Edsel, Yugo, and GM seek more Bailout Cash

It comes as no surprise that GM is coming to the taxpayer trough again but I would have to say that the executives at GM need to learn how to fish. Don’t get me wrong, I’m a huge union worker supporter and as liberal as the day is long but this company along with Chrysler have already come to the taxpayers for a bailout and the billions of dollars went through their pockets like water in a spaghetti strainer. It’s only been three freaking months!

Did they slash executive pays across the board by ten, twenty or even thirty percent to save the company some money? Did they do a damn thing to save the company any money as the billions of taxpayer dollars came into the “General” funds account? Besides taking down clocks and changing light bulbs, lowering the thermostat from 72 to 68 degrees, did they do anything? I think you already know that answer.

Over at the Wall Street Journal they have this to say on the second tapping of the well by Detroit’s automakers…

GM Seeks $16.6 Billion More in U.S. Aid

By JOHN D. STOLL, SHARON TERLEP and ALEX P. KELLOGG

General Motors Corp. and Chrysler LLC told the federal government they need at least $21.6 billion more combined in bailout loans to put them on the road to recovery, and outlined possible scenarios if either auto maker should have to file for bankruptcy protection.

Both GM and Chrysler, in the recovery plans submitted Tuesday to the U.S. Treasury, argue that bankruptcy would be more costly and drawn out than government-funded restructurings.

General Motors Chairman Rick Wagoner speaks at a press conference at the company's world headquarters Feb. 17, 2009, in Detroit, Mich.

GM said it might need as much as $100 billion in financing from the government if it were to go through the traditional bankruptcy process. Rick Wagoner, GM's chairman and chief executive, said the bankruptcy scenarios are "risky" and "costly" and would only be pursued as a last resort.

Chrysler's plan said the company would likely have to file for Chapter 11 protection if it doesn't get additional loans from the government and concessions from unions, creditors and dealers. It said it would need $24 billion in financing if the company were to file for bankruptcy. But company officials said in a conference call that they believe a Chapter 11 filing is "not necessary" for Chrysler's survival.

The submission of the recovery plans was required under terms of the U.S. loans the auto makers received in early January. The plans, however, described only a relatively few major new restructuring steps they plan to take to cut costs and downsize their operations. - Wall Street Journal

With this latest grab for taxpayer cash in three months time comes GM with an announcement to layoff 47,000 people and talks about bankruptcy. Did anyone go over the fine print of the original loans from the government to GM if they filed bankruptcy? Does Uncle Sam and all his siblings (you and I) get screwed legally in a money for nothing deal? If the government demanded shares and the company is found insolvent, does that or does that not make the value of those government held shares at zero, null, nada, kaput?

I don’t know what the answer to this whole mess is other than absolute frustration and disgust. If GM and Chrysler were competing mom and pop stores on the corner of Main and Elm Street and they couldn’t sell the products then simple economics dictate what happens next. If both mom and pop stores were given a loan just three months ago to get through difficult times but both stores wasted the time and money then the doors need to be shuttered. I’m liberal, I’m a moderate, but I am not a fool.

The government should demand the CEO’s and Board of Directors of each companies resignation if any more cash is to follow. Insert Mitt Romney at GM at the helm and Jack Welch at Chrysler. People may not like what Mitt Romney or Jack Welch can do but you have to give them credit for knowing business and knowing how to turn situations around under pressure. The alternative choice is that GM and Chrysler go the way of the Edsel or the Yugo.

I think both sides of the political aisle can agree that management at both of these companies is clueless. Can our economy afford to let them just die off? I don’t think so and thus we have a major political dilemma building and boiling.

Tip to self: Buy stock in junkyards that specialize in GM and Chrysler parts.

Papamoka

Move your Ass Detroit!

In India they unveiled the cheapest car in the world. It’s God awful ugly but goes from point A to point B at 50 MPG. Don’t even think about looking for it on the streets in North America any time soon. It won’t pass the bicycle hitting the newspaper stand test. But it is innovative in an entrepreneurial kind of way of making brand new car ownership possible to millions of people in India.

This raises the question, why the hell can’t Detroit do this for the folks in the United States? Could it be that all the outsourcing of jobs to India has created the end of Detroit’s ownership on the world transportation needs? Either way you look at it, India has a compact super little car that fit’s the needs of their people and cuts emissions that can be bought for $2500 US dollars.

Tata unveils Nano, its $2,500 car

The long-awaited Indian 'People's Car' aims to replace the scooter in first-time buyers' hearts. Though you won't see it in the West anytime soon, it could signal a wave of lower-priced cars to come.

By MSN Money staff and wire reports

India's Tata Motors today unveiled the Nano, its much-anticipated $2,500 car, an ultracheap price tag that brings car ownership into the reach of tens of millions of people.
Company Chairman Ratan Tata, introducing the Nano during India's main auto show in New Delhi, drove onto a stage in a white version of the tiny four-door subcompact, his head nearly touching the roof.

With a snub nose and a sloping roof, the world's cheapest car can hold five people -- if they squeeze. And the basic version is spare: There's no radio, no air bags, no passenger-side mirror and only one windshield wiper. If you want air conditioning to cope with India's brutal summers, you need to get the deluxe version. - MSN MONEY

All is fair in love and war and American’s love cars. The current administration has proven that we will go to war over the go go juice that gets our people from point A to point B. With this little car we just might not have to go to war to protect our need for more go go juice.

Cheap cars are never pretty, remember the Yugo? That was a joke of a car but many people bought them and drove them till their Bic Lighter life ran out. Same thing goes for the Geo Metro, put me in the ownership column of Geo Metro lovers. I loved my little four door grasshopper. Filling the tank once every two weeks with a work commute of 19 miles each way fit my larger than life family.

Watch your back Detroit, India is knocking on the door and they are bringing savings to the driving consumers. It may not be pretty now but these cars will be on the streets of North America in less than ten years with some beefing up crash test passing results. The clock is ticking… tick, tock, tick, tock…

Papamoka

Feel free to link to or steal this post...

Technorati Tags:
Conservation, Gas Mileage, Saving Gas, Gas Prices, Cost of fuel, nano, India, Detroit, Michigan, Ford, Chevy, GM, Toyota, Chrysler, Jeep, Compact Car, automotive innovation, Oil, MPG, Cars, Car and Driver, MSN Money