Well said, but culture clash definitely played a role. Those on the inside agree that these companies never worked well together. However, your analysis is also right on the money.

 

I think that had a lot to do with Daimler's attitude on the merger. From what I've read, Daimler said merger of equals and meant, our American subsidiary. Chrysler said merger of equals and meant merger of equals. Chrysler had some issues when DCX formed, but they were by no means in serious trouble at the time. General inability to work well together comes more from above than below.

I have to give the Senator credit. There are very few people who could make me suddenly think better of Secretary Paulson right now. He's rapidly done it. Go Paulson!

Not sure where else to post this but it's an interesting read:

 

Are you an idiot to keep paying your mortgage?

Not sure where else to post this but it's an interesting read:

 

Are you an idiot to keep paying your mortgage?

 

haha, thats pretty good.

Not sure where else to post this but it's an interesting read:

 

Are you an idiot to keep paying your mortgage?

 

I watched the press confrence where this plan was announced and I had two thoughts. #1, my first mistake was not buying a big enough house and my second was paying my mortgage.

 

That is my biggest problem with this crisis from top to bottom is that we are rewarding risky behavior. I hate the fact that we are basically put into a situation where we are forced to make the decision to either let these institutions die at the expense of our economy or bailout bad behavior. Its the same issue at the individual level. My wife and I planned to keep our payment under 25% of our net income. Both our realtor and banks were trying to get us to go higher, and we wouldn't. Now it turns out we could have gotten a free ride, and we have to pay for people who didn't plan like we did. This whole situation is a clusterf*** of epic proportions.

This automaker bailout is complete fail. It fixes nothing, they aren't competitive in the world market. They need major restructuring. Their union deals are bad, their product line direction has been horrible, and another 26 billion will just hold them over until they come back for more bailout money. Unfortunately, they will eventually get their bailout, as the labor unions paid about 80 million in bribes to the Democrats this past election.

 

 

 

Edited November 17, 200817 yr by mr_genius

Can't they attach strings to the bailout? If GM/Ford doesn't have half of their vehicles with 40mpg rating or higher by then we pull the plug on them.

Edited November 17, 200817 yr by BigSqwert

I watched the press confrence where this plan was announced and I had two thoughts. #1, my first mistake was not buying a big enough house and my second was paying my mortgage.

 

That is my biggest problem with this crisis from top to bottom is that we are rewarding risky behavior. I hate the fact that we are basically put into a situation where we are forced to make the decision to either let these institutions die at the expense of our economy or bailout bad behavior. Its the same issue at the individual level. My wife and I planned to keep our payment under 25% of our net income. Both our realtor and banks were trying to get us to go higher, and we wouldn't. Now it turns out we could have gotten a free ride, and we have to pay for people who didn't plan like we did. This whole situation is a clusterf*** of epic proportions.

Coming at this from the left...some of us out there would say that this is the biggest failure of the low-regulation environment we've created the last 30 years or so.

 

Up and down the line, there's probably 15 different steps where simple government regulations and enforcements could have prevented the mess from getting to where it is now. I.e. additional disclosure requirements on basic loans, better regulation of the investment insurance/rating companies, cutting off the CDS market at its infancy before it ballooned, and so on. Because stupid little things like not taking out an $80,000 BMW loan when you couldn't afford it were no longer illegal, it actually makes some economic sense for people to take out those loans, because it gets them the item, they don't take the losses, and all it costs them is their credit score.

 

We're rewarding risky behavior because we as a nation and as a government decided that our behaviour wasn't risky enough. So we're punishing the people who weren't that risky, like you and I.

So we're punishing the people who weren't that risky, like you and I.

 

Speak for yourself. I was able to buy this house on a $35K/year salary!

 

This automaker bailout is complete fail. It fixes nothing, they aren't competitive in the world market. They need major restructuring. Their union deals are bad, their product line direction has been horrible, and another 26 billion will just hold them over until they come back for more bailout money. Unfortunately, they will eventually get their bailout, as the labor unions paid about 80 million in bribes to the Democrats this past election.

 

I'm starting to believe more and more that bankruptcy is the best for GM's long-term viability but that would f*** the workers over in the short term. They (GM) need to be slapped around a bit, it's just that it's everyday people who'd have to pay the price.

I'm starting to believe more and more that bankruptcy is the best for GM's long-term viability but that would f*** the workers over in the short term. They (GM) need to be slapped around a bit, it's just that it's everyday people who'd have to pay the price.

I started off believing like you did. But I think that the argument that GM can't go in to normal bankruptcy right now, because it would be unable to get the financing it would need to survive a period in chapter 11 due to the credit crisis, and thus the only thing it can do is shutter the doors of the entire company and sell off its assets in chapter 7 is the one that is currently persuading me, unless someone can establish for me how GM could get the financing no one else can get.

Bankruptcy could be a deathblow for a car manufacturer. Who wants to spend $20-100K on a car whose warranty might mean nothing in 6 months?

It's a moot point for me, I'm stuck with my GM warranty anyway or what's left of it. lol.

I think that had a lot to do with Daimler's attitude on the merger. From what I've read, Daimler said merger of equals and meant, our American subsidiary. Chrysler said merger of equals and meant merger of equals. Chrysler had some issues when DCX formed, but they were by no means in serious trouble at the time. General inability to work well together comes more from above than below.

 

No doubt about that. I've heard the same things about Daimler's view on the "merger of equals." Back to the original question, would you expect the Japanese to act differently?

I'm starting to believe more and more that bankruptcy is the best for GM's long-term viability but that would f*** the workers over in the short term. They (GM) need to be slapped around a bit, it's just that it's everyday people who'd have to pay the price.

 

One thing those everday workers need to realize is that they are going to have to make concessions on their union contracts. The unions along with upper management pushed for the bad direction of product lines and unrealistic employee payment plans. I see no way that this economic situation is going to be fixed with endless bailouts.

Edited November 18, 200817 yr by mr_genius

One thing those everday workers need to realize is that they are going to have to make concessions on their union contracts. The unions along with upper management pushed for the bad direction of product lines and unrealistic employee payment plans. I see no way that this economic situation is going to be fixed with endless bailouts.

I was driving around today and I thought: Unions are one of the great things about America, and one of the worst.

 

It's great they dont let management run all over them, but too often the take too much power.

One thing those everday workers need to realize is that they are going to have to make concessions on their union contracts. The unions along with upper management pushed for the bad direction of product lines and unrealistic employee payment plans. I see no way that this economic situation is going to be fixed with endless bailouts.

You know...at least a decent chunk of that though was fixed by their most recent contract, the ones that the companies signed under threat of strike about what, a year or two ago? Where they gave up the responsibility for managing the retirement and health care accounts? I've read in many places that the newest contract does acknowledge those issues and does deal with a lot of them, but that it really hasn't had a chance to make much of a difference yet, because the banks pushed everyone off a cliff too soon.

 

One other way to fix a lot of that also would be to have a nationalized health care system...I'm game for my part of the GM bailout being taking on their health care costs.

Coming at this from the left...some of us out there would say that this is the biggest failure of the low-regulation environment we've created the last 30 years or so.

 

Up and down the line, there's probably 15 different steps where simple government regulations and enforcements could have prevented the mess from getting to where it is now. I.e. additional disclosure requirements on basic loans, better regulation of the investment insurance/rating companies, cutting off the CDS market at its infancy before it ballooned, and so on. Because stupid little things like not taking out an $80,000 BMW loan when you couldn't afford it were no longer illegal, it actually makes some economic sense for people to take out those loans, because it gets them the item, they don't take the losses, and all it costs them is their credit score.

 

We're rewarding risky behavior because we as a nation and as a government decided that our behaviour wasn't risky enough. So we're punishing the people who weren't that risky, like you and I.

So explain to me to me how places that have huge amounts of government regulations are failing? And don't forget that large amounts of that risk behavior were government mandates.

So explain to me to me how places that have huge amounts of government regulations are failing? And don't forget that large amounts of that risk behavior were government mandates.

I believe you just made the point there. If the government regulations don't do anything, or aren't designed to keep insane things like the unregulated CDS gambling market from appearing, then bad regulation is just as effective as no regulation.

I believe you just made the point there. If the government regulations don't do anything, or aren't designed to keep insane things like the unregulated CDS gambling market from appearing, then bad regulation is just as effective as no regulation.

 

You will never get good regulation under the system we have set up. It is too fragmented, disjointed, and contradictory.

You will never get good regulation under the system we have set up. It is too fragmented, disjointed, and contradictory.

Which is, of course, exactly how the people who benefited from the building of the bubble wanted it.

 

At this point, I think I'm willing to follow along with ideas for a complete overhaul of the regulatory environment. Not just changing a few laws, but doing something like you advocate and starting from scratch. I'd be interested in hearing other ideas though, but I hope some of those will come with time.

You will never get good regulation under the system we have set up. It is too fragmented, disjointed, and contradictory.

You forgot what might be the most important adjective - competitive.

 

Which is, of course, exactly how the people who benefited from the building of the bubble wanted it.

 

At this point, I think I'm willing to follow along with ideas for a complete overhaul of the regulatory environment. Not just changing a few laws, but doing something like you advocate and starting from scratch. I'd be interested in hearing other ideas though, but I hope some of those will come with time.

 

Bill Clinton and George Bush?

You forgot what might be the most important adjective - competitive.

 

Really good point!

To answer my own question here, I at least am giving an argument about why Chapter 11 simply might not be possible in the current lending environment.

In other words...if the first bailout had done it's job, we wouldn't need to bail out GM. But if that bailout was constructed in such a way that it did not force lending to resume, we may well have to bail out GM because GM won't be able to finance its way through Chapter 11.

 

 

Not if the gov't was the the DIP.