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Well, they got 8 billion and are getting 17 billion more, but it is not officially 'bailout' money. No biggie. They'll pay it back one day, so lets call it a government loan. Did I hear correctly that GM new CEO also said they will pay back every penny to the tax payer?
You are probably correct. Possibly it would have been less painful to let GM and Chrysler fail instead of getting tax dollars involved. Now taxpayers stand to lose billions that they wouldn't have lost had the market been allowed to operate independent of the federal government.
Many ddn't agree when Iacocca persuaded the fed to guarantee Chrysler's loans,...and they certainly disagreed when the fed stepped in an took over GM and Chrysler. IF there is only one American automaker, it will be in direct competition with whoever buys the carcasses of GM and Chrysler.
IF GM & Chrysler fail, all US production by all auto makers in this country may come to a end. Too many suppliers would fold, leaving nothing but frames & body parts in all the factories, both domestic and foreign. There are a couple of million jobs in this country that are directly tied to the industry.
IF GM & Chrysler fail, all US production by all auto makers in this country may come to a end. Too many suppliers would fold, leaving nothing but frames & body parts in all the factories, both domestic and foreign. There are a couple of million jobs in this country that are directly tied to the industry.
Ford is also hiring, that's the good news. The bad news is that they are hiring at $14/hr and that is not enough money to buy a Ford product with a bank loan. Jobs like that will do little to nothing to get this economy back on track. Secondly, Ford has sacrificed the retiree benefits of their satellite companies like Visteon. No wonder they can post a profit.
Well, most certainly. That profit came from a lot of debt restructuring and cutting TONS of overhead. So, it was not a profit based only on sales to be honest.
$2.7B in profit...$5.1B in overhead cuts...you get the idea.
Booth did caution that much of last year's profit had to do with debt restructuring, but Ford also lowered its structural costs in Q4 by $500 million and $5.1 billion for all of 2009, which also beat the company's own goal of a $4 billion reduction.
Location: Jonquil City (aka Smyrna) Georgia- by Atlanta
16,259 posts, read 24,757,602 times
Reputation: 3587
Quote:
Originally Posted by cdne
You are probably correct. Possibly it would have been less painful to let GM and Chrysler fail instead of getting tax dollars involved. Now taxpayers stand to lose billions that they wouldn't have lost had the market been allowed to operate independent of the federal government.
Many ddn't agree when Iacocca persuaded the fed to guarantee Chrysler's loans,...and they certainly disagreed when the fed stepped in an took over GM and Chrysler. IF there is only one American automaker, it will be in direct competition with whoever buys the carcasses of GM and Chrysler.
I agree. When Chrysler asked for the loans in the 70s, it was thought that the problems were short term. Today the problems are long term structural problems that cannot be solved without a bankruptcy that I can see. GM needs to void the union and dealer contracts. It needs to close all but 2 or 3 divisions (keeping only Chevrolet, Buick and Cadillac) and it needs to quit making crap cars and gas hogs. Then it ***might*** live to see another day.
Location: Jonquil City (aka Smyrna) Georgia- by Atlanta
16,259 posts, read 24,757,602 times
Reputation: 3587
Quote:
Originally Posted by donsabi
Ford is also hiring, that's the good news. The bad news is that they are hiring at $14/hr and that is not enough money to buy a Ford product with a bank loan. Jobs like that will do little to nothing to get this economy back on track. Secondly, Ford has sacrificed the retiree benefits of their satellite companies like Visteon. No wonder they can post a profit.
Sometimes when your survival is at stake you have to make tough choices you would rather not have to make.
Well, most certainly. That profit came from a lot of debt restructuring and cutting TONS of overhead. So, it was not a profit based only on sales to be honest.
$2.7B in profit...$5.1B in overhead cuts...you get the idea.
Booth did caution that much of last year's profit had to do with debt restructuring, but Ford also lowered its structural costs in Q4 by $500 million and $5.1 billion for all of 2009, which also beat the company's own goal of a $4 billion reduction.
Since they (Ford) sold 600000 less vehicles and still made money, the other 2 US manufactures, with the more drastic restructuring that they took, should improve their chances for profit, even if they drop a bit in sales.
Reuters: U.S. taxpayer profits from bank bailout investments are being offset by estimated losses from American International Group and automakers and mortgage payment cuts for struggling homeowners, a U.S. Treasury report showed on Monday.
The Treasury estimated net losses on its $700 billion bailout program at $68.5 billion for the fiscal year ended September 30, 2009.
The December report for the Troubled Asset Relief Program, or TARP, showed that the fiscal 2009 net loss included estimated losses of $30.4 billion for AIG and $30.4 billion for automakers, with $27.1 billion in losses from the Home Affordable Modification Program.
These were much larger than a $15 billion profit registered from the Capital Purchase Program for banks and $4.4 billion in profits from other bank investments, asset guarantee and lending programs.
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