News, Cramer's 'Mad Money' Recap: Can't Afford a GM Crash. (borrowing, loan)

[John1960]

What would the economy look like if the government allows General Motors (GM Quote - Cramer on GM - Stock Picks) to fail? Jim Cramer pondered that very question on his "Mad Money" TV show Friday.

Cramer said it's no secret GM is borrowing billions of dollars that it doesn't have the ability to repay. And it's no secret that things at the company are getting worse by the day. But the economic consequences of a GM failure would be staggering, said Cramer.


Cramer's 'Mad Money' Recap: Can't Afford a GM Crash | Page 1 of 3 | Mad Money Recap | Financial Articles & Investments News | TheStreet.com

[floridasandy]

Cramer predicted the impact would translate to another 2,000-point drop in the Dow.

i think that sentence shows what cramer is worried about most, not necessarily the welfare of the american people. i like his show but he certainly cannot be objective about the bailout!
the biggest thing people are not considering is that the bailout might not work and then it would be lost borrowed money, creating even bigger unemployment and disaster down the road. people will not be buying new cars in a tanking economy and taking on more debt when more unemployment is around the corner. where is the common sense?

[bale002]

Originally Posted by floridasandy

where is the common sense?

The US ruling class, both in the corporate and government sectors (the union leaders too), is still hell-bent on looting.

Until their appetites are satisfied, there is no possibility that common sense will shape policy. The risk is that, by the time they are satisfied, the US will be a carcass.

[banger]

Two points.

1, At the end of any "bail out" the American public must be buying G.M cars. Therefor, they must be convinced of their value and reliability.

2, This current plan is less of a "bail out" of G.M., and Ford than it is the U.A.W. union. Through all of this "disaster" talk, what have the Unions agreed to "compromise" on?

[floridasandy]

another obvious point is that if GM was a successful formula or had a good game plan, somebody would buy them. as usual, instead of finding a buyer they are looking to saddle taxpayers with the cost of continuing to do bad business.

[f_m]

Originally Posted by banger

Two points.

1, At the end of any "bail out" the American public must be buying G.M cars. Therefor, they must be convinced of their value and reliability.

2, This current plan is less of a "bail out" of G.M., and Ford than it is the U.A.W. union. Through all of this "disaster" talk, what have the Unions agreed to "compromise" on?

Chrysler was in this situation about 30 years ago, and now they are in the same situation. History repeats itself as you know. I don't necessarily mind loaning them money, but if it happens again in about 30 years, then it's just the same old same old. They have to have a successful business plan to succeed. Where is this plan? I don't hear anyone talking about that. They're only talking about getting enough money to make it through the next day, week, month.

What they should do is have a reasonable length warranty, maybe 5 years, and no cost loaner car of equal or better value if you have to have warranty service done. Because in the end if you buy a car you expect a dependable product and not something sitting in the garage for warranty work.

[f_m]

Originally Posted by floridasandy

another obvious point is that if GM was a successful formula or had a good game plan, somebody would buy them. as usual, instead of finding a buyer they are looking to saddle taxpayers with the cost of continuing to do bad business.

When Diamler sold their majority in Chrysler off, it showed what others thought about investing in the US companies. Renault bought a lagging Nissan and have been doing reasonably well.

[floridasandy]

americans need to wake up before they start losing their choices, whether it is a car, electricity, healthcare, or anything else our government seeks to control.

I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.
Thomas Jefferson

I sincerely believe that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.
Thomas Jefferson

[KevK]

Originally Posted by John1960

What would the economy look like if the government allows General Motors (GM Quote - Cramer on GM - Stock Picks) to fail? Jim Cramer pondered that very question on his "Mad Money" TV show Friday.

Cramer said it's no secret GM is borrowing billions of dollars that it doesn't have the ability to repay. And it's no secret that things at the company are getting worse by the day. But the economic consequences of a GM failure would be staggering, said Cramer.


Cramer's 'Mad Money' Recap: Can't Afford a GM Crash | Page 1 of 3 | Mad Money Recap | Financial Articles & Investments News | TheStreet.com

It would be painful in the short term but in the longer term the country would do fine without GM or Ford

[KevK]

Originally Posted by floridasandy

another obvious point is that if GM was a successful formula or had a good game plan, somebody would buy them. as usual, instead of finding a buyer they are looking to saddle taxpayers with the cost of continuing to do bad business.

Agreed. Like any big corporation, GM and Ford got lazy and quit turning out products that people wanted to buy. They quit making cars and only made big trucks and SUVs and when the market fell out for those, they could not turn it around fast enough. They still make Hummers and people want Corollas and Accords. I think the solution to GM is, if the government is going to essentially finance the company, it should be taken over and sub divided into smaller companies (like AT&T was done in the 80s) where each smaller company would be ran as its own business to compete with each other and the foreign car makers. And each smaller company would have its own union contracts.