GM bailout final numbers

General Discussion
101

"…the work would have just moved over to other better run companies. That’s the whole concept behind Capitalism. "

The “better run companies” you hint at are highly supported by their governments. Not exactly capitalism and it is unlikely they would be buying the GM and Chrysler plants, putting their workers to work, and using their parts suppliers. I guess the advantage would have been all of the sheet metal parts would have fit all of the other cars since they all look the same. Or maybe you were talking about BMW, VW, Volvo, and Mercedes stepping in to take over?

102

Allowing those companies to do business in our country is a completely different argument. You want to have a closed society…fine. But as long as they’re allowed to compete here in the US…then they must abide by our laws. If they are breaking our laws…that’s one thing…but they aren’t. Are they taking jobs away from US workers…probably…but so are American companies moving jobs to other markets…That’s a completely different argument.

If you want to keep paying higher and higher taxes to support bailing out mismanaged companies…fine…I DON’T. I can assure you that very large companies are going to fail again…

103

@Docnick
The strategic value when not contracting directly, lies in GMs ability to be a subcontractor for other manufacturers, like General Dynamics. The Allison transmission division of GM is widely used in military applications. Likewise, subcontractors depend upon GM for non military support to keep them solvent. Non war time vehicles are used extensively in the military…and at least half of them are GM products.

A strong auto manufacturing base was a key in both world wars in building airplanes even though prior, they were not big military contractors. Not knowing what the future holds, it is equally important strategically to maintain a strong manufacturing base. It is also important to provide a well educated populace as a matter of security as well. Everything that contributes to our national security, including thousands of tax paying jobs, infrasturture, internal security etc. should be in line for govt. intervention when needed. No @MikeInNH, it isn’t socialism, it’s self defense and preserving the things we hold dear, like our democracy.

104

It is my firm belief that propping up manufacturing companies that have mismanaged themselves into chapter 11 after having been some of the largest, globally dominant organizations in the world doe not support a strong manufacturing sector. Artificially supported poorly operated companies will lose out to better run offshore companies every time. The days of distance being an obstacle have disappeared.

I would point out to those suggesting that the business would have gone to offshore companies that Honda, Toyota, and Nissan, to whom I believe GM’s lost market share would have gone, employ more U.S. citizens in their U.S. operations than GM does, and often have higher U.S. content in their cars. The money would have stayed right here, supporting many thousands of Americans, casting houses, machining facilities, grocery stores, educators, and on and on. The only reduction in total manufacturing jobs would have been due to the better efficiency of those manufacturers that absorbed GM’s lost volume. And I would argue that THAT difference makes a manufacturing base remain strong.

Imagine if you will where we’d be if the feds had artificially supported the textile industry. Offshore producers still would have produced less costly textiles in volume, and all we’d have gotten out of it would have been huge deficit spending. Our textile industry still would have died out.

Imagine if you will if our tax dollars had been used to artificially bail out the steel industry. We lost that because the industry refused to invest in higher tech blast furnaces. We lost that one to offshore competition too. All we would have had left from the government bailouts would have been even more deficit spending.

To me the bottom line is whether you believe that money should be drained from individual taxpayers to support organizations that have mismanaged themselves almost into oblivion. If you believe that’s a valid use of taxation, than you read a different version of the constitution than I did. And that’s assuming that my belief that the money was actually spent for altruistic reasons rather than to buy the union vote.

I should also add that I believe GM did file under Chapter 11 of the bankruptcy laws. Chapter 11 allows, with a plan approved by the bankruptcy court, a company to reorganize to reduce its liabilities and dig its way out. Chapter 7 of the bankruptcy laws, the one that allows liquidation of its assets and with dissolution of the company and its liabilities, is, I believe, the one everyone thinks of when they hear the term “bankruptcy”. Chapter 7 has a very defined hierarchy of who gets the money in what order and who ends up last on the list.

I should also point out that the reason I posted the thread was because I was tired of hearing some say that we didn’t lose money on that bailout. We did. Billions. That happened to be the first final accounting of the final balance. Now at least I won’t hear THAT fable anymore!

105

@same
You have good principles . But for me, they don’t always apply exactly in all situations. It’s like abiding by " though shalt not kill" as a guiding principle. It works well, until you’re in a combat situation. We were with the economy. Not bailing out hurts worse then biting the bullet. Congress felt as you do but decided logically, this was not the time to stand on principle. As I relativist, I get it. The question is not, did we loose billions. We lost that when we printed up the 700 billion for the banks. The question was, how do we best spend this monopoly money to save the most people… If you want to stand on principle all the time, that’s fine. I just never agree that principles regardless of the situation shoukd be espoused by anyone I would vote into office.

The workers did not make the bad decisions yet they would be the ones to suffer most by GM not recieving aid. The Obama aid version was much more structured then the request from the banks OK by the Bush administration… In govt as in sports, as in life, how you execute a plan is just as important as the plan itself. The bank plan was a fiasco, the auto plan was better. Shifting money over to help workers AND the eonomy, was worth the effort of saving a mismanaged company. The CBO approved the plan even though it cost tax payers money. The alternative would have cost them much more.

That’s why I vote for people who are open minded and tolerant of other people and their ideas. Intolerance for the sake of principle in a decision to do the right thing at the right time is something I would not like in my doctor or my representative.

106

Bailing private companies out with tax dollars is not the “right thing”. And it is never good long term economic policy. It leaves the market less efficient, insulates the poorly run companies from the consequences of their bad decisions, and does not save jobs in the bigger picture. All it accomplishes in the end is that the givers of the money get more vote.

This whole principle that laws and out constitution and bill of rights are only “guiding principles”, that they’re only “relative”, is the basis of chaos and the mortar upon which banana dictatorships are formed.

I think you and I will forever disagree on this issue. And it is the absolute nature of our Bill Of Rights that enables us to do so freely and openly.

107

Please read the Bill of Rights and tell me there is not one of those rights that is not subject to conditions and relativity.
Not everyone has/had the right to bear arms
Not everyone has /had the right to a speedy trial
Not everyone has/had the right to free speech
Etc.

( timing and relativity had and has now, a lot to do with it)

The constitution is a living, breathing charter that fortunately has a congress that actually changes to fit the times they are in. You may disagree with that, but we are not a Banana Republic because we do change with the times. The constitution not only encourages, but provides for it. Every law that has ever been written by Congress is always scrutinized as to it’s relationship to the constitution. When it appears to conflict, an amendmend is then made to justtify the law. But, the constitution provides for and encourages amendments to meet the times. That’s how you have a govt. that lasts.

108

There’s bailing out and bailing out! The British government bailed out one sick company after another, only to see them fail again and disappear into the sunset. Like rehabilitating a drunk or druggie, the subject needs to be firmly determined to change his lifestyle.

The Brits finally learned and let the Royal Doulten group go under without any support. The Chinese promptly capitalized on the famous brand and make it all in China with just as good a quality. The irony of the Chinese buying Britain’s largest china producer is not lost here.

It’s interesting that no one lifted a finger or came to the rescue of a true American icon, Kodak, when it filed for bankruptcy. There was a massive job loss in Rochester, NY, and no Japanese or Korean car company would want to build a plant there to replace these jobs.

Kodak has a vast number of patents and technologies that were sold to pay the creditors.

Companies come and go, especially in the arline industry. The world’s oldest airline, KLM, Royal Dutch Airlines dates from just after WWI, but it too went into receivership in the last 10 years, and was bought out by Air France. The two keep separate names; the Dutch suffered once under Napoleon and having Air France as their new national airline would not go over well.

Some of the world’s oldest companies have gone through a lot of changes. Stora Koppersberg is one of the world’s oldest, dating from the 1400’s I believe. It is now a Swedish conglomerate with paper mills , mines, mineral processing, etc. Problably had some governent help somewhere along the line.

The Hudson Bay Company started in the early 1600’s as a British team of fur traders, mostly in Northen Canada. It became a department store and was bought by Canadian investors who moved the head office to Canada. It is now owned by US investors from Chicago, but has kept its “Northern” image. They only recently stopped trading in furs but long ago sold of their stores in Northern Canada. It is offcially the world’s oldest department store.

109

There are reasons why the fed chooses to give aid to one company over another. Kodak was a local job supplier not with the same national economic influences as GM related jobs. If they wanted help, it was up the State govt. to provide it imho. Likewise, as a company ages before bankrupcy they tend to withdraw from national economic relavance. The auto industry has more national implications in it’s failure then most…except for LL Bean. ;=)
Btw, the auto bailout was during a severe recession, the worst since 1929. Timing has a lot to do with it too.

110

The problem with Kodak was the end of the film camera industry when digital cameras became prevalent. They had capital equipment that was no longer useful to anyone. I’ve been to Rochester and seen how large those factories were. This was more a buggy whip event than getting caught in the worst capital crisis in 90 years.

111

@jtsanders
I have an SLR Canon tlb camera that I have had since the service. I have had it worked on several times. The last time, the camera repair service told me to put it in plastic and store it and not use it much. I would be hard pressed to find someone around here or parts for it. I used to do my own developing with Kodak supplies, paper and chemicals. Now, we just push a few buttons on the printer or plug the drive into the display. Poor Kodak. They didn’t start making refrigerators quickly enough.

112

I finally broke down and bought a digital camera when my trusty film camera could not be repaired anymore. The digital is nice but I miss that old film SLR with manual overrides for all settings. It was simple to learn and use, durable, and downright comfortable to hand. Still getting acquainted with the digital. Talk about a learning curve, hadn’t had a new camera in 30 years. Same sort of tech shock as when I went 20 years between new cars. :slight_smile:

113

@Marnet I still have a trusty Pentax ME Super with the various lenses. Took pictures of 4 different family weddings with it, countless travel trips (Asia, South America, Africa, Europe) and Christmas parties. Although in perfect shape (bought in 1983), taking pictures and getting Costco to develop them is more trouble than it’s worth; besides you can’t send them over the internet.

Our hiking group has a dedicated nature photographer. This lady still uses film to get her incredible plant and wildlife pictures. Some day she’ll convert to electronic cameras.

Agree that Kodak completely misread the speed at which technology improved digital photography. Their industrial and commercial division making X-ray film and other special products did OK.

114

Dag, properly vetted and enacted amendments have modified the Constitution over the years to make it a functional legal framework, supported by properly vetted federal laws. Your statements are out of context. I’ve read the If a federal law is no longer working, there is a process for changing it, including the Constitution and Bill of Rights. Simply It isn’t flexible. It’s amendable…but NOT without first going through the proper process.

This philosophy that laws and rights are flexible, to be enforced or ignored depending on what suits your whims, is the basis for anarchy.

Like I said before, we’re not going to agree on this issue anytime within the next millennium, so there’s no sense continuing the argument.

Peace.

115

The 13 th amendment that abolished slavery which was a necessary amendment for the US to sustain itself. Without it, the United States was divided. With it we prospered and became stronger. We would have ceased to exist as a single sovereign nation with this deplorable situation without a constitutional change. It completely altered to whom the bill of rights pertained. Prior to that, slavery was constitutional and legal and the bill of rights did not pertain to those enslaved. The 13 amendment just didn’t make a legal framework. It changed our nation and the application of entire Bill of Rights.

The bill of rights, the first ten amendments are not experienced by all.
Everything from location (airplanes, stores, federal and corporate grounds which controlled expression of these rights us lawful) to status ( prison record, mental health etc. ) affect the expression of your full rights.
These rights are relative, without a doubt and each had to be defined interms that agreed with the constitution or the constitution needed amendment as exemplified.

116

Northwest Airlines (now bought out by Delta) went through the same thing in Minnesota. State union investment money was used to keep them afloat. It was a loan though of millions with many restrictions. They didn’t have the same national impact except in Minnesota so it was appropriate that Minnesota finance them so I guess I’m in agreement with @dagosa. No public funds were used though but they may have been if the state unions didn’t come through.

I don’t know much about the Kodak camera business but as far as their copier business goes, they were always higher priced than Xerox and farther behind technology wise. All their copiers ended up repainted gray though from yellow in the end.