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  1. #1
    Forum Member DaSharkie's Avatar
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    Default Another Bailout Boondoggle

    Well since we just added a Trillion dollars to our collective debt, as I predicted the Big Three would step up, hat in their hand, start crying, and beg the Feds to bail them out from their ridiculous business decisions of the past 10 years.

    It seems that GM, Chrysler, and Ford are all asking for the Feds to give them money AND help to bail out their respective automotive financing arms. Once again, a business screws the pooch, endangers its own financial well-being, acts in poor manner, gives loans that it knows it shouldn't, and makes the wrong products..........Then has the unmitigated to gall to ask us for money to bail it out. Corporate welfare is alive and well........

    http://www.msnbc.msn.com/id/27328971/

    Michigan wants federal help on car loans
    Automakers 'face the most difficult conditions they have faced in decades'
    The Associated Press
    updated 4:13 p.m. ET, Thurs., Oct. 23, 2008
    WASHINGTON - Michigan lawmakers asked the government on Thursday to make it easier for car buyers to get loans, in hopes of helping U.S. automakers ride out the financial crisis.

    The state’s congressional delegation want Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke to use their powers under the $700 billion bailout to buy troubled assets quickly from auto finance companies.

    Democratic Rep. John Dingell also said automakers were considering asking the Fed for access to a program that provides low-cost credit.

    “We are not ashamed to point out that this crisis that we have on credit did not begin in the auto industry, it began in the financial industry,” Dingell said.

    Dingell, a longtime advocate in Congress for automakers, declined comment on whether the financial crisis could lead to a bankruptcy filing by any of the Detroit Three — General Motors Corp., Chrysler LLC or Ford Motor Co.

    “The situation is very serious with regard to all three of the manufacturing companies,” Dingell said. The situation is equally serious for auto suppliers and dealerships, he added.

    In their letter to Paulson and Bernanke, the lawmakers said the lack of liquidity in credit markets could cripple the auto industry. Many banks and auto finance companies have tightened credit standards because they cannot borrow money to lend or they have been reluctant to lend and risk defaults.

    “They need to do for autos what they’re doing for the mortgage industry,” said Sen. Carl Levin, D-Mich.


    GM spokesman Greg Martin said the government “should consider all of its tools, some recently enacted, to support industries that are in distress.” He said GM continues to “keep all of our options open” but would not discuss any talks GM may have had with the government.

    Ford spokesman Mike Moran said “well functioning credit markets are vital for the entire industry including dealers and suppliers.”

    The lawmakers said they may try to expedite the availability of $25 billion in low-interest loans approved by Congress last month. Levin has said he may try to double the loan amount, which would help the industry retool plants and build fuel-efficient vehicles.

    Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
    URL: http://www.msnbc.msn.com/id/27328971/


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    "Too many people spend money they haven't earned, to buy things they don't want, to impress people they don't like." Will Rogers

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    "No man's life, liberty, or property are safe while the legislature is in session." - New York Judge Gideon Tucker

    "As Americans we must always remember that we all have a common enemy, an enemy that is dangerous, powerful and relentless. I refer, of course, to the federal government." - Dave Barry

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  2. #2
    Forum Member DaSharkie's Avatar
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    Default And another one wanting more money

    And GM wants even more money to buy Chrysler - which wsa just bought by a bunch of multimillionaires within the last couple of years. More government money just to prop up another company.

    Meanwhile, the average taxpayer gets no assistance. Just more of their money mis spent.

    http://www.msnbc.msn.com/id/27312060/

    GM may need government to help Chrysler deal
    Automaker could ask Congress for money to get a merger accomplished
    The Associated Press
    updated 6:49 p.m. ET, Tues., Oct. 21, 2008


    DETROIT - Like much of middle America, Mike McCarthy doesn't think taxpayers should have to pay $700 billion to bail out Wall Street. The second-shift worker at a Chrysler engine plant also doesn't think the government should pay to save his own company, although he's a lot less sure about that one.

    McCarthy would like to see Chrysler's jobs and pensions preserved, but that directly conflicts with his opposition to a bailout. His dilemma is one that could soon be facing every member of the U.S. House and Senate.

    Talks toward General Motors Corp.'s possible acquisition of Chrysler LLC may involve going to Congress for cash, according to a person involved in the financing discussions. The person, who asked not to be identified because the talks are private, said he was unsure if the government has been approached yet.

    Cash-desperate GM is said to be interested in Chrysler first for its pile of money. Chrysler, whose sales have dropped 25 percent during the first nine months of the year, reportedly has about $11 billion available. It also has debt, but the amount isn't available because Chrysler a private company, 80.1 percent owned by the private equity firm Cerberus Capital Management LP.

    But the cash may not be enough for GM to take on money-losing Chrysler, and that's where Congress may become part of the negotiations. Without additional money, GM may be unwilling to acquire Chrysler, which would add factories, brands, models, dealers and employees to GM, which already is too big for its sales.

    Cerberus also is shopping Chrysler to the combined Nissan Motor Co. and Renault SA as it tries to exit the auto business.

    Industry analysts say Congress may be interested in kicking in cash because if Chrysler goes into bankruptcy, the government could be forced to take on the pension costs for the Auburn Hills-based company's 124,924 retirees and spouses. Congress may also want to preserve as many of Chrysler's 49,000 U.S. jobs as possible.

    While it may be a hard sell in Washington, Sen. Carl Levin, D-Mich., said in a debate Monday in Detroit that government may need to step in.

    "If they need support to make some kind of a merger between Chrysler and another auto company happen, we clearly ought to do that," said the longtime advocate for the industry. "No other country in the world would stand by and watch major corporations go under this way without trying to do something about it."

    Republican Rep. Thaddeus McCotter, who represents a suburban Detroit congressional district, said any government role in a deal was premature, but the United Auto Workers, a key constituency for majority Democrats, would be critical to any action by Congress. UAW President Ron Gettelfinger has expressed worries that a GM acquisition of Chrysler would lead to massive job losses.

    "The reality is ... Gettelfinger and these guys are saying they don't think a merger is the best thing," McCotter said. "How do you do anything in a Democratic Congress, and it looks like it will stay a Democratic Congress, if the UAW is telling you that this is not good for jobs in America?"

    With automakers unable to borrow in the frozen credit markets because of poor ratings, and unable to offer equity due to already depressed stock prices, analysts say it's almost inevitable that automakers would ask the government for help beyond the $25 billion in loans Congress approved last month for new fuel-efficient technology.


    "With or without the acquisition, the industry will be turning to the federal government to boost their liquidity over the next 12 months," said Fitch Ratings analyst Mark Oline.

    Next, Oline said, would be somehow restructuring the automakers' obligations to a UAW-administered health trust fund that will take on billions in retiree health care costs starting next year. The union already has let GM defer $1.7 billion in payments to the trust in exchange for 9 percent interest on the money. GM has said it will have to pay up to $33.7 billion into the trust, although some of that is already sitting in existing trust accounts.

    Gettelfinger has said the union isn't willing to accept more delay in the trust payments.

    Detroit-based GM is burning up more than $1 billion per month, with several analysts predicting it will reach its minimum operating cash level of $14 billion sometime next year. GM's sales are down 18 percent, and the company has lost $57.5 billion in the past 18 months, although much of that comes from noncash tax accounting changes.

    GM has pledged to raise $10 billion through cost cuts and another $5 billion through asset sales and borrowing as it tries to outlast a U.S. auto sales slump that could run into 2010. The company says it's on track with the operational part of that plan.

    Both GM and Chrysler have had to deny bankruptcy rumors in recent weeks, saying consumers won't buy cars from a company that looks like it could go out of business.

    The deal being discussed calls for Cerberus to hand over Chrysler in exchange for GM's 49 percent stake in GMAC Financial Services. GM sold a 51 percent stake in its finance arm to Cerberus in 2006. Cerberus also would get an equity stake in GM, hoping to get a good return should GM recover when U.S. auto sales bounce back from a serious slump.

    McCarthy, 43, who makes six-cylinder engines in Trenton, Mich., and has worked for Chrysler more than 14 years, doesn't think selling the company to GM will help workers, with or without federal money. GM, he said, is likely to make drastic job cuts in its drive to become profitable.

    Past mismanagement of Chrysler, he says, caused its problems, and taxpayers shouldn't have to pay for that.

    "What we really need is a great management group to save us, not the federal government," he said.

    Although he knows it may not be possible, McCarthy said he'd like to see Chrysler stay intact.

    "I don't believe Chrysler is destined for failure," he said. "We do have good products. The people I work with are great people and do a real good job. They deserve better."


    Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
    URL: http://www.msnbc.msn.com/id/27312060/


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    "Too many people spend money they haven't earned, to buy things they don't want, to impress people they don't like." Will Rogers

    The borrower is slave to the lender. Proverbs 22:7 - Debt free since 10/5/2009.

    "No man's life, liberty, or property are safe while the legislature is in session." - New York Judge Gideon Tucker

    "As Americans we must always remember that we all have a common enemy, an enemy that is dangerous, powerful and relentless. I refer, of course, to the federal government." - Dave Barry

    www.daveramsey.com www.clarkhoward.com www.heritage.org

  3. #3
    Forum Member DeputyChiefGonzo's Avatar
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    Default

    GM wants Chrysler for two reasons...

    The Jeep brand and Chrysler's cash reserves...
    ‎"The education of a firefighter and the continued education of a firefighter is what makes "real" firefighters. Continuous skill development is the core of progressive firefighting. We learn by doing and doing it again and again, both on the training ground and the fireground."
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  4. #4
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    Default

    Quote Originally Posted by CaptainGonzo View Post
    GM wants Chrysler for two reasons...

    The Jeep brand and Chrysler's cash reserves...
    Can't say as I blame them.

  5. #5
    Forum Member DaSharkie's Avatar
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    Default

    But why should we, as the taxpayers be floating a loan to them to buy another company?

    We are already screwing up the financial markets, bailing out companies who are then consolidating money, pwer, and finances into a few larger banks without doing a damned thing to help people out. No different.
    "Too many people spend money they haven't earned, to buy things they don't want, to impress people they don't like." Will Rogers

    The borrower is slave to the lender. Proverbs 22:7 - Debt free since 10/5/2009.

    "No man's life, liberty, or property are safe while the legislature is in session." - New York Judge Gideon Tucker

    "As Americans we must always remember that we all have a common enemy, an enemy that is dangerous, powerful and relentless. I refer, of course, to the federal government." - Dave Barry

    www.daveramsey.com www.clarkhoward.com www.heritage.org

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