And think about getting your story straight. Do you want free markets or not?
Wasn’t talking about ME or what I said…I was questioning Caddymans remarks since he on this forum has shown that he’s a staunch capitalist…Which by his past remarks seems to say he’s NOT.
I do believe in the free market…You can’t have it both ways…You either have a free market or you don’t…You can’t say you’re for the a free-market and on the other hand believe in government bailouts…sorry but they conflict.
“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…”
Can you post a link to that story? Saying that shares need to reach $133 assumes that a certain number of shares are sold. How can anyone know how many shares wiil be sold in an initial public offering? There are no shares in GM now. The only ones that will exist are the ones the Feds put up in an IPO. Even then, they don’t need to sell of GM at once.
Well, on the surface, it could be because he (as he disclosed in one of his pages) owns stock in Ford. . .
DETROIT - The U.S. government would have to sell its General Motors stock for $133.78 per share to recoup the nearly $50 billion it spent bailing out the Detroit automaker, according to a watchdog of government bailout funds.
And on the other shoe…
If GM doesn’t straighten itself out…and it fails again…How much will it cost us then to bail them out??? And if we don’t how many jobs will be lost…how much of our economy will suffer??? Once you start the cycle it’s difficult to stop it.
As for the bailout…GM could have easily filed for Chapter-11 bankruptcy and reorganized itself into a smaller better run company…OR some other company could have bought them out…The bail out was NOT the ONLY option. There have been other LARGE companies (obviously not as large as GM) that have filed for bankruptcy and reorg’d and came back as strong or stronger…
The last thread on this subject almost took on a life of its own. Every single aspect of this bankruptcy and bailout was explored, and no concensus was ever reached. The following are my personal perspectives, with respect to those who disagree.
The bailout was political rather than economic. I remain convinced that GM has emerged from the bailout in much worse position to turn itself around than it would have been had it been forced to collapse and reorganize itself. It has valuable but nonproductive assest that could and should have been liquidated to “right” itself. If it could not, then it should have liquidated and that share of the market been absorbed by the more efficient producers. Artificially supporting them with billions of our tax dollars did not make the market more efficient, rather it artificially overrode the regular markety forces that make a marketplace efficient.
I’m also a firm believer that the federal government’s function, and the purpose of our tax dollars, are not to artificially support one element of a private sector marketplace, unless perhaps that element is necessary for mational defense. Clearly that was not a factor in this decision. In short, the government should not be using our tax money to bail out a failing private corporation. That’s not what taxes are for.
What the bailout accomplished was good PR for the white house, union support, and precedent to allow the federal government to use our tax dollars to meddle in the private sector even more directly than they already were. I’m convinced that artificial meddling by the feds is, long term, bad for a free market.
If I’d wanted to live under an all-powerful central government that took large portions of our hard-earned money to control markets I would have moved to Russia.
Let me ask this then.
How do you explain the fact that the Fords I’ve owned have been great cars, all of them seeing high miles with few problems?
How do you explain the fact that the majority of people around where I live are also happy with their Fords, GM vehicles, etc?
My late father in law owned 2 businesses, one of which is still carried on by his 3 sons. His trucking company used larger GMC trucks to haul grain and rock. The only mechanical issues there were transmission problems and this was not a manufacturing fault; it was due to gear-slamming drivers.
The masonry business relies on Chevy and GMC trucks and these were also used for personal use. These trucks see literally hundreds of thousands of miles, much of it in rough use. Obtaining 300-450k miles is the norm, not the exception.
These vehicles have been used in this manner for over 30 years. If these vehicles were problematic I guarantee you they would not have used them this long and mangled the bottom line.
Do you consider all of these vehicles to be mutants and out of the norm?
Mike, you’re misreading things as normal -
You use your personal experience (from years ago) from a manufacturer to condemn them as “less reliable”. I point out that despite having had a lousy experience personally with what is rated as a reliable manufacturer, I (unlike you) do not condemn them or pretend that they somehow do not make good vehicles. The data simply does not support the idea that Toyota or Honda makes bad cars. But the same data, the exact same data you try to draw on, shows that Ford (and some GMs) are their equal, yet because YOU personally had a bad experience you think that you can extrapolate that to all vehicles made by that manufacturer.
And, yes, not ALL Ford models are above average vehicles - but neither are ALL Hondas and Toyotas. As for Tauruses lasting, every last person I know who has bought one had them last a minimum of 10 years before they traded, and with minimal trouble. The 96+ Tauruses were not perfect vehicles, but they were FAR more reliable than you give them credit for.
Maybe if you stopped the PERSONAL ATTACKS…people would listen to you.
Please reread my posts and others…
You have a very hard time with people who don’t agree with you…Anyone who doesn’t agree with you…the only way you can make your point is by personally attacking them…GEEZ…grow up.
I was pointing out (which you PURPOSELY IGNORED)…was that YOU ACCUSED ME of using my personal experience…yet IGNORED everyone else INCLUDING YOU…You say my argument is WRONG…because I use personal experience…but when YOU and anyone who agrees with you does…it’s fine…What a hypocrite!!!
As for Tauruses lasting, every last person I know who has bought one had them last a minimum of 10 years before they traded, and with minimal trouble.
GREAT…another personal experience which YOU say doesn’t matter…Thank you for proving my point…AGAIN…
As for GM “easily” filing for Chapter 11 bankruptcy…
Remember that the bailout came in late 2008. At that time credit markets were so frozen that many companies with stellar credit ratings couldn’t even get loans. Toyota had to turn to the US and Japanese governments to borrow money for Toyota Motor Credit that they normally would have easily been able to issue as bonds. My company found it impossible to borrow, despite such a high credit rating our bonds have traded at lower yields than Treasuries.
Given that environment, where exactly would GM have found the capital injection necessary to go through a Chapter-11 proceeding? In case you didn’t know, without enough working capital (GM’s case), they would have needed someone to provide debtor-in-possession financing through the bankruptcy process if they were going to restructure and not liquidate. WHO would have provided GM, with their horrid management, such financing at a time when AA and AAA rated companies couldn’t even find financing? Those other large companies you refer to have always been able to get D-I-P financing to proceed through bankruptcy.
We’ve been through this dozens of times, Mike, but Ford and GM are simply NOT guilty of offshoring any jobs that rightfully belong in the US. Both companies still have a larger % of their employee base in the US than their percentage of business that they get from the US. They don’t owe Americans a single job (though it would be NICE if they did put more jobs in the US). On the other hand, not a single import brand can make a claim that the % of their employees based in the US even approaches the % of sales they get from the US. Not one.
How do you explain the fact that the Fords I’ve owned have been great cars, all of them seeing high miles with few problems?
How do you explain the fact that the majority of people around where I live are also happy with their Fords, GM vehicles, etc?
Good for you…if they were as reliable as you say they are…then they wouldn’t have such a lousy resale value…I guess is one of those conspiracy theories…MILLIONS of people all over the world are in on it…they just decided NOT to tell you.
As for your family trucks…I only have YOUR word on it…I have a brother-in-law who owns a construction company…and tried GM/Ford an Dodge trucks for years…finally started buying Toyota’s about 10 years ago…He’s NOT buying from the big-3 again…and he’s a retired Chryco VP…retired early…and glad he did.
I agree 100%…
You CAN’T call yourself a believer in the free-market system and in the same breathe believe in Government bailouts…It’s one or the other.
Mike, READ again, and carefully.
I’m accusing you not of ignoring US but ignoring the very sources of data that you point to time and again to show some big difference in reliability. We ALL have horror stories we can tell about brand x,y,or z. I have made it VERY clear that despite having those stories myself, I cannot condemn a manufacturer when the broadest sources of data show that perception is not true. Because my Ford was a VERY reliable vehicle, I cannot claim ALL Fords are. But the data from numerous sources says that they are solid vehicles.
Do you not see the difference? You point to a source of data that says brand x is great, say that you had great experiences with brand x but lousy with brand y, and therefore brand y is lousy. I say I had lousy experiences with brand x but great experiences with brand y, but since that same source of data says both brand x and brand y are good, I cannot use my lousy experience with brand x to condemn it…
There are plenty of posters around here I do not agree with, and sometimes quite often. Docnick, mountainbike, bscar, etc… but they’re reasonable people with well-thought out positions that I respect.
We’ve been through this dozens of times, Mike, but Ford and GM are simply NOT guilty of offshoring any jobs that rightfully belong in the US.
There are no jobs that I ever said rightfully belong in the US…Sorry…never said it…GM and Ford can offshore any job they want…it’s their company…And they have…The number of employees per car sold has DROPPED drastically since the 70’s…Much is due to improved manufacturing…much is also due to offshoring segments of their manufacturing…
They don’t owe Americans a single job (though it would be NICE if they did put more jobs in the US). On the other hand, not a single import brand can make a claim that the % of their employees based in the US even approaches the % of sales they get from the US.
You start with 0 and grow to TENS OF THOUSANDS (Asian cars)…or you start with HUNDREDS OF THOUSANDS and shrink to TENS OF THOUSANDS (Big-3). Not so much of where they are NOW…but where they are heading…Which direction do you want to be heading???
Just so you DON’T misinterpret what I’m saying AGAIN…
I’m all for a free market…GM and Ford can do what ever they want…Me as a FREE citizen to choose how I believe…doesn’t have to like it…and I can VOTE against it by NOT buying one of their vehicles…and you can do as you choose.
Resale value has very little to do with reliability. It has to do with availability and perception.
Ford used to sell well over 100,000 Tauruses a year to fleets, mainly as rental cars. That meant an overabundance of 1 year old vehicles on the market. An overabundance of supply means low prices AND a negative on the $ the company can get on the new vehicle market. This sort of sales behavior is what has killed Ford resale value in the past more than anything.
Then there is perception. A 2002 Chevrolet Prizm runs about $3235, while an identical 2002 Toyota Corolla runs about $5085. That right there tells you that perception, absent all facts, is worth about $1850 on an 8 year old vehicle… That alone explains nearly the entire difference you see nowadays in resale value on cars NEWER than 8 years old.
Combine perception and flooding the market with lightly used vehicles, and you’ve got the prescription for a resale value disaster, regardless of actual quality or reliability. Take away the market flooding alone and you can see over at ALG what a difference it has made in resale values already.
I’m accusing you not of ignoring US but ignoring the very sources of data that you point to time and again to show some big difference in reliability.
I’m NOT ignoring it…I even addressed it…
CR’s doesn’t have any data on cars 5-6 years old…Almost any car I know will last 5-6 years…It’s the 5-15 years which CR doesn’t have any data for…
“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.”
Ok4450, I believe that is a bit misleading. For one, share price is almost meaningless without consideration of the number of shares issued, so the shock value of $133/share should be ignored. Berkshire Hathaway trades for 2314 times what Walmart trades for (per share), but the company is worth only 5% more than Walmart in terms of Market Cap (the real value the street puts on the company).
But the bigger thing is that the $133/share number is what it would take for the government to recover ALL of its investment in GM. The way this post was worded, you make it sound as if it has to hit $133/share for the government to recover ANY of its investment, when in reality, that $133/share number is the value where the government could turn a profit.
I don’t believe GM is currently worth that much, as it would require a market cap about 50% higher than Ford… but it is possible that the government might recover most or even all of its investment eventually.
Possibly…We don’t know the whole picture…I do know that the bailout in the LONG term is NOT good for us the Taxpayers and GM…There are ways companies can survive…
Texico, Dow Corning, Delta are all HUGE companies and have all survived Chapter 11…
If you believe in the free market then you MUST believe in the companies failing…Sorry, but that’s a free market…When other countries do what we just did…we call it Socialism…
On a personal note…I have two cousins and 3 nephews who work for GM and Chryco. One of my cousins has been there for 35 years…He’s lucky since he can actually retire…All my nephews have only been there 20 or so years and are only in their 40’s with 2-3 kids each…They are going to be hurting when they loose their jobs (which is very likely).
"Much is due to improved manufacturing…much is also due to offshoring segments of their manufacturing… "
Mike, the offshoring of their manufacturing has been the result of a dramatic realignment in their business. If you told someone even 15 years ago that in 2010 Ford and GM would both be getting around 2/3rds of their sales OUTSIDE of the US, but their worldwide sales would not grow during that period, they would have told you that you were nuts. They aren’t importing any more parts or vehicles than they did then - they’re simply more dependent on sales outside of the US.
As for where they are heading, the key is that despite shrinking sales, the key metrics of jobs/car, domestic content, and import/export balance show that the domestics are simply not reducing their commitment to US labor (ie, NOT headed in the wrong direction). On the other hand, the imports, while increasing employment in the US, simply have NOT kept up to their growth rate over the years, resulting in a higher dependence on imports today than just 10 years ago. On metrics of jobs/car, domestic content, and import/export balance, it is clear that all of these ARE headed in the wrong direction for import brands as a whole.