News: President Bush: Automakers to get $17.4B

[Tuna]

Some good news (maybe) this morning.
The top news headlines on current events from Yahoo! News - Yahoo! News has an article with the title
President Bush: Automakers to get $17.4B

this morning.

 

[Erik S. Klein]

How is rewarding stupidity and failure good news?

 

[bradfordsvettes]

I ask my self the same question :confused what happened to the dawin theory even bailing the financial world . I just do not know this country is on the slide in my book hnoes. where else can you get rewarded with big bonuses stock options etc for being incompetent and failures . I would be out the door Steve

 

[Tuna]

If we were to believe the politicos in Washington, the Big 3 haven't built a car that anybody wants in 20 years and that's just not true. GM still sells more vehicles than any company and what they sell now in North America are some of the best cars in the world. Otherwise, they would have files bankruptcy years ago and I wouldn't be driving C6's right now.
The tight credit market - i.e.: banks going bankrupty for their stupidity and failure is making it very difficult for GM to borrow money for restructuring or daily operations.
Another issue is the 'legacy' costs of operations the Big 3 have. Over the years, they have agreed (caved in) to union demands for all kinds of perks (Job Bank, health care, retirements, etc.) that no other industry has. Even foreign car companies building cars here in America don't have those issues.
Sure GM needs to restructure but that is going to cost them a huge fortune that they don't have. Going bankrupt would definitely make restructuring quicker but would the end result maintain enough jobs to support the economy.
Another consideration - GM is looking for loans to keep them going long enough to restructure and continue business. Loans that are to be paid back. Congress and the Prez are demanding and getting lots of oversight of GM for a few billion dollars. Congress and the Prez are throughing lots and lots of billions at the financial markets to keep them going and not getting much control of all that money. Where's the justice and fairness there? Congress and the Prez are out of touch with the reality of the automotive business and do not have a clue what GM and Ford are doing these days. They spout stuff that hasn't been true in years and years. It's like Congress wants everyone to believe the the Big 3 are the one problem with the nation and that if they go bankrupt the rest of the nation's problems will be fixed. Horse Hockey.