GM Bailout of 2008-2009: A Provocative Query

Looking over those “GPA” scores, I see numerous blatant discrepancies.

Could someone please explain to me:

  1. How a 2-6 year old Ford Fusion w/ V6 gets a 3.5 GPA while a 2-6 year old Mazda6 w/ V6 gets a 2.5 GPA?

  2. How a 2-6 year old Mercury Milan w/ I4 gets a 4.0 GPA while a 2-6 year old Mazda6 w/ I4 gets a 2.75 GPA?

That’s just two examples.

The screwy thing is that he takes Consumer Reports’ data, which, while definitely useful despite flaws, hides the scale of difference between vehicles, then obfuscates it some more by attaching his own “grade” on top of their data. Stupid. Useless. Worse than useless, actually. It openly distorts already questionable differences and then tries to make the reader believe the differences are bigger yet.

I’ll add in that if you look on the OP’s “Toyota Age Equivalent” data, you’ll see how ridiculously full of nonsense he is.

He claims a 3 year old Ford is only as reliable as a 15 year old Toyota? A 7 year old Ford is only as reliable as a 24 year old Toyota? Bull. Even Consumer Reports, who he openly admits he takes data from, doesn’t show such a difference, or anywhere close to it.

My GM cars have not been perfect. But they were well worth the money. The Regal was $2000 less than an Accord in 1998, and I never made up the difference. I liked them both, and used up-front cost to decide. The Buick is 12 years old now, and I really don’t care about depreciation. I got the Silhouette for about $12,000 (no misprint) less than a comparable Sienna or Odyssey, and the only problem I paid for thus far is replacing the front wheel bearings. It’s 7 years old now and still runs well. I don’t care about depreciation for this car, either. Although the actual depreciation on this car is be better than any comparable minivan that I could have purchased at the time.

“The main purpose of the bailout was to rescue the autoworkers’ union.”

The UAW was a big part of it, and so were the entire economies of states with large GM and Chrysler plants. As you may (or may not) recall, the economic problems that led to default were fabricated by uber-risky loans and a government that was only too happy to let the banks carry on - especially the high risk mortgages. Should Michigan, Indiana, and Ohio become 3rd world states because lenders on both coasts made foolish loans? I don’t think so.

excellent points, D

I’m not convinced by the domino theory that everything else would have failed if GM and Chrysler declared bankruptcy. Assuming that the factories and name brands actually have value, someone would have bought them, and continued to make cars.

My argument is not so much against the necessity of doing something, but against the manner in which it was done. The interests of the union, an unsecured creditor, were advanced far beyond the interests of the secured bondholders. The government forced GM and Chrysler to close dealerships and made the decision not based on economics, but on politics (minority owners were deliberately spared over other dealerships that were more financially sound, for example). And the union, whose generous pay and benefits and restrictive work rules, contributed significantly to the problems of the car companies, was not force to take a proportionate share of the burden.

“Caddyman…I thought you were a capitalist???”

I AM a Capitalist!! Capitalism depends on constant growth and government bailouts to make it work! That’s the HISTORY of Capitalism!! A truly “Free Market” is guaranteed to collapse.

With Globalization, if someone in China or India is willing to do your job for $1/day, then that’s all YOU can expect to be paid, and at some point that’s what YOU WILL be paid.

Mike, You State, " …Maybe for the first 150k miles they do…but after that…sorry…but they still fall behind Toyota, Honda and Nissan"

Sorry, I always run our cas to well over 200,000 miles and they are always reliable until I replace them. I replace them due to age and the toll taken by tons and tons of salt we drive on for half the year. It’s cosmetic, not structural damage, but by then it’s time to update to safer technology. I just can’t accept the “exception theory” when I buy one American car after another of superior quality.

The Asian Myth lives on to this day withtanding even the latest blunders by Toyota and Honda.

CSA

JT, I Know What You’re Talking About, But Don’t You Know That Those Cars Aren’t Supposed To Be More Durable Than Asian Cars ?

CSA

Henry Ford declared bankrupcy once. GM had the opportunity to buy out Ford. It didn’t.

Ford learned its lesson early on. I drive a Corvette, but when Ford did not take the Government handout, I bought up as much stocks as I could @ $2.00 a pop.

As an American I did my part to help save a company and invest in a vehicle manufacturer that knows how to rebound in difficult times.

In case anyone missed the entire story consider this. You may remember the WH appointed head of GM doing TV commercials stating the Feds had been paid back in full.
About a month ago the story was revealed that only a fraction had been paid back and even this was Federal (a.k.a. taxpayer) money paying back Federal money.
The story from about a week ago is that GM’s stock will have to hit 133 dollars per share before any of it is ever paid back, and even that’s a maybe.

Question for MikeinNH regarding the domestic bashing. My daughter owns one of the new generation Mustangs; an '05 with about 85k miles on it. Other than fluids, filters, spark plugs, etc. this car has never needed anything nor does it need anything at this point. (Not even any squeaks and rattles)
So what do you think? Anomaly, Ford got it right, or what?

As to the secured bondholders losing out, an important note that many people miss is that any employee pay and benefits payable 180 days or more prior to bankruptcy can take priority over bondholders in bankruptcy court. That’s why the Supreme Court found 8-1 that there wasn’t anything even legally questionable about the deal.

Also, note that some analysts are now predicting bondholders will recover more than their bonds were worth on the market in the months leading up to bankruptcy.

As I said…your experience is NOT the norm…And I run my cars past 300k miles…Last I knew my wifes 87 Accord was still going past 430k miles…My sister-in-law Taure’s…JUNK after 100k miles…Her husbands 92 Explorer…JUNK after 110k miles…No accidents…just repair after repair after repair…

And if I was in you shoes I’d be buying American too…If you’re having great luck with them then why switch…I switched because myself and MANY MANY others were having MAJOR problems…I got very disappointed when I could no longer by a Chevy that lasted over 300k miles like my 68 Malibu SS did…or a Pontiac Firebird that I sold with 240k miles on it…it had a little rust when I sold it…but the engine and tranny were original and in EXCELLENT condition.

Question for MikeinNH regarding the domestic bashing. My daughter owns one of the new generation Mustangs; an '05 with about 85k miles on it. Other than fluids, filters, spark plugs, etc. this car has never needed anything nor does it need anything at this point. (Not even any squeaks and rattles)
So what do you think? Anomaly, Ford got it right, or what?

Maybe…time will tell…My 05 Toyota with OVER 160k miles on it…Same thing…Just fluids, filters and spark-plugs (plus front and rear brakes…I do a bit of towing in the summer)…As for the Mustang…In my opinion it’s probably the BEST looking Production car manufactured by ANYONE in the past 20 years.

Last Taurus my Sister-in-Law owned was an 03…Sold it in 07 (bought a new Corolla) after she had put well over $4000 in repairs into that clunker…She is now a firm Toyota loyalist…She’s yet to find out what the Toyota’s service center looks like…Same period with her Taurus…she was on first name basis with the Service rep and a few of the mechanics.

As always, you’re extrapolating your individual experience to represent millions of vehicles, which is ridiculous.

No one in my family nor any of my neighbors and friends have had anything more than minor problems with any domestic-brand vehicle in the past 15 years. On the other hand, we’ve had/seen 2 1998 Corollas dragged off to the trash heap with electrical gremlins no mechanic could solve, a 1999 Camry taken to the scrapyard leaking oil like a sieve, a 2002 Prius with $5000+ in repair bills and counting, and a 1997 Lexus that needed more repairs at 10 years old in that single year than my 1997 Taurus needed over the 14 years I owned it.

I wouldn’t dare say that they are representative of the entire brand. Consumer Reports and every other source says that they are, on average, some of the most reliable vehicles out there. They also say that Fords are every bit as good (and better than Nissan, who you constantly extol). On the other hand, I wouldn’t dare say that a 1992 Explorer was ever a reliable vehicle, but that is a near 20 year old vehicle. Times change. Toyota was producing unreliable vehicles in the 70s and early 80s. That doesn’t reflect on them now.

CSA, I think you are confusing “durable” with “reliable.” Nobody who has even owned a light weight Japanese car thinks they are durable. In many cases, you can’t even sit on one without denting it. The prevailing reputation for Japanese reliability is another thing, and I will agree, the difference in reliability isn’t as pronounced as marketers would have us believe.

As always, you’re extrapolating your individual experience to represent millions of vehicles, which is ridiculous.

I suggest you RE-READ EVERYONES posts…Funny how you single out me when you yourself and EVERYONE who doesn’t agree with me are doing the same thing…Kinda of a hypocrite???

a 1999 Camry taken to the scrapyard leaking oil like a sieve

So here you are quoting how unreliable the Camry is…

Yet you also then say this…

I wouldn’t dare say that they are representative of the entire brand. Consumer Reports and every other source says that they are, on average, some of the most reliable vehicles out there.

First you saying how unreliable the Camry is because of YOUR personal experience…yet according to CR in 99 that was the MOST reliable car they tested…And THEN you say I should read CR because their data is more reliable then my own personal experience…
Well which one is it???

They also say that Fords are every bit as good (and better than Nissan, who you constantly extol).

They said that certain Fords are…NOT all…Maybe the NEW Taurus is…But it’s only been out for a couple of years…CR’s doesn’t post any reliability of any cars past 5 or 6 years…Since I keep my vehicles to 10 years and past 300k miles…their ratings are meaningless to me…Almost every person I know who’s owned a Taurus kept no longer then 5 years…Yup…after that who knows what happened…

No one here can predict the future…or how well a company is going to perform in the future…To make a logical prediction…I look at past performance…Have GM and Ford quality improved since the 80’s…YUP…But I still don’t trust them…They haven’t changed their business model where VP’s and other execs get huge bonuses based on their sections performance…has nothing to do with quality…just the number of units they produce or sell in a 3-month period.

Capitalism depends on constant growth and government bailouts to make it work!

I don’t know where you got that definition from… Could you show me the source???

Free market means…NO GOVERNMENT INTERVENTION…That’s by definition.

I agree Globalization is bad…I’m right there with you…Now tell GM and Ford to stop sending jobs to those countries that make less then 1/3 we make in the US.

Its not a definition of capitalism. Its a statement about how it works. The state has always always always been standing there propping up corporate capitalism. Stop conflating “free market” and “capitalism.”

And think about getting your story straight. Do you want free markets or not? If you want free markets then there are no political borders. Labor and the means of production move freely and any company is free to go get its labor from wherever it wants. That’s what the “free” part means.

Agree; GM’s future will stand or fall on their products. So far the new ones introduced have been good enough to be competitive. The new Chevy to replace the Cobalt will be a critical vehicle, since the future hold a big market for this segment as we get to the next fuel crisis.

The Aveo replacement will have to be as good as the Honda Fit and Toyota Yaris. Like Ford earlier, GM is finally focusing on products that will sell, and with the leaned down organization, I think they will succeed.