Auto Bailout Agreement Reached: Short term

[Engi-Nir]

Late this evening news has broke out that Congress has agreed on a plan to assist the faltering Big 3 automakers. The agreement is said to include $15-$17 Billion in loans to cover the short-term; keeping, namely GM and Chrysler, afloat until the Obama Administration takes over on January 20th. Other details are unknown at this point, however the agreement is expected to be passed and on President Bush's desk early next week.

-------------------
all i know about what GM agreed to get bailout (RUMORS or FACT not sure yet, from GMI):

-GM will cut saturn/saab/pontiac/hummer.
-works towards eliminating job bank (paying laid off operators to stay home)
-senior mgmt 20% paycut, CEO gets $1/annually
-UAW to match salaries/benefits that of Toyota/Honda by 2011 or 2012
-UAW to take ownership of its own healthcare 2010

[nornet]

Late this evening news has broke out that Congress has agreed on a plan to assist the faltering Big 3 automakers. The agreement is said to include $15-$17 Billion in loans to cover the short-term; keeping, namely GM and Chrysler, afloat until the Obama Administration takes over on January 20th. Other details are unknown at this point, however the agreement is expected to be passed and on President Bush's desk early next week.

-------------------
all i know about what GM agreed to get bailout:

-GM will cut saturn/saab/pontiac/hummer.
-works towards eliminating job bank (paying laid off operators to stay home)
-senior mgmt 20% paycut, CEO gets $1/annually
-UAW to match salaries/benefits that of Toyota/Honda by 2011 or 2012
-UAW to take ownership of its own healthcare 2010

All valid points. now if they develop the right models during the downturn at least 2 companies should survive.

[Pete_Coach]

Some significant adjustments, particularly by the UAW. Wages and benefits are a huge drain on the automakers.
There really was never any doubt about the bailout anyway. There was no way that the Governments (Canada included, although no announcements yet) could leave the automakers alone to fold up. The impact would be so severe the economy would totally collapse. The auto industry is so deeply entrenched in so many places, entire cities would disappear and would cease to exist.

[Justin]

:cry: Cutting 4 brands? I can see 3 but not Pontiac. wtf? Pontiac had the best looking cars imo. G8, G6, Solstice.


CEO $1? How does he get money? Bonuses if the company does good, stays poor if the company does bad?

[Jon Lai]

CEO $1? How does he get money? Bonuses if the company does good, stays poor if the company does bad?

$1 CEO salary is common in many companies. Their bonuses and stock options are more than enough to cover their daily spendings.

[Anonymouse]

Why is this subsidy of the domestic auto industry not illegal in WTO terms? Is there a clause about financial exigency?

[Justin]

Why is this subsidy of the domestic auto industry not illegal in WTO terms? Is there a clause about financial exigency?

They have to pay the money back so it is a loan. Not free money.

[hagbard]

It will do nothing but make it even worse when they do fail. Very bad move, but what I've come to expect since Bizzaro World started.

[Engi-Nir]

:cry: Cutting 4 brands? I can see 3 but not Pontiac. wtf? Pontiac had the best looking cars imo. G8, G6, Solstice.


CEO $1? How does he get money? Bonuses if the company does good, stays poor if the company does bad?

Pontiac if it does exist, will be a niche brand, basically only G8 lol Put the saturn sky as a caddy or something, and move the G8 to a Chevrolet impala replacement. Solstice is weird looking in comparison to the sexy Sky Redline. G6 is a direct competition to Malibu sales, so no need of it, I actually like the look of the malibu(in gray or black), seen so many on the roads lately.


The only reason congress approved it might be given the economy job losses in November, lowest ever since depression or something(don't quote me on it). Let GM die, and let the tickle down effect screw up everyone.

[evanx]

Killing off Pontiac is a good move but surprising.

[Justin]

Killing off Pontiac is a good move but surprising.

Well if Pontiac gets killed GM better make a 2 door malibu or something. GM needs a mid-size 2 door. Currently the g6 is really the only midsize 2 door they got.

[Pete_Coach]

Why is this subsidy of the domestic auto industry not illegal in WTO terms? Is there a clause about financial exigency?
Theoretically it will be paid back, therefore not a subsidy and breaking any anti trade laws.
It will do nothing but make it even worse when they do fail. Very bad move, but what I've come to expect since Bizzaro World started.
Sure, let them rot eh? Where do you live (Windsor isn't it?) and what would happen to your economy if the auto makers failed? Even you would not be working in whatever job you have because there would not be any automaker money floating through your community.
Wouldn't that be Bizzaro?

[nornet]

Killing off Pontiac is a good move but surprising.

I would have phrased it: "Killing off Pontiac is a surprisingly good move."
They have suffered from poor QC and the only thing in lineup which is worth saving is the Wave. GM should be careful not to rebrand too many Pontiac models as Chevs.

[frogger]

Nooo that means there's no chance of another Fiero?
;-)

I haven't seen those concessions/that plan of action stated anywhere else, only rumours of those being possibilities a while back.

[Longobongo]

wait, wait, no more Hummer?!

Good riddance, i'm glad i won't see them on the road anymore and feel bad for the owners trying to unload them

[hagbard]

Sure, let them rot eh? Where do you live (Windsor isn't it?) and what would happen to your economy if the auto makers failed? Even you would not be working in whatever job you have because there would not be any automaker money floating through your community.
Wouldn't that be Bizzaro?

I've dealt with this issue in previous postings.

Just because these poorly managed companies fail doesn't mean that all the infrastructure would vanish, it would just go into other, (hopefully) more efficient hands. It would also mean fewer producers which is a good thing as there is more supply than demand which is fueling the problem.

Capitalism is about filtering out the incompetent and inefficient, bailing such companies out will only lead to more incompetence and inefficiencies. It didn't work for the Soviets, it won't work for us. Bailing them out is a huge mistake that won't work and will lead to a Soviet style collapse in the US and Canada.

They'll do it anyway. We can always count on the government to do the wrong thing.

[Canuck2fan]

Why is this subsidy of the domestic auto industry not illegal in WTO terms? Is there a clause about financial exigency?

How is a loan or loan guarantees any different from Japan having 0% interest rates for all their companies for 6yrs.... before they raised it to .25% in 06. No wonder Toyota and Honda grew during that period. That was worth more in real terms than any "bailout" the big three will get.

[Engi-Nir]

Nooo that means there's no chance of another Fiero?
;-)

I haven't seen those concessions/that plan of action stated anywhere else, only rumours of those being possibilities a while back.

It came from the GMI website, summary of bailout plan. Original UAW contract was, health care legacy costs were to be absorbed by UAW. The salary being competitive with Toyota/Honda was slated for 2011+, and killing the divisions was also stated but Pontiac was a question mark. It was planned to be cut. Job bank was to be eliminated so they said. GMI is very good when it comes to rumors/facts,etc.

[Mattones]

They should just give all that money to Toyota to buy the others out. They seem to know what their doing.

Hell give the money to them if they agree to build energy efficient cars/Trucks.

[Engi-Nir]

They should just give all that money to Toyota to buy the others out. They seem to know what their doing.

Hell give the money to them if they agree to build energy efficient cars/Trucks.

lol...at this point, all car companies are in a mess, losing sales.

I would agree with Toyota if it didn't come out with Tundra, sequille, etc...they would have been in the same mess if they didn't have Corolla/camry ;)

PS: My beef with Toyota is, I am pissed that in the 90's they came with excellent cars, and in 2004+, they quality started slipping, transmission issues, braking camshafts, etc. And for the love of gud, they need new designers for their cars ;)

[TheFuteballer]

i've dealt with this issue in previous postings.

Just because these poorly managed companies fail doesn't mean that all the infrastructure would vanish, it would just go into other, (hopefully) more efficient hands. It would also mean fewer producers which is a good thing as there is more supply than demand which is fueling the problem.

Capitalism is about filtering out the incompetent and inefficient, bailing such companies out will only lead to more incompetence and inefficiencies. It didn't work for the soviets, it won't work for us. Bailing them out is a huge mistake that won't work and will lead to a soviet style collapse in the us and canada.

They'll do it anyway. We can always count on the government to do the wrong thing.

+1

[Jon Lai]

PS: My beef with Toyota is, I am pissed that in the 90's they came with excellent cars, and in 2004+, they quality started slipping, transmission issues, braking camshafts, etc. And for the love of gud, they need new designers for their cars ;)

I have to agree. Our 06 Camry is nowhere near as a good drive as our 98 Camry. Same specs, same upgrades, but there are noticable differences. Yes, the 98 goes through gas faster than the 06, but then there are many other sacrifices made.

I don't mind the designs though. Nobody steals Toyotas because of their ugly look :)

[frogger]

Toyota trucks are not fuel efficient compared to their competition.

[Jay Hova]

What if, all North American (meaning the big three) auto-makers merged to form just one company.

[Tijuana]

So no more pontiac's or saab's?

[hagbard]

What if, all North American (meaning the big three) auto-makers merged to form just one company.

One zombie instead of three zombies.

[Anonymouse]

Theoretically it will be paid back, therefore not a subsidy and breaking any anti trade laws.

I think the legality depends on the interest rate. The Canadian government gave Bombardier a loan associated with an American aircraft sale, and the WTO ruled it an illegal subsidy because the interest rate was low.

How is a loan or loan guarantees any different from Japan having 0% interest rates for all their companies for 6yrs.... before they raised it to .25% in 06. No wonder Toyota and Honda grew during that period. That was worth more in real terms than any "bailout" the big three will get.

That was a result of general economic conditions that prevailed at the time. The Japanese government has never subsidized the car industry directly.

[nornet]

So no more pontiac's or saab's?

The Pontiac brand likely dies, Saab (and Hummer) will be sold as they were originally separate companies.

[Pete_Coach]

I think the legality depends on the interest rate. The Canadian government gave Bombardier a loan associated with an American aircraft sale, and the WTO ruled it an illegal subsidy because the interest rate was low.


Don't get me started on Bombardier. There is a scum sucking welfare company of monumental proportions. There is nothing since old Monsieur Bombardier was making snow sleds that the Canadian public has not paid for. It is the most subsidized company in Canadian history and still can't turn a profit.
If you think that bailing out the automaker with some billions of dollars, I cannot even imagine how much we have given Bombardier (or it's subsidiaries) regularly over the past 30 or so years.

[Engi-Nir]

Don't get me started on Bombardier. There is a scum sucking welfare company of monumental proportions. There is nothing since old Monsieur Bombardier was making snow sleds that the Canadian public has not paid for. It is the most subsidized company in Canadian history and still can't turn a profit.
If you think that bailing out the automaker with some billions of dollars, I cannot even imagine how much we have given Bombardier (or it's subsidiaries) regularly over the past 30 or so years.

+1 so true.

[Canuck2fan]

That was a result of general economic conditions that prevailed at the time. The Japanese government has never subsidized the car industry directly.

What is the difference? In Japan the government made sure that the industries were taken care of by bailing them out by not letting them default through the central bank there. If they hadn't of done that Japan would have folded up like the house of cards it was.... everything there was leveraged to the hilt. (sound familiar) Not to mention they have kept their markets closed to importing everything but raw materials for decades.

The same types of things are being done in China to support their industries.... The government there has consistently falsely devalued their currency for years now, they have at the same time subsidized the price of energy by more than 40% of what the world price would be. The communist government there has also made sure there are no environmental, or labor laws to slow growth. Lastly they just announced a 600 billion dollar stimulus.

Every other country has had to bite the bullet and help out various industries directly or indirectly. I don't see a problem with us doing the same.

[nalababe]

Well if Pontiac gets killed GM better make a 2 door malibu or something. GM needs a mid-size 2 door. Currently the g6 is really the only midsize 2 door they got.

midsize 2 door is a niche product. Really not much use for it...especially when trying to rebuild your company.

[Spray]

Please porsche buy Saab *keeps fingers crossed*

[ES_Revenge]

:cry: Cutting 4 brands? I can see 3 but not Pontiac. wtf? Pontiac had the best looking cars imo. G8, G6, Solstice.
Agreed. Sad to see Pontiac go, they were the best division they had outside of Caddy but they've been messing it up recently. I mean where's the G5/Pursuit GXP? C'mon if there was an Ion Red Line why wasn't there a performance G5, given Pontiac was supposed to be the performance division? :rolleyes:

When the Cavy had it's Z24, the Sunbird/Sunfire always had it's GT. Once Delta started that was all over. While there was a G5 GT, that was the same as the normal Cobalt SS; not like the SS Supercharged (or new SS Turbo).

Pontiac if it does exist, will be a niche brand, basically only G8 lol
Yeah I was thinking that--the G8 is getting great reviews at the moment, so it would be strange if they canned Pontiac and the G8. Then again they can always use marketing to change it into a Chevy something or other. The G6 never got great reviews but the "new" Malibu (which is the same stinkin' car) managed to get all kinds of praise :rolleyes:

Put the saturn sky as a caddy or something, and move the G8 to a Chevrolet impala replacement. Solstice is weird looking in comparison to the sexy Sky Redline.
x2, the Sky seems like it should have been the Pontiac, and the Solstice the Saturn. Don't know how it got done like that. The Sky easily transforms into a Caddy--I can see it as the Caddy XLS or something, heh.

G6 is a direct competition to Malibu sales, so no need of it, I actually like the look of the malibu(in gray or black), seen so many on the roads lately.
Meh, I always liked the G6 looks better than the Malibu. Again though the G6 gets crap reviews, the Malibu gets raves just from marketing/badge engineering, so yeah the G6 isn't needed. The G6 is over the hill and so is the Malibu (even before it started) but the latter seems to get approval by the public anyway. Just goes to show that marketing seems to count for more than anything else. As I said in another thread they should be marketing the Cobalt/G5 as being "German [or European] engineering" because that would probably sell them more, and it would hardly be a lie.


Sure, let them rot eh? Where do you live (Windsor isn't it?) and what would happen to your economy if the auto makers failed? Even you would not be working in whatever job you have because there would not be any automaker money floating through your community.
Wouldn't that be Bizzaro?
Yeah nevermind what would happen to the rest of the auto industry in the aftermath. The people that go on about how GM et. al should "rot" just because they don't like GM products and prefer their Toyota crapboxes like the Corolla, don't really realise just how much GM has put into the auto industry. They weren't the biggest auto maker in the world for years without making one heck of a contribution to it. If GM were to disappear completely, the next decade or two of automotive technology advancement would be seriously stunted. And of course the economic impacts would be huge, as stated.

Well if Pontiac gets killed GM better make a 2 door malibu or something. GM needs a mid-size 2 door. Currently the g6 is really the only midsize 2 door they got.
Well the G6 and the Malibu are already the same car, but really the Malibu seems to big to be a coupe just by removing two doors. They might as well take the G6 coupe and rebadge it as Malibu coupe (nothing changed) or name it something else (like the Solara and Camry for example). The change in marketing will probably get killer reviews and higher sales, despite the G6 always being lacklustre :rolleyes: Other coupes (like the Altima Coupe) are fairly different from the sedan so just slapping a Chevy badge on the G6 coupe would not be so bad of an idea.

I'd rather they can Chevy instead of Pontiac (outside of the Vette), but Chevy sells way more and is considered the "American automobile" by Americans, who really make up the vast majority of sales. Since Chevy will certainly stay and Pontiac will go, they should at least keep the good Pontiacs going and just rebrand them Chevys.

[vek]

I think to be profitable, the domestics need a legitimate car to compete with the Civic and Corolla. And of course, do something about their current and legacy union costs.

So in other words, calling this a "loan" is pretty pointless.

[Engi-Nir]

I think to be profitable, the domestics need a legitimate car to compete with the Civic and Corolla. And of course, do something about their current and legacy union costs.

So in other words, calling this a "loan" is pretty pointless.

Here is the 2010 Cruze(Cobalt replacement), comes out in Europe in April 2009.


http://image.motortrend.com/f/motorsports/race-ready-chevrolet-drops-new-pictures-of-2009-wtcc-chevy-cruze-race-car/11834849+cr1+re0+ar1/chevrolet-cruze-wtcc-car.jpg

http://image.motortrend.com/f/motorsports/race-ready-chevrolet-drops-new-pictures-of-2009-wtcc-chevy-cruze-race-car/10909990+cr1+re0+ar1/chevrolet-cruze-wtcc-car.jpg

http://www.blogsmithmedia.com/www.autoblog.com/media/2008/10/x11ch_cz004.jpg

[mpsrent]

GMI News states that the deal may not go through. There are a lot of political hurdles that must be crossed before this deal becomes reality.

[Billa-786]

wait, wait, no more Hummer?!

Good riddance, i'm glad i won't see them on the road anymore and feel bad for the owners trying to unload them

Even the Taliban got tired of em after their fun test drives and made sure they never have to endure being behind the wheel of one

http://www.gulfnews.com/images/08/12/07/08_wd_pakistan1_ap_5.jpg

and went back to their trusted mode of transportation: :lol:

http://www.herecomestheboss.com/blog/wp-content/uploads/2008/08/toyota_taliban.jpg

[Tijuana]

Here is the 2010 Cruze(Cobalt replacement), comes out in Europe in April 2009.


In the pics it looks like the grill is just a plastic covering like in nascar, hopefully and most likely they are real grills.

[Jon Lai]

In the pics it looks like the grill is just a plastic covering like in nascar, hopefully and most likely they are real grills.

+1
Maybe that's just the prototype.

For once the interior looks okay - GM interiors are usually crap. It's still tons of plastic and the seats look very uncomfortable but at least the dash has curves on it. I hate the old rectangles and boxy dashes.

[B0000rt]

In the pics it looks like the grill is just a plastic covering like in nascar, hopefully and most likely they are real grills.

That's the race preped version.

[aquariaguy]

What if, all North American (meaning the big three) auto-makers merged to form just one company.

Well, let's see, 3 stringy pieces of poo will form one long piece of poo.

[Engi-Nir]

That's the race preped version.

...INterior is the actual.

HERE IS PRODUCTION VERSION:
http://www.caranddriver.com/var/ezwebin_site/storage/images/reviews/hot_lists/car_shopping/latest_news_reviews/2011_chevrolet_cruze_official_photos_and_info_car_ news/2011_chevrolet_cruze_official_photos_and_info/checru_real_11_4/1675054-1-eng-US/checru_real_11_4_gallery_image_large.jpg

http://www.caranddriver.com/var/ezwebin_site/storage/images/reviews/hot_lists/car_shopping/latest_news_reviews/2011_chevrolet_cruze_official_photos_and_info_car_ news/2011_chevrolet_cruze_official_photos_and_info/checru_real_11_25/1681483-1-eng-US/checru_real_11_25_gallery_image_large.jpg

http://www.caranddriver.com/var/ezwebin_site/storage/images/reviews/hot_lists/car_shopping/latest_news_reviews/2011_chevrolet_cruze_official_photos_and_info_car_ news/2011_chevrolet_cruze_official_photos_and_info/checru_real_11_1/1675012-1-eng-US/checru_real_11_1_gallery_image_large.jpg

[SkylineGTR]

Even the Taliban got tired of em after their fun test drives and made sure they never have to endure being behind the wheel of one

http://www.gulfnews.com/images/08/12/07/08_wd_pakistan1_ap_5.jpg

and went back to their trusted mode of transportation: :lol:

http://www.herecomestheboss.com/blog/wp-content/uploads/2008/08/toyota_taliban.jpg

lol...great pictures. I drive a Toyota ('86 Celica GT-S) and I'll NEVER drive anything else; I'll stick with a Toyota.

[golden]

I think GM only need 2 lines, one lower and one upper end. Just consolidate. Why have 4 brands?

[Jon Lai]

I think GM only need 2 lines, one lower and one upper end. Just consolidate. Why have 4 brands?

At least 4 is better than the 7-8+ they had before, usually with at least 4-5 of them having models directly competing with each other. And then you wonder why the Japanese companies only have 2 (okay, Toyota has 3 if you include Scion XD)

[B0000rt]

At least 4 is better than the 7-8+ they had before, usually with at least 4-5 of them having models directly competing with each other. And then you wonder why the Japanese companies only have 2 (okay, Toyota has 3 if you include Scion XD)

What about Netz?

That puts 4 major brands for Toyota. They're looking to push Prius into it's own brand too.

[Anonymouse]

Don't get me started on Bombardier. There is a scum sucking welfare company of monumental proportions. There is nothing since old Monsieur Bombardier was making snow sleds that the Canadian public has not paid for. It is the most subsidized company in Canadian history and still can't turn a profit.
If you think that bailing out the automaker with some billions of dollars, I cannot even imagine how much we have given Bombardier (or it's subsidiaries) regularly over the past 30 or so years.

I think Bombardier is doing okay these days, although the stock price is terrible. This last quarter they had 4.6 billion in revenue; 454 million EBITDA. There's a 50 billion dollar order backlog.

[hagbard]

http://www.motherjones.com/commentary/fiore/2008/12/clapper.html

[Jon Lai]

What about Netz?

That puts 4 major brands for Toyota. They're looking to push Prius into it's own brand too.

Please allow my ignorance, but I've never heard of it. There's nothing on wiki and Google gives me limited outdated results in English or Japanese websites that don't look like they are selling cars. Please educate.

[Engi-Nir]

This is the car GM Canada is using for a CDN BAILOUT ...most times I would say buick is old mans' car, but I don't know about the below (copy of Opel Insignia), already released buick regal in china.

http://a332.g.akamai.net/f/332/936/12h/www.edmunds.com//media/il/news/2008/1104/china.buick.regal.500.jpg

[golden]

Most Buick in China are good looking cars. Just not sure why the GM offers their ugliest products in their home country while the European and Asian got the best.

[B0000rt]

Please allow my ignorance, but I've never heard of it. There's nothing on wiki and Google gives me limited outdated results in English or Japanese websites that don't look like they are selling cars. Please educate.

It's a dealership network that Toyota is using in Japan to rebrand their vehicles under of some sorts. Well my point was Toyota's just as guilty of brand marketing too... For the most part this branding works, and Toyota isn't stupid enough not to do it!
http://netz.jp/lineup/rav4/index.html

A Netz RAV4, with totally different symbol see?
http://www.theautochannel.com/news/2004/03/29/186950.html

[mikeycanuk]

Most Buick in China are good looking cars. Just not sure why the GM offers their ugliest products in their home country .

Too true. My wife was looking for a new car and I suggested the Malibu. Her response was less than flattering. Flex anyone? The new Jeeps are butt ugly too.

[mikeycanuk]

Toyota has sales of 145 vehicles per dealership. Pontiac is 35, Saturn 42. I tried to get the article at the Financial post but got page not found.

GM needs to cut it's dealership base so more can survive.

[Jon Lai]

It's a dealership network that Toyota is using in Japan to rebrand their vehicles under of some sorts. Well my point was Toyota's just as guilty of brand marketing too... For the most part this branding works, and Toyota isn't stupid enough not to do it!
http://netz.jp/lineup/rav4/index.html

A Netz RAV4, with totally different symbol see?
http://www.theautochannel.com/news/2004/03/29/186950.html

Those were the links I've read but I don't understand the picture fully. But my point was, at least when Toyota does it, it makes sense. I don't know about the Netz, but Lexus and Scion are both very justified brand marketing strategies. On the other hand, why does GM have Cadillac vs. Buick? Chevrolet vs. Saturn? Just to name a few. All this just confuses the customer.

[woodstock827]

List of GM's current brands internationally.
* Buick
* Cadillac
* Chevrolet
* Daewoo
* GMC
* Holden
* Hummer
* Opel
* Pontiac
* Saab
* Saturn
* Vauxhall

Brands that I think should be sold/cut.
Buick -> combine with Cadillac
Chevrolet -> combine with Pontiac, or vice versa although I prefer keeping Pontiac
Daewoo -> cut except may be in Korea
Hummer -> sell it. It has potential in a niche market.
Saab -> sell it. Again it has potential.
Saturn -> either keep it as a platform for European styled line (with proper advertising) or just bring in Vauxhall/Opel.

[B0000rt]

Too true. My wife was looking for a new car and I suggested the Malibu. Her response was less than flattering. Flex anyone? The new Jeeps are butt ugly too.

I think the Malibu front is pretty nice, the rear is bleh!

Yeah the Flex is pretty bleh! I've only ever see one on the road lol... the GM lambdas on the other hand are everywhere!