Thursday, Nov 20, 2008
look how much money they are losing, 25billion wont last long.
bloomberg: GM, Ford, Chrysler Leave Congress Empty-Handed After Hearings
The companies are seeking aid as industry-wide sales have plummeted to a 17-year low. GM this month said it lost $4.2 billion in the third quarter and almost $73 billion since the end of 2004.
Posted by mark @ 10:09 AM (1230 views) Add Comment
20 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. planning4acrash said...
I'm against the bailout of these guys, but, how the heck did Congress approve TRILLIONS to global financial corporations, and not give $25bn to the auto industry. Like, Brown giving a £Trillion to banks and nothing to Rover. So say, how is the USA going to pay social security to the 10% of their workforce who are dependent on the car industry? I kind of support a short term bailout to tide over if the US govt moves towards sound money, because, these car companies are screwed significantly because of America's inflationary policies.
2. 51ck-6-51x said...
I can understand why the U.S. government would be tempted to bail out the car firms.
I am against it.
however, if they do provide capital I think they should be:
i) looking for preference shares,
ii) looking to ensure some finality to such a provision - i.e. no second chances for some specified term (maybe 5 years) to force companies to really think about what they are requesting.
ii) enforcing the removal of unionisation, after all this is a huge economic greenbelt in this specific sector and region - is Toyota's U.S. arm struggling? Are they selling more cars?
3. str 2007 said...
To me this beggars belief
$73 billiion loss since 2004.
What will the losses be like when times get tough.
These factories should be put to good use making something to produce free energy.
If someone went to the US government and said they'd like $73 billion for windwills they'd no doubt be shown the door.
At least if you spent $73 billion on windmills you'd have something to show for your effort and money.
4. Neo-serf said...
The factories should be used to make environmentally aware affordable housing.
GM only ever made money out of land sales - that's why the Japanese car industry have knocked them into a cocked hat.
5. mark wadsworth said...
Hang about, didn't we establish that people desperate to sell houses without dropping the price would throw in a 'free' car? All the US gummint has to do is make it mandatory to include a car made in Detriot, and hey presto - houses start selling again and the Big Three have a whole new source of demand.
6. renting2 said...
Love it MW!
A failed business model is a failed business model no matter how large. Bailing it out will reinforce the failure and lose even more. Better option is to break them up.
7. phdinbubbles said...
"ii) enforcing the removal of unionisation, after all this is a huge economic greenbelt in this specific sector and region - is Toyota's U.S. arm struggling? Are they selling more cars?"
Nissan UK seem to sell cars and their workers have a union. Could it be Japanese management practices giving an edge?
8. mark said...
if it is failing on this level let it go..... best option...
9. 51ck-6-51x said...
phdinbubbles:
The unions in the UK are structured very differently, so that is comparing apples with bananas.
But, yes - I am not saying unions are all bad, just the ones in force in the case in point.
10. wiltshire said...
First the banks, then the car manufacturers, then the airlines, then the farmers........ it has to stop at some point.
11. jack c said...
@phdinbubbles - Nissan UK (Tyne & Wear plant) recently placed everyone on a 2 week training course whilst production was halted, there is no weekend work and they are now operating on a four day week. Nissan UK operate a NON union policy. They also had to seek a suitor to effectively bail them out in the shape of Renault (approx 30% stake)
Just out of interest it might be an idea to see how much profit Nissan UK has generated since inception and how much they have had in government support. If Sunderland Shipbuilders & Swan Hunters were given anywhere near the same level of support they would still be producing world class shipping. There is more than an efficiency and demand factor involved there is also a political factor.
12. Kruador said...
p4ac: these car companies are screwed whatever. If they've been losing money since 2004, before the oil price shocks, they're not producing enough of what people want, or pricing realistically. It's not, largely, that they just produce gas guzzlers (though that's part of it) but that they produce unreliable crap with poor dealer service. Japanese cars, even those built in the US, are much more reliable.
The effect of the bailout would be to keep Detroit churning out more unsellable cars if no jobs were to be lost. They will have to lose some jobs. It's harsh but unless we're going to have a centrally-planned economy, less demand for the product means you have to produce less of it, and that means fewer people needed to do the production.
Ford of Europe and Vauxhall/Opel have very little to do with their parent companies, and are profitable (or at least were in 2007/8). They sell very few US designs and don't share platforms - the US Focus is a badly-done cost-reduction of the European MkI on a slightly longer wheelbase. If the US parent companies go down I can see management buyouts happening.
13. planning4acrash said...
Guys. Ask, why is it failing? Because other countries like China have undercut via currency manipulation. This stinks of the big car companies fighting unions to off shore jobs. Bailout money will buy them via Goldman Sach's when stocks r at rock bottom.
14. phdinbubbles said...
Apologies for posting a link to the socialist worker here - it's the most recent article I could find with a reference to union activity at the wearside plant. Unless something has happened since then that I don't know about, Nissan UK has always had a single union agreement with the AEEU which became amicus. And unless I'm believing lies that are fed to me (which could be true I'm no expert on the subject), they are one the most efficient car-plants in europe. I would imagine they are struggling at the moment along with everyone else.
15. shipbuilder said...
The efficiency and quality of the big three are nowhere near as bad as clearly many on here believe. They have been learning from the likes of Toyota for years. Quite a large part of the problem now is image and reputation. Companies just can't rely on their home countries staying loyal to their products anymore - this is simply an adjustment that is inevitable in the long term - more big companies with flawed business plans. While the likes of Toyota focus on selling cars, any company that relied on finance to cover up insufficient improvement in their core business over the past few years will suffer.
16. mountain goat said...
SB - agreed i remember reading that GM is still profitable in asia for example where they build and sell small cars.
17. little professor said...
Did you see their begging video on Youtube?
Let's see if this works, I'm no good at links:
18. mark said...
now get writing to your member of congress and ask them to let GM fail... I am fedup with bailing out everyone, where is my bailout.................
19. fjcruiser said...
Staggering figures. These companies went bust 8 years ago IMO.
20. Joliver said...
If the figures in the video correct, there are 3 salesmen to every worker that actually makes cars (740.000 vs 239.000). IMO that's the problems of the Western World, where 3 people sell products produced by 1 man, ie not adding any value. Maybe it's time to have direct sales of nearly everything? If I can buy a used car off internet, surely it's easier and more secure to buy a new car and have it collected from regional distribution centres or delivered to you.