BREAKING NEWS - $17.4 billion bailout package approved for GM & Chrysler

Discussion in 'OT Driven' started by Variant, Dec 19, 2008.

  1. Variant

    Variant Cast in the name of God, ye not guilty.

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    Hmm....not sure how I feel about that. I really hope that the gov't stands behind it's demand that the companies be financially viable by 3/31, but I honestly won't be surprised if that doesn't happen.

    http://money.cnn.com/2008/12/19/news/companies/auto_crisis/index.htm?postversion=2008121909
     
  2. Karnejj

    Karnejj “A true conservative is one who can't see any diff OT Supporter

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    Stock market barely reacted.
     
  3. Variant

    Variant Cast in the name of God, ye not guilty.

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    I'd guess the assumption that they'd get some sort of bailout was already factored in.
     
  4. Karnejj

    Karnejj “A true conservative is one who can't see any diff OT Supporter

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  5. TankRizzo

    TankRizzo Sensational Moderator Super Moderator

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    back to the bailout, I fail to see what this is going to do or how it's going to help. This money is going to go directly into their cash burn and they won't fix any of the things that need to be addressed immediately because they are legally bound to most of the things that have put them in this situation.
     
  6. Dissent

    Dissent OT Supporter

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  7. |3illy the |<id

    |3illy the |<id New Member

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    I tend to agree. I think the only good thing in this mess is that they'll get some stake in the companies... so long as they use that to try to swing the companies to make better automobiles.
     
  8. Variant

    Variant Cast in the name of God, ye not guilty.

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    Yep. To me it sends them a message of "it's OK to run your companies shittily, we'll save you because you're too big/important to let fail. Don't worry about your unprofitability, we'll save you". :sad2:

    I really hope the gov't takes a hard line when they're back on Capitol Hill next March talking about how they need more time, and more money, to turn things around.
     
  9. Variant

    Variant Cast in the name of God, ye not guilty.

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    Big mistakey?
     
  10. |3illy the |<id

    |3illy the |<id New Member

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    it's a tarp!
     
  11. Handerhan

    Handerhan New Member

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    Well, you'd think those legally bound expenditures would've already been accounted and allocated well in advance from some other type of fund. Then again this is Detroit we're talking about. :dunno:
     
  12. alkalinesolo

    alkalinesolo Active Member

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    How is it a good thing that our government is now in the business of partially owning private companies?
     
  13. WyldKat

    WyldKat Come with me if you want to live.

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    TriShield will still have stuff to post about :bowdown:
     
  14. Dissent

    Dissent OT Supporter

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  15. |3illy the |<id

    |3illy the |<id New Member

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    Well it's all crap. But a positive of it is that the government gets a stake. If we're going to loan them $17Bil we should get something back in return as well as some say in the direction that this companies are heading in.
     
  16. WyldKat

    WyldKat Come with me if you want to live.

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    In for American "People's Car"
     
  17. Variant

    Variant Cast in the name of God, ye not guilty.

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    I'm eagerly awaiting the release of the Chevy Comrade SS. :bowdown:
     
  18. Dissent

    Dissent OT Supporter

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    :rofl:
     
  19. tom37211

    tom37211 New Member

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    I am still waiting for my Red Star Mortgage Package.
     
  20. whutaboutbob

    whutaboutbob Guest

    I have a little new found respect for Ford backing out of this thing, and I am sincerely concerned about where our government appears to be taking us.

    Just consider this for a minute:

    They will have stakes in all of the largest financial institutions, banks, insurance companies, your mortgage company, and now your only manufacturing base left.

    Meh, sounds to me like they have us coming and going.

    Say you decide to be a third party candidate and challenge the two parties, and you win. Now your in office and trying to do what you said to get elected, when all of a sudden you get a notice that your house is getting taken away, your credit card is canceled, and your car just up and shut off.

    Tinfoil I know, but hey man.. :noes:
     
  21. mr jenzie

    mr jenzie New Member

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  22. disley

    disley Ooooh no it isn't. Ooooh yes it is. OT Supporter

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    Wall st = 50 billion.
    Detroit and the rest of Main st = 650 billion.
    That's the right way around.
    Giving money to Wall st won't get America back to work, and return it's industrial strength.
    This will.
    Start building new airports, shipping ports, railways, mass transit, schools, hospitals, clean energy power plants, ships, refineries, drill for oil, highways and bridges.
    The list can be added to as economic benefits flow through.
    So far the banks have started sharing the money given them, by paying bonus's and paying a return to investors on shored up, bad or over leveraged and over priced investments, which are detrimental to the economy.
    Now they want more taxpayers money.
     
  23. TriShield

    TriShield Super Moderator® Super Moderator

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  24. TriShield

    TriShield Super Moderator® Super Moderator

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    Between The Lines: President Bush’s Bailout Defense

    By Robert Farago
    December 20, 2008

    President Bush’s radio address this morning: “Good morning. For years, America’s automakers have faced serious challenges — burdensome costs, a shrinking share of the market, and declining profits. In recent months, the global financial crisis has made these challenges even more severe. Now some U.S. auto executives say that their companies are nearing collapse — and that the only way they can buy time to restructure is with help from the Federal government.

    I’m not going to name names. I’m not going to lay blame. I’m just trying to clear my name.

    This is a difficult situation that involves fundamental questions about government’s proper role. On the one hand, government has a responsibility not to undermine the private enterprise system. On the other hand, government has a responsibility to safeguard the broader health and stability of our economy.

    I’m sacrificing A for B.

    Addressing the challenges in the auto industry requires us to balance these two responsibilities. If we were to allow the free market to take its course now, it would almost certainly lead to disorderly bankruptcy and liquidation for the automakers. Under ordinary economic circumstances, I would say this is the price that failed companies must pay — and I would not favor intervening to prevent automakers from going out of business.

    I don’t favor intervening in free markets unless I do.

    But these are not ordinary circumstances. In the midst of a financial crisis and a recession, allowing the U.S. auto industry to collapse is not a responsible course of action. The question is how we can best give it a chance to succeed. Some argue the wisest path is to allow the auto companies to reorganize through Chapter 11 provisions of our bankruptcy laws — and provide a Federal loan to keep them operating while they try to restructure. But given the current state of the auto industry, my economic advisors believe that bankruptcy could now lead to its disorderly collapse — sending our economy into a deeper and longer recession.

    A government-aided Chapter 11 is the right thing to do. But we’re not going to do it.

    A more responsible option is to give auto companies an incentive to restructure outside of bankruptcy — and a brief window in which to do it. My Administration proposed legislation to achieve this, but Congress was unable to get a bill to my desk before adjourning for the year. This means the only way to stave off a collapse of the auto industry is for the executive branch to step in. So yesterday, I announced that the Federal government will grant loans to auto companies, which will provide help to them in two ways.

    This is Barack Obama’s problem now.

    First, the loans will give automakers three months to put in place plans to restructure into viable companies — which we believe they are capable of doing. Second, if restructuring cannot be accomplished outside of bankruptcy, the loans will provide time for companies to make the legal and financial preparations necessary for an orderly Chapter 11 process that offers a better prospect of long-term success.

    We believe GM and Chrysler can do what they say they’re going to do– minus the bits they say they’re going to do. But I can’t say that. Because if I did, I would be saying I don’t believe them. Which would mean this bailout makes no sense whatsoever. Anyway, like I said, this is Barack Obama’s problem now.

    The terms of the loans will require the auto companies to demonstrate how they would become viable. They must pay back all their loans to the government, and show that their firms can earn a profit and achieve a positive net worth. This restructuring will require meaningful concessions from all involved in the auto industry — management, labor unions, creditors, bondholders, dealers, and suppliers. If a company fails to come up with a viable plan by March 31st, it will be required to repay its Federal loans. Taken together, these conditions send a clear message to everyone involved in American automakers: The time to make the hard decisions to become viable is now — or the only option will be bankruptcy.

    Chrysler and GM must pay back the federal loans because that’s what a loan is: something you pay back. Actually, fuck it. If they can’t repay the money, they can declare bankruptcy. At that point, no one’s going to care about a measly $17.4b.

    The actions I’m taking represent a step that we all wish were not necessary. But given the situation, it is the most effective and responsible way to address this challenge facing our Nation. By giving the auto companies a chance to restructure, we will shield the American people from a harsh economic blow at a vulnerable time. And we will give American workers an opportunity to show the world once again that they can meet challenges with ingenuity and determination, and emerge stronger than before.

    Who’s your Daddy?

    Thank you for listening.”
     
  25. 0wn3d_productivity

    0wn3d_productivity OT Supporter

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