USVI-On-Line

I know that you all are burnt out on politics, but let's face it, we're in a crisis...and I think we're all concerned.

I'm torn with the GM bail out and need to hear your opinions on this.

My initial problem is where do we end the bail out process. I know that the "heads" of countries are meeting this weekend, but what can the "world" do?

I have to admit, I'm really concerned and confused on what the answer is.

Please, can we keep this civil in response? Just ideas...no blame.

Even if they go BK, they won't go away. They will still be there working it out and since the infrastructure exists, they will be gobbled up by someone that knows how to make cars.

The very big advantage is that the union contracts that exist would would no longer be in affect. That's one of the reasons that some in Congress would like to see a bailout.

i am torn too, but when you look at the ripple effects it seems like a no brainer--the estimates are 250,000 jobs within GM and another million related jobs--
I am not fond of the US car industry, they really have screwed up royally when they had 30 years to get it right (with fuel efficiency, etc)
--i am not an economist, so i will admit a lot of ignorance as tot he nuances here- but i think as repugnant as i find the idea it probably needs to be done

Promo,
I am with you on unions.

And, I agree that the makers needed to see the future years ago as did Toyota, Honda etc. and build fuel efficient cars. The big 4WD gas hogs were not needed to drive to and from work.

Many concerns on that note.

To think that the Mustang, the Malibu, etc would be collectors items...

http://www.theonion.com/content/node/90029

A very clear perspective.

I am a fan of The Onion. Where does it originate? I pick the paper version up in Boulder.

had a dinner party tonight and this was a subject of conversation.... one of my guests is ceo of a major u.s. company, a company that is doing very well and is known for having a generous profile. he argued for the fact that GM has mismanaged itself and deserves to fold. he said if he mismanaged his company, he would not expect a bailout.

* at the same time, another guest, an insurance person, pointed out that 1 in 10 people in this country is affected by the car industry. the fallout is great. no easy answers.

I really can't decide about this bailout at all. Companies are folding all over and don't have any chance of a bailout.

My daughter just got laid off from Apple Vacations, along with about 100 others.

This is a sign of the times.

Don't know much about such stuff. Common sense tells me that maybe GM should get a bailout but only if they dump their entire management and unions (and no golden parachutes). That way the labor force could keep their jobs if they really want to work. Is that too simplistic?

I just caught the end of the news...I thought I heard that the City of Detroit now also wants in on the bail-out. Did anyone else hear this?

If that is the case, this is getting ridiculous.

If anyone needs in on a bail-out, it's the folks that are loosing their entire homes in the CA fires!

I caught Sir Winston S. Churchill (the grandson) on with Neil Cavuto over the weekend discussing the bailouts. He kept referring to these legacy companies (AIG, GM, etc) as "sacred cows"...Making the point that everyone seems to think that these companies must always survive - when that is not the case. In fact, it might be better in the long run to allow these companies to meet their fate.

I heard someone else make a good point...If these companies are allowed to fail, chances are that they will be bought out by a financially solvent company down the road. This is due to the fact that the infrastructure at these companies already exists, making them prime for an acquisition.

I have always thought about this in the terms of forest fires (I know, very simplistic)...Any environmental engineer will tell you that forest fires are actually good for the environment...They get rid of dead wood and disease that left unchecked would wipe out an entire forest on it's own, and then spread to other species. Forest fires are necessary to encourage new growth - and that forest always comes back stronger, healthier, and "greener" than it was before.

No bailouts. I know, that horse has left the barn. No MORE bailouts.

Terry wrote:I just caught the end of the news...I thought I heard that the City of Detroit now also wants in on the bail-out. Did anyone else hear this?

If that is the case, this is getting ridiculous.

Get a load of this…
FOUR INSURERS ASK GOVERNMENT TO LET THEM ACQUIRE THRIFTS SO THEY CAN RECEIVE BAILOUT FUNDS.
Los Angeles Times. 2008/11/14.
On November 14 four insurance companies - Hartford Financial Services Group Inc.; Genworth Financial Inc.; Lincoln National Corp.; and Aegon NV, the Dutch company that owns Transamerica - asked the Office of Thrift Supervision to allow them to buy thrifts so they can qualify to participate in the financial rescue program. November 14 was the deadline for filing applications, and the Treasury Department reported having received submissions from the four insurance companies to become thrift holding companies. Insurers that own thrifts, which are federally regulated, will be eligible for a portion of the $250 billion that the government will spend acquiring shares in banks and other financial companies.

Great - lets change our business model so WE can feed at the trough too. Come on now, where does the selfishness end?
Maybe what we need RIGHT NOW is a few big time CEO or CFO “Perp Walks”. Lets start with those idiots at AIG…

Obviously, I have a vested interest in seeing General Motors succeed. My parents are only in their 50s, and the only income they have is a GM pension. I'm scared to death what will happen to them if GM goes bankrupt. My brothers and I can't afford to support them, and neither of them is well enough to work (my dad is blind, and my mom has COPD). And before you go nutso about my parents not having IRAs and 401(k)s, you have to remember when my dad started working, guys like him got a job, become "company men" and then were rewarded with a pension. He was told he would always be taken care of. And not like they ever had a lot of extra money with four kids anyhow. Perhaps this was not the wisest move on General Motors' part, but that's how business was done then.

But, truly, honestly, I don't think anyone who lives outside of Detroit and hasn't been intimately involved in the auto industry realizes how big of an economic crisis this country will have if the auto industry collapses. In addition to hundreds of thousands of people working for GM, Chrysler and Ford directly, there are MILLIONS of people's jobs tied to the auto industry -- parts suppliers, dealers/car salesman, truckers, etc. Even my first job out of college was as a contract PR person for the Big Three. Detroit will crumble, and the whole country will be crippled. Not to mention that I will have to hitchhike, because I'm not ever driving a foreign car. (I truly believe that if one collapses, all three companies will collapse. It will be the beginning of the end.)

I'm not going to say that the U.S. automakers have managed themselves as well as they should've, but if the country can save AIG for no apparent reason, then they have to bail out the U.S. Automakers. If for no other reason than because there have been a lot of legislative policies over the last few years that have led to their demise -- NAFTA, the erosion of workers' rights, etc.

Maybe I have a different perspective than most people, but it's one I think everyone needs to see. And for those of you who drive foreign cars and think this won't affect you, you have to remember that most of the foreign cars sold in the U.S. are made through joint ventures with the U.S. automakers. And when the parts suppliers go under (and they all will without business from Ford, Chrysler and GM), there won't be anyone to sell parts to Honda, Toyota, Nissan, etc. (And most of those companies have significant operations in Detroit, as well.)

The GM bailout is a tough one. The personal cost to probably over a million Americans and domino effect if it goes under is undeniable – most common figure I’ve seen is a $175 billion blow to an economy that is already on the ropes. And emerging from bankruptcy would be really difficult in the current credit environment.

That said, Tom Friedman’s OpEd piece last week expressed misgivings about a GM bailout (how they became brain dead, enabled each step of the way by the Michigan Congressional delegation, etc.) and cited the WSJ article how it should ONLY be given with strictly enforced preconditions on management, unions, dealers, and suppliers. Why don’t the leaders and rank and file of those groups get that? Why would they rather go down with the ship than make concessions? We as taxpayers need to demand that.

http://www.nytimes.com/2008/11/12/opini ... nted=print

And regarding Wall Street, the bailout money should’ve never been given to them unless they changed their method of compensation/bonuses that rewarded the risk taking that got us into this mess. Compensation expense has historically consumed half or more of every dollar of revenue generated on Wall Street - what other business even comes close to that?