General Motors Bailout

Op-Ed by John Addison (11/17/08). On September 24, Congress approved a $25 billion bailout for GM, Ford, and Chrysler. “It seemed like a lot when we first started pushing this,” says Democratic Sen. Debbie Stabenow of Michigan, one of the bill’s sponsors. “Suddenly, it seems so small.” The three troubled automakers are already back in Washington D.C. asking for another $25 billion.

A couple of weeks ago, GM said that the future of our nation depended on it getting added billions so that it could buy Chrysler. GM has changed its mind. It just wants taxpayers to give the Detroit three another $25 billion. The problem is that the total of $50 billion is paid by taxpayers like you and me.

Congress would do well to have some national goals for the $50 billion, not goals set by auto lobbyists. Goals include America’s need to become competitive with the world if we hope to create more jobs and end this recession. Workers need help by either keeping their jobs or by getting new jobs. Americans need cars that cost less at the pump and better alternatives to always using a car. America needs to be energy secure, not desperately dependent on oil. To meet these goals, several alternatives are being considered:

  • Another $25 billion with no strings attached.
  • Let GM reorganize under Chapter 11 bankruptcy.
  • Boost consumer auto purchases with tax credits for buying vehicles with excellent fuel economy.
  • Invest the $25 billion in rail and transit.

When Chrysler got its 1980 loan guarantee, Lee Iacocca cut his annual salary to a dollar and slashed the wages of other top workers by 10 percent. The tax payers never paid a cent. It was a $1.5 billion loan guarantee.

This time around, Chrysler will be fine. Chrysler President Jim Press, when talking in September at a Western Automotive Journalist meeting, stated, “We need a new business model based on one word – Reality.” The new management team at Chrysler inherited a 4 million car per year overhead with sales falling to one million per year. Chrysler is privately owned by Cerberus Capital Management. Chrysler has been actively downsizing to be smaller, agile and profitable.

Ford is also moving to a business model that matches the name of its best selling car – Focus. In recently discussing its third quarter results, Ford stated that it remains on track to achieve $5 billion in cost reductions in North America by the end of 2008 compared with 2005. After a quarterly pre-tax loss of $2.7 billion, Ford had overall liquidity of $29.6 billion. The company promised shareholders further cost cuts and cash improvements.

In his November 17 Wall Street Journal article, Michael Levine discusses why Chapter 11 bankruptcy is the best option for GM. Chapter 11 would allow GM to be more competitive with Toyota, which now has now the world leader in market share. Over the years, GM has lost about two-thirds of its market share. Only with bankruptcy can GM be free of restrictions that prevent it from being competitive. It has 7,000 dealers compared to Toyota’s 1,500 successful dealers. GM has enormous pension and health care costs that add thousands to the cost of cars. The burden is so great, that GM needs SUVs to make money and sees no margin in fuel efficient cars. Yet, it is fuel efficient cars that customers are now buying. If GM reorganizes under bankruptcy, creditors will be forced to give it breathing room and paralyzing restrictions will be removed.

Robert Reich, former Labor Secretary, wrote on November 11, “When a big company that gets into trouble is more valuable living than dead, there used to be a well-established legal process for reorganizing it – called chapter 11 of the bankruptcy code. Under it, creditors took some losses, shareholders even bigger ones, some managers’ heads rolled. Companies cleaned up their books and got a fresh start. And taxpayers didn’t pay a penny. In exchange for government aid, the Big Three’s creditors, shareholders, and executives should be required to accept losses as large as they’d endure under chapter 11, and the UAW should agree to some across-the-board wage and benefit cuts.”

Al Gore, in his November 9 NY Times Op-Ed identifies a major opportunity, “We should help America’s automobile industry (not only the Big Three but the innovative new startup companies as well) to convert quickly to plug-in hybrids that can run on the renewable electricity that will be available as the rest of this plan matures. In combination with the unified grid, a nationwide fleet of plug-in hybrids would also help to solve the problem of electricity storage.”

Now law, the Emergency Economic Stabilization Act of 2008 gives tax credits exceeding $7,000 for the purchase of plug-in hybrids. President-elect Obama, when campaigning, favored expanded use of tax credits to speed the transition to a competitive auto industry that makes clean cars. Consumer vehicle spending could be boosted now by expanding the offering to include a $2,000 tax credit for vehicles getting over 35 miles per gallon and up to $10,000 for zero-emission vehicles. Auto industry sales would immediately jump without a $25 billion give away.

In the seventies, I left my job with a major Detroit corporation, Burroughs, then the second largest computer firm. At the time, all makers of mainframe computers were in trouble, including IBM. If the government had done a massive bailout and protected their businesses, the United States would not have transitioned into the global giant of information technology. Lacking a bailout, IBM reinvented themselves into a global leader in IT services with a deep new patent portfolio. Burroughs became Unisys. Honeywell redefined itself. GE exited the computer field. An industry thrived instead of died. The transition made the United States the global leader in the Internet and technology innovation, creating millions of jobs.

Big corporations resist change, yet change they must. To grow and be profitable, the United States transportation industry must be innovative and responsive to customers.

Car customers are voting with their pocketbooks. The average car owner spends $8,000 on their car. The average household with two cars spends $16,000. People are demanding fuel economy. They have stopped buying vehicles with lousy mileage. They want hybrids that deliver over 40 miles per gallon. There is a pent-up demand for millions of electric vehicles and plug-in hybrids.

Only a smaller innovative customer-oriented GM can create permanent jobs. Yes, a GM bankruptcy reorganization could lead to the short-term loss of over 100,000 jobs at GM, its suppliers, and some of its dealers. These laid-off workers, however, could be part of a million new workers. Federal government tax credits could be given to any company hiring laid-off auto workers. Community colleges could be funded in Michigan and other states to retrain workers for jobs of the future.

$25 billion invested in public transportation would create over one million new jobs in the United States. The America Public Transportation Association has learned that every $1 billion invested in public transit capital projects generates 30,000 jobs, and the same amount invested in transit operations generates 60,000 jobs.

U.S. citizens want better public transportation as ridership soars to 11 billion this year. This November, voters across the country in 16 states approved 23 measures out of 32 state and local public transit ballot initiatives, authorizing expenditures approximating $75 billion. Clean Fleet Report

Senate Majority Leader Harry Reid plans to move forward with a bill that would give the auto industry access to the $700 billion Troubled Asset Relief Program set up by the government in October to help ailing banks and other financial firms.

As Ben Franklin observed, “Great haste makes great waste.”

Congress may release the total $50 billion by Thanksgiving. Such haste sends all taxpayers a message, “Enjoy this turkey. You can pay for it later with interest.”

John Addison publishes the Clean Fleet Report.

18 replies
  1. Anonymous
    Anonymous says:

    While provoking, this article misses a crucial point that is continually broadcast as fact, but in actuality is fiction "Car customers are voting with their pocketbooks… People are demanding fuel economy. They have stopped buying vehicles with lousy mileage. They want hybrids that deliver over 40 miles per gallon. There is a pent-up demand for millions of electric vehicles and plug-in hybrids. "If this were in case the truth there would be a fundimental shift in the buying habits of the consumer, which is not the case. The domestic manufactures provide more models with over 30MPG than their competitors, as well as more hybrids. Unfortunately these are not the vehicles people clamour for when gas is cheap and credit is plentiful, and now that credit is not avaialable all sales are down, domestic and foreign.

  2. WebSmith
    WebSmith says:

    What Congress, the Senate, and the President are arguing about is whether or not 10 million more Americans will lose their jobs and whether or not this country will maintain any manufacturing capability at all. If we lose 10 million jobs the loss of commerce will cost us 10 million more jobs and affect foreign companies and the ability of people to eat in 3rd world countries.The unemployment costs to the taxpayers, should they fail to provide our automakers loans, will exceed $200 billion per year. Aside from all of the other issues that these armchair automakers are trying to cloud the issue with, it definitely is a no-brainer so, even these people should not be having this much trouble making a decision .http://ewebsmith.com/gov/autobailout.html

  3. Michael
    Michael says:

    Absolutely, we must bail out the "big 3". The cost will be far worse if we're forced to pick up the pieces after a Chapter-7 bankruptcy (i.e. buy out 750,000 pensions, buy-out hundreds of thousands of auto warranties, etc.). That doesn't even touch upon the jobs that would be lost. I've read estimates between 2 and 3 MILLION jobs would be lost. Consider this – It takes about 6,000-7,000 parts to build a car – most of those suppliers would also fail taking 100,000s more jobs with them. In turn, because parts would no longer be available, any remaining domestic auto operations would quickly cease, taking out still more suppliers. Dealerships would close, aftermarket operations would be stuck with excess inventory, and on and on and on. And don't kid yourself about Chapter 11 restructuring. Cars aren't like smaller ticket items – once Chapter 11 hits, people will completely stop buying "Big-3" autos altogether because nobody wants to take the chance of there not being a warranty. There will be zero chance for reorganization after sales truly dry up, and Chapter 7 will follow.Finally, from the point of view of the "Big-3" outdated business model – the "facts" I'm hearing from a certain Republican senator and many in the media are 4-5 years out of date. GM and Ford (especially GM) have made major strides forward recently – renegotiated deals with UAW, poured money into development of efficient and alternative-fuel vehicles, and have recently started producing cars that people really like. Don't believe me? Check out the automotive press – do a "google" search on "2008 Chevrolet Malibu", "Chevrolet Volt", "Chevrolet Cruze", "GMC Acadia", "Mercury Milan", "Ford Freestyle", "Saturn Outlook", "Saturn Sky", "Saturn Aura", "Cadillac CTS" or "Buick Enclave" – just to name a few.That particular senator should be ashamed of himself for creating misinformation, and the media should be even more ashamed for spreading it.I haven't even touched upon what it would mean for our nation's manufacturing base – do you expect Honda and Hyundai to build the tanks, planes, and jeeps our heirs will need to defend this nation someday? Or maybe you think human nature is going to change and there won't someday be such a conflict? Dream on.Make no mistake, if we let the "big-3" collapse outright, I believe we'd be nailing this nation's economic coffin shut. The ripple effects could trigger a real 1930's style depression.Respectfully,Mike

  4. Anonymous
    Anonymous says:

    Electrify the nations railroads, and build a rail system (think 250MPH) that can replace most domestic airline flights for passenger and freight. Electrify the nations bus systems, and build new passenger interurban rail as was the case in the 1920's. This will be needed as oil becomes less and less affordable over the next 20 years.

  5. Bluebee
    Bluebee says:

    Not to bailout the last three American Automakers would be unpatriotic. General Motors 1997 was worldwide #1, Ford #4, and Chrysler #12 (OICA). There are no others from this country anymore. May be most people do not realize that Buick, Pontiac, Dodge and other American names are only brands owned by these three.See the Future-Headlines "American Automakers defeated by Germans and Japanese" – what an outcry would shake our country!But – this bailout has to be done thoughtful. The situation now arose from actions mistaken and actions not done in the past, actions which are now overdue.Indeed the situation gives the chance to start a lot of initiatives for a grand overhaul which is long overdue: Retirement-Regulations which do not lead into nowhere, affordable Health-Insurance for every worker, even if he is unemployed and does not get unemployment money, Unemployment Money until there is a new job, for every American Citizen the right to have a home to live in, and on the other hand, mentioned by other contributors before, to mention only one: public transportation.Where are the people who think about a postindustrial society? How will our society be when there is no more manufacturing in this country? Who will be able to buy a car and what for? Who will be able to make a living anyway?So many things to do. Let's start to do the right things now, things with integrated future! Let's start to rise like a Phoenix!

  6. Anonymous
    Anonymous says:

    10 Reasons why we should help the American Automotive Industry1. It would be one in many decisive steps toward putting America on the forefront of the Green revolution — “Do we really want to depend on Japan, Korea, and Germany (and soon China) for the future of our cars and related technology or do we want it grown here in the USA?” For our generation the new Green Energy revolution will be equivalent to the space race of the 60s. Whoever gets there first will be a power player in the world economy. And guess what the American Auto Industry got there first and will be able to regain that spot if we help them through this difficult time. By 2010 the GM Volt will roll off the assembly line. This will be the first fully electric production vehicle produced. Talk about Toyota all you want, the truth of the matter is that Toyota’s answer to the Volt is a plug in Prius. That vehicle will be able to travel 7 miles on a charge vs. the Chevy Volt’s 40 miles on a charge. That vehicle will be gas base vs. the Volt being a true electric car. Beside that US auto manufactures are working on Plug in hybrid, Clean diesels and hydrogen vehicles. 2. They do produce cars that American wants to drive –.Just a short time ago that was the SUV. The American appetite for the SUV did not change until gas prices became unbearable for most consumers. That did not happen until price where well over 2.50 per gallon. And that happened in 2007. And even with the change in gas prices GM still sold, more than 9.3 million vehicles, keeping the brand in a dead heat with Toyota as the world’s largest automaker. It was the second-best sales year in GM’s 100-year history. US auto companies change gear to pick-up the production of their smaller car lines in 2008. And in 2009, dealer showrooms will boast about 140 models with highway fuel economy ratings of more than 30 miles per gallon. That’s an increase of 25 percent over the number of 30 mpg products offered in 2008. Model year 2009 vehicles will include 25 hybrid and eight clean diesel models, as well as autos employing fuel-efficient technologies like continuously variable transmissions and cylinder deactivation. By 2010 the GM Volt will roll off the assembly line. This will be the first fully electric production vehicle produced. Soon to be followed by plug in hybrids and on the horizon hydrogen vehicles (which are already being driven by selected consumers around the country). 3. We are Americans and if we are going to succeed in this global economy we need to stick together – Ask yourself in these hard economic times would Japan allow Toyota to fail, would Germany allow Volkswagen? More importantly given the lessons of the financial meltdown, we need to return our economy to one that’s based on producing real products not financial paper pushing. Sure, we should have bailed out textiles before it all went overseas. We should have slowed the loss of electronics. But because we didn’t save those industries doesn’t mean we shouldn’t now save the American auto industry–particularly given the lesson of the financial collapse. We need to save the auto industry because cars are one of the few things we make anymore–and we need to focus our economic recovery on the things we make rather than on the bubbles we finance. 4. They saved us not to very long ago – We owe the Auto Industry some help. They helped save this country in World War II. If we loose our leading Manufacturing base do you really want to rely on Japan and Germany to make our tanks and planes? I’m sure this would be wonderful news for Toyota and Volkswagen but I’m not so sure I would want my country’s security dependent on their good will toward us. Representative Thad McCotter said it best in his opening remarks “And finally, for some of my more conservative friends I point this out, If America does not have a manufacturing base, a manufacturing base in which some may think is not necessary in this new global world, the United States will seese to be able to defend itself. We will be reliant on other nations for their innovation technologies, not only of their creation, but their provision. From friendly nations such as communist China, and others. And the arsenal of democracy in our lifetime will have been dismantled in a time of war.” 5. It is very likely that our country will make money by helping the US auto industry- lets be very clear here this in not a bailout it is a loan that will be paid back with interest. In 1980 we guaranteed $1.5 billion of private loans to Chrysler. Chrysler paid back the loans with interest and the US government made $400 million on the deal. 6. If they went under, the job losses would touch every State in the union — Nearly 3 million jobs would be lost in the first year alone – with another 2.5 million to follow over the next two years. 1 out of every 10 people employed in America today is tired to services that is related to the U.S. auto industry. These people would see job cuts as well.7. American Standard of living would be adversely affected — Personal income in the United States would drop by more than $150.7 billion in the first year. “To put GM failing into perspective, in 1998 during a GM strike that lasted for 3 months, the aggregate US GDP dropped by 1/3rd”. Think about that, one company being on strike for only 3 month cut our Gross Domestic Product by a third. The government standing back helped cause the Great Depression. Did we not learn the lessons so painfully taught to our grandparents? 8. The US tax base would see substantial erosion — The cost to local, state, and federal governments could reach $156.4 billion over three years in lost taxes, and unemployment and health care assistance. This affects every American not just those tied to the auto industry. Meanwhile the most of the profits of foreign-brand cars assembled or imported in the United States go back to their home countries. Yes, foreign companies pay tax’s on their operation here in the USA, the bulk of there operations feed their country’s tax base not ours. 9. Domestic automobile production would more than likely fall to zero – even by international producers, due to supplier bankruptcies — “If GM goes down, it will take down companies like Lear and Johnson Controls,” That will shut Ford down, and it would shut down production at Toyota and Honda,” John Wolkonowicz, an analyst for Global Insight, told Automotive News. “They would go down like dominoes.”10. “We’re lending $120 billion to an insurance company. There’s $700 billion set aside for banks and others whose leaders enriched themselves while ruining their companies and our economy. The leaders in the US auto industry have made their mistakes–plenty of them–but they didn’t enrich themselves beyond decency as those other executives did. Today’s economic problems, brought on by subprime mortgages, credit default swaps, a credit freeze and a stock market collapse, were caused by those other folks not the US auto industry”.

  7. Eric
    Eric says:

    I think the ideas expressed in this post to be headed in the right direction. Someone in response said that if the companies went into bankruptcy that folks would not buy cars for fear that the warranties would be worthless. Ok, so the government agrees to back the warranties while the companies restructure. I think that a middle ground must be found. Simply handing the big 3 a check for 25 billion does not seem prudent, esp. with no plan to use the money wisely, no plan for success and not even an attempt to avoid returning with hat in hand in 6 more months.Perhaps bankruptcy is not the way either, but what I hear is not real plan. Someone stand up with a plan and then I might be less reluctant to open my walle twww.goinggreenaccidently.blogspot.com

  8. tellucas
    tellucas says:

    as all of know the seeds of the Amercan auto industry's destruction were planted years ago and now its time for the harvest! this should not be a shock. Im 33 yrs old and have watched them rest on their name and consumer patriotism thru the 80s as Japan made inroads, they essentially turned the small car market over to japan and put their eggs in the SUV basket. this stratagy could still be working if they would have heavily invested in advanced powertrains (years ago) and introduced low weight composite body structures. Economies of scale and new production methods would keep the price of these inovations under control and may have yeilded a reliable SUV w/35mpg and 300-400hp on tap at a reasonable price. W/those specs consumers would still prefer SUV's given there utility/capability/& perceived safety, and yes LOOKS. as for them complaining about their legacy costs maybe back in the day when they were the BIG DOGS they should have properly funded or reduced these forseable future costs and paid out fewer profits. but now is now and the best course for them is to drop all non performing models like a bad habbit. Operate an American Automotive Group W/ a combined dealerhip network with each nameplate fielding only 1-2 models that are consistant with it's theme and target customer, instead of of a full model lineup for every name plate containing non desirable models.

  9. Lilly's BlogSpo
    Lilly's BlogSpo says:

    If these manufacturers are not prepared to deal with the economy as it is, and are not prepared to deal with a shift in consumer spending, then they need a complete restructuring. In other words, they need to file bankruptcy. The federal government and a ridiculous "car szar" are the worst solution, as the government has never done it right, and won't do so in this case. Jobs won't go away, and manufacturing won't go away. What will happen is shareholders will lose everything, bond holder will likely collect pennies on the dollar for their stupid investments. The unions will get busted up. But the economy will decide what the best way to restructure these pieces is, better than any government could ever do. Just like foreign manufacturers locate facilities in the U.S. which are competitive and provide good jobs, so can GM, Ford, and Chrysler, but only after they go through bankruptcy. What form they will take on the other side is difficult to know for sure, but it will be leaner, meaner, and more competitive than ever. If we feed the drug addict with more of the same, they will be slow, sluggish, lethargic zombies, and in the end, will not survive. They are not sustainable .WWW.AMERICANFLEECING.BLOGSPOT.COM

  10. Lilly's BlogSpo
    Lilly's BlogSpo says:

    If these manufacturers are not prepared to deal with the economy as it is, and are not prepared to deal with a shift in consumer spending, then they need a complete restructuring. In other words, they need to file bankruptcy. The federal government and a ridiculous "car szar" are the worst solution, as the government has never done it right, and won't do so in this case. Jobs won't go away, and manufacturing won't go away. What will happen is shareholders will lose everything, bond holder will likely collect pennies on the dollar for their stupid investments. The unions will get busted up. But the economy will decide what the best way to restructure these pieces is, better than any government could ever do. Just like foreign manufacturers locate facilities in the U.S. which are competitive and provide good jobs, so can GM, Ford, and Chrysler, but only after they go through bankruptcy. What form they will take on the other side is difficult to know for sure, but it will be leaner, meaner, and more competitive than ever. If we feed the drug addict with more of the same, they will be slow, sluggish, lethargic zombies, and in the end, will not survive. They are not sustainable .WWW.AMERICANFLEECING.BLOGSPOT.COM

  11. Lilly's BlogSpot
    Lilly's BlogSpot says:

    If these manufacturers are not prepared to deal with the economy as it is, and are not prepared to deal with a shift in consumer spending, then they need a complete restructuring. In other words, they need to file bankruptcy. The federal government and a ridiculous “car szar” are the worst solution, as the government has never done it right, and won’t do so in this case. Jobs won’t go away, and manufacturing won’t go away. What will happen is shareholders will lose everything, bond holder will likely collect pennies on the dollar for their stupid investments. The unions will get busted up. But the economy will decide what the best way to restructure these pieces is, better than any government could ever do. Just like foreign manufacturers locate facilities in the U.S. which are competitive and provide good jobs, so can GM, Ford, and Chrysler, but only after they go through bankruptcy. What form they will take on the other side is difficult to know for sure, but it will be leaner, meaner, and more competitive than ever. If we feed the drug addict with more of the same, they will be slow, sluggish, lethargic zombies, and in the end, will not survive. They are not sustainable.WWW.AMERICANFLEECING.BLOGSPOT.COM

  12. Bluebee
    Bluebee says:

    My opinion is that letting the last three US autocompanies fail is unpatriotic.But if these people working at carmaking plants will loose their jobs, it is extremely important that they will get unemployment money until they find a new job, not only to support them, but most important to help the rest of the US economy. If so many people loose their income, they are not able to buy any more, and all other selling business will fall like dominos.Unemployment money is totally important to prevent our economy diving deeper into trouble.

  13. Andrew Gross
    Andrew Gross says:

    3/16/09 You've got to question why the US Administration would announce we've given the US Automotive Manufacturers a "pass" before their Plans are due? Have we lost our minds? Will look for your call on this matter if you'd like an alternate theory on this so-called "oversight committee." Regards, Andrew GrossChairman & CEOAutomotive Consulting Services, LLC(An Oregon Corporation)www.autoconsult.us503-701-6003andy@autoconsult.us MARCH 16, 2009, 8:10 P.M. ET Obama to Avoid Auto Bankruptcies Article Comments (1) more in Politics »By NEIL KING JR. and JOHN D. STOLLThe leaders of President Barack Obama's auto task force are focused on restructuring General Motors Corp. and Chrysler LLC outside of bankruptcy court, despite suggestions from some experts that a Chapter 11 filing would be the best way to revamp their troubled operations.Steven Rattner, a private-equity executive leading the team, said Monday that "I don't think that bankruptcy is necessarily a better place for any company.""It sometimes becomes a necessary place for some companies, but it's certainly not a desired place and it is certainly not our goal to see these companies in bankruptcy, particularly considering the consumer-facing nature of their businesses," Mr. Rattner said in an interview.GM had said in December when its U.S. loans were granted that bankruptcy could mean an end to the company because many consumers wouldn't buy a vehicle from a car maker in Chapter 11. But the company has since softened that stance.Administration officials also said the team doesn't plan to recall early the $17.4 billion in government loans given to GM and Chrysler — something allowed under the loans' terms if the companies don't prove by March 31 that they can be viable long term.Related StoryChrysler Presses Request for LoansThe administration officials said the two auto makers had already spent the cash, and that asking for the funds to be returned immediately would trigger their collapse.By backing away from bankruptcy discussions and the threat of putting the auto makers in default by recalling the loans, Mr. Rattner's team will ease some of the pressure that has been on GM, Chrysler and their constituents to make immediate and sweeping concessions.The car companies, along with bondholders, unions and suppliers, have been renegotiating contracts to meet certain requirements set out by the Bush administration when the loans were approved in December. Those conditions include eliminating two-thirds of unsecured debt outstanding, and renegotiating the terms of multibillion-dollar health-care trusts established with the United Auto Workers union.Because the U.S. Treasury has the broad power to call back the loans, GM and Chrysler have been rushing to craft bankruptcy contingency plans that could be executed as soon as April 1. Teams of advisers and attorneys have created a variety of scenarios under which the two companies could survive while under court protection.GM and Chrysler submitted plans on Feb. 17 that were designed to explain how the companies intended to return to health in the coming years. The plans included details of how the two companies will work with unions, bondholders, suppliers and dealers to fix their structural issues.Mr. Rattner indicated the Treasury is taking a close look at requests by GM and Chrysler for an additional $22 billion in loans. "They do need more money," he said. At the same time, he said the Obama administration would not "put these companies on an intravenous drip-feed that lasts forever."By the end of the month, the government plans to lay out its view on the companies' viability and what the industry should look like in future years, Mr. Rattner said. However, those plans won't include a comprehensive fix for the two companies. That, he said, will largely be left to the stakeholders, such as unions, management and investors.Earlier Monday, Mr. Rattner met with GM Chief Executive Rick Wagoner and Chief Operating Officer Fritz Henderson at the Treasury Department. A GM spokesman said the meeting was essentially a fact-finding expedition on the part of the auto task force, and no concrete decisions were expected.Write to Neil King Jr. at neil.king@wsj.com and John D. Stoll at john.stoll@wsj.com

  14. phone search
    phone search says:

    I believe that this did not work well at all. You can't just throw money at problems and wish them away. Its up to the companies to take care of themselves, and one did. The other two? struggling with bad money.

  15. Muscle Cars
    Muscle Cars says:

    Great info! I recently came across your blog and have been reading along. I thought I would leave my first comment. I don’t know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

  16. kellybrown273
    kellybrown273 says:

    Right ! Ford is also moving to a business model that matches the name of its best selling car – Focus. In recently discussing its third quarter results, Ford stated that it remains on track to achieve $5 billion in cost reductions in North America by the end of 2008 compared with 2005. After a quarterly pre-tax loss of $2.7 billion, Ford had overall liquidity of $29.6 billion. The company promised shareholders further cost cuts and cash improvements ! Great improvement … Best regards 🙂

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