Henrik-

I'm not particularly in favor of government hand-outs, but what makes you so sure Ford won't go under as well? The stated difference between the GM & Ford, in terms of insolvency, is just a few months.

GM has been the squeaky wheel (and the biggest)- and therefore all attention has been focused on it. Despite what Mullaly would like us to believe, Ford is just as bad.

If any one of the "Big US 3" goes under- it will drag the rest of the US auto industry (manufacturers + suppliers) down with it.

No on bats an eyelid when socialist EU offers their ailing auto manufacturers multi-billion euro "loans" to keep them afloat. But it is surprising to talk about massive bail-outs in non-socialist USA.

God help us through this crisis.

Alex:
For gas mileage, we can either have our lifestyle changed by congress or by OPEC. Choose your poison.

Far better to fix what caused the problems in the first place:
1. healthcare- do a derivative of HR 676 and put the UAW and retirees onto medicare-
2. cafe standards distort production and induce dislocation between manufacturers and customers- instead, lets do a gradually implemented ( eg 10 cents per year) gas tax that ramps up to 2 bucks total, that way everybody understands the need to get fuel efficient, all together
3. in return for medicare, automakers must agree to drop all anti ghg law suits they have brought.
4. let euro safety standard cars be imported here if manufactuers want to( Ford Ka etc)

Alex:

What is the relationship between GM going bankrupt and 45 mph cars? There are at least 50++ cars in the world that can do at least 100 mph. Nobody needs GM to meet that requirement.

If you mean 50 mpg cars, that is another statement or requirement. None of the current GM products can do it but about 10+ another cars in the world can do as much and a bit more.

In other words, GM does not produce a single product that is not already available elsewhere. The world would survive after the passing of GM, Ford and Chrysler. However, by letting one or two go bankrupt may help the remaining one to survive. Who should be the one to survive? Ford may be in a better position. GM could downsize to the VOLT PHEF with a single $ billion or two. and Chrysler could go where it wants to.

Shall we support $73/hr jobs with tax money? People working for $8 to 10/hr would be justified not to like such huge bailouts unless car industries labor cost goes down by at least 50%, to about $35/hr. Maintaining such wide pay disparities with tax dollars would not be very democratic.

However, laid off auto industry workers should get extended $8 to $10/hr unemployment insurance while they are being retrained and/or find another job.

@Harvey:

Did you actually read what I wrote? I didn't say anything about GM specifically, I meant General Motors AND OTHER AUTOMAKERS (Whoooopppsss, sorry for shouting :) )

We are not only demanding 35 MPH CAFE at the federal level. Some state governments are demanding 40 MPG or more. I don't think anybody, not even Honda or Toyota, nor even the Smart Car, can cope with such demands without sacrificing something. It might be safety, or room, or performance. Or, cost.

For example: The Tesla, a fully electric car using lithium ion batteries, costs over a hundred grand. Many people can't afford to pay that much for just one car.

Well, after trying to decode what Alex is saying, I do think the car has value to Americans more than just in job creation.

I value my Honda becuause of its:

1) Reliability--its a 2004 and Ive put 165,000 miles on it with very little trouble

2) Solid build--the thing drives just like the day I bought it. No loose, gangly feeling in it anywhere.

3) Decent fuel milegae for its type--its a box on wheels and I still average 22mpg with 4wd

4) Resale Value--If I ever would want to part with the thing, I could have been able to get more than I owed on it--with excessive milage for over a year and a half now. Ive never had that with a Domestic Brand. Not even close.

My point of making four points: I dont have any use for GM, Ford or Chrysler Products. I don't care how much money they get thrown at them, they have NO care but to put out "the same old" stuff.

Do they have a few slightly competitive products? Sure, but good luck getting one. GM sold like 1100 hybrids last month and what, 900 of them were behemoth Tahoe/Suburban/Escalade type. But, ooh, they did sell 130 hybrid cars! Wee!

That is NOT viabliltiy that is NOT sustainability. The nonsense "green" image GM and Ford is trying to Milk is ludacris. 3000 vehicles a month for the BOTH of them is nonsense.

For me, a better car company gets my support-- Honda.

Nate Hawkins
Dover, Ohio

Until I read the GM Plan:

I had NO IDEA that the Dealer consolidation had gone so far. It is amazing that 80% by volume of BPG vehicles were sold in the consolidated troika dealerships, already. That means to most practical purposes, that the dealer rationalization has already pretty much taken place. Conventional wisdom was that was a multi-billion dollar, decade or more effort, is yet to be fully undertaken or even begun.

I had NO IDEA that sales representing 83% of volume was concentrated in the four brand channels of Chevrolet, Buick, Cadillac and GMC, in North America.

I applaud the decision to dispose of Hummer, and turn Pontiac into a few model sub-brand.
Depending on what models you give to Pontiac, either performance "sporty cars" or the small end of the car range, perhaps not so appropriate to Buick, there are two alternatives to the Saturn dealerships.

1) Absorb them into the PBG troikas as a brand for the small cars, PBGS, if Pontiac is restricted to "sporty vehicles " OR
2) turn the Saturn dealer network into an import brand dealership for GM Europe and sell Opels, & Saabs with little change, as fully European brands without modification. If you are in reality selling Opels, why spend money to re-badge them as Saturn's with all the costs involved for nonsense like grill work. Only to have the auto press deride the "Americanization" efforts anyway, and pine for the genuine "European" versions.

The auto writers like getting to travel to Europe to "test drive" vehicles. Let them go there, to test drive their Opels and Saabs, just like they do for their reviews of Mercedes and BMWs.

Unstated but by implication, I deduce, Saturn and SAAB should/will be annexed by Opel/Vauxhall. No one else inthe world has the money or the the reason to buy them. GM Europe should/will export to America, transplant manufacture in a Southern state of Tennesee, like the others, and the ex-Saturn dealerships provide an easy to construct, existing distribution channel.

I knew that Buick has a realtively high quality rating. It makes sense to keep it as one of the four main brands. I just had no idea that it was so well accepted in terms of volume. When Quality is the number one concern of buyers, alongside fuel economy, and actual quality is statistically indistinguishable now, Perception is everything.

Buick is much further along in building/maintaining a Quality image, than many of the other GM brands. Reserving small cars for either Pontiac or Saturn will keep the Buick "near luxury status" image alive, as it is already well-established, too. The PBG dealer network will certainly cry for a range of small, higher volume cars to vend, from Pontiac. The real discipline will come in a few years as Pontiac strives to "return" to a full model lineup via cheap badge engineering.

Al Sloan's construction of GM did not envision each brand growing upward and downward to encompass the entire market. Each brand represented a small market segment appropriate to its brand image. Only later did it morph into rediculous redundancy.

Incidently I suspect that I can deduce what GM envisioned doing with Chrysler, had they merged. GM would have merely substituted Dodge for Pontiac as a vendor of small cars for ther PBG, er DBG, dealer network. Jeep could be taken up by any of the remaining channels.

Nate H. writes about his Honda:

>I value my Honda becuause of its:

>1) Reliability--its a 2004 and Ive put 165,000 miles on it ....

>2) Solid build--the thing drives just like the day I bought it. ...........

>3) Decent fuel milegae for its type

>4) Resale Value ....

Nate, I hear you loud and clear. I'm a Toyota owner myself! It is because of the points you raise in your post which I exerpted above, that I am 100% AGAINST any proposal to help the Big Three which includes any provision to limit American consumer access to Toyota, Honda, or other foreign cars.

I raise this point because I fear that if someone like Nancy Pelosi or Senator Harry Reid of Nevada is hostile enough towards the automobile to lay on draconian fuel economy requirements, they are probably also hostile enough to lay on draconian domestic content requirements as well.

"GM’s wages and benefits for both current workers and new hires will be fully competitive with Toyota by 2012." total BS! does ron givethefinger know that GM has said that? Hyundai pays $26 an hour/$44 with benefits. Gm pays $28 an hour/ $73 with benefits. does GM really expect us to beleive that the UAw will take a 40% cut in pay? especially when ron has only said they will "suspend" the jobs bank and "delay" benefits payments? none of that involves changes in cost, just when the cost is incurred. so they wont have any money to be able to pay back in 2012.
and what about the $8 billion they owe the benefits fund in 2010? how are they paying that off?
GM owes close to $66 billion right now according to the last quarterly statement. how many of those institutions they owe money to are stupid enough to take part of the company in payment?
how did they get within one month of total failure with virtually no actions to forestall it? did they think $65 million in campaign contributions ( in addition to the union's $20 million and thousands of volunteers) was all they needed to buy some political support?
the union saw the books at the last strike settlement, they knew this was coming and also did nothing.
I dont buy their "a depression will occur" fearmongering. they say people wont buy cars from a bankrupt company, but most people wont buy GMs from a crooked dealer either. the whole company and dealer network is a total loss and small, meaningless steps woant prevent the inevitable. the SNL skit had it right, $4 billion now, $4 billion in 3 months, $4 billion in 6 months, then $8 billion.... you cant fix gangrene with bandages.

The Citigroup no-plan will form another black hole for government money. It goes in. Then more will be needed.

Well those who insist Citigroup got $300B from the government won't be convinced by any refererces.

I invite anyone interested to try google or another source and see what the widely reported $300B consisted of. And why it does have conditions and why No K and Huh are mistaken when they write stuff such as:

"So citigroup, an institution which produces absolutely nothing, receives $300 billion without a plan and without questions asked."

What the government did is buy preferred stock in Citicorp. About $25B worth. That may not be a good idea but does not give away $25B and it is not $300B.

The government also partly guaranteed Citigroup assets. The guarantee was only partial comes into effect after Citigroup takes the first losses.

Even should the Citigroup asset prove absolutely worthless the government would not lose $300B and Citicorp would not have been given money.

And numerous controls were put on Citigroup to reduce executive compensation and prevent routing of any money to stockholders.

But people who won't read the facts as reported in the financial press won't believe me either.

Henrik you start - A bailout may be needed to prevent mass unemployment in the entire industry.
and then Alex continues on with...
My complaint about the auto industry's "friends" is, all they talk about is jobs, jobs, jobs! We are told again and again, about the millions of jobs that will be lost if American auto firms declare bankruptcy.
to be echoed by....
DieselHybrid- If any one of the "Big US 3" goes under- it will drag the rest of the US auto industry (manufacturers + suppliers) down with it.
I, for one, resent this blackmail from the old guard automakers of North America on our politicians. Namely that unless you give them billions of dollars they will throw millions out of work.
That said I concur with Henrik ...
However, maybe the best way to use (federal funding) is to let GM and Chrysler go bankrupt and then help Ford and some of the auto suppliers to get through the resulting turmoil.

I've no problem with the demise of GM. We long ago gutted our established electronics manufacturing by allowing the Far East to supply our consumer electronics and computer hardware. What makes cars so special ? The so-called transplants seem to be doing very well over here supplying North American markets with the type of cars we need. GM is merely superfluous. And we don't need to encourage what would undoubtably become an American "Leyland" situation, particularly with its current management.
Moving on, I would like to tackle a new thread here that Henrik brought up.

The problem with playing the jobs card is, it promotes the idea that the only socially redeeming value of cars is job creation. So I would like to ask everyone who reads this: Do you believe your own car serves no purpose nor has any redeeming social value other than creating a job for someone ?

Exactly right it's, the very way of life we are used to when cars equate purely to jobs. Then we are in effect financing a make work project here.

It seems to me we are beginning to separate into two classes. The rulers in the form of highly paid and tenured for life government workers and upper management, and the ruled - those who made the wrong choice and ended up in the private sector.

Corrupt management from those rulers has caused tax money to be diverted away from social services like health care and the refurbishment of our disintegrating infrastructure and put instead into unprofitable wars.

Incompetent management from those rulers has resulted in the production of consumer goods that miss their target. We now see tax money from workers in the private sector being steered towards their rulers in upper management to allow them to continue. The cycle will be repeated when the money runs out and they need to be back at the trough again. With this scenario BK for GM would be a good thing.

The truth is all those GM jobs won't be disappearing, they will merely gravitate towards those manufacturers with the more competent management boards, as they have always done in industries elsewhere. I don't see 3M or Kodak with begging bowls just because recording media has moved away from magnetic tape and film.

What I have a problem with is the thought that taxpayers money can be used in the billion dollar amounts just to save jobs, when there is no shortage of cars in North America. We have overcapacity in manufacturing. Even if they were to shutter all the facilities we would not be immediately reduced to the whip and buggy era, there are still many vehicles on new and second hand lots. Life would continue. It's just that the rulers have trouble in handing out money to people for doing nothing as if a life of 40hrs/wk servitude is the only acceptable role for those outside government

We have to get a grip that perhaps there will be less work in the future. We should prepare for the changes that home recharging, regen braking and the complete absence of mechanical powertrains will make when electrically propelled cars become the norm. If it is indeed true that one in seven are auto related then there are probably going to be a lot fewer service oriented jobs around. It could well be a significant reduction.