GM Making Case That It's Too Big To Fail

New York Times:

Is General Motors too big to fail?

Rick Wagoner would sure like us to think so. Mr. Wagoner, the chief executive of the ailing automotive giant, spent most of Friday down in Washington, pressing his case for a government rescue.

Yes, G.M. wants our tax dollars too. Banks are getting billions. Insurance companies are getting billions. Why not G.M.?

Read the whole story: New York Times

Comments

[IdocNC]

These people for years resisted any efforts either by federal or state govt's to increase mileage standards,and now are suddenly wanting help by the government?? For what? To make more large,crappy cars people dont want? They are the cause of their own demise,I say let them go that way. Its not like another manufacturer couldn't pick up the slack in the long run.

[DennyCrane]

Republicans are such hypocrites. For decades, they've preached about how government should stay out of the way and let the free markets work. But they don't have a problem with taxpayer dollars going to business who make bad decisions. Maybe if Chrysler and GM die, they'll learn something. If they get the bailout, then you'll see every other giant corporation lining up for their handout.

[Paul]

They are running out of time to get a sweet deal from a corrupt congress and administration.

Tell GM to come back after the inauguration and new congress convenes.

Maybe they would like to be nationalized?

[sposton]

GM is too big to fail under current circumstances. If you are going to bail out banks what would be the rationale for not helping GM? After all, they actually produce something. The question is what kinds of strings ought to be attached to the government's help. It ought to be structured so that the taxpayer benefits at the end.

[iambusto]

its not too big to fail. GM could go bankrupt tomorrow and nothing will change. factories will still be producing cars, employees (some of them) will still be working for same companies.

stockholders will get hosed (no body in huff po likes them anyways!!) and bondholders will take a huge haircut. A trillon $ credit default swaps written on GM will be triggered and maybe settled at pennies on the $.

Toyota/Honda might swoop in and buy some assets from GM.

life will go on.

[sposton]

Ordinarily I'd agree with you but these are not ordinary times. Nobody knows what the real impact would be on the economy in general and in particular the economy of Michigan. I don't think it is worth taking that risk to find out.

[iambusto]

If GM and Chrysler do not merge, then first company to go bankrupt will be Chrysler. Job losses HUGE (even though chrysler emerges from bk)

If GM and Chrysler merge, job losses (according to consultants in a yahoo report today): 25000.

Take your pick.

If I was GM CEO, i would wait till chrysler goes bk, try to pick up their assets on the cheap and then restructure. but at the rate GM is burning cash, its a risky play. plus, Chrysler has 11 billion of cash in balance sheet (supposedly, since its a private compnay no one knows for sure). GM could use that.

thats why the merger will happen. GM gets access to 11 billion of chrysler's cash. restructure huge. drop off all plants + brands but the Jeep one. huge breathing room for the time being.

Whether you like it or not, job losses from these 2 companies will exceed 20000 or so. anyone else got a better idea?

[TrooAmerican]

GM:
We're too Phat to Phail.
We're too Big to Bite it
We're too Large to Liquidate
We're too Significant to Slip the Skids
We're too Colossal to Close
We're too immense for insolvency
We're too Broad to Blink

[StephenBarry]

If there is one thing the world has too many of, it is cars. Let Detroit build solar panels for every roof top in America.

[OneTop]

GM is pathetic.

The same idiots that drove it into the ditch are still in charge.
What in the name of all that is holy makes anyone think that these dummies can fix it now?
Not a chance .... but go ahead and give them Billions in loans at preferential rates just to extend their life by a few months .......... and line their own pockets.

[jsarets]

GM won't go bankrupt. One of the Asian automakers will snap it up before it falls to the banks. Somebody surely wants GM's massive infrastructure and skilled workforce.

[Formeralaskangal]

The bigger they are the harder or farther they fall? Nothing is too big to fail.

[000Jade000]

The middle class = too big to fail.

If GM and Chrsyler are too big to fail, wouldn't merging make them "too bigger to fail" like all of these banks that are swallowing each other up? GM is already closing plants, cutting back shifts, and letting go of workers. Chrsyler is paying employees to go away. I don't want to see either of them fail, but at the same time, what will a bail out do for them? Will they hire back the workers they just let go? Will they just sit on the $ like the banks are doing? Will they use up the money and then ask for more? How will they repay the taxpayers? Will they stop going to court with organizations that try to get them to comply with better environmental standards?

[LouisvilleLiberal]

Chrysler got a govt bail out back in the days of Lee Iacocca, so I suspect GM will get this bail out. Congress has already approved 85B for the auto industry....that hasn't been paid out yet. GM wants 10B to do the Chrysler deal and will be able to survive on Chryslers cash for about a year.

GM will hunker down for a year and re-tool and redesign it's lines to offer more hybrids and more small cars with better mpg, plus rush out it's Volt and probably extend that line. They will also wait for Universal Health Care and then re-negotiate with the UAW to try to cut some of their Health Insurance cost out of the cost of an American car. Then, they will call back the workforce -- probably in late 2009 for the 2010 model year.

The American Auto industry creates 1 of 6 jobs in America and these are good paying blue collar jobs. Also, in the event of a huge war, it's the auto industry that has the manufacturing infrastructure to gear up for a war effort quickly. I don't see GM being allowed to fail....or Ford for that matter.

[rstjones]

Many people forget that the Big Three are not just companys but as a symbol of American Pride but not just on our shores but around the world. Granted we do make too many large SUV's but remember they produce what we ask for.
Im not a tree hugger and I do own 2 SUV's, but I can afford it and the $4-5 per gal that goes in it.

So let say the Big Three close there doors, what will you drive? If your one of the employees or sub contractor and you loser your job, where will you work? If you retired from them what will you live on?

Mr Wagner should not have recieved a pay increase but eveyone believes he is in total control, is it not the stock holders and the board the ones who vote for everything?

I hear everyone say to not give GM bail out money, if thats the case we should not bail out the banks or to people help save the homes because they made stupid desions when buying a subprime loan.

And those of you relying on Obama to save the day and our country needs to wake up!

I have been GM all my life and I have stuck to my guns to buy everything I own from America.

[rpahk]

If GM, Ford and Chrysler file Chapter 11, they will still be making cars but they will become much smaller companies. You ask what will Americans drive if GM closes? The same cars they are driving today: Toyotas, Hondas, Nissans, etc etc many of which are made in the US of A. Chapter 11 for the big three will mean more new factories for the healthy producers and more employment with companies that are well managed.

[LouisvilleLiberal]

I try to buy American whenever possible too....even if it costs more. It's hard to do these days and it says something about our country when we allow the dollars we earn to leave the country at the rate they are. I think people need to start thinking "buy American" as their patriotic duty......so they can put their neighbor to work and keep their own jobs.

[rpahk]

Bankruptcy is the best solution for GM and Chrysler and possibly Ford. Chapter 11 gives these companies a chance to re-organize quickly and to get the pain over with. Why drag this out any longer than necessary?

[UnderdogSRD]

LOL. So we should just throw good money after bad? Enable GM to continue to suck and make crap? GM has no vision, no ethical or moral standards. Hummer, Escalades, Suburbans... thanks for making my gas prices go up. Way to look towards the future. Way to care about the environment.

GM isn't needed. We don't need to reward failure - mediocrity.

[LouisvilleLiberal]

GM has already manufactured the EV1 - a completely electric car - but abandoned it because the market wasn't big enough. They also have 8 hybrids and the plug in electric hybrid Volt gearing up for production. GM has the know how but needs the motivation.

[plages]

Does GM make a loud audible sound when it collapses, if there's no one around to hear? GM has had ~20 years to get its act together, and what do they do, play golf and have a drink with their good friends in the war for oil guys! Absolutely NO critical thinking! Profits before country! It will go on forever . . Oops, its all coming to and end! Home land securty, POOF!