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Originally Posted by dkb
It has nothing to do with fear ... it's philosophical. Why would I buy a car ... the proceeds of which are going NOT to individual investors but to Congress. Frankly it's bizarre. I pay taxes. Barney Frank takes my taxes and buys general motors. Then with the money I have left over I buy a car from Barney Frank.
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The government wouldn't take any bit of the profit, with exception of the stock value when they sell it.
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Originally Posted by dkb
Actually what I've read today is that the UAW is going to end up with nearly 80% of the company ... which I've only seen in one place ... I need to find out more about that little bit of news.
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I've read in multiple places the number for that was more like 39%...and again, it's all a temporary discussion. They are seeking to put stock in place of cash, because they don't have any...eventually, that stock will have to turn into cash; It's being used to fund the VEBA...and you can't buy health insurance with stock...
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Originally Posted by dkb
I've noticed some of the comments on the thread keep talking in terms of the gov getting a return on its investment. They're clearly missing the point.
What they're interested in is controlling a major american industrial company. They can hand out jobs and contracts to their favored consitutencies ... they can placate the green movement by dictating the production of green cars that will lose money and that will have to be subsidized. But since they "own" the company who cares if they lose billions. Again .. it's chump change.
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You could argue that point, yes...but then explain to me why they made such a hassle about loaning the money in the first place...it's just "chump change", right?
They are politicking. And if they make money off the stock, which they WILL, then the administration can turn to the taxpayers and say "look what we did for you guys"....it is about power, yes...but there is no benefit power-wise for them to hold a majority stake in GM...they don't know wtf they're doing, and they know it. Government regulation of vehicles will stay limited to CAFE and friends, not the boardroom of General Motors. You surely agree that the country would be in an uproar if there was a blatant "nationalization" of such a large corporation. Without getting into it, the nation would go from blue to red overnight........
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Originally Posted by dkb
They'll run this thing like they run everything .... very poorly and straight into the ground.
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**IF** they run it at all...again -- this is what I meant when I said that about "fear". Perhaps it was the wrong word; but the point remains -- there's a group of folks already assuming that the government will own GM!! Hell, there's been two misguided people that've already abandoned Camaro because of it!!!
#1; this is still a PROPOSAL. The gov't has not agreed to take the stock, yet -- and they very well may NOT. That would be an added force to send the company into that "surgical" bankruptcy, which - I'll admit, looks mildly appealing.
#2; The treasury...the President, GM PR, and the CEO himself have all said, repeatedly, that the government has
"no intentions of controlling or running General Motors Corporation." The question then becomes do you believe them...all of them...or not? If not...fine. But be advised that you have
no evidence to the contrary until something 'happens'.
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Originally Posted by MrIcky
Dragoneye, I like the way you think in general. I don't think it's doomsday, even if GM did go under I don't think the earth would rip apart and pull us in. I do have some disagreements though so I'm just inserting them in italics or whatever.
Fair enough!  I'll respond to what I can.
They may not be running GM directly, however having a controlling stake in board elections means that whatever oversite committee that is set-up in this deal WILL control the future vision of GM.
Not necessarily. They'll have an entity on the board, but this person, or person(s) will be the newbie, so to speak, with most likely 0 knowledge about the car business. In the most probable cases, this person(s) will refer to everyone else, so long as they can be assured the venture is in the best interests of the taxpayer...which also happens to be the consumer...
The other scenario, is that they place somebody with a moderate, to good bit of knowledge about the Industry on there. There's plenty of analysts, and Industry Insiders that could be picked...in this case...it may not be so bad -- every desicion they make may not be a screw up.
I guess my point is that in either scenario, there will be other parties involved. They will act as a buffer of sorts; the gov't won't have 100% say in what happens, which is good. ALL involved will be interested in making money, and none will be interested in making a decision or series of decisions that will hurt the company, or the consumer.
Asking Wagoner to resign as a prerequisite to getting loans may not technically be firing him- but it's splitting hairs. Sure the Government had the right and ability to attach strings to loans though- as would any lender.
It is splitting hairs, and I confess I did it knowingly; Intending to make the distinction that there was a difference between the influence they have over the loan money and it's uses, vs. an outright takeover of the company.
I would agree that you are historically correct, however manipulating the board (which would be their right as majority holder) to people who would prefer Priuses to Tahoes is more likely than not to be the net outcome. Is this bad or not? I guess that depends on if you like Priuses or Tahoes.
See above about the board. It's a rosey outlook, for sure, but it's got as much merit as the gov't-f**ks-up outcome...
Priuses to Tahoes....yeah, probably...but what about everything else? What about Prius vs Volt? ....NO gas...."oooohhhh" says the board member. There's more to GM than their trucks...MUCH more...and I'm positive whoever MIGHT get placed on the board will realize this.
Energy policy is one of the most hotly debated issues in government today and an identity issue to the majority leadership of congress. Energy policy goes hand in hand with transportation. You can't predict whether the governing body will think it's pointless or not to hold on to one of the largest manufacturers of transportation devices in the world.
No, I can't. But again, as I said above -- by internally manipulating the company to make unwanted cars...it would be evident that the gov't is screwing up...and it would severly harm the company in terms of sales and finances....that the gov't now as stock in, literally. Personally, I see a greater benefit in such a case as the company working WITH the gov't versus the gov't taking over the company...I would guess they do, too...which is why they want to 'protect' them in bankruptcy court. They need them, but they can't own them.
*edit* wow that turned f'ing long Sorry!
Don't be! This is important, and must be talked about -- but with far less doomsday predictions, and more fact-checking and rational thinking. |
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Originally Posted by dbotsfordtat
I think this is a great opportunity for our Government to re-regulate these huge corporations and bring some sanity back to the market.
I would like to see a lot more transparency in our Government but I still think its better than trusting private business.
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I agree with the first half -- with one addition, there MUST be a happy medium. We were in it for the better half of the last century...we must find that again, as over-regulation can cripple the market.
I disagree with your last statement. Private business is all about making money, and serving their stakeholders...people can be fired in private business for failing to do that, so they are always hard at work with fulfilling that criteria, with the occasional exception. Whereas gov't officials are elected, for the most part, willy-nilly. Very few actually know what they're doing, and getting a goal completed satisfactorily is a rare occasion due to the nature of beaurocracy. They cannot be fired without going through a long and dragged out process, and they answer to their most valuble ($$$) supporters, not the public at large. The exception to this rule is rare, but welcome.
Rules are set in place by the gov't. Yes...but of the two entities, which is more likely to break the rules? the guy who has to follow them, or the guy who made them?
Those are the characters of the two entities as I have observed them for the past twenty years or more if you include outsider's input I have gathered. Would you disagree with the above assesment? If so...why? But if not -- who would you really rather trust? They guy you can fire if he screws up, or the guy who can't get anything done to begin with?