How to Bail Out General Motors

While GM may be the most deserving, the truth is that if one goes, they all go. The supply chain can not sustain a simple default by GM which is why Chapter 11 is just flat not doable. This isn't a Circuit City type operation and people can't seem to 'get it'. However, your comments are pretty close to the target. Ford has also done alot of developments to hybrids and smaller vehicles, second to GM. Chrysler simply doesn't have the cash-on-hand nor the international presence (where small vehicles are already in vogue) to do so at the moment.

Sorry, but you're just wrong. It isn't like any other business entity. They produce extremely complicated machines built from 14,000 parts made by over 3,000 suppliers. It's the second most expensive product (aside from your house) that people will ever buy. They are the only ones with the capacity to mobilize for war, should that be needed. They spearhead technology advancements in industry. Did you know GM spends more on R&D than NASA? You know who is third? Microsoft.

Look, get off the inefficient products rant. They were building the cars that people wanted them to build. What happened, with lightining speed, was the rapid escalation of gas prices and then, compounding the issue, the relaxing of the gas prices but the onset of the credit/financial crisis.

While you can jab them for being slower than you think reasonable, to say the Japanese (who are also in a huge bind and have built now-idle SUV factories) and the Germans are better is a deceptive talking point to inflame the real issue.

What in the hell are you even trying to say here??

I share your goal of becoming energy independent, but I don't believe we can do it the way you have outlined, in the foreseeable future. Electric cars aren't ready. They're too expensive and don't offer the same level of value that gasoline powered cars do. Even if by some miracle someone does develop a cost-effective electric car soon, it will take years to replace the cars that are already on the road. Also, I don't think solar power generation will ever be more than a niche technology. It's too expensive to generate electricity. The laws of physics will limit solar's success. Wind is a good method of generating electricity, but most of it has to be generated in the central plains states. However, we will need to install extensive power distribution lines to get the electricity from where it will be generated to where it will be used. This is expensive and requires unpopular government intervention to secure the right-of-ways. Also, many people don't want these lines crossing their property, for aesthetic reasons. I'm sure environmentalists don't like them either. The reality is that the cheapest and easiest way to generate electricity in the US is by burning coal and natural gas which are both abundant, relatively cheap, and can generate electricity near population centers. The primary reason we need to become oil independent is to reduce our trade deficit, of which roughly 1/3 is caused by our purchase of crude oil from foreign countries. Reduction of the trade deficit would strengthen the value of the USD. This would mean our money would be worth more, and our standard of living would improve. It also means a whole lot less money would go to hostile oil producing countries which should help our security situation. Having said all this, the only "short" term solutions to oil independence that I can see are 1) encourage oil and gas drilling, refining, and distribution, and 2) encourage natural gas flex-fuel vehicles. These technologies are available today. Regarding the prospects for sufficient supplies of oil and gas in the US, recoverable natural gas reserves has actually been increasing in recent years due to new drilling techniques. Recoverable oil reserves has been declining, but that's been in the face of cheap oil supplies from foreign countries and increasing restrictions against drilling in the US. Recently, British Petroleum drilled a well in the Gulf of Mexico that is producing about 100,000 barrels of oil per day, in an area where previous wells produced much less oil. Let???s find out how much oil lies off our coasts. Longer term solutions should include greater utilization of electric, and possibly hydrogen, driven cars and trucks. However, I'm very much opposed to the government setting fuel standards, raising taxes, and increasing regulations to push the process along. If they do, companies will fail, and the economy will slow. The government needs to get out of the way and let the market wor

I share your goal of becoming energy independent, but I don't believe we can do it the way you have outlined, in the foreseeable future. Electric cars aren't ready. They're too expensive and don't offer the same level of value that gasoline powered cars do. Even if by some miracle someone does develop a cost-effective electric car soon, it will take years to replace the cars that are already on the road. Also, I don't think solar power generation will ever be more than a niche technology. It's too expensive to generate electricity. The laws of physics will limit solar's success. Wind is a good method of generating electricity, but most of it has to be generated in the central plains states. However, we will need to install extensive power distribution lines to get the electricity from where it will be generated to where it will be used. This is expensive and requires unpopular government intervention to secure the right-of-ways. Also, many people don't want these lines crossing their property, for aesthetic reasons. I'm sure environmentalists don't like them either. The reality is that the cheapest and easiest way to generate electricity in the US is by burning coal and natural gas which are both abundant, relatively cheap, and can generate electricity near population centers. The primary reason we need to become oil independent is to reduce our trade deficit, of which roughly 1/3 is caused by our purchase of crude oil from foreign countries. Reduction of the trade deficit would strengthen the value of the USD. This would mean our money would be worth more, and our standard of living would improve. It also means a whole lot less money would go to hostile oil producing countries which should help our security situation. Having said all this, the only "short" term solutions to oil independence that I can see are 1) encourage oil and gas drilling, refining, and distribution, and 2) encourage natural gas flex-fuel vehicles. These technologies are available today. Regarding the prospects for sufficient supplies of oil and gas in the US, recoverable natural gas reserves has actually been increasing in recent years due to new drilling techniques. Recoverable oil reserves has been declining, but that's been in the face of cheap oil supplies from foreign countries and increasing restrictions against drilling in the US. Recently, British Petroleum drilled a well in the Gulf of Mexico that is producing about 100,000 barrels of oil per day, in an area where previous wells produced much less oil. Let???s find out how much oil lies off our coasts. Longer term solutions should include greater utilization of electric, and possibly hydrogen, driven cars and trucks. However, I'm very much opposed to the government setting fuel standards, raising taxes, and increasing regulations to push the process along. If they do, companies will fail, and the economy will slow. The government needs to get out of the way and let the market wor

That's why the taxpayers will be the owners after the 'bailout'. Uncle Sam, on your behalf, will have the authority to dictate what they produce and whom they employ in management and labor. That includes their 'absurd' salaries and bonuses (which I agree are, in some cases, beyond absurd).

But, please don't mistake the case. A failure will unemploy 3 million people. The UAW has membership of less than 300 thousand. The 'executives' would be less than 1 thousand. Please don't enrage the public at the 90% that fit neither of those categories. Focus the distrust and bad feelings toward those that you feel deserve it.

Actually, they don't necessarily have to build them. The 'normal' year is to produce about 16 million vehicles in the US spread out across all makes, domestic and foreign. They are on a pace to sell about 10 million. The sales aren't actually zero and that's an exaggeration that people are stuck on. The sell rate will never be zero. But, 10 million hurts and hurts bad. The question is that, of the 10 million to be sold, who sells them? That's more than enough to fill the assembly lines at the big 3. But, when you spread it over Toyota, Honda, Nissan, BMW, et al, everyone hurts. We have too much Industry capacity in total.

We can survive at 10 million units. It WILL hurt short term. The problem is that nobody was expecting this financial meltdown. My firm was expecting 13 million units which was also considered dismal. But, when the 'credit crunch' occurred everyone was still throttled up for 13 million units. Thus, we have overstuffed dealerships, too much inventory (for the moment), and the big 3 (being at the top of the food chain) can't sell their cars. Also, the Japanese and Germans also can't sell their cars.

But, the big 3 are ENORMOUS organization and have supply chains of over 2,000 companies. To simply 'stop' is impossible. It's like stopping the Titanic (irony hopefully funny) immediately. You can't do it. But, we can and are slowing down quickly. My firm will be closed for a full month because of lack of sales. I've taken a 5% salary cut, agreed to pay twice my health care premium, and my 401k match has been eliminated ( now a 201 k). I'm sure there will be more pain as we adjust to the new volumes. People WILL lose their jobs. My salary WILL continue to go down.

The problem is....allowing us the time to adjust without bankrupting everything. I know that sounds crazy to someone not intimately involved in the industry. But, consider how hard it would be for me to understand the details of what you do? It's the truth.

Look, we 'get it'...all of us. We're willing to do whatever is necessary to save the industry including personal sacrifices. We just need the time and we'll regain the confidence of the public. I think we've already made some good strides.

But, nobody, including me (and probably not you nor anyone else) expected this god awful financial meltdown and credit crunch. That's creating the massive immediate liquidity problems.

What also needs to end is calling it a 'bailout'. It's a loan from crying out loud. It's even a short term loan at that. The taxpayer will be given warrants and preferred status in the event of a liquidation. Moreover, there is precendence that this does work and work well. The taxpayers actually make a bundle of money from the Chyrsler loans in the early 80's. That's an undisputed fact.

That's odd isn't it? GM sells more vehicles here than any other make.

Very cerebral.