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Chrysler wants to get out from under government loans for two reasons.
The federal loan has an 11% interest rate. The private loans have a 6% interest rate. The rate on the bonds is 8%. Chrysler frees up capital by paying less in interest rates on its outstanding debt. Think of it as refinancing the mortgage on your house.
Fiat was given a minority stock position in Chrysler in exchange for its managerial expertise and for the transfer of its small car technology from itself to Chrysler. Fiat can purchase a 51% controlling interest in Chrysler if the loans from the U.S. and Canadian governments are paid off.
Americans laugh at Fiat because of the disaster Fiat was 10 or 20 or 30 years ago. But Fiat CEO Sergio Marchionne has managed to turn Fiat around from a perennial money loser into a profitable company. He's not quite an Alan Mulally, but given Fiat's ties to automotive companies around the world, Marchionne was the best available for resolving the problems at Chrysler.
As always, andrea3821 is correct; the bankruptcy laws permit companies and individuals to reorganize their finances, and The Donald merely did what any businessman would do given the opportunity.
I also wouldn't be doing any cartwheels for either GM or Chrysler; Chrysler's car lineup is unquestionably inferior to those of Hyundai, Honda, Toyota, Ford, Nissan, & Mazda, so they still have a ton of work to do.
Obama's proposal to boost the pointless CAFE standards will ensure GM's return to bankruptcy court, if not destroy the company completely, leaving distressed assets experts such as Wilbur Ross & Carl Icahn to buy the remains for peanuts and rebuild them, which should have already been done last time around.
GMs profits are far too dependent on their truck and SUV sales, and their outsized contracts with the UAW make earning profits on their passenger cars, even the brisk-selling yet horrendously overpriced Cruze, next-to-impossible, and Obama has prohibited them from moving product of those passenger cars overseas.
With an Energy Secretary (Steven Chu) who is absolutely obssessed with European-level prices for gasoline in this country, alongside Obama's statements that energy prices in this country will skyrocket under his policies, GM & Chrysler are still on life support, in spite of the over-the-top gushing and cheerleading from the totally clueless liberal press.
What "outsized contracts" with the UAW? Since the last GM/UAW contract the union took deep cuts and agreed that all new hire-in will only be making $14 an hour and with no pension rights plus the UAW now covers all GM worker's health insurance costs. I swear some of you people won't be happy until everyone in the U.S.A. but yourself is working for $5.00 an hour.
What "outsized contracts" with the UAW? Since the last GM/UAW contract the union took deep cuts and agreed that all new hire-in will only be making $14 an hour and with no pension rights plus the UAW now covers all GM worker's health insurance costs. I swear some of you people won't be happy until everyone in the U.S.A. but yourself is working for $5.00 an hour.
Unions have a history of hiring non unionized workers to do things like, picketing for union jobs..
And the UAW took deep cuts, in exchange for ownership interest and equity.. That doesnt equate to real cuts, just a change of how they are being paid.
Some people cant have a serious discussion on a topic, lying that they are upset about things they are upset about, and making claims that things would have not survived that would have.
I dont really know why you dont ever want to communicate with people, having a give and take, rather than sitting here posting nonsense all day long.
I don't know if the Industry would have survived or not. But, when the Chairman of Ford and many others involved in the Industry say that, I tend to think they have a level of understanding beyond mine. But, when one thinks he knows all, any dissent is unacceptable and by definition, wrong. That makes the interaction pointless and I don't care to play .
I don't know if the Industry would have survived or not. But, when the Chairman of Ford and many others involved in the Industry say that, I tend to think they have a level of understanding beyond mine. But, when one thinks he knows all, any dissent is unacceptable and by definition, wrong. That makes the interaction pointless and I don't care to play .
Um.. Ford didnt get a bailout, so why would they say a bailout is needed when they proved it wasn
Um.. Ford didnt get a bailout, so why would they say a bailout is needed when they proved it wasn
Ford didn't need a bailout. GM and Chrysler needed a bailout. Even Toyota said so.
The fear in the automotive industry at the time was that GM and Chrysler owed an enormous amount of money to its suppliers. If GM and Chrysler went under, those suppliers wouldn't get paid and thus be unable to pay their own debtors and they themselves would also shut their doors.
The lower tiers of the automotive industry supply all major automotive manufacturers. If that tier had been disrupted then Ford, Toyota, Honda, Nissan and Mazda would have been greatly affected in their North American operations as all of those manufacturers share the same automotive suppliers. Effectively, these companies would have been unable to build vehicles for an undetermined length of time.
Consider the effect caused by the earthquake/tsunami/nuclear disaster in northern Japan. It effectively shut down several supplier plants resulting in production cutbacks by Toyota and Honda and to a lesser extent GM and Ford. Toyota and Honda are projecting to return to full operations sometime next year - or at least that's what they hope.
I just try and understand how people could possibly think this economy is any better then it was 2 1/2 yrs ago..and further more no economy should stay screwed up like ours is,unless the people in power don't understand economics and keep messing it up(I dont care if there DEM OR REP)...
Prime example FDR and the depression....It should have never lasted all those yrs unless "he and his econ. team was screwing it up and wasn't smart enough to see it".....Most economist worth there salt will tell you its imposssible to have a depression last 10 yrs and the way Obama is going, were going down the same damn road.
More people on welfare and food stamps is not cutting it in my book!
Where was your outrage during the administration of Bush 43 when this economic slide started?
The administration of George W. Bush Jr. was responsible for an over 50% increase in the number of people getting food stamps. The largest increase of any two term presidential administration since they started keeping records.
This is how the number of people on food stamps increased during George W. Bush Jr.'s two terms which started in Janaury 2001.
In addition the number of Americans living below the poverty rate increased faster under George W. Bush Jr. than any other two term president since 1960.
Bush 43
Americans Below The Poverty Level 2001 - 32.907 million 2008 - 39.829 million - increase 21.04%
Overall Population Growth
2001 - 281.475 million 2008 - 301.041 million - increase 6.95%
During the Bush 43 Administration poverty INCREASED more than three times faster than rate of population growth.
For all the hoopla over the Bush Tax cuts they were essentially a "Sugar High". After reaching a high of 4.1% in Q1 2004 and 4.0% in Q2 2004, quarterly GDP was NEVER over 4% for the rest of the Bush 43 terms in office. The economy started SLOWLY sliding downward and Q2 2006 was the last time quarterly GDP was about 3% during his term. The economy continue to slow between 2007 before finally cratering in 2008.
The administration of Bush 43 also had the WORST JOB CREATION RECORD of any two term president since the end of World War II.
President George W. Bush entered office in 2001 just as a recession was starting, and is preparing to leave in the middle of a long one. That’s almost 22 months of recession during his 96 months in office.
His job-creation record won’t look much better. The Bush administration created about three million jobs (net) over its eight years, a fraction of the 23 million jobs created under President Bill Clinton‘s administration and only slightly better than President George H.W. Bush did in his four years in office.
Here’s a look at job creation under each president since the Labor Department started keeping payroll records in 1939. The counts are based on total payrolls between the start of the month the president took office (using the final payroll count for the end of the prior December) and his final December in office.
Because the size of the economy and labor force varies, we also calculate in percentage terms how much the total payroll count expanded under each president. The current President Bush, once taking account how long he’s been in office, shows the worst track record for job creation since the government began keeping records. –Sudeep Reddy
President Bush has presided over the weakest eight-year span for the U.S. economy in decades, according to an analysis of key data, and economists across the ideological spectrum increasingly view his two terms as a time of little progress on the nation's thorniest fiscal challenges.
The number of jobs in the nation increased by about 2 percent during Bush's tenure, the most tepid growth over any eight-year span since data collection began seven decades ago. Gross domestic product, a broad measure of economic output, grew at the slowest pace for a period of that length since the Truman administration. And Americans' incomes grew more slowly than in any presidency since the 1960s, other than that of Bush's father.
The Conservatives PROVED during the term of Bush 43 that:
Tax cuts are NOT a long term sustainable way to achieve economic growth.
Conservative policies actually INCREASE poverty for lower middle class and working poor Americans.
Tax cuts contributed to the budget deficit by lowering revenue at a time when this country was waging two wars and the economy was basically limping along.
Despite the Bush Tax cuts and increasing profits by American corporations the job growth record of the Republican presidential administration was extremely poor despite a very pro-business regulatory environment. About the only people that really benefitted under the policies of the Republican Party were high income individuals and corporations.
So why would anybody with a shred of common sense vote the Republican Party back into the White House based on this p*ss poor tract record unless you are interesting pandering to corporations?
Last edited by JazzyTallGuy; 05-21-2011 at 11:42 AM..
Originally Posted by andrea3821 Is one of those rights to have a job?
We are guaranteed life, liberty and the pursuit of happiness, plus we are protected from not being hired due to gender, race, religion or ethnicity. It seems that some states do have right to work laws, but that pertains to unions. Twenty-two states have such right to work laws, under the provisions of the Taft-Hartley Act. Internationally, there is an alliance that believes in the right of every person to work.
LOL No, Obama's bad business policies are what is driving this country into ruin. The GOP would NOT have complained about letting businesses fail.
That's easy to say after the fact, but Wall Street and the GOP work hand-in-glove and have for many decades. There's no reason to believe that they would have let the big companies go under, knowing full well who butters their bread. It made for great street theater, though.
They SHOULD have failed. Then another company that was still strong could have bought them out and turned things around.
Sadly, jobs went the way of the passenger pigeon under Bush, and employment is only now showing some signs of picking up. Frankly, none of the major auto companies were in a position to buy one another out, and no investment firms or huge corporations stepped in to help fill the vacuum. We didn't have a plethora of companies that were "still strong," much less sound enough fiscally to take such a bold step. And bravo for wanting America to fail...way to show your true colors.
Or competitors like Ford would have become even stronger and hired up some of the displaced workers.
Ford will be doing some hiring soon; it was in the news this week.
Don't even get me started on the policies that led to offshoring of jobs, we would have more factories here in the US of A if we had more business-friendly policies...so yes, more people would have been able to keep their jobs in my scenario above.
The out-sourcing of jobs didn't begin with Obama; millions of jobs were lost under Bush, and many are gone forever. Not for a presidential term or a U.S. Senator's term, but forever. The situation is too grim to be flippant, but that escapes you. Your scenario would have led to the collapse of the economy and required additional trillions in unemployment benefits and social programs like SCHIP or WIC. It would have created millions more of those for whom you show such disdain...the poor and unemployed.
Btw, I'm pretty sure everyone feels that this is a second great depression. We are really not improving the economy, and we've been in this slump since 2007. FOUR FULL YEARS NOW. Staggering unemployment numbers, foreclosures at all-time highs, cost of homes dropping while cost of living skyrockets. Right, no depression there, the economy is turning around, we can all be living high on the hog in no time!
Yes, we remember exactly how bad things were when Bush left office, and how many of today's problems lead directly back to him and what he was doing four years ago. To attempt to compare today's economy with the Great Depression shows that you are either too young or too poorly informed to comprehend what you're saying. Times are hard, but this is a cakewalk compared to the Great Depression. There is a small growth in both jobs and small business, although not as rapid as any of us would like. Again, we will never enjoy the level of affluence that we had before Bush took the tidy surplus left behind by Clinton and squandered it; those days are gone for the lifetime of most posters here. That isn't something to gloat about, but that goes over your head as well.
Anyone who wants to cite a bankruptcy of Trump's as a reason for not voting for him is a moron. I don't know which chapter he filed, but in business, filing bankruptcy is usually a SMART move, not a shameful one. Obama could take some money management tips from Trump, that's for sure.
Anybody who would attempt to turn the Donald's financial woes into a reason for voting him into public office is a moron. America isn't a business, and there is no rational reason for making an attempt to turn it into one. Governance and business are very different; one deals with the lives of all Americans and is necessary to the act of legislation for the well-being of its citizens, while a business is beholden only to its stockholders. Actually, Obama retained several of Bush's economic advisors but that apparently escaped your notice, like so much else. You may be able to be flippant today, but you have a rude awakening coming
in the years ahead. Eventually, barring a stroke of good fortune, it's going to affect you, personally. It's going to affect us all.
Problem with your "rights" thing is that those are rights given to us by the gov't in later years, they are not God-given inalienable rights, like life, liberty and pursuit of happiness are.
You're right, we can't say what the GOP would have done. It doesn't really matter, though, since Obummer is the one in office and the one making the crappy decisions. We need to hold him accountable for that. Can you do that, or do you want to just point the finger at Bush until the economy turns around?
I never said I wanted America to fail, where did you get that? Don't put words in my mouth. I said the big companies should have failed, that has nothing to do with wanting America to fail, it doesn't even have to do with me wanting those big companies to fail. It just means there is too much gov't interference. Let the free market decide. Things have a natural way of working themselves out, but no, our gov't has to intercede in everything and screw it all up.
I never said Obama is fully responsible for the outsourcing of jobs, I am well aware that that has been going on for years and years. Again, stop assuming and putting words in my mouth.
LOL I remember how Clinton is responsible for a lot of the housing meltdown, and that is arguably one of the major contributors to the economy crashing. One side is not 100% to blame, though, I can admit that...can you?
The majority of people alive today are too young to be able to recount the Great Depression with any meaning. This is a modernized form of the Great Depression. To say that this isn't the worst economic times since then, that's just ignorant.
And again with your partisan blaming of Bush for this sorry state of affairs. Do you liberals not want Obama to own up to his part in this? Can you really not see how he has contributed to this?? Don't tell me what is going over my head, as you obviously are missing many of the points I am trying to make with your blind liberal love for Obama.
I don't know what you're talking about with the Trump stuff. I never said we *should* vote for him b/c of the bankruptcies his business(es?) filed years ago. I said you don't know much about business if you want to hold it against him.
America SHOULD be run as a business, if it's not good for the taxpayer, it should not be done. Why don't you see that? Money in has to at least equal money out. It's called following a budget, and I'm willing to bet that you do it in your own household. Tell me why the gov't should be allowed to spend all it wants and just charge it to the people. Why can the gov't just rape us to fund their special projects, etc.?
Anything else you have to say? If so, I will warn you that nasty responses from you will elicit no more attention from me.
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