Bailout Watch 497: GM C11 Will Cost Taxpayers Another $70b Plus
Someone. Make. This. Stop. Now that the MSM has woken up to GM’s impending government-sponsored, C11, they’re beginning to understand that this is the only the end of the beginning, not the beginning of the end. The New York Times headline (and Autoblog) may proclaim a “surgical” bankruptcy for The General, but the bottom line is buried with in the text. “Treasury officials are examining one potential outcome in which the “good G.M.” enters and exits bankruptcy protection in as little as two weeks, using $5 billion to $7 billion in federal financing, a person who had been briefed on the prospect said last week.” Using the top figure, that brings our total “investment” to $25.8 billion, of which $18.8 billion is a total write-off. And, as I’ve pointed out here many times, then there’s the next bit. “The rest of G.M. may require as much as $70 billion in government financing, and possibly more to resolve the health care obligations and the liquidation of the factories, according to legal experts and federal officials.” So call it $100 billion just to get going. Government Motors (a.k.a. American Leyland) is born.
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@akear - Soon the GM deathwatch will be America’s deathwatch. The disease is spreading everywhere. Actually, one might view this as the deathwatch of the American empire; like GM's empire, it has been refinanced enough times that it may not survive. However, as with the UK, Netherlands, Spain and Rome, America will not necessarily cease to exist as a nation unless we deliberately allow the barbarians to take over. The "disease" is not altogether different from any of our predecessors; greed, magnified by hubris in the face of an economic power we cannot best. In the UK's position, that economic power was the U.S.; in our case, it is a very hungry China powered by 1.3 billion people.
It is strange but from a development standpoint the Chinese don't really have an auto industry. Their cars cannot even pass US emission and safety standards. This does not stop GM from outsourcing to China. In this case GM is handing over its American ingenuity to China. The timeline of despair. 70's-US loses it consumer electronic industry. 80's-US loses most of its machines tool industry to Germany and Japan. 90's-US loses most of its PC manufacturing 2000's-The end of the US autoindustry as we know it. Only Japan and Germany are left standing.
Hey I designed a small part of the car (ECV3) in the photo. Well, I actually designed a rather larger part but they only kept one bit. Behind the oval cooling duct there is a large flap that throttle the intake of air, so reducing the cooling drag of the vehicle. They kept my design for the flap but didn't like the way I activated it. Incidentally the ECV3 got 80 mpUKgallon 27 years ago, was faster to 60 than a base Ford Sierra, and bigger inside as well.
Thanks for that Katie Pukric, BUY AMERICAN!!!!!!!!!! Why do you UAW haters begrudge good jobs and good benefits for American workers? Shouldn't we be rather be working towards creating the same gainful employment opportunities for ALL American workers rather than trying to tear down the few that have them? The UAW has operated within our capitalist system to legally negotiate good things for blue collar workers. The result is that they enjoy the types of benefits that the makers of Benz's, Volvos, Saabs, and Beamers enjoy as a birthright in socialist Europe. UAW workers in the "richest" nation in the world have used their considerable political power to obtain a normal level of first world bennies. They have done it without subterfuge. Why should the fat cat bankers who don't employ nearly as many people, who concentrate the wealth more in the top executive levels, and who are the ones who caused this credit crunch be unscathed while the blue collar worker suffers? I think it's because we consider those fat cat banking executives to be some sort of untouchable royalty who we can't truly envision suffering, while we see the UAW high school graduate as someone we can envision getting screwed. Just like us. Instead of exulting in the UAW's loss of good wages we should think hard about we can all create wealth for all Americans, not for our foreign competitors. Take care of your own BUY AMERICAN!!!!!!!!!!!!