ggravant

Well, 7 billion still significant. I think Chrysler only took about 8 billion post bankruptcy and they are paying it back. But - it it has been discussed already, then great.

CDNROCKIES

There has been tons of discussion on the bailouts previously just less recently, including the discussion on the short term lending to Ford, BMW and even Toyota. First article is that discussion, the other two are a couple years of discussion on the actual true bailout.

https://www.clublexus.com/forums/car...ng-crisis.html

https://www.clublexus.com/forums/the...ailout-41.html

https://www.clublexus.com/forums/the...ng-bigger.html

ggravant

No doubt they are different situations, I was just responding to post #11 that said that Mulally did not borrow a dime. What would have happened to Ford if those short term loans from the Fed were not available? Maybe they would have gotten them elsewhere, but ...

In any case, I do hope that we get paid back and that they are on their own from now on ...

-J-P-L-

Ford had also secured large private loans before the banking crisis occurred. Something GM and Chrysler failed to do. There's no doubt Ford would have been included in the bailouts if not for this.

Big Mack

iTrader: (1)

As JPL said - they had already established lines of credit from private lines. They chose to tap the government line because it was the cheaper alternative.

I'm more concerned with two things in this whole scenario:

The new chairman of Chrysler (well, relatively new) is Charles Kidder (AKA C. Robert Kidder, a strategy used by other executives to hide who they really are, IMO) who previously was CEO of Duracell (good), CEO of Borden (not good), board member of Merck (bad), and board member of Morgan Stanley (good). He's clearly not the greatest choice to run a company, given the history of failure at Borden and how Merck tanked as it was merging with Schering-Plough. I like foresight in executives, and he doesn't appear to have much.

GMAC, the financing arm of General Motors is now known as Ally Bank and has been under scrutiny since becoming Ally and for questionable practices in order to attain the capitalization that was being required of the banks for the security of investors and the capital that was being put at risk. By offering higher than the normal rates of return, Ally has put itself in a position to pay these rates while using our money to do so. It's a vicious cycle that can function - provided there is no run on Ally where investors pull their funds out. Given the economic situation many people in this country are in, this is a likely situation. Herein lies the problem - Ally promises the high rate of return but puts penalties in place if you remove the money prior to the commitment. While this practice is not new, it can be seen as predatory, which is not something viewed by most as a positive thing.

I know that I won't be putting any money into anything GM related any time soon, and am appalled/offended by the bonuses and corporate pay of the executives of this company.

Big Mack

rdgdawg

I should have said "did not borrow a dime of bailout dollars" but since that topic has been beaten into the ground (thx CDN on links) I wouldn't think I needed to clarify, yet here ya go.

Mulally saw the future, invested money wisely in R&D and plant acquisition/upgrades with his loans, which were strategic to the company's resurgence... NOT to pay off unions and fat cats.There is nothing positive coming from continued incentives and the car you pin your company's future on is $10K over original estimated cost PER vehicle while your paying out bonuses on borrowed money and as mentioned you don't seem to have an executive in any position who has a clue (3 CEOs in what, 15 months???)... oh yeah, there's Barry again....

As CDN said, and I agree cuz I said it at the time... GM and Chrysler shoulda died... give 12-18 more months, they'll be asking for another bailout, NOT loans... crystal enough?

mmarshall

I'm not sure I agree....even though I helped contribute to it as as an American taxpayer. We are seeing some long-overdue improvement in new vehicles from both GM and Chrysler, though, of course, long-term reliability remains to be proved.

-J-P-L-

As much as I'm against government intervention, I wouldn't have wanted GM gone. Considering the excellent lineup they've put together since, it would be a shame if those cars were absent from the market. And the economic disaster that would have taken place would be devastating.

That said, without the bailout, a proper bankruptcy and reorganization would have resulted in a similar outcome as we have today although bumpier. No way a GM would simply go away.

bruce van

+1. As a car enthusiast and an American, I think it's very important to have GM around. I think most of us would agree to this.

Whether the government should have intervened to the extent that it did is debatable. I'm just glad Rick Wagoner is gone and the company needs to clean house from top to bottom.

mmarshall

It wasn't just government money involved in the GM buyout. The UAW auto-worker union also put up some cash to buy a block of shares. .

Wagoner wasn't the only one who screwed things up at GM. Roger Smith and Bob Stempel were also awful managers. Smith was arguably the worst GM chief in my lifetime. Under his reign, GM built some of the most unreliable junk in its history....he simply didn't care, profits were his only aim. The vehicles built under Stempel were only slightly better.

rdgdawg

tick... tick... tick...

http://www.marketwatch.com/story/us-...ist=beforebell

It's... uhhh... selling at $29.97 this morning pre-trade...

LexFather

Thanks for the update.

Infra

iTrader: (1)

Ah, yes, Nardelli. At the same time Chrysler made some of the worst cars in the American market, he claimed that they were too well-built, lasted too long, and therefore people weren't buying cars, which was hurting his company in the long term.

I wonder how someone who so terribly fails with economics concepts could ever become a CEO?

rdgdawg

From Wikipedia:

"Robert Louis Nardelli (born May 17, 1948, in Old Forge, Pennsylvania) was the chairman and chief executive officer of Chrysler. He had earlier served in a similar capacity at The Home Depot from December 2000 to January 2007. Prior to that, Nardelli had risen to become one of the top four executives at General Electric. CNBC named Nardelli as one of the "Worst American CEOs of All Time".

... During Nardelli's tenure, Home Depot stock was essentially steady while competitor Lowe's stock doubled, which along with his $240 million compensation eventually earned the ire of investors.[2] His blunt, critical and autocratic management style turned off employees and the public. Nardelli was notably criticized for cutting back on knowledgeable full-time employees with experience in the trades and replacing them with part-time help with little relevant experience.[3] This move reduced costs, but hurt customer service at a time when Lowe's was making inroads nationwide. While the board strongly stood by him for most of his tenure, questions about his leadership mounted in 2006, and in an ominous portent of the near future, he was the only director present at the annual meeting; he only allowed shareholders to speak for a minute each....

On December 4, 2008, in an appearance on CNN's Situation Room with Wolf Blitzer, when asked "So what do you say about the argument that the Japanese, the Germans, Koreans make better cars than the Americans?" Nardelli responded, "We spent about half a billion dollars in the first several months. Our warranty costs are down 29%. It's an interesting comparison because in the hearing today, going around the panel, the majority of the Senators said that citing specific vehicles that they own that they've got 60, 70, 80,000 miles. The comment was you guys are making them too good and therefore, we're not buying vehicles and we're contributing to your problem. That was from the Senators on the committee today."[10] On April 30, 2009 Bob Nardelli announced that he would leave the company as soon as the bankruptcy was over.

On March 17, 2009, Nardelli said that Chrysler Financial would require a second round of loans.[11] On April 21, 2009, it was revealed that a $750 million loan from the government was turned down, on the grounds that it would have required that executive compensation be capped.[12] On April 30, 2009, Chrysler filed for Chapter 11 bankruptcy, and it was announced that Nardelli's replacement (Sergio Marchionne [13]) would likely face a pay cap"

I8ABMR

if they fail again I hope they just let GM fall......like it should have in the first place