GM Stock Sale: Taxpayers and investors not as fortunate as UAW

[Big Brunsy]

Originally Posted by UCI CamaroFan

TARP was a success

funniest thing I've heard all year....and I've heard some pretty funny things

[2010-1SS-IBM]

Originally Posted by Dragoneye

It is completely theirs to allocate as they will as our leaders.

Nope, it isn't. Example:

http://en.wikipedia.org/wiki/William...orruption_case

Originally Posted by Dragoneye

No, I didn't think it was absurd to worry about the repercussions of a giant corporation falling in the middle of a recession. The money doesn't become anything -- it gets used. In this case, it was used as a repayable (see: not 'given') crutch to help an ailing, but promising company from being destroyed by external conditions. And I didn't get a bill in the mail for my share of the loan/investment....so.....it didn't come out of my pocket. Not that it matters, I'd have gotten it all back, anyways.

First, going bankrupt because you were mis-managed isn't "external conditions". Markets go up, markets go down, and companies are expected to whether the ups and downs (it's called a fiduciary responsibility). You can believe the credit crunch caused GM's bankruptcy all you want, but they put themselves in that situation by becoming so leveraged that they couldn't survive a credit crunch. There were plenty of companies who didn't go broke.

And no, you don't get billed for your taxes. They are either taken out of your check, or you pay directly. Failure to do either appropriately will garner you a fine or jail time (see Wesley Snipes).

Originally Posted by Dragoneye

Well first, we need to change the condition of the question: They didn't drive themselves anywhere.

Oh yes, they did. See above.

Originally Posted by Dragoneye

And if the company was liquidated, they would have effected many of those successful sectors...so I suppose it's equally productive in the given chicken/egg scenario.

You assume they would have crashed without government aid, and also assume that crash would have affected the entire country. Here's my counter assumption; they would have been bought voluntarily by investors, and the new investors would have taken on the risk of getting GM solvent (and making any profits) without risking public funds. Without having to bailout GM, the government deficit wouldn't be as high as it is now, and the government chatter about raising taxes next year (or whenever) wouldn't be as much as it is now.

See how much better that is?

Originally Posted by Dragoneye

True. Here, we are being offered class-leading, innovative vehicles designed and built by many hardworking American employees, with parts from thousands of suppliers in every imaginable market, and the chance for a new set of investors to make some money off of the company.

Except I get my $5.50 back, too.

You don't pay taxes, remember? As a guy who does, and who also bought a GM vehicle last year, let me say that the perspective changes when it's your own money going out the door.

[Mr. Wyndham]

Originally Posted by 2010-1SS-IBM

Nope, it isn't. Example:

http://en.wikipedia.org/wiki/William...orruption_case

I can't help but think we're talking about two different things here....because that has nothing to do with what I said.

Originally Posted by 2010-1SS-IBM

First, going bankrupt because you were mis-managed isn't "external conditions". Markets go up, markets go down, and companies are expected to whether the ups and downs (it's called a fiduciary responsibility). You can believe the credit crunch caused GM's bankruptcy all you want, but they put themselves in that situation by becoming so leveraged that they couldn't survive a credit crunch. There were plenty of companies who didn't go broke.

Oh yes, they did. See above.
Humbly, I suggest you read up on your history and stop trying so hard to crucify somebody because it's an easier chip to argue with.

The facts are: US gov't provided immense tax breaks to transplant factories, while providing nothing to domestic automakers. US consumer flocked to cheaper foreign vehicles produced with an unfair market advantage of cheap offshore labor, forcing domestics to cut costs. Consumer then blames and abandons domestic automakers for making 'cheap cars'. UAW agreements during times of prosperity and comradery led to debilitating legacy costs decades down the road. Gas crisis of the 70s leads the government to enact fuel economy standards and forces additional development costs on car companies. Progessive malcontent of the US consumer (thanks to above conditions) drives them away from domestic auto products throughout the 90s and '00s leading to massive losses in profit. Consumer demand and lack of ability to compete in small car segment leads domestic automakers to focus on large SUVs. Gas Crisis of '08 halves US SUV sales, debilitating domestic automakers further, Credit Crisis of 2009 eliminates all sources of private credit, for both the companies and the consumer. Leading to no safety net, and massively reduced sales. And that's the abbreviated version....

Let's get one thing PERFECTLY clear. No human is perfect, and if you can prove me wrong, I invite you to do so. Yes, management over the course of 100 years will tend to make mistakes. But the reason for the old GM's failure is NOT solely their fault. It was a combined effort on the part of the American consumer, gov't incentives to foreign makers, worker legacy costs, and yes managerial mistakes. At least 75% of all of that was completely outside their control, or direct responses to external conditions. So I believe it...because it's TRUE. Not because it helps me sleep at night.

Originally Posted by 2010-1SS-IBM

You assume they would have crashed without government aid, and also assume that crash would have affected the entire country. Here's my counter assumption; they would have been bought voluntarily by investors, and the new investors would have taken on the risk of getting GM solvent (and making any profits) without risking public funds.

See how much better that is?

Yes, that does look great. Unfortunately I don't live in the Mushroom Kingdom. This go around, all the financial institutions were either failing, being propped up, or publicly crucified. Nobody was spending money or taking any sorts of risks at this time.

Cerberus tried that with Chrysler, and they ended up in bankruptcy, too. Only an auto group has the expertise and ability to run another brand. But none of the auto groups had any money to spend. Go back and see how difficult it was for GM to sell Hummer, Saab, and try to sell Opel. Not only that, but none of the auto groups needed/wanted to have anymore brands. Everyone was consolidating and shrinking. And if they WERE bought? It would have been for the intellectual property alone. Maybe some of the manufacturing resources. The company would have been totally liquidated and all 2+ million people either directly employed or in other sectors would have been jobless.
[/QUOTE].

[DGthe3]

Originally Posted by 2010-1SS-IBM

You assume they would have crashed without government aid, and also assume that crash would have affected the entire country. Here's my counter assumption; they would have been bought voluntarily by investors, and the new investors would have taken on the risk of getting GM solvent (and making any profits) without risking public funds. Without having to bailout GM, the government deficit wouldn't be as high as it is now, and the government chatter about raising taxes next year (or whenever) wouldn't be as much as it is now.

See how much better that is?

If investors were willing or able to put billions required into GM, they would have done so in the fall of 2008. They didn't.

It was two sides of the same coin. Individuals couldn't get loans to buy cars, and GM couldn't get loans to keep building cars. Why? Because investors were tightening up their own lending policies at the time.

[2010-1SS-IBM]

Originally Posted by Dragoneye

I can't help but think we're talking about two different things here....because that has nothing to do with what I said.

It's exactly what you're talking about.

Originally Posted by Dragoneye

The facts are: US gov't provided immense tax breaks to transplant factories, while providing nothing to domestic automakers. US consumer flocked to cheaper foreign vehicles produced with an unfair market advantage of cheap offshore labor, forcing domestics to cut costs. Consumer then blames and abandons domestic automakers for making 'cheap cars'. UAW agreements during times of prosperity and comradery led to debilitating legacy costs decades down the road. Gas crisis of the 70s leads the government to enact fuel economy standards and forces additional development costs on car companies. Progessive malcontent of the US consumer (thanks to above conditions) drives them away from domestic auto products throughout the 90s and '00s leading to massive losses in profit. Consumer demand and lack of ability to compete in small car segment leads domestic automakers to focus on large SUVs. Gas Crisis of '08 halves US SUV sales, debilitating domestic automakers further, Credit Crisis of 2009 eliminates all sources of private credit, for both the companies and the consumer. Leading to no safety net, and massively reduced sales. And that's the abbreviated version....

Doesn't seem like an honest version. For one thing, you don't mention trucks. Auto manufacturers sell more trucks than anything else in the US. Domestic manufacturers dominate the truck category. Hard to reconcile the fact that they dominate the biggest auto category with your claims of an unfair business situation.

Your excuses are completely dishonest. Gas prices always move, and foreign cars have been in the US market in big number since the 70's.

Here's what the problem was: GM invested in financing instead of product improvements. They took the easy route and it blew up in their face. Just like their previous decisions to put off paying into their benefit plans.

It wasn't an act of god that pushed them into bankruptcy, it was mismanagement and greed.

Originally Posted by Dragoneye

Let's get one thing PERFECTLY clear. No human is perfect, and if you can prove me wrong, I invite you to do so. Yes, management over the course of 100 years will tend to make mistakes. But the reason for the old GM's failure is NOT solely their fault. It was a combined effort on the part of the American consumer, gov't incentives to foreign makers, worker legacy costs, and yes managerial mistakes. At least 75% of all of that was completely outside their control, or direct responses to external conditions. So I believe it...because it's TRUE. Not because it helps me sleep at night.

There's a difference between being perfect and not going bankrupt. It was GM's fault. Get over it.

Originally Posted by Dragoneye

Yes, that does look great. Unfortunately I don't live in the Mushroom Kingdom.

Yes you do. The US government bails out your company, makes a profit for everyone and saves the Mushroom Kingdom.

Originally Posted by Dragoneye

This go around, all the financial institutions were either failing, being propped up, or publicly crucified. Nobody was spending money or taking any sorts of risks at this time.

Wrong.

Originally Posted by Dragoneye

Cerberus tried that with Chrysler, and they ended up in bankruptcy, too.

Chrysler's still around.

Originally Posted by Dragoneye

Only an auto group has the expertise and ability to run another brand. But none of the auto groups had any money to spend. Go back and see how difficult it was for GM to sell Hummer, Saab, and try to sell Opel. Not only that, but none of the auto groups needed/wanted to have anymore brands. Everyone was consolidating and shrinking. And if they WERE bought? It would have been for the intellectual property alone. Maybe some of the manufacturing resources. The company would have been totally liquidated and all 2+ million people either directly employed or in other sectors would have been jobless.

Just like what happened with Chrysler, right?

[a_Username]

Originally Posted by Big Brunsy

funniest thing I've heard all year....and I've heard some pretty funny things

[mickss]

Originally Posted by Berean

Were there any facts that were wrong in the article?


Didn't think so.

This is the part of the article that is factually wrong!
"The union's health care and pension trust fund earned $3.4 billion through the sale of one-third of its shares in GM last week."

The Washington Times has no idea of what they are talking about. It is NOT the union, UAW, it is a seperate trust fund that took over GM`s bankrupt health and pension plan. They are NOT one and the same. They are seperate legal entities with a different set of directors and responsibilities. Thus the article is LYING when it refers to the UNION getting or selling stock.

You should recall that the UAW and GM agreed to this before the bankruptcy in an effort to stave off bankruptcy. In short, the UAW bent over to try and save GM.

What has me curious is why you thought this article was so important that you just had to post it in the "General Automotive + Other Cars Discussion Come chat about other cars" of the forum, it certainly has no bearing on cars, only political in nature, so I ask, what was your intentions for posting this article?

[mickss]

Originally Posted by chevydude26

Be a man name some names buddy

You mean you can`t read the post and figure it out for yourself?

[Mr Twisty]

Everyone keeps talking about 'us' bailing GM out... Funny... I never got a bill.
.... I guess that means I won't be getting a check either.

[Silverado]

How is this thread not closed? I mean, this is a political topic, and I thought we weren't supposed to have those here on C5? Unless of course, mentioning GM gets you out of the political discussion (but, since the government "bought" a big piece of GM and gave another big piece to the UAW for their own political reasons, it is kind of ridiculous to think it is anything but a political discussion).

On top of that, I've seen other threads get closed that were far less heated than this one's getting.

Someone keeps pointing out that by "saving" GM, the government saved x number of jobs (try proving that you saved jobs...you can prove which jobs were lost, but you can't prove you saved jobs). Why should the union jobs have been saved? Forget the jobs, why should the union's pensions or healthcare plans been saved? What makes them so special? They didn't save my (or millions of other American workers') jobs, or healthcare, or other benefits. I lost my job and couldn't find another one due to this administration's policies and the uncertainty that they were/are bringing for American businesses. However, I stilll have to pay my own way. I still have to pay for my own healthcare. I don't have a big pension coming, or eternal benefits like the union, and yet, I pay for my own.

Sorry, the UAW (and all other unions for that matter) should have to shoulder their own pension/benefit burden like us regular working stiffs. But, instead, the taxpayers shoulder those burdens, only to find that they may not have any left to pay for their own. What a great deal for taxpayers.

[Berean]

Originally Posted by MisterCamaro69

Everyone keeps talking about 'us' bailing GM out... Funny... I never got a bill.
.... I guess that means I won't be getting a check either.

Check your next pay stub. You get a bill every week. You also reconcile the weekly bills every year in April. If you don't feel it's a bill, try not paying it and see what happens.

[Mr. Wyndham]

Originally Posted by 2010-1SS-IBM

.....

Well, this exercise was fun. Now, I'm not sure I care what else you have to say, because now your acting like a child in your responses; it's not worth my time to respond.

At this point, its perfectly clear that, you're not going to either prove me wrong, or convince me to change my views on the situation. And I'm not going to be able to convince you of some vital facts. But that wasn't my point from the outset...My arguments on the subject needed a little sharpening, as I haven't spoken about this in a while...

So thank you for the exchange, and from refraining from lowering yourself to name-calling, etc. I bear no ill will...but I'm all done here.

[Mr. Wyndham]

Originally Posted by Silverado

How is this thread not closed? I mean, this is a political topic, and I thought we weren't supposed to have those here on C5? Unless of course, mentioning GM gets you out of the political discussion (but, since the government "bought" a big piece of GM and gave another big piece to the UAW for their own political reasons, it is kind of ridiculous to think it is anything but a political discussion).

I haven't read much in the way of politics here. Actually, I'm quite proud how this conversation has progressed on the economics of the situation and left out any political allegiances or perogatives.

Originally Posted by Silverado

Sorry, the UAW (and all other unions for that matter) should have to shoulder their own pension/benefit burden like us regular working stiffs.

And that is the point of all of this. VEBA is the "Voluntary Employees Beneficiary Association", which is a program set up and financially separate from the union that will take care of all the healthcare/pension responsibilities that were once GM's. And the projected effectual life of this fund is nearly 80 years!!!

GM promised to pay xx dollars into the fund, in concert with Ford and Chrysler. But that was before the economy took a dump. So instead, during the bankruptcy, they exchanged some of their debt to the program with stock until they could afford to pay into it via the purchase of those shares. That's one of the reasons the UAW didn't actually own the company in the first place, and the reason they're selling off the shares now.

[Number 3]

Originally Posted by 2010-1SS-IBM

Ok, I'll ask again. What did GM employees or management lose when they drove their company into the ground.

You're real big on explaining how the cost was minimal to the tax payer. It makes me wonder why GM employees and management didn't shoulder more of the burden themselves.

Do you really want to know about the team members I had to let go last year? or on a more personal note the simply fact that my wife no longer works for GM or the reduction in healthcare benefits? And that is just the salary side of the equation.

But the simple answer...................LOTS!!!