat.:peace
 
pbrauer said:
There is noway you can compare a manufacturing company (GM) with a
service company (AA). GM was dependent upon numerous supplies (tires, breaks, radios, ete. etc) while AA was dependent upon jet fuel.
Click to expand...

LOL !!

Yup....those 50 million dollar jets fly themselves, and clean themselves, repair themselves, BUILD themselves, serve peanuts to their passengers....themselves.

They load themselves, inspect themsleves, fuel themselves and account for additional airtraffic by themselves.

Their parts never need to be replaced and they can land anywhere.

Yea, no comparison.....
 
Fenton said:
LOL !!

Yup....those 50 million dollar jets fly themselves, and clean themselves, repair themselves, BUILD themselves, serve peanuts to their passengers....themselves.

They load themselves, inspect themsleves, fuel themselves and account for additional airtraffic by themselves.

Their parts never need to be replaced and they can land anywhere.

Yea, no comparison.....
Click to expand...
If the airlines built the jets, I would agree with you. But as a matter of fact they don't. Almost every part that goes into an automobile or truck must be supplied by some company. These parts are specific to and auto. Airlines use jets from the same manufacturer.
 
pbrauer said:
If the airlines built the jets, I would agree with you. But as a matter of fact they don't. Almost every part that goes into an automobile or truck must be supplied by some company. These parts are specific to and auto. Airlines use jets from the same manufacturer.
Click to expand...

The aviation supply chain is considerably more complicated than that. Nonetheless it doesn't matter; AA is a large complex business whose situation is/was fully analogous to that of GM. You need to stop defending an indefensible position.:peace
 
You must log in or register to reply here.
Back
Top Bottom