Bush Destroyed General Motors

When Bill Clinton left office, GM was at the top!!

Bush sat there for eight years and watched GM die. He didn't raise a finger and when push came to shove, he shoved it off on John McCain, who he hoped would follow him.

Like the terrorist alerts, the alerts for the death of GM were out there. Heck, DU has been covering GM's death throes for the last eight years. We all saw it coming.

Bush could have saved GM. He could have protected America's number one company.
He should have saved us. He failed his duty.

but the mindset of GM and other mega corporations who wanted the middle class destroyed (and hired cheney to finish the job) had more to do with this one.

In their plans to destroy the middle class, GM had to go.

You're a real bonus for DU, Havocmom, did you know that? Hey, I'm noy just brown nosing here, I mean it. Thanks!!

Would be good to look at most days when I get blasted by knee-jerk posters who have let themselves get too conditioned to emotional response that blurs vision (just like the right likes to keep us) ;)

...if you ever sell it.

The right does have us pretty much where they want us. Even here on this thread there are accusations that Obama is to blame. Right where they want us.

he's a dog. I don't get it. The mess took decades to make and it will take a bit more than a few months to turn around, let alone implement all our wish list contains.

Burger King mentality is killing us. We want it our way and in under a minute. :banghead:

Bush conspired to kill GM. Because the death of GM hurts many, many Americans, especially labor.

GM killed itself.

Hell, Bush's free trade bias even helped GM.

They were the ones who invested in gas guzzlers at a time when oil prices were going through the roof. They were the ones who produced inferior products while paying more for labor than the Japanese car companies. And even if you make the argument that GM's cars are as reliable as Japanese cars (and I have seen no proof to back up this claim), then they didn't do enough to change public perception.

Bush had about as much to do with GM's problems as Clinton had to do with Netscape's. They were bankrupted through a lack of internal restraint and external market pressures.

And it was Katrina's fault? Bush had nothing to do with what happened?

Same story, different case with GM. They let Nawlins fail when they could have helped, they did the same with GM.

Now that Hannah made me dig it up here you go:

2001 +0.6B (on $169B in sales = 0.7% profit margin)
2002 +1.7B (on $178B in sales = 1.1% profit margin)
2003 +3.8B (on $186B in sales = 1.5% profit margin)
2004 +2.8B (on $194B in sales = 1.4% profit margin)
2005 -10.4B
2006 -2.0B
2007 -38.7B
2008 -30.8B
2009 -31.7B (projected, -5.9B recorded in Q1)

GM burned through $122B in last decade with nothing to show for it.
Even pension obligations, or UAW labor costs don't explain that.
Just think about they lost $122B over a 10 year period!
Nothing changed.

Now if New Orleans got destroyed every year for a decade then maybe we should think about not rebuilding there.

This financial crisis wasn't a one time loss for GM. GM was very good at selling things for substantially less than they cost to make.
Which will bankrupt any company.

2005
GM sold $193B worth of cars. Sound good right?
Well it cost GM $209B to make them.

2006
GM sold $204B worth of vehicles. Hey thats $10B more so that will make them break even right?
Nope. It cost $210B to make them.

2007
$180B worth of vehicles @ $184B to build.

2008
$149B worth of vehicles @ $170B to build.

Even Q1-2009 when GM was "cutting costs" to get more govt money.
Sold $22B worth of vehicles which cost $27B to make.

Come On!
GM was dead a long time ago.
Just like a family with a $50K income living a $70K lifestyle on credit cards.
Once the credit stops they are bankrupt.

GM good credit rating kept them afloat for 5 years after they had lost any hope of being profitable.

GM was profitable before Bush got in power and even continued for a few years.
Bush gave them all kinds of subsidies. Kinda like keeping them on welfare, barefoot and pregnant, then destroyed the economy by stating wars, driving up the cost of oil and not regulating the financial markets.

All in all, Bush failed America. Surely you don't quibble that fact?

You are kidding right.

Subsidies somehow cause GM to lose money.

Not GM poor management?
Not the fact that GM lineup was top heavy (large vehicles) at a time when gas prices were rising?
Not the previous years having a plan of "planned obsolescence" destroying the brand?
Not the crippling debt load GM racked up?

Nope. It was "free money" from Bush.

Ok. Honestly (for your sake) I hope you are just pulling my chain.

I said it was sick. The idea is that Bush could have, and should have done whatever it took to get GM back to health. By not doing so, Bush failed to protect America from this great loss. In fact his actions helped make it happen.

You have to look at the whole picture to see what I see, not just at statistics.

There are lies, damn lies, and statistics. IIRC.

get "saved" and which ones die.

That's up to each corporation.

Two wrongs don't make a right.

If the bank bailouts were a bad idea then the GM bailout was a bad idea.

To be against the bank bailouts but for the bailout of your industry makes you lose all credibility.

If you for all bailouts of all troubled industries I would still say you were wrong but at least consistent and credible

Especially when the financials (who we are told are the very underpinning of our economy, no less!) play by the "too big to fail" rules.

"If the bank bailouts were a bad idea then the GM bailout was a bad idea."

Simple-minded. The bank bailouts changed the game from the darwininian "free market" competitive environment which you espouse into one in which the government chooses the winners and losers. Under such facts, it is unconvincing to appeal to the "free market" as the reason one industry should be allowed to fail without at least attempting to explain away the difference in treatment.

Once again (for millionth time) GM management failed.
GM shareholders & board failed by not kicking the bums out a decade ago.

Wagoner couldn't lead a high school soccer team but was handed virtually unlimited power by the board.
Wagoner killed GM by not restructuring on his own 5 years ago.

Saturn could have been spun off for $20-$30B and that cash used to pay down debt.
$30B paying $0.30 on the $1.00 (like Ford did) would have paid down $90B which would have improved GM cash flow by about $6B-$9B annually. Enough to actually be profitable! Wow. Crazy. Management has to manage.

Hummer & Ponitac should simply have been scrapped (or sold if possible).
Numbers of dealerships should have been reduced to similar numbers that the competitors have.

These would have been hard calls to make. Even harder to make EARLIER when they could do the most good.
Wagoner didn't have the stones to make the hard calls.
His plan was the same plan that caused GM to bleed cash for last decade.

A decade of bleeding cash and they figured year 11 would magically be different?
Blame GM management.

Again, free market principles ring hollow under such facts. You keep spouting numbers, when who lives and who dies is clearly based on a political, not a financial, calculus.

Odd that you can't drop the "free market" spiel for two seconds to actually acknowledge reality. :hi:

Banks, financial institutions, etc. need to learn there are consequences for stupid decisions...as do car companies.

No one is served in the long run by the government removing risk and rewarding failure.

That's one hell of a financial aid package.

"No one is served in the long run by the government removing risk and rewarding failure."

Except the banksters and their foreign "counterparties", you surely mean? They've profited quite nicely from this "minor aberration" from the free market principles you hold so dear. :hi:

What, just because they got theirs, everyone else should get a bailout, too? That's inane.

"What, just because they got theirs, everyone else should get a bailout, too? That's inane."

It's equally inane to advocate for an semi-religious free market ideology that is falsified by every fact on the ground. You want to go on preaching the markets without explaining why your last free-market prophecy didn't pan out. Forget fairness for a minute--how is it even possible for a "free market" to function as to industry when those who decide whether a company gets financing are themselves bankrolled by powerful politicians? Let the "market" decide? What market? The value of the so-called "free market" is determined by the wherewithal of the American people to carry Chinese debt, not some algorithm or scientific principle!

This fundamental contradiction is only highlighted by refusing to address the incompatibility of the two positions--economic darwinism for most of us, bail outs for financials (the supposed backbones of our "free market" order, no less!)

Huh? If you made the slightest bit of sense, I might be able to respond.

and yet you continue to advocate for this self-same "free market" as the end all, be all.

At any rate, even if my metaphor was a bit over your head, you have completely ignored all my other points. I think I know why. :hi:

Why is it the responsibility of the government to "save" failing businesses?

Please don't bring up the banks. 2 wrongs don't make a right.

You can't think the bank bailouts were a bad idea and then at the same time say Bush should save GM and have any credibility.

GM could have saved GM.
GM could have sold Saturn (which would have fetched good price 4 years ago) and used the cash to pay down debt.
GM could have closed dealerships.
GM could have renegotiated its debt.
GM could have scrapped Hummer & Pontiac.

GM could have produced the small, popular, fuel efficient vehicles IT ALREADY SELLS IN EUROPE here in the US.

Please.

Ford saw the writing on the wall 5 years ago and began to change the company. Reducing model counts, consolidating factories, PAYING DOWN DEBT.

GM under Wagoner tried the "same ole, same ole". He is even quoted as saying it is GM "destiny" to remain the largest car company?
The board failed GM by not axing him years ago.

:hi:

It's definitely not coherent or compelling.

It's a shame that we're in the position of doing what we've done already.

GM was given a bridge loan. A bridge loan they said would allow they to reorganize debt obligations and keep cashflow going until they could get sales up.

Nobody believed it but that was GMs line.

GM was about to miss a debt obligation and under bankruptcy law that entitles the bondholders to force the company into liquidation.
GM filed bankruptcy protection to avoid liquidation.

So how exactly did Obama force GM to fail on it's obligation to bondholders and thus need BK protection to avoid liquidation?

Please explain.

"GM was about to miss a debt obligation and under bankruptcy law that entitles the bondholders to force the company into liquidation."

You don't know what you're talking about with regard to the bankruptcy code, btw. Your above statement is simply incorrect. :hi:

What is the stick behind the carrot of a bond?

Why doesn't any company simply say "sorry all bonds are canceled".

It is called "bankruptcy PROTECTION" for a reason.
GM misses bond repayment and GM has failed to meet its contractual obligation.
Bondholders sue GM and seek liquidation for repayment.
GM avoid complete death by filing for bankruptcy PROTECTION.
This halts any legal recourse bondholders have.
Allow judge to restructure the company and allow the company to emerge under conditions that will lead to profitability (hopefully).

GM choices were liquidation or bankruptcy protection.
GM had $19B in debt due this year with no method to repay them.

Shareholders only own a company that isn't in debt to its eyes.
This isn't the first or last time bondholders "bond bullies" force a company in BK protection.
If you are a company and that isn't a risk you want to take then don't sell bonds!

You are simply incorrect in this assertion. All the rest about simply cancelling debt is strawman garbage (the word "PROTECTION" in big letters notwithstanding!)

"GM choices were liquidation or bankruptcy protection."

Nonsense. The government could prop it up indfefinitely for a fraction of what we gave the banks. (Btw, liquidation also occurs under bankruptcy protection, er, I mean PROTECTION--it's called Chapter 7, LIQUIDATION bankruptcy, and liquidation can take place under Chapter 11 as well.)

"Shareholders only own a company that isn't in debt to its eyes.
This isn't the first or last time bondholders "bond bullies" force a company in BK protection."

Shareholders and bondholders are completely distinct conceptual categories who are treated very differently in bankruptcy. Bondholders did not force GM into bankruptcy, btw (this is a very specific process)--the Obama administration ordered GM into bankruptcy.

Why didn't GM simply say NO?

GM filed bankruptcy protection because they were insolvent.
Debt was only part of the problem.
$180B in liabilities. $80B in assets.
Negative cash flow for last decade.
Insufficient short term assets (cash) to meet obligations (payroll, account payable, etc).
GM own admission in Nov that without a bridge loan they would not be able to operate past end of the year.

Without ability to borrow they would have been bankrupt a decade ago.
GM borrowed their way from 2000 till now.
GM is a textbook example of an insolvent company.

The idea that Obama forced them into bankruptcy is laughable.

Obama didn't need to force them.
Eventually GM would have simply ran out of cash.
They would have factories with power off, unpaid workers striking, no ability to move product, bondholders filing claims to liquidate the company.

Bankruptcy Protection gave them time to reorganize rather than simply go away.
Obama didn't force anything. They simply didn't give GM anymore money.

I give you $500 to pay your back rent. Next month you ask me for more money and I say no. Did I FORCE you to get evicted? No I simply cut off the free money.

The rest of what you wrote is related, but not really responsive, to the preceding conversation.

"The idea that Obama forced them into bankruptcy is laughable"

It's a fact. The Obama administration ordered GM into bankruptcy as a condition of DIP financing. All the rest of your verbiage is a distraction from this basic point.

As a condition meaning if GM didn't want/need DIP financing they didn't need to file bankruptcy.
Only thing Obama said is "no more money outside of BK" which given GM inability to accept reality and change to market conditions is a good thing. It would simply be more and more money taxpayers never get back.

Obama didn't force GM into bankruptcy though.
GM chose BK protection because the govt was willing to supply DIP (which nobody else in their right mind would do).
If GM wasn't insolvent they wouldn't need to file BK protection. Period.

GM was INSOLVENT! It isn't Obama fault that GM was broke.
If GM wasn't broke they wouldn't need DIP and therefore they wouldn't have filed BK.

Without BK what would GM do. They burned though $12B in a matter of months. Is your "solution" that Obama hand over $12B ever couple months forever or until GM decides to change things.

What incentive to change.

Nothing GM has done in BK couldn't have been done 5, 6, 10 years ago.
GM didn't want to change. Wagoner and the crony board drove GM into the ground, not Obama.

And you won't (can't) explain why.

"GM didn't want to change. "

How has AIG or Citi changed? Not much, eh? Again, this seems like a glitch in your programming that you can't explain the difference. :hi:

I think the "too large" banks should be split.
I think any future anti-trust approval should have a section on "too large".

Your argument that because they did something (which you admit was wrong) for the banks they should do it for the autos too.

Well what about every other industry?
What about private jet companies which have massive layoffs because companies aren't using them now?
Travel industry? Construction? Retail?


I mean based on your logic we should torture future enemy combatants because we tourtured previous ones?

It is morally bankrupt to be opposed to something but since it was done we should keep doing it.

Bailouts are right
OR
Bailouts are wrong

I am in the wrong camp.
You want to be in both (wrong for banks but right for GM).

both inasmuch as they discredit the idea of a self-regulating market as the ultimate in rational economic allocation, and on the far more practical level that trillions of taxpayer dollar are flowing to private corporations, very much choosing the "winners" and "losers".

"Your argument that because they did something (which you admit was wrong) for the banks they should do it for the autos too."

No, that's not my argument. My argument is that your "free market" ideology is proven totally and utterly false. And you want to ignore that proof, and carry on preaching "free markets" like nothing happened. It's like discussing religion with a true believer--your arguments have become faith based.

"Bailouts are right
OR
Bailouts are wrong"

This is simplistic and childish. There are a myriad of choices in between. :hi:

Giving GM more money would simply continue that path of selling LOTS of vehicles for LESS than they cost to build.

That isn't UAW fault. Even retiree benefit costs don't explain that.

GM lost an unbelievable amount of money over an extremely long time.

Even if you erase pension costs, and remove the higher UAW wages (under older contract) GM still lost money.

They lost money on low vol years, and high vol years. They lost money with incentives and without incentives.

They lost money in every single division. $122B over last decade.

$122 BILLION.

$122,000,000,000!

Any other company with lower credit rating would have been bankrupt years ago.

but then arguing that GM is a worse risk than the financials.

But you still must explain why the relatively small investment in GM is a worse risk than the exponentially larger taxpayer bailout to AIG and the other financials, for example, which have a recent track record that is at least as bad as GM's.

But at least you've abandoned that ridiculous "free market" cant! :hi:

However the govt believed AIG presented a systemic risk.
That AIG was the counter party for so many banks, even small ones, and well run ones that it failure would cripple the entire banking industry.

Personally I don't believe it but that is what the govt believed.

Also AIG failure was a onetime loss. Regulation (could if Congress had a spine) prevent that sort of risk taking in the future.
Banks could be forced to leverage less. All derivatives could be regulated. Trading in unregulated securities could be considered a felony.

CEO and other executives could be paid based on 20yr future performance of the company ensuring that such future failures would wipe out their life savings.

Now I doubt Congress will have the guts to do this but they could.

Also not all banks were saved. Wachovia was a forced sell. Countrywide was also as was Meryl Lynch. Leaman brothers was allowed to fail. Shareholders in Fannie Mae were so diluted by federal capital those shares are essentially worthless.

GM however made no credible case on how they were going to prevent a need for $30B every year for next decade. Good years and bad years GM lost money or had a margin so small it could be considered luck.

GM should have spun off Saturn last year when asking for govt money and use the funds to pay down debt. Even then GM was paralyzed because their board and CEO were inept.

I am sorry you work for a company that had the rotten luck of finding the worlds most spineless board members who gave complete authority to a man who had no leadership and allowed GM to become a second rate company that bleed cash for so long that nobody believed they could do otherwise.

The govt felt that GM outside bankruptcy would simply be another repeat of 2003-2008. Nothing would have changed except instead of investors losing $100B or so it would be shareholders. Eventually when patience ran out in 2012 (maybe after Dems lost Congress over that debacle) the gravy train would be cut off and GM would have failed then.

There was no evidence that GM either had the ability or will to make changes necessary to return to profitability.
Based on that any continued bailout would just be "feel good" money.

It happened. It must be accounted for. One may not proceed with a "free market" ideology that ignores these massive, game-changing data points by merely saying, "I don't agree with it." Economics purports to be a science--a scientist must not discard data points that contradict his long-cherished theses!

You explain the politics of the AIG bailouts, but not the economics, then you want to return to a hard nosed analysis of GM? It's not credible. So you don't agree with the bailout of AIG? So what? It happened. Either you so-called "free market" ideology must be modified to explain and integrate this foundational shift in US economic policy, or else you are indulging in cognitive dissonance.

"Also AIG failure was a onetime loss. Regulation (could if Congress had a spine) prevent that sort of risk taking in the future.
Banks could be forced to leverage less. All derivatives could be regulated. Trading in unregulated securities could be considered a felony."

SLOW DOWN. Two or three sentences dispose of the situation? Really? How in hell can you reconcile a hard-nosed, balance-sheet approach to GM profitability when many of its creditors were recipient of TARP funds in the first place, and more importantly, when the entire financial market has been buoyed by government intervention?

How in hell can you say what the "free market" value of GM is when GM's creditors are kept on life support by the US Government? Do you think that some of GM and Chrysler's creditors (many every bit as insolvent as the auto companies, by the by) could negotiate "hard-nosed" settlements of their debt if their legal departments (along with CEOs and shareholders) weren't financed by taxpayer dollars? Do you understand how a government bailout of GM also amounts to a bailout of its secured creditors, who also count some of these self-same financials amongst their numbers? Do you see how a $12,000,000,000,000.00 "moral hazard" may distort the "free market" just a tad?

Again, I ask you: Where the hell is this "free market" where we are testing GM's profitability? :hi:

Where the hell is this "free market" where we are testing GM's profitability?

The market where we compare GM stock performance, rising debt, market share loss, and continual negative cashflow to its peers.

GM has underperformed its peers (even Ford who shares similar suppliers, costs, employees, and market segments.

Long before the financial crisis GM showed an inability to adapt to changing market conditions.

All car companies were hurt by rising oil.
All car companies were hurt by consumers keeping cars longer.
All car companies were hurt by stagnant wages over last 2 decades.

Other companies adapted. GM did not.

I don't blame the workers.
Looking deeper at the numbers I don't even buy completely the argument of retiree costs and higher UAW wages.

GM management was inept.
GM creditors were unlikely to accept the pain necessary outside bankruptcy.

If it were me instead of Obama I would have done the same thing:
Step in with DIP funding but only in BK situation with conditions on restructuring brands and debt load.

You may disagree with me (which you obviously do) but even in hindsight I would do it.

I honestly think that if GM stayed out of Bankruptcy nothing would have changed. Ultimately GM would have failed at some future date and the taxpayers would balk at putting up more funding so it would be liquidated instead.

Structurally GM was unwilling to make the hard calls necessary for a company that sick to get back to profitability.

If banks burn through the money they were given the same litmus test should be used: are they a systemtic risk? if not - blam gone. If they are wipe out board, CEO, all shareholders, burn bondholders 80%-90%. layoff uneeeded employees and keep a skeleteon bank alive long enough to restructure it.

Personally I don't think any banks present that level of systemic risk so I would simply let them fail.

(that's what proves that your economics is a "science". :hi: )

Everything he came in contact with turned to shit.

in corporate boardrooms all across the world.

bush was just an image; he didn't do anything but divert attention.

that needed repairs every week. It took them ten years to turn around and produce a decent vehicle. By then the Japanese were on top of their game and GM could not catch up. I don't think that either political party was to blame.

Pensions and health care costs. The cancers that ate our GM. Bush could have cured that cancer. He didn't even try. He just sat there.

They weren't number one. They are now. Ford going down wouldn't have made the hurt as bad. See, targets make themselves. Too, Ford was supporting Hitler at one time so they are like part of the family for all we know.

If GM was a well run company (or at least moderately run like Ford) they never would be in a position for Bush to "not save them"?

Don't blame Bush with some super conspiracy theories. Blame Wagoner who likely is the worst non financial CEO in the last decade.

The man had no vision.

1999 - GM loses money. Plan for 2000 same as 1999.
2000 - GM loses money. Plan for 2001 same as 2000.
2001 - GM loses money. Plan for 2002 same as 2001.
2002 - GM loses money. Plan for 2003 same as 2002.
....
2008 - GM loses money. Plan for 2009 same as 2008.
Bailout plan for post bailout same as pre-bailout.

I mean come on!

Insanity: doing the same thing over and over again and expecting different results. - Albert Einstein.

GM, Delphi Automotive Workers to Get Record Bonus of $1,775.(Knight Ridder/Tribune Business News)
Knight Ridder/Tribune Business News , January, 2000

Jan. 21--Workers at General Motors Corp. and Delphi Harrison Thermal Systems will receive record profit-sharing bonuses for 1999 of $1,775, but less than other auto companies pay.

GM hourly employees who worked full-time throughout 1999 will receive about $1,775, the company announced Thursday. The automaker has about 3,800 employees at its Powertrain division plant in the Town of Tonawanda.

http://findarticles.com/p/articles/mi_hb5553/is_200001/ai_n22449386/

Sorry I didn't get exact stats.

Here you go per GM annual report:
2001 +0.6B (on $169B in sales = 0.7% profit margin)
2002 +1.7B (on $178B in sales = 1.1% profit margin)
2003 +3.8B (on $186B in sales = 1.5% profit margin)
2004 +2.8B (on $194B in sales = 1.4% profit margin)
2005 -10.4B
2006 -2.0B
2007 -38.7B
2008 -30.8B
2009 -31.7B (projected, -5.9B recorded in Q1)

So in the last decade GM has either lost money or had a profit margin of <2%.

Hell consumer staple companies shoot for at lest a 6%-8% profit margin.
I mean 2% is essentially breaking even. They were getting by.

A 5% fluctuation in sales would be enough to sink them.

Anyway you look for it since 2000 GM has burned through $122 Billion in cash flow.
Strangely they were $180B in debt.

Without the ability to borrow money GM would have gone bankrupt 2-3 years ago.

Borrowing money when losing money only works if something is going to tunr around.
Hell GM wasn't even really slowing the cash burn.

So how much should Obama have put up $30B (enough for another year), $100B more (more than GM lost last decade), $200B?
GM asked for bridge loan to restructure. They were unable to do so. They needed to go into BK to do what needed to be done.
GM had no intention of changing anything. The management was clueless, slow, and inept.

list.

i also know, per the 2007 annual report, that gm's auto mfg/sales was profitable in 2007, & that the $38 billion "loss" came from booking tax offsets. No actual money was lost, just gov't-granted potential tax credits booked as part of gm's net worth were moved to the "loss" column - because they were expiring.

similar accountancy "losses" occurred in other years.

at any rate, the poster's list = wrong, rationalize as you will.

Ford Motor Co. has shunned the kind of U.S. government bailout afforded to General Motors Corp. and Chrysler LLC. But that doesn't mean that the Dearborn, Mich., auto maker is going it completely alone.

From governments around the world, Ford is trying to secure hundreds of millions in direct loans and loan guarantees to aid its credit arm and comply with environmental regulations in North and South America, Europe and Australia.

"Ford is avoiding going to down the same road as GM and Chrysler, but they are still taking advantage of money elsewhere," said IHS Global Insight auto analyst Aaron ...

http://online.wsj.com/article/SB124458945139699841.html



Ford Uses Assets For First Time To Secure Loans

Automaker Mortgages Plants, Volvo Line As Collateral for $18 Billion From Banks

By Sholnn Freeman
Washington Post Staff Writer
Tuesday, November 28, 2006; Page D01

Ford said yesterday that it arranged $18 billion in bank loans, for the first time using company assets such as its U.S. assembly plants and its Swedish luxury brand Volvo as collateral.

Analysts said Ford had to seek some secured financing because its deep losses and junk ratings on Wall Street made other borrowing avenues nearly impossible.

http://www.washingtonpost.com/wp-dyn/content/article/2006/11/27/AR2006112700263.html



Published: April 8, 2009

DEARBORN, Mich. — On Nov. 29, 2006, Ford Motor made a surprising pitch to the nation’s biggest banks. In a packed ballroom at a New York hotel, Ford’s chief executive, Alan R. Mulally, said he would mortgage all the company’s assets for billions of dollars in loans to finance an overhaul of the troubled automaker...

At the time, the request was considered an act of desperation. But the $23.6 billion in loans it received turned out to be Ford’s salvation.

Ford is hardly out of the woods. The company lost $14.6 billion last year, when its vehicle sales in the United States slumped 20 percent, compared with 22 percent at G.M. and 30 percent at Chrysler.

Its once-bulging bank account is dwindling as well. Industry analysts estimate that Ford has about a year’s worth of cash left to carry it through a still-depressed car market.

Still, Ford’s decision to borrow billions in 2006 when the capital markets were thriving will go down as one of the most significant moves in the company’s 105-year history.

Unlike G.M. and Chrysler, the company has reached agreement with the United Automobile Workers to finance half of its new retiree health care trust with company stock. (same plan!)

At the time, the consensus among analysts was that G.M. was in better shape than Ford.

“It was not seen as a positive that Ford needed to leverage itself so dramatically,” said John A. Casesa, a former Merrill Lynch analyst and consultant to auto companies. “It was more of an act of desperation.”

http://www.nytimes.com/2009/04/09/business/09ford.html

But not golden parachutes for imbecile bosses? tsk tsk tsk

Single payer WOULD help a lot of businesses, but if the clowns at the top of some don't make wise decisions, they would still be doomed. GM has not made wise decisions for a very long time. Blaming the workers who just expect to receive the benefits that were promised as part of the compensation for their labors is a bit disingenuous and flat out wrong.

The guys at the top KNEW what their obligations were. Labor gave concession after concession. The guys at the top NEVER conceded they had to change their ways too.

Makes ya wonder, don't it?

They didn't want to change. They were convinced to let it die and they were allowed to let it die by the government that is supposed to protect the public. So did Bush protect the public? Did he even make much more than a peep about the damages GM's death has caused to the American people?

Oh, he loaned them some money, gave them tons of cash for hydrogen. But wait, government is bad when it does that? So why did he do that -give them $$ - and not make GM work?

He wanted it to fail. He helped kill GM.

Oh, he loaned them some money, gave them tons of cash for hydrogen. But wait, government is bad when it does that? So why did he do that -give them $$ - and not make GM work?

It is Bush job to "make GM work". Even if the GM board doesn't want to. Bush should use extra-legal power to force GM board to do the "right thing" based on his judgment.

So not only is Bush required to save GM.
He has to save GM from GM?


Really? I mean it is lunacy. Remember the Congress voted AGAINST bailing out GM. Bush used TARP money (which might not even be legal) to bail out GM because GM said they didn't have the time to wait for Congress to try again.

If you take a real narrow view then I can agree with your point.

I take a broader view. And that view is that GM was known to be ill and that it's death caused America great harm. Bush stood there and said he was protecting America from great harm. "Hard work".

He failed. I figure he did so by design, others figure it was an accident: "As if they could never imagine"

Where I disagree is that I think Bush shouldn't have intervened at all.
Maybe he did personally want GM to fail and maybe he did want the middle class to suffer.
Regardless he shouldn't have "saved anyone".

Obviously we disagree with the role of govt in propping up failed companies.
The taxpayer doesn't get profit when companies do well, they shouldn't absorb the losses when the fail.

It would be like a casino where you keep your winning but the casino refunds the losses.

Bush didn't make any decisions. They were all done on behalf of the rich and powerful by his VP Cheney.

GM's CEO's set the path for their own destruction. The United Auto Workers were the ones who sat on their hands while their bosses made Rustmobiles and gas-wasters. And they are both going down together.

If the CEO's wanted universal health care paid for by the government, which would have helped, they would have gotten it. But they didn't, so we didn't, and thus they sealed their own doom.

Nice try, BeFree, but you give too much credit to the Monkey in a Man Suit.

Bush was either a fool or a staunch supporter of the 'free market'. Certainly not the latter since he started rolling out all those taxpayer-funded bailouts (to companies that likely got lots of "government subsidy" over the years too, no doubt).

GM's execs kept hyping hummers and other gas guzzing garbage for people who did not need such purported power. Nobody wanted them once the gas prices went through the roof (more speculative bullshit that isn't free either.)

Bush gave them all the taxcuts they could swallow up.

They mismanaged their business.

and many, many other businesses to fail. It was more negligent homicide than murder.

Sid