posted
IMHO if you are going to buy auto stocks Ford would be your best play. It really is a no brainer as Obama said he would bail them out and has a plan already so it will happen. It will happen after Jan.20,2009
-------------------- Wise men learn more from fools than fools from the wise.
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posted
I don't care too much for Mitt Romney but here is an (if anything) interesting read. -
Let Detroit Go Bankrupt
By MITT ROMNEY Published: November 18, 2008
"The federal government needs to rethink its priorities. Let's spend our money wisely and invest in 'America' first."
IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.
Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.
I love cars, American cars. I was born in Detroit, the son of an auto chief executive. In 1954, my dad, George Romney, was tapped to run American Motors when its president suddenly died. The company itself was on life support — banks were threatening to deal it a death blow. The stock collapsed. I watched Dad work to turn the company around — and years later at business school, they were still talking about it. From the lessons of that turnaround, and from my own experiences, I have several prescriptions for Detroit’s automakers.
First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.
That extra burden is estimated to be more than $2,000 per car. Think what that means: Ford, for example, needs to cut $2,000 worth of features and quality out of its Taurus to compete with Toyota’s Avalon. Of course the Avalon feels like a better product — it has $2,000 more put into it. Considering this disadvantage, Detroit has done a remarkable job of designing and engineering its cars. But if this cost penalty persists, any bailout will only delay the inevitable.
Second, management as is must go. New faces should be recruited from unrelated industries — from companies widely respected for excellence in marketing, innovation, creativity and labor relations.
The new management must work with labor leaders to see that the enmity between labor and management comes to an end. This division is a holdover from the early years of the last century, when unions brought workers job security and better wages and benefits. But as Walter Reuther, the former head of the United Automobile Workers, said to my father, “Getting more and more pay for less and less work is a dead-end street.”
You don’t have to look far for industries with unions that went down that road. Companies in the 21st century cannot perpetuate the destructive labor relations of the 20th. This will mean a new direction for the U.A.W., profit sharing or stock grants to all employees and a change in Big Three management culture.
The need for collaboration will mean accepting sanity in salaries and perks. At American Motors, my dad cut his pay and that of his executive team, he bought stock in the company, and he went out to factories to talk to workers directly. Get rid of the planes, the executive dining rooms — all the symbols that breed resentment among the hundreds of thousands who will also be sacrificing to keep the companies afloat.
Investments must be made for the future. No more focus on quarterly earnings or the kind of short-term stock appreciation that means quick riches for executives with options. Manage with an eye on cash flow, balance sheets and long-term appreciation. Invest in truly competitive products and innovative technologies — especially fuel-saving designs — that may not arrive for years. Starving research and development is like eating the seed corn.
Just as important to the future of American carmakers is the sales force. When sales are down, you don’t want to lose the only people who can get them to grow. So don’t fire the best dealers, and don’t crush them with new financial or performance demands they can’t meet.
It is not wrong to ask for government help, but the automakers should come up with a win-win proposition. I believe the federal government should invest substantially more in basic research — on new energy sources, fuel-economy technology, materials science and the like — that will ultimately benefit the automotive industry, along with many others. I believe Washington should raise energy research spending to $20 billion a year, from the $4 billion that is spent today. The research could be done at universities, at research labs and even through public-private collaboration. The federal government should also rectify the imbedded tax penalties that favor foreign carmakers.
But don’t ask Washington to give shareholders and bondholders a free pass — they bet on management and they lost.
The American auto industry is vital to our national interest as an employer and as a hub for manufacturing. A managed bankruptcy may be the only path to the fundamental restructuring the industry needs. It would permit the companies to shed excess labor, pension and real estate costs. The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk.
In a managed bankruptcy, the federal government would propel newly competitive and viable automakers, rather than seal their fate with a bailout check.
-------------------- "When you're in a hole, the first thing you do is stop digging." -H. Ross Perot
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posted
Were dammed if we do and dammed if we don't, the story of our lives as related to helping all these big companies that have made a mockery of the real purpose of what these bailouts should mean.
Ceo's and upper mangement sucking the blood out of these companies then saying we need more money to keep us accustomed to how we are use to living.
They even fly to Wash. in their private jets to beg for money.
Many companies have had a tough decision to make on whether to bankrupt the company or whether it is better to take the government handout of billions of dollars. All these tough decisions to help support the live style of their Ceo's and his buds.
This crap goes on and on, Siri for example has to decide whether it is better to take a buyout or bankrupt, if they bankrupt and reorganize they can eliminate all their 3 billion shares which they have used to support the company until now, then make more money if they decide to sell because they have gotten rid of a lot of debt.
Some how i do not think the real purpose of bankruptcy is how it is being used now by big corporations. Their executives are abusing this system again to help keep filling their pockets and somehow us taxpayers pick up the check.
They made it harder for the individual to bankrupt a few years ago, but it seems like big corporations have a different luxury.
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posted
Let's spend our money wisely and invest in 'America' first."
funny thing about Romney, his investment group isn't/wasn't exactly about investing in America first.
Bain Capital's average annual internal rate of return on realized investments was 113 percent,[12] making money primarily through leveraged buyouts.
Bain Capital today manages approximately $80 billion in assets, and its strategies include private equity & venture capital as well as long/short public equity, credit products, and global macro hedge funds.
you can talk all you want but he has never walked the walk
-------------------- Don't envy the happiness of those who live in a fool's paradise.
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posted
You would think there would be a period of morning during these troubled economic times, cutting back a tad and staying low for awhile until things die down would be the smart thing to do, of course who ever said they were smart.
These guys pretty much are saying that we middle and lower class citizens may have a money problem but these ceo's and executives don't!
You might lose your home but don't worry these guy's have plenty of money to buy these cheap houses.
These politicians and executives just don't get it, their actions say a lot more than their words do, about how they really feel about the problems many are facing in these troubled times.
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posted
take a look at this.. they tell us we need to bail them out to save thousands of american jobs and they are taking that money and investing in brazil.. Gold i tell ya.. !!
quote:General Motors plans to invest $1 billion in Brazil to avoid the kind of problems the U.S. automaker is facing in its home market, said the beleaguered car maker.
According to the president of GM Brazil-Mercosur, Jaime Ardila, the funding will come from the package of financial aid that the manufacturer will receive from the U.S. government and will be used to "complete the renovation of the line of products up to 2012."
whats even stranger to me is, they are refering to using bailout money that havent even been approved yet! maybe they know more than we do and the "hearings" from the CEO's were just lip service.
-------------------- "Gentleman, you have come sixty days too late. The depression is over." Herbert Hoover 1930
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posted
This whole bailout business is just starting to make me plain sick.
One of there big problems is they invested there money over seas and now they even bragg about how they will use the money they get from us tax payers ,to build a new factory in Barzil?????????
-------------------- Wise men learn more from fools than fools from the wise.
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quote:Originally posted by glassman: none of it makes sense anymore. (not that it ever did )
lessee if i got this figgered out?
house prices got too high? or wages didn't keep up? which is it? wages went down 5% while housing costs went up 25%.
so? now? the answer is to lower wages more and keep housing costs high so people don't lose their "investment"?
did people borrow too much money? or did people who actually HAD the money make poor decisions on how to "invest" it?
Sounds to me we have alot to work out. The only thing that will solve all of this is time!! The government needs to step back. When I say time I mean years! Didn't it take years to gt into this? So why would it only take months to get out of it? Its going to be a long bear market!
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Yes, it was a bubble caused by Greenspan and his cheap money after the dot.com bust.
quote:wages didn't keep up? which is it? wages went down 5% while housing costs went up 25%.
Wages are not supposed to "keep up" with house prices. Wages should be set on a market basis and by that standard, many wages in this country are FAR TOO HIGH, i.e. (the UAW)
quote:so? now? the answer is to lower wages more and keep housing costs high so people don't lose their "investment"?
No, the answer is to let the market work. Let wages be set by supply and demand. Let housing prices be set by supply and demand. Let businesses that screwed up go out of business. Let people who bought houses they can't afford go into foreclosure (and become renters).
quote:did people borrow too much money? or did people who actually HAD the money make poor decisions on how to "invest" it?
Yes and Yes - and they both should be allowed to fail.
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posted
Wages are not supposed to "keep up" with house prices. Wages should be set on a market basis and by that standard, many wages in this country are FAR TOO HIGH, i.e. (the UAW)
LOL... where did you learn this gem? people have to have a place to live. the idea that the UAW charges too much for their labor can be argued straight back that the Japanese do not pay enough and the Japanese car makers got "sweetheart" deals from the states they moved to. japan has been in a 15 year no-growth economic situation where their version of the federal reserve was charging 0% interest.
how much do European Car makers labor get paid? oh wait, they get paid more than US labor!
the fact is that "free-market" principles have hobbled US business and allowed other countries to take our jobs and business away...
China has no free-market attitude what-so-ever... they just raised tax rebates to their exporters.
in other words? if you sell your Chinese goods to other countries? you get a tax break..
they subsidize all of their energy costs, gasoline and electirc. how is an American business person supposed to compete with that?
there's your freemarket gimmick. a few importers and retailers get rich while their customer base loses their jobs, in the end? there's no customers. which by the way is what has happeend to Detroit.
the Japanese car manuf. are right behind them too... they just haven't been asking Washington for help....
Japan's Exports Fell the Most in Almost Seven Years (Update3)
By Jason Clenfield
Nov. 20 (Bloomberg) -- Japan's exports declined at the fastest pace in almost seven years in October as the intensifying global financial crisis stifled sales of cars and electronics.
Exports, the main engine of Japan's economic growth in the past six years, fell 7.7 percent from a year earlier, the biggest drop since December 2001, the Finance Ministry said today in Tokyo. Economists surveyed by Bloomberg News predicted an 8 percent drop.
The Nikkei 225 Stock Average dropped 4.1 percent on concern exporters' profits will deteriorate as the global slowdown spreads to Asia, where Japan's shipments dropped last month for the first time in six years. Automakers Isuzu Motors Ltd. and Hino Motors Ltd. said today they plan to cut output in response to weaker overseas sales.
``We're in store for even more depressing export news,'' said Kyohei Morita, chief Japan economist at Barclays Capital in Tokyo. ``Exports will heavily weigh on Japan's economy as the impact of the global financial crisis deepens.''
there's this strange phenomena to economics, people (consumers) ave to actaully earn some money in order to have money to buy products (from Captialists)....
so whoever has money to lend is responsible for how they lend it.. just as much the fools who borrow too much.
-------------------- Don't envy the happiness of those who live in a fool's paradise.
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posted
This is all a test to see if the average american can figure out that we are being had no matter which way it turn's out.
We have the gay marriage issue in Ca. one minute Ca. legislature decides it's okay for gay's to marry, then it's decided it should be up to the majority of citizens to decide, they vote and decide no gay marriage. Then when they get the outcome some people don't like, so now it appears that Ca. legislature will decide the issue.
How much did this cost us and for what?
If it is law shouldn't that have been decided before we voted?
It runs along the same lines as bailouts, maybe there should be good plans before money is released since we all pay the bill in the US, maybe 99% of the business should stay in the US for these companies that are bailed out and if they can't figure a way to make profit this way then let them fall, this being a requirement for any money released!
Bet they would figure a way.
All these companies need a very good plan for long term growth and be required to stick with this plan in general, it doesn't take a genius to know that many large companies have not had long term growth on their minds for a long long time.
We have stated this many times on this board over the years and we are seeing the results, it has that domino affect.
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quote:Originally posted by glassman: Wages are not supposed to "keep up" with house prices. Wages should be set on a market basis and by that standard, many wages in this country are FAR TOO HIGH, i.e. (the UAW)
LOL... where did you learn this gem? people have to have a place to live. the idea that the UAW charges too much for their labor can be argued straight back that the Japanese do not pay enough and the Japanese car makers got "sweetheart" deals from the states they moved to. japan has been in a 15 year no-growth economic situation where their version of the federal reserve was charging 0% interest.
how much do European Car makers labor get paid? oh wait, they get paid more than US labor!
the fact is that "free-market" principles have hobbled US business and allowed other countries to take our jobs and business away...
China has no free-market attitude what-so-ever... they just raised tax rebates to their exporters.
in other words? if you sell your Chinese goods to other countries? you get a tax break..
they subsidize all of their energy costs, gasoline and electirc. how is an American business person supposed to compete with that?
there's your freemarket gimmick. a few importers and retailers get rich while their customer base loses their jobs, in the end? there's no customers. which by the way is what has happeend to Detroit.
the Japanese car manuf. are right behind them too... they just haven't been asking Washington for help....
Japan's Exports Fell the Most in Almost Seven Years (Update3)
By Jason Clenfield
Nov. 20 (Bloomberg) -- Japan's exports declined at the fastest pace in almost seven years in October as the intensifying global financial crisis stifled sales of cars and electronics.
Exports, the main engine of Japan's economic growth in the past six years, fell 7.7 percent from a year earlier, the biggest drop since December 2001, the Finance Ministry said today in Tokyo. Economists surveyed by Bloomberg News predicted an 8 percent drop.
The Nikkei 225 Stock Average dropped 4.1 percent on concern exporters' profits will deteriorate as the global slowdown spreads to Asia, where Japan's shipments dropped last month for the first time in six years. Automakers Isuzu Motors Ltd. and Hino Motors Ltd. said today they plan to cut output in response to weaker overseas sales.
``We're in store for even more depressing export news,'' said Kyohei Morita, chief Japan economist at Barclays Capital in Tokyo. ``Exports will heavily weigh on Japan's economy as the impact of the global financial crisis deepens.''
there's this strange phenomena to economics, people (consumers) ave to actaully earn some money in order to have money to buy products (from Captialists)....
so whoever has money to lend is responsible for how they lend it.. just as much the fools who borrow too much.
now that a lot of the leverage has been brought down to eye level maybe "the free market" will have a chance to re-leverage. Free market is just that imo. I will make a buck wherever I can. Make it easier here and stop putting the US up for sale. Is that even possible?
-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!?
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posted
The Key to giving them any money is to fire the whole top management.
They are just plain stupid think of it they come before a a group of our government leaders to ask for 25 billon dollars of tax payers money they have no business plan on how they will use said monies GM says it will be broke in 60 days but they fly to the meeting in a private jets that cost $15,000 for each jet to make the trip.
No wonder a bank won't lend them a dime they are just stupid a kid running a paper route has more business sense.
-------------------- Wise men learn more from fools than fools from the wise.
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posted
well I don't necessarily agree with that statement, although there are some downsides to enable an industry, key thing industry (not one company). Continuing the LARGEST industry in the country is critical.
Allow foreign takeover of auto industry? Them to profit?
approximately 10% of all jobs in US. THAT is over 30 million!! How much tax dollars would that be gone from our economy.. and spending at restaurants... every faucet of our daily living.
Consider the consequences. They are changing, reforming etc...
we are in debt as a nation, the President still uses it's jets. It's efficient.
As a resident of MI and consulting area business related to auto industry... it is critical we make the right decision.
posted
Foreign companies are not the only millionaires/billionaires in the world. In fact...I believe that prior to 12 months ago it was reported that there were more millionaires in America then ever before. Have not heard how many have been wiped off that list since. My point is that if there are wealthy individuals that see an opportunity here, they will take it when they see the right deal. And if a foreign company does purchase?...They can either continue production here or shutter it and move it back home. If they coninue production here folks won't lose their jobs. If they move it overseas there is a bunch of infrastructure just waiting for someone to roll the dice and fill the void.
Let em go bankrupt and then let the bank go bankrupt too once the ink is dry. Paulson's an idiot.
-------------------- No longer eligible for government service due to lack of tax issues.
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posted
Oh...and that 10% number...first off 30 Mil is 10% of the population of America not of the jobs in America. Second that 10% number includes all vendors and services (i.e. auto mech) that deal with the automotive industry. The vendors, depending on how their business is structured and how closely they are tied to one of the big three, may see decline in sales but...gee...they would be seeing that right now anyway. That percentage is misleading and not a good number to use. The actual number of employees directly employed by the big three automakers is closer to 350k.
-------------------- No longer eligible for government service due to lack of tax issues.
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Consider the consequences. They are changing, reforming etc...
we are in debt as a nation, the President still uses it's jets. It's efficient.
_________________________________________________
One of the many problems here is that even if they get money without a real good plan you still have the same consequences just more money down the drain.
Who is next? Hopefully me, print me a million or two as long as the presses are running.
As far as the Ceo's flying to Washington in their private jets, it's got to do more with their arrogance then it has to do with the money.
If you need money the cut backs should start at the top, no bonuses unless you can show good performance and good performance has to do with profitability when it comes to upper management.
Some how over time bonuses and salaries in big companies have had very little to do with profitability and perserving long term growth, maybe it's time they should get back to some basics of running a business if they want this free money.
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posted
Some how over time bonuses and salaries in big companies have had very little to do with profitability and perserving long term growth, maybe it's time they should get back to some basics of running a business if they want this free money.
i see this as the real problem in our country.
people have come to beleive that the position defines the man or woman now.
it doesn't. Bush is the very personification of that. people beleived he deserved respect just because he won his parties nomination and then the election. he did nothing to earn that respect.
Wall St says they have to gove bonuses to keep talent. well? the talent failed. where is the talent going to go? competition?
LOL, with the track record they have? they won't be getting much, and the competition won't be very competitive.
-------------------- Don't envy the happiness of those who live in a fool's paradise.
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quote:Originally posted by IWISHIHAD: If you need money the cut backs should start at the top, no bonuses unless you can show good performance and good performance has to do with profitability when it comes to upper management.
Some how over time bonuses and salaries in big companies have had very little to do with profitability and perserving long term growth, maybe it's time they should get back to some basics of running a business if they want this free money.
Exactly... i agree 100%... What Lee Iacocca did back in the day should of set the example... for these idiots... but I guess not... Iacocca took a salary of $1 to set the example... I believe Michael Bloomberg does the same as Mayor of NY...
I believe the Big 3 should study the methods of Iacocca, Bloomberg and other similar smart business men who turned things around & put it into practice... then and only then they will come out of this nightmare...
-------------------- Let the world change you... And you can change the world.
posted
It's funny Turbokid that they bring up Ferrri,Lamborghini,Porsche and somehow are trying to compare them.
I think that's part of their problem, their thinking. I don't feel they will take customers from these other three, especially two of them no matter what chevy makes.
Different clientele and a completely different following.
I think they would most likely lose customers over to Ferrari and Lamborghini if they really tried to compete.
And i am a corvette lover, although i do not like their recent years design.
Make that two in your combination of colors, add mag wheels to mine for my donation to their company.
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quote:Originally posted by Propertymanager: GM announced this morning that they were going from 5 corporate jets to 3. What more do you guys want?
How's about the management team saying that salaries (in all forms) are capped at 100k max for all employees from CEO on down until the company turns a profit? That sounds good to me. I might even be willing to loan em a buck or two then.
-------------------- No longer eligible for government service due to lack of tax issues.
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