Congressman responded to letter

[swifttal]

Originally Posted by Chemical

I'm not quite clear on the regulations on Chapter 7 but Congress has been talking about an agreement that if in Chapter 11 the loan that GM recieves will help the reorganize.

I think most importantly the out dated contracts can be updated to save the comany billions.

the reason they cant last past this month is because of the legal requirements to pay union contracts and pensions I believe + of course opertion cost.

Everything seems to be on the way to working out but the cost will be most to the invester, especially if the government owns a piece of GM. The cost will be that anyone who owns GM stock will be diluted to... lets say for example 1/10 the value (maybe not as bad or maybe worse).

... but GM will stay above water so to speak.

I'd like to help out GM by purchasing a Camaro right now but I must graduate first, until then I hope GM can hold on.

Ah, OK, I missed them talking about that part. Well, if that happened, I would imagine the camaro (and everything else) way be put off for a while while everything goes through renegotiations. I hope somebody comes to a conclusion soon

[DGthe3]

The problem with a chapter 11 is that few people will consider buying a car from a bankrupt company. And if few would consider it, even fewer would actually do it. While it would probably be beneficial for them to be able to restructure under ch11, their revenue would drop faster than they could cut costs. And companies that are under chapter 11 protection can essentially be forced to liquidate if it seems like things aren't going to work out.

[Inspector 17]

Originally Posted by DGthe3

The problem with a chapter 11 is that few people will consider buying a car from a bankrupt company. And if few would consider it, even fewer would actually do it. While it would probably be beneficial for them to be able to restructure under ch11, their revenue would drop faster than they could cut costs. And companies that are under chapter 11 protection can essentially be forced to liquidate if it seems like things aren't going to work out.

Is this really true? I mean, I know it seems that would be the case, but are people still buying from these companies: K-Mart, Circuit City, Delta Airlines, Macy's, USAirways, United Airlines, etc?

[DGthe3]

Difference between most of those companies is that once you've made your purchase, you're done. For a car there is the worry that the warranty might not be honored, or replacement parts would be hard to find if the company liquidates. That is the fear, but it has to be acknowledged. Funny thing is, if people didn't have these fears then the companies would have enough buyers to make those fears completely groundless. As it is, its a self fulfilling prophecy.

After researching a little more, the poll that I was thinking about had the following numbers:

The survey of 800 Americans, conducted from December 1 through December 3, reveals that 52 percent of Americans are unwilling to buy a car from a manufacturer that is under bankruptcy protection. Thirty-seven percent said they're willing to purchase an auto from a manufacturer under bankruptcy protection and 11 percent said they weren't sure

Not as bad as I thought, but still bad.

[The_Blur]

Originally Posted by camaropete

Is this really true? I mean, I know it seems that would be the case, but are people still buying from these companies: K-Mart, Circuit City, Delta Airlines, Macy's, USAirways, United Airlines, etc?

Nothing you buy from any of those companies requires a commitment of tens of thousands of dollars and the possibility of an expensive breakdown. When it comes to a car, DGthe3 points out that parts may be impossible to find or that the warranty that came with the car is worthless. Plus, you don't resell a United Airlines ticket, but a lot of buyers want to resell their new cars in a few years. Without a warranty or dealer to handle that car's maintenance, there's simply no value retention. The car will be as worthless as your used plane tickets.

Originally Posted by DGthe3

Difference between most of those companies is that once you've made your purchase, you're done. For a car there is the worry that the warranty might not be honored, or replacement parts would be hard to find if the company liquidates. That is the fear, but it has to be acknowledged. Funny thing is, if people didn't have these fears then the companies would have enough buyers to make those fears completely groundless. As it is, its a self fulfilling prophecy.

After researching a little more, the poll that I was thinking about had the following numbers:
Not as bad as I thought, but still bad.

Those are better numbers than I've seen cited previously, but it still isn't good. The world's largest automaker can't survive on 52% of its sales.

[swifttal]

Originally Posted by swifttal

What's killing me after watching the proceedings this week is why aren't the CEOs standing up for their product? They're getting hammered by congress on why they haven't modernized and how unreliable and un-green our cars are and all the CEOs had to offer back this week is being apologetic and how they've made mistakes. Why aren't they standing up for their product. Why didn't they tell congress how they've already embraced global platforms, how GM makes more 30+ mph cars than any other company, show them they HUGE quality improvements that have already been made without help, how their styling on both exterior and interior are world class, etc, etc.

It did nothing to improve consumer confidence and only reinforced the incorrect assumption a lot of Americans had about their own cars. Made me mad. Understand the need to be humble, but as most of congress has these incorrect assumptions themselves, they should've done a better job of educating how good their cars are - would've inspired consumers with all the free press "advertising" a lot more than the "we screwed up" approach they took

Now here's what I'm talking about! Bob Lutz FTW!!!

http://www.msnbc.msn.com/id/21134540/vp=28118708�

Lutz interview starts 45 seconds into the video

[DGthe3]

Originally Posted by swifttal

Now here's what I'm talking about! Bob Lutz FTW!!!

http://www.msnbc.msn.com/id/21134540/vp=28118708�

Lutz interview starts 45 seconds into the video

The link you gave has nothing of Lutz. I saw one where he says GM has a liquidity crisis at the end of another interview. Is that the one you mean?

[swifttal]

Originally Posted by DGthe3

The link you gave has nothing of Lutz. I saw one where he says GM has a liquidity crisis at the end of another interview. Is that the one you mean?

Dang, another reason why I hate MSN...

while watching whatever video comes up from this link (after the stupid mandatory advertisement), On the sidebar to the left of the screen, highlight (hover your mouse over, don't click) business, click autos, and scroll down to the video titled "Lutz on autos, financial rescue". It's about 10 videos down - it's about 14 minutes long, but worth it.

[swifttal]

Originally Posted by DGthe3

The link you gave has nothing of Lutz. I saw one where he says GM has a liquidity crisis at the end of another interview. Is that the one you mean?

How bout this link

http://www.msnbc.msn.com/id/28110296

[CWI]

Here's what my Representative wrote back to me. I think this guy gets it. Why can't the senate vote non-partisan on a non-partisan issue? :

Dear Mr. Wood:



Thank you for contacting me to express your support for the federal government providing bridge loans to the domestic auto industry. I appreciate knowing your thoughts on this issue.



I share your support for rescuing the auto industry. In this economy, when over 1 million have already been lost this year, I believe Congress has a responsibility to protect the 3.3 million jobs GM, Chrysler, and Ford provide for American workers. In Oregon, more than 37,000 jobs are directly liked to the "Big Three" automakers.



Our nation is facing serious economic turmoil that has been characterized by a sharp downturn in auto sales. While I am deeply concerned about the business decisions that contributed to the automakers inability to respond to our nation's current economic crisis, I believe we should help the auto industry weather the current economic crisis. That being said, I believe any assistance should be tied with conditions, and the federal government must have broad accountability and oversight powers. These conditions should be based on the automakers overhauling their business foundations for long-term viability.



I voted for the auto industry rescue (H.R. 7321, the Auto Industry Financing and Restructuring Act) when it was considered by the House of Representatives on December 10, 2008. The rescue would have provided up to $15 billion in short-term bridge loans to the automakers. In addition, H.R. 7321 would have created a "Car Czar" to hold the car companies accountable for developing and implementing viable long-term restructuring plans. The bill also would have prohibited participating automakers from providing excessive compensation packages to their executives, including so-called "golden parachutes." H.R. 7321 was passed by the House by a vote of 237 to 170. The bill, however, stalled in the Senate, and it now appears unlikely that Congress will enact a rescue package for the automakers before the end of the year.



Congress will likely re-consider a revised auto industry rescue when the 111th Congress convenes in January. As Congress debates further auto industry rescue proposals, I will keep your support in mind.



Thank you again for sharing your views on this issue. If you have further questions or concerns, please contact me at 503-326-2901 or 800-422-4003.


With warm regards,

David Wu
Member of Congress


Please do not respond to this message. This mailbox is unattended. If you wish to contact me, please use my website, www.house.gov/wu. Thank you.

[Mr. Wyndham]

You reminded me....I got one back from Hillary Clinton a couple days ago.......ironically...of the two senators I emailed, the one whos leaving actually responds to me.

Dear Mr. Bella:

Thank you for sharing your views on the state of the auto industry. I appreciate your concern and I welcome the opportunity to respond.

The auto manufacturing sector has been devastated by the recent economic crisis. Frozen consumer and commercial credit and sharply declining sales have pushed U.S. automakers to the edge of bankruptcy. According to one estimate, almost three million American jobs are tied to the Big Three automakers. The collapse of the domestic auto industry would have a ripple effect that would be immediately felt by New York's nearly 98,000 auto manufacturing-related workers and the many suppliers and dealers throughout the state and the entire nation. Moreover, a collapse would have a destructive impact on our economy.

It is profoundly disappointing that the measure on the floor of the Senate last week was blocked. It would have provided critical assistance for American automakers and the millions of workers whose jobs are directly and indirectly in jeopardy. Millions of Americans, whose livelihoods are in jeopardy, are left to wait over the holidays to see whether their jobs will be saved.

This is a difficult time for America and for American families. Our economy has been buffeted by turmoil in the financial markets and the growing mortgage crisis, resulting in - and compounded by - severe job losses and a deepening sense of anxiety across this country. Inaction is not an acceptable option. I have called for the current administration to use the tools at its disposal to keep our automakers afloat, including using the authority given to the Treasury Secretary to stabilize our markets and troubled companies. In the long term, we must pursue economic policies that will not only create jobs but create the incentives for these companies and many others to lead our nation and the world in developing innovative technologies that will shape our future and ensure our prosperity.

Again, thank you for your letter regarding the auto industry and our economic challenges ahead. For updates, please check my website at http://clinton.senate.gov.


Sincerely,
Senator Hillary Rodham Clinton

[Mr Twisty]

<<"I have called for the current administration to use the tools at its disposal to keep our automakers afloat, including using the authority given to the Treasury Secretary to stabilize our markets and troubled companies.">>

Notice Hillary didn't really have a definitive answer? That is the art of double-talk at it's finest, I'm impressed...Really.

A year ago the big 3 were building what the American people wanted, now, when they're in trouble, we turn our back on them. It's a shame, but it's typical human behavior.

Aside from a few folks on this forum, most of us are biased toward saving GM because we want something in return. I honestly don't know what should be done, but if I figure it out, you folks will be the first to have the oportunity to buy my book of answers for only $19.95 plus shipping.

[bigralph]

Here's my seneter said.


Dear Mr. Escoto:

Thank you for contacting my office regarding H.R. 7321,
the Auto Industry Financing and Restructuring Act. I appreciate
hearing your thoughts and concerns.

As you may know, the U.S. House of Representatives
passed this legislation on December 10, 2008 by a vote of 237-170.
I voted in its favor. However, Republican Members of the U.S.
Senate successfully blocked similar legislation from a vote. The
fate of the auto industry now lies in the hands of the current
Administration.

The House passed bill aims to help the U.S. auto industry
hit hard by a sharp downturn in sales and already on shaky
business foundations. One in 10 American jobs is linked to the
domestic auto industry, and it is a key pillar in an American
manufacturing sector critical to our national security and economic
competitiveness for decades to come. This legislation provides up
to $15 billion in short-term bridge loans.

By making loans available in already appropriated funds,
this bill will provide a needed boost to the overall U.S. economy.
Allowing the auto industry to collapse would devastate not only
the economy here in the U.S. but around the world. In the first
year alone of a collapsed auto industry would result in a loss of
nearly three million jobs, $150 billion in lost income (thus
decreasing income tax revenue by $60 billion), benefits lost for
775,000 retirees and surviving spouses and an additional two
million Americans would lose their healthcare.

H.R. 7321 demands strict accountability to the American
people. The legislation calls on the President to designate one or
more individuals responsible for holding the car companies
accountable for developing and implementing viable long-term
restructuring plans and ensuring compliance on financial efforts.
This "Car Czar" will have full information access, veto power over
industry expenditures in excess of $100 million and ability to
allocate funds on a priority basis to protect the economy.

The government and the American people will be issued
warrants for stock to allow taxpayers to profit from the companies'
recovery. "Super Seniority" status for the federal bridge loans puts
the taxpayers ahead of all other lenders for repayment. In many
cases, these tough protections extend to Cerberus, the private
equity firm that owns Chrysler. In addition to strong repayments
standards, shareholders will not be able to earn dividends over the
life of the loans. Bans on corporate excess are in place to prevent
"golden parachutes", no bonuses for the 25 most highly paid
employees at each company and no corporate aircrafts, with
requirements to sell or end leases on any existing aircraft. Both
the Government Accountability Office and Special Inspector
General overseeing the TARP financial rescue funds will have
oversight powers.

The Auto Industry Financing and Restructuring Act calls
on shared sacrifice from executives, employees, labor union,
dealers, suppliers, creditors, and shareholders should all participate
in restructuring efforts. To ensure the companies restructure to
achieve viability, international competitiveness, fuel efficiency and
reduced emissions, the "Car Czar" can require immediate
repayment of the loan if the company has not made adequate
progress by February 15, 2009 to develop a long-term restructuring
plan. Also, the company will get no more federal assistance if it
fails to submit an acceptable final restructuring plan by March 31,
2009.

Congress intends to keep its commitment to innovation and
fuel efficiency. The legislation calls for maintaining and
replenishing the $500 million of innovation funding in the
Department of Energy program set aside to help the industry retool
to build advanced technology vehicles that greatly improve
efficiency and reduce carbon emissions. The companies must
analyze the potential for converting unused production facilities,
especial former sport utility vehicle lines, to the production of
buses and rail cars for public transit agencies. Each company's
restructuring plan will not be approved unless the President's
Designee determines that the plan will result in the ability of the
auto manufacturer to comply with applicable fuel efficiency and
emissions requirements. In addition, the President's Designee may
accelerate repayment of a loan or cancel other financial assistance if
the auto manufacturer fails to comply with applicable fuel
efficiency and emission requirements after March 31, 2009.

Rest assured, I will be keeping a close watch of this issue.
Please know that I am looking forward to working with the new
Congress and a new administration to help solve this economic
crisis. If you have any questions regarding this or any other issue,
please do not hesitate to contact my office.




James P. McGovern


Member of Congress

[rgrizzard]

Originally Posted by The_Blur

I also take issue with the argument that Detroit's automakers fundamentally are inefficient or not green. How can this guy argue that they need to break with the past? Ford and GM have been in the market for as long as Mercedes and longer than anyone else. It is a past of success and market dominance. Is that somehow un-American or inefficient?

Where did he say that they are fundamentally inefficient or not green?

I think by saying that they need to break from the past, he is referring to the business model with unions and other business actions.