Finally, Standing Up To Obama's Plans For Chrysler and GM

Discussion in 'Politics' started by Flashy, May 25, 2009.

  1. Flashy

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    Now, since none of the more blinkered Obama fans have actually commented on this particular issue, without screaming about Bush or excusing it in some way, let us hear the excuses now...

    this is *OBAMA'S AUTO BAILOUT PLAN*

    George W. Bush has nothing at all to do with it.

    *NOTHING*

    We all know Bush was one of the worst presidents in the history of the USA.

    there. done and dusted.

    now deal with this issue.

    *NOW* justify this policy based on the facts about what Obama is doing, and the people he is hurting *WITHOUT* mentioning George W. Bush since his stupidity is completely irrelevant.


    Here are the facts-

    - Obama's "plan" for Chrysler is to wipe out 71% of the money American institutions invested in the company.

    - Secured lenders, who were guaranteed more from a bankruptcy filing in court, rejected his "offer" of 29 cents on the dollar (so UAW could be given control of Chrysler with 55% of its shares) Obama accused them of being "unpatriotic", and having their own self-interest above that of Chrysler's workers (to whom he wanted to give control of the company)

    "But while many stakeholders made sacrifices, some did not, in particular, a group of investment firms and hedge funds that hoped to hold out for a taxpayer-funded bailout. I don't stand with them. I stand with Chrysler's employees, management and suppliers. I don't stand with those who held out when everybody else made sacrifices."


    - Since nobody feels any sympathy for these mean hedge fund managers who actually manage people's money who Obama was clearly trying to demonize conveniently, how abouyt having some sympathy for many of the *REAL* people getting screwed by Obama so he can pay back the unions?


    two Indiana state pension funds --
    Indiana State Teachers Retirement Fund,
    Indiana State Police Pension Trust
    and the Indiana Major Moves Construction Fund, own about $42.5 million of Chrysler secured debt


    ( representing teachers and state police officers -- and a state construction fund) Filed objections against Obama's plan to seize their money in contravention to bankruptcy laws.

    The teachers' pension fund alone has said it would lose $4.6 million under Obama's proposal.

    - The fact is, President Obama is in fact stomping on investor's legal rights. Cops and teachers are hardly greedy wall streeters, are they?

    Secured investors are *LEGALLY* entitled to be repaid first, before other Chrysler bondholders are, and to receive an ownership stake in the company should it go bankrupt.

    President Obama has *DELIBERATELY* circumvented those *LAWS* in order to give UAW more money, and control of the company by simply voiding all the legal documents that Chryselr had with its secured lenders.



    NOW, On to Step 2...



    President Obama is now attempting to do the *EXACT SAME THING* to GM...and worse...

    these are *AMERICANS* who have *RIGHTS* for a market determined decision of what their investment is worth - not a decision by an Obama political fiat.

    At least with Chrysler, it was easy to ride roughshod over the bondholders, because it had much fewer and they were much richer, but this is *GM*



    As for how this will all shake out...take a look at how great a job Great Britain did of running their car companies when the government got involved.

    the government will *OWN* 51% of GM under the Obama "plan".
    the UAW will own 38%.

    the bondholders who *SHOULD* by all legal rights, have the first claims to all the company's assets, get only *10 percent*

    and the *CURRENT* stockholders...get *1%*

    GM is going to be 90% (nearly) owned by the government and the UAW.

    The UK tried it in the 70s and failed miserably, with the majority going out of businees....and now, we are doing the *EXACT* same thing, saving the unions at the expense of making good cars.

    When it is all said and done, the GM deal will give UAW 3 times more equity as the bondholders, even though they hold 8 billion dollars less worth of GM's liability then the Bondholders.

    there are over 100,000 Individual GM bondholders, and the majority of them are not these rich wall street meanies.

    Those "greedy" bondholders who protested and wanted to meet with the administration to discuss it, were then rebuffed by the Obama adminstration...

    So let us look at a couple of those greedy folks who Obama is about to destroy to pay back some of his most ardent supporters...roughly 25% of them are individual investors, and that does not account for the pension funds that hold a large portion of the remaining 75%.


    Marjorie Holden, 81 years old, retired teacher, widow
    Five years ago, paid about $40,000 for GM bonds, which generate interest ranging from 7.4% to 8.4%. Now the bonds are worth just under $10,000.

    "The bondholders are not all rich," says the retired teacher. "I need to conserve my assets."


    Chris Crowe, Denver, Co

    I’m a retired electrician from Denver, Colorado. I’m not rich and I’m not a Wall Street bank. These bonds finance my son’s college tuition and my retirement. I’m actually very concerned about not getting a check on May 15 from my bonds because I need this money to pay my property taxes. When the administration refuses to meet with the bondholders or chooses to wipe them out, they’re wiping me out, and lots of others like me.


    Gary Thomas, (retired mechanic) from Kingston, Tenn.


    I spent a good portion of my life working on GM cars and decided to buy bonds in GM because I believed they would be a solid investment for my future. I use the interest from the bonds for everyday living expenses and I cannot afford to see GM go bankrupt. After doing the math, I have realized that if I were to accept the administration’s current offer, I would only have $10,000 per year to live off of. That is barely enough to live a decent life and I doubt anyone would deny that.

    Harley VanDeloo, 69, (retired high-tech marketing representativ" Thousand Oaks, Calif., bought $20,000 in GM bonds a year ago, now valued at less than $3,000. "I thought GM was too big to fail."

    Dennis Buchholtz,67, superintendent of a factory
    who invested $98,000 in GM bonds and relies on the $150 a week he receives in interest to help fund his retirement. "That offer doesn't seem fair...We have invested twice as much as the government and we'll only get a fifth of what the government will."

    "If this deal goes through, we're wiped out," sitting in his living room with Judy, 61. "We're too old to recoup. Who's going to hire me?"

    John Milne, retiree
    holds GM bonds with a face value of $20,000.
    "I'm equally as mad at GM as at the government because GM has done nothing more than give the UAW and the government what they want,I came here because this is the only place where small bondholders can be heard," he added. "We've been shut out of this entire process."


    Teresa Durhone, retired early from her job as a paralegal to take care of her 83-year old mother in Ocala, Fla,


    "To this day, if they told me GM would be OK, I'd hold them to maturity,It wasn't a speculative venture for me. It was an attempt to get a nice solid retirement income that would allow me to stay home with my mother."


    She said the GM bonds, which have an original face value of $25,000, are about 10% of her savings, and an even greater percentage of her retirement income. She said she's still hopeful the company can survive without bankruptcy. But she's very worried.


    "I try not to obsess over it but I do lose a little bit of sleep,"




    Obama is offering the bondholders, who hold roughly 60% of the secured bonds, 10% of an insolvent company and saying that is "fair"

    SO, tell us why these people should suffer, so Obama can pay back the unions?

    If you cannot do this without attempting to draw the idiotic george w bush into it, then do not bother posting.

    This is *OBAMA'S PLAN*

    and we have not said anything about the future effects this is going to have on lending to highly unionized companies, like airlines, steel manufacturers etc...the risk priced in by the firms doing the lending is going to make it to expensive for these companies to seek loans...lenders, wary of being wiped out by an administration that does not care at all about lenders rights, will turn their backs on these unionized companies with underfunded liabilities...

    anyway

    do these folks look like Wall Street Sharks?

    http://www.latimes.com/media/photo/2009-05/47037697.jpg

    either defend the plan for what it is, or criticize it.
     
  2. speshk

    speshk New Member

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    Will you all please stop hating George Bush?

    All he wants to do now is call his old friends for reassurances and work on his memoirs (in between hits of Scope in the loo).
     
  3. _avg_

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    What would YOU do? What's the alternative -- do NOTHING?
     
  4. Flashy

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    no, actually, the alternative is to give the bondholders, who hold roughly 60% of the liabilities, (27 billion) the largest share of the company, as opposed to giving the government and the UAW far more than what their share is.

    that is the point of the whole problem.

    Obama is wiping out the creditors, in this case, over 100,000 small creditors who, like the other 75% of institutional investors, own GM's debt...in favor of the UAW, who gave over 5 million to his campaign, giving them nearly 4 times what the bondholders receive, despite holding 33% less of the liabilities of the bond holders.

    these people bought GM bonds...i.e. loaned GM money, and they have rights, that the Obama administration is trampling on in order to pay back the UAW.

    Bankruptcy Court, would give the bondholders a much better deal, since they have the same rights as employees in bankruptcy court to repayment of liabilities(that is unsecured lenders, secured lenders have more rights than anyone)

    Obama is trying to force a deal on these people, that does not give them equal rights to the UAW and the government.

    the government is using *YOUR* money, (in the form of the 19 billion the government has already guaranteed to GM or roughly 63$ for every american) to hand the company over to the UAW and the government, giving them 90% combined of the company, even though combined, the UAW and Government have liabilities of 39 billion combined, and the bondholders have 27 billion.

    they*OWE* these people the same fairness they would receive in bankruptcy court...

    Obama does not have the authority to trample 100,000 small investors, who bought GM bonds over the last few decades, i.e. loaned GM money, and hand 38% of the company to them UAW, and only 9% of the company to the 100,000 individual bondholders, even though bondholders hold nearly 60% of the debt.

    the point is, how would you feel, if you owned 60% of a companies debt obligations, and all its wworkers owned 40% of it...then, a big all powerful entity came in, and since that entity had received millions from the workers of that company, decided to completely trample your case to go to the time honored american laws regarding bankruptcy and creditors right, and said, you own 60% of the companies liabilites, and the workers own 40%, but we are going to give you 9% of the company, and we are going to give them 38%, and if you don't like it tough shit, because we are more powerful than you, law be damned.

    you would not be very happy in that situation.

    neither are these people...the majority of whom are very small investors, who invested in these great "workers" and this "great" company, who are now being raped by the government and these workers.
     
  5. lucky8

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    Get over it. While I don't agree with giving the UAW such a big share, you should remember that the free market already destined GM to bankruptcy. Without Obama,
    GM would be forced to liquidate, which would bring the bondholders more money, but would end GM forever.

    We don't need to bailout GM bondholders. If I were to make a bad investment, I wouldn't expect the government (your tax dollars) to pay for my mistake, so why should this be any different? It's the fundamentals of finance, risk vs reward. Risk means there's a chance you're going to lose your money, reward means there is a chance you're going to make money. Investments are never guarenteed, unless we're talking about t-bills. We shouldn't change the fundamentals of investing just because a bunch of wealthy people made poor investment decisions.

    Let's face the hard facts here. Currently, GM has no creditors, and will have no creditors for some time to come, which is why they had to turn to the government for money. Why don't they have creditors? Because the market has determined that the company is a piece of shit, so no body will lend them money. The loss of bondholder money is much more Wagoner's fault than Obama's. Afterall, he's the reason GM is in the position it's in in the first place.

    BTW, I think the UAW will destroy the company quicker than Wagoner and Obama put together. Might as well start the liquidation process now
     
  6. D_Ireonsyd_Colonrinse

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    Will somebody please teach Flashy how to write a simple, unadorned sentence?


    Watch:

    Flashy writes:

    this is *OBAMA'S AUTO BAILOUT PLAN*... *NOTHING*... *NOW* justify this policy... the people he is hurting *WITHOUT* mentioning George W. Bush since his stupidity is completely irrelevant...

    President Obama is now attempting to do the *EXACT SAME THING* to GM... these are *AMERICANS* who have *RIGHTS* for a market determined decision of what their investment is worth... the government will *OWN* 51% of GM under the Obama "plan"... and the *CURRENT* stockholders...get *1%*...This is *OBAMA'S PLAN*

    --------------------

    WHY is *FLASHY* resorting to so many "bells" and "whistles" and "quotation marks" and **ASTERICKS** and CAPS to "make" his ***points***??

    What does this "look at me, look at me" style of writing accomplish?


    *NOTHING* %#&F#WR*&(!!!!!!!!!!!)

    Isn't this type of writing "fun"?

    I mean **FUN**?

    Or "**"FuN^^^^**************"""?
     
  7. TurkeyWithaSunburn

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    Let the freemarket work, let it fail... :smile: Should have did that with the banks too! grrrr
     
  8. D_Tully Tunnelrat

    D_Tully Tunnelrat New Member

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    Flash, totally agree with everything you have written. This and the Chrysler deal are all about political payback to the UAW. As much as I am for the working man, the UAW has not done him any favors, as this plan only forestalls the inevitable, which is a total dissolution of GM, or some such British Leyland muddle, ala '75.

    As another motivating force, I am sure the US gov. does not want to take on the pensions of every retired GM/Chrysler retiree, or surviving spouse. They are hoping this action will avoid that. I am not so sanguine.

    As a lawyer, Barack should have let the bankruptcy courts, which are seasoned in such affairs, even if this one is a doozy, handle the matter.

    The irony, of course, is that the financial industry is getting bailed out without this kind of wealth destruction, unless you were a Lehman employee, or creditor, which is perhaps why the Admin is bending so far the other direction for GM, and Chrysler.

    The biggest single stat on the US auto industry that stands out is that if the Big 3 could have purchased all the shares of every other automaker in '98 with the $200B they've since "invested" into the US auto industry. But then they might have ruined BMW, etc. too. What a waste.

    Alternative energy, perhaps bouyed only by gov. fiat, will be the next asset bubble... IMHO.
     
  9. lucky8

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    Don't be so humble about that opinion...I'm right there with you on this one. If and when plug-ins dominate the roads, we'll soon have another problem on our hands because all we'll be doing is trading one natural resource for another. The cost of electricity is going to skyrocket over the next 15-30 years, especially with a carbon tax in place
     
  10. BobLeeSwagger

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    It's not so much about protecting the UAW as much as preventing a huge percentage of the auto industry's workers from being laid off at the same time. By keeping GM and Chrysler alive for a while, they at least prevent a complete collapse of that sector.

    GM and Chrysler already ran their stock into the ground before any bailouts started, so their investors were already screwed.

    I would argue that the real problem is how much is being spent on the bailouts as a whole. I suspect that the real plan is to let these various mega-corporations gradually fail instead of letting them all fail at once.
     
  11. midlifebear

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    Flashy, you ingorant slut! For once I almost completely agree with you. I can't completely agree with you, because I'm not privy to all the rickety financial agreements in place that were supposed to hold up GM and Chrysler. As for the bond holders, I'm in agreement that GM and Chrysler should have been allowed the old-fashioned means of exiting via bankruptcy, with the hope that the bond holders would receive substantially more than the 10% on their original investments. As for the UAW, fuck 'em. When was the last time you ever bought a quality American-made product produced by union workers? I'm not against unions, per se, but I learned the hard way that looking for the union lable did not ensure quality. Case in point: In 1990 I bought a Sylvania flat screen TV, the last television sets built in the USA (Tennessee, or so it said on the back of the case). It lasted a whopping two years. But enough about anyone in Tennesse being able to produce anything except for the possibility of a good race horse.

    I'm probably wrong, but is seems there would be plenty of valuable manufacturing chunks and parts left over of Chrysler and GM which other automakers could pick up at bargain rates to refine, rebuild and reuse in their auto manufacturing processes. When Hudson was taken over by American Motors in the 1950's, people gasped. But AMC, which was on its own on slow road to nonexsitence, helped absorb much of what would have otherwise been a serious catasrophe in the first of two major recessions in the 50's. (However, there are some people -- my father included -- who would argue that the entire Eisenhower Administration was one, long snooze-fest of a recession.) And Studebaker, which was more American than apple pie bought a luxury car nameplate as well as the company behind it, Packard, for pennies on the dollar. Unfortunately, Studebaker's own problems with the UAW and contracts renigged on by US military started it's slide into bankruptcy. MotorTrend Magazine and their ilk insist is was Studebaker's unappealing, solidly engineered, mid-sized and compact cars that 'Mericuhns just didn't want. That may have been part of the proplem, but since when has dependable quality and reliability been a marketing problem? (I am the third owner of a 1963 Studebaker Lark which, except for new tires, having the wheels turned for a brake job and regular oil changes, seems to be in no need of any repairs. Even the paint remains in good shape. But I digress.) As a magical emblem of American fabulousness even Dinah Shore would have admitted to preferring Studebaker's (she owned two), but she had to pimp for GM telling 'Mericuh to hit the road for Chevrolet. By 1963 Studebaker was cold and life-less. Ironically, in 2009 it is still possible to buy a brand new 1963 Raymond Loewy-styled Avanti that looks like it just rolled out of Studebaker's plant. It hasn't. Some independent entrepreneur bought the rights to the Avanti and builds them to order. They look almost the same, but incorporate things like BMW suspensions, new Corvette engines, airbags manufactured in México -- you get the idea. Still, with the fall of Studebaker (and Packard), the USA continued to survive the loss of yet another car company.

    As for Chrylser, it has been one of the most poorly managed US companies in history. I'm old (old old) and of all the car manufacturers in the 1950's anything produced by Chrysler from 1955 to 1965 was incredibly inferior to Ford and GM -- and that's not saying much. Sure, they had the "hemispherical" piston engines with lots of horsepower, but little things like dashboard wiring harnesses, brakes, transmissions, and power options rarely lasted long enough before the owner of a Desoto (remember them?) could trade in their purchase two-years later for a newer model that might last another two years without turning to a pile of rust. Chrylser could have died a quiet death in 1965 and 'Mericuh would have still remained safe from being overrun by commie pinkos hiding under rocks in everyone's back yards.

    I do have sympathy for those citizens and former workers holding bonds in the car companies. But not much. First, none of them strike me as types who understand the risks of investing -- especially in bonds. Not long ago I, myself, was able to miraculously cash in municipal bonds at their maturity in two Texas cities without losing my total investment . . . and it was due to just dumb luck. Yes, cities go bankrupt, too.

    As for Obama throwing money at Chrysler and GM? I do not believe he should have been advised (or strong-armed by the UAW) to do it. If possible, it should have been done so that the US government held those compan's executives testicles to hot coals until the original investors received a more equitable return on their losses and -- once again -- fuck the United Auto Workers Union.

    In the next couple of years I will need to buy two 'Mericuhn auto-MO-biles to replace those on my ranch. Unless Toyoto or Honda start to fold, I'll unquestionably go to the dealers for those manufacturers and negotiate cash-discounted purchases. After all, the majority of those brands are manufactured in non-UAW controlled facilities in the USA and consistently earn higher marks for quality and excellent gas mileage than Ford.

    However, during the next decade I am going to miss crawling into the back of a big, cushy triple-black Lincoln Town Car limousine when I'm futzing around Manhattan. It looks as though Ford has convinced New York that their mid-sized Ford Explorer hybrids will answer most of the needs of corporate businessmen, ladies from the upper east side out for a day of shopping, and kids on prom dates. Nope. It just won't be the same. Hell, I can make a more comfortable call with my TracPhone from my 1995 Jeep Wrangler (of course, the scenery is a lot different -- cows instead of crack heads).
     
    #11 midlifebear, May 25, 2009
    Last edited: May 25, 2009
  12. Flashy

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    actually, WT...the phrasing was rather simple...you said

    "FLASHY WRITES"

    I never wrote what you said i wrote. You removed considerable amounts of text from between the emphasized words.

    What does this "selective editing" and outright lying about what i have written accomplish?

    I wrote plenty of simple sentences and paragraphs...you removed text and inserted all the "adorned" words together.

    If you are going to critique the post, you should be able to do it without lying about it.

    selectively editing people's posts, removing key points and phrases, hardly reflects well on your writing skills.

    Of course you could not take issue with the substance of the posts, either.
     
  13. Flashy

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    #13 Flashy, May 26, 2009
    Last edited: May 26, 2009
  14. Flashy

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    thank you duc...

    as usual, you are articulate, incisive, and right.

    and i also agree on alternative energy...unfortunately, since i am a huge proponent of it...i just think that once the government gets its hands too far into the production end, it will be a disaster...
     
  15. Flashy

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    thank you MLB...your post was enjoyable, as usual.

    I am not anti-union either...but my problem with the unions, is one of a problem that affects all enterprises...how much is enough?

    When Unions were started, the focus and ideals was to protect workers from unfair exploitation, terrible conditions, chronically low pay, scarce benefits, and very limited protection.

    I am all for that...exploitation is unacceptable to me. That is not how you build a good company.

    A good company is built by taking care of employees...being generous, but not recklessly so. Being inventive and open to new ideas...(helping employees by having a daycare center *AT* work, performance bonuses, etc.) a happy and loyal employee is a productive employee.

    But somewhere, the Union creedo became less about protection, and more about exploitation themselves.

    ultimately though, unionized workers in very blue collar industries in the USA are becoming dinosaurs as the two bells that have been tolling their death knell continue to clang:

    1. Automation
    2. Foreign Workers who work harder and for less money and make better products that can be sold cheaper.


    unions like UAW have become as corrupt, stubborn and as exploitative as the very institutions they were founded to protect themselves against.

    I do not feel badly for them at all.
     
  16. lucky8

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    Flashy, I fully understand what is happening. I'm arguing that if the adminstration hadn't stepped in as a creditor for GM, the company would be forced into liquidation, not reorganization, which I fully believe.

    Purchasing bonds is a form of investment, you cannot argue against that. GM bondholders all had the option of putting their money elsewhere. The interest they receive from bond payments is derived from risk, MRP. This risk stems from the fact that there is always a possibilty the investor will lose his or her money, ie, capital risk. This risk is derived from several things: maturity risk, business risk, financial risk et al. Poor investment decisions, I don't feel bad for people who make poor decisions.
     
  17. sparky11point5

    sparky11point5 New Member

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    Flashy --

    I am not convinced that this is really true. Do you have any references?

    Here is what I know, but am too lazy to google.

    -- Pay generally correlates to productivity worldwide. US workers (both union and non-union) are paid roughly in line with higher productivity.
    -- US workers put in far more hours than workers in other countries.
    -- Other countries have a high labor cost driven by workforce rules, paid vacation, and other social safety net programs. These costs are generally company-paid and not reflected in gross or net pay.
    -- Car-guy friends tell me US cars are similar in quality now to foreign makes built here. The quality problems of the 80s and 90s were largely resolved by adopting JIT manufacturing, lean techniques, other QC etc.


    I think the main problem is that GM and Chrysler have had 30+ years of designing and building bad cars -- too little innovation, too little styling, just OK quality.

    Here is the major one though.

    -- *Annual increases in health care costs of 15%* Japan, Germany etc have public health care, and we should too.

    As for bankruptcy, I think the most likely course for Chrsyler would have been Chapter 13, since without government intervention, they had no operating cash. Some operating cashflow is a *requirement* for Chapter 11. The bondholders would have gotten zero.

    I think Obama's logic is similar to that for the banks -- avoid a cascade of failure that would push the US into a far deeper recession. In other words, it was about preserving the jobs, even if just for a few years.
     
  18. Flashy

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  19. sparky11point5

    sparky11point5 New Member

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    Flashy --

    A few points. First, the fact that GM is expanding in China does not necessarily prove that it is cheaper to produce cars there. Lower unit labor costs does not directly impute into lower production costs. (I'll find the right productivity numbers over the next few days.) Remember this is GM, so no management decision is really proof of anything sensible.

    Second, my take is that almost every manufacturing or consumer products company has wanted to expand in China (a few have been clients of mine) and this was driven by the current and potential market size. And, of course, no labor protection, environmental protection, and enormous government subsidies. I don't think this has always been beneficial, but similar to offshoring US jobs, has been the trend.

    If the price of having a manufacturing sector is to act like China, then the US should find other ways to produce goods and services of value.

    Let's save your prediction, and see if there are any Sino-GM or La Chrysler bond holders in two years. I just cannot get too worked up over hedge funds rights. At the end of the day, the UAW needs the jobs more than the financial services class (that includes me btw, so I will put my money where my mouth is) needs the 100% return on principal.
     
  20. D_Tully Tunnelrat

    D_Tully Tunnelrat New Member

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    I think Flash is correct in pointing out that Obama's way of handling the creditors, which includes mom and pop investors as well as hedge funds, has been to ignore existing Ch. 13 bankruptcy law. Anytime any Administration changes bond financial rules mid transaction, you are going to create a poor group of bond holders, and in this case there were a lot of blue collar pensioners in the mix too. I have a family member who worked for GM for 30+ years, and they fall into this group.

    Although buying any financial debt is a calculated risk, senior bond holders usually get, at minimum, equity $ for debt. Often they get 100% on the dollar. In this case, they got a major haircut in the Chrysler deal. Obama should have let both companies go through the Ch. 13 bankruptcy process. I rarely hear of anyone, at least prior to last fall, going the Ch. 11 path. If Obama had let experienced judges handle the restructuring of the companies, the taxpayer infusion would have been less.

    China has a distinctly unfair trade advantage since their currency is artificially linked to the dollar, so any comparison to their flooded labor markets is not fair. Cheaper labor doesn't necessarily make for a cheaper product, as Spark points out, but it does make for an unlevel playing field. However, a carbon tax, properly adjusted against a US consumption, or flat tax would begin to offset China's cheap labor costs.

    Toyota, Honda, Nissan, Hyundai, etc. also lost money during this downturn, so one cannot simply fault the GM/Chrysler workers. Factory workers, who started straight out of high school, and put in twenty five or thirty years on the line, are living into their 80s, outstripping defined compensation retiree benefits negotiated back when life expectancy was in the 67-77 range. Health care costs have increased 10 fold since then as well.

    To be sure management of both entities has been atrocious, but that has largely been the case since the 70s. One story I read about how Toyota starts off their MBAs strikes me as apt here. Instead of being given a big cushy office, and an assistant, they are put on the factory floor for several months. Their first task is to take an assembly line process, and eliminate 30% (or so) of the process. The first 10% come easy, the next 10% are hard, and the final 10% very difficult. I cannot imagine Ford, Chrysler, or GM doing the same. I think it illustrates that in order to be more gain competitive advantage, you have to be willing to change, and change is hard. Something everyone associated with GM, and Chrysler are now realizing.
     
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