GM needs up to $30 billion in aid to avoid failure

Discussion in 'Politics' started by faceking, Feb 18, 2009.

  1. faceking

    faceking Well-Known Member

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    GM needs up to $30 billion in aid to avoid failure


    GM needs up to $30 billion in aid to avoid failure - Yahoo! Finance
    Wow... um... I recall Flashy, starinvestort, and few other folks here months and months ago.... saying the GM float last year was pointless.... now they need $30B.

    Why not...if high speed rail lines to Harry Reid's district... why not to an american icon in GM???
     
  2. faceking

    faceking Well-Known Member

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    [edit]
    [FONT=Verdana,Sans-serif][/FONT]
     
  3. D_Ireonsyd_Colonrinse

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    faceking: "Why not...if high speed rail lines to Harry Reid's district... why not to an american icon in GM???"

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

    Fine. Give billion-dollar bailouts to GM, Chrysler & Ford.

    That's fine. But now the definitions for these companies have changed.


    There was a time when buying General Motors and Ford meant "buying american", investing in your country, considered as american as baseball and apple pie, a patriotic point of pride, evidence of a booming, thriving free-market capitalist system.


    But, now, buying GM no longer equates with national pride (or free markets).

    Buying General Motors = Socialism

    Buying Ford = Socialism


    They've accepted bailout moneys. In Darwinian capitalism's "survival of the fittest" - a jungle swarming with Toyotas & Hondas - GM & Ford should be extinct, they bit the dust long ago, kept on life-support by "contributions" from you and me.

    It's a crazy circle. The taxpayers work & pay taxes to the government ---- The government takes your money and gives it to General Motors. --- General Motors takes this money (your money) to keep in the game of selling cars a while longer, and then hopes to sell cars back to you, the consumer, the one who finanaced the revamped company in the first place with the bailouts.


    Buying General Motors and Ford = Socialism. That's the new motto.

    Cue the flag & national anthem.
     
    #3 D_Ireonsyd_Colonrinse, Feb 18, 2009
    Last edited: Feb 18, 2009
  4. D_Ireonsyd_Colonrinse

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    Addendum:

    After writing the above post, I found this article online:

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    Government provides $429M to 29 more banks

    2/17/09


    The government has provided $429 million to 29 banks in the latest batch of investments under the $700 billion financial industry bailout program.

    The Treasury Department said Tuesday that the government now has invested almost $200 billion in 419 banks.

    Former Treasury Secretary Henry Paulson committed $250 billion of the first $350 billion in the financial rescue program to government purchases of bank stock. Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co., along with six other major banks, received $125 billion of the money in October.

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

    Ok. So our government has now "invested" $200 billion into many banks, including Bank of America and Citigroup (by the way, Merrill Lynch was filing for bankruptcy; just days before B of A finalized a deal to takeover the collapsing firm.... Merrill Lynch doled out $3.6 billion in corporate "bonuses". -- How can a bankrupt company afford to hand out $3.6 billion in bonuses you might ask? With the $45 billion it received in taxpayer money).

    That's our money being "invested" for another company's eventual profit. This is socialism without the benefits that accrue to socialism.

    When banks are truly nationalized -- when the automotive industry is truly nationalized -- when oil (crude) is nationalized, it's the people (meaning taxpayers, the guys who pony up the dough) that are the beneficiaries of any profits.

    When banks or automobiles or oil is nationalized, it's the country that profits (the people own the industries), and these profits can be used for infrastructure (building roads & schools & bridges), they can be used to create jobs, these profits can pay off debts or build a surplus.

    However, when General Motors or Bank of America take taxpayer money, very little "profit" is paid back to the stockholders (the american people). It's socialism without the benefits of socialism- other companies are making out on our investment.


    We have 2 options.

    We either have to demand REAL socialism from our elected officials (the "people" own the industries, the people share the profits).

    Or we have to abide by free market principles and let failing institutions fail.
     
    #4 D_Ireonsyd_Colonrinse, Feb 18, 2009
    Last edited: Feb 18, 2009
  5. transformer_99

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    Uggghhhhhh, GM, another personal moment to really let them know how I really feel.

    A year ago I went to buy a new truck at a GM dealership. After finally ending up with a Nissan Pathfinder, I can see why they need bailouts. Their product line is over-rated. And that's not even the half of it. The treatment I received was like they were doing something for me and at every point of the buying process they were trying to squeeze me for an "absurd" amount more. And the final straw was when they insulted me on my trade-in from start to finish of the test drive. I figured at the end of any offer/counter-offer that they didn't want to sell a used truck. I basically was going to give them cash for what they were asking on the vehicle, less a $ 900 trade-in. I thought that was reasonable ? I told them they wanted $ 10,900 before taxes and paperwork, make it $ 10,000 before taxes and paper work and we could work a deal. Well, they jacked up the price on transferring my tag, which also included taxes on their 10,900 price to 12,500 off the lot. Yeah, there's nothing I can do about 7 1/2% tax on $ 10,900, that's simple math $ 817.50, but the tag transfer was another $ 782.50 in their figures. That's when I proposed $ 10,900 less $ 900 trade-in and then tax on that and reasonable for the tag transfer. I figured if they had just worked with me on a 2004 Silverado at around $ 11K cash or so, we'd have a square deal. The dealer trade-in value on the vehicle in excellent condition per on-line was $8,500. They accused me of trying to get a $ 3,500 trade-in value, when in reality I was willing to go $ 11-11.5K on something they wanted $ 12.5K for. I was giving them my truck and not paying another $ 1,000-1,500 from their figure. To me that's foregoing the private sale of my vehicle that I wound up getting $ 1,000 for anyway, so it turned out my $ 900 trade-in offer was reasonable fmv for my trade-in.

    In the end I wound up happier and with more vehicle in the used Pathfinder, than the used Silverado ever was rolling off the lot with zero miles on the odometer. I just may go back to that dealership just to f*ck with them and rub salt in the wound ? I'd sincerely love to insult whatever it was they had to sell, because they had no issue with insulting my vehicle at the time. I went there with the intent of having a thick skin and just straight up dealing fairly for a vehicle, but the jerk salesman kept telling me where my older Ford trade-in fell short of a 2004 GM product. Of course a 4 cylinder truck isn't going to compare to a 6 cylinder, but neither was all the bells and whistles for either model of truck. Funny, the Ford got me the hell off their lot the same as it got me there and even another month or so down the road until I bought the Pathfinder. I saw my Ford just the other day, still roadworthy after selling it just over a year ago.

    Just me, but I'd just assume pull the plug on GM, screw them, who needs them ?
     
  6. faceking

    faceking Well-Known Member

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    $429M/.... that's peanuts to such a sector, given what Barrah and company just gave ACORN....
     
  7. vince

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    Yes, go back and rub their faces in it. I can't stand it when a retailer/service company acts like they are doing you a favour. In '92 I was trading in my '90 Caravan for a new one. I was in the manager's office, ready to sign, when one of his salesmen popped in for a word. I said "That's the asshole that I dealt with at the other dealer when I bought the '92! He's the reason I didn't go back there. Forget about this deal", and walked out. The poor guy was stunned.

    In '97 I tried to trade for a new model at a Plymouth dealer. These idiots wanted me to go around the city to other dealers, get the best price (in writing) and come back to them, whereupon they would undercut the other's deals and give me the best price. I said "no, just tell me what you want for the van". They wouldn't do it. The "salesman" said he didn't think I was serious and he had other customers to deal with. So I went half a mile down the street and bought a Caravan with every bell and whistle available. For it's first servicing, I made sure I took it in to the first place. When I saw the salesman, I told him and his manager how stupid I thought they were.

    The American auto industry has had it's head stuck up it's own ass for so long, I doubt there is any solution that will let them continue in they same way they have been since the 1930's. I don't have a problem with public investment in or help for the sector. The USA has a long history of corporate bailouts and subsidies for key industries. But bailing the Big Three out and letting them continue unchanged is probably a mistake. They may have to be broken up into smaller companies and let some fail and some succeed.

    It won't be the first time there has been major shake out in the industry. AMC, Studebaker, Packard, etc etc... have all gone down and it was'nt the end for the world because there was competition in the markets. This time the are only three manufacturers, so it's a problem to let them completely close the doors. Re-organize it and bring back healthy competition. Either that or just resign yourselves to driving old clunkers and not being able to afford new Toyotas.
     
  8. midlifebear

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    Just an aside about GM dealers: At the end of last October I dropped by the GMC, Buick, Chevrolet, Pontiac dealer in Elko, Nevada. I had no intention of buying new or used car. However, I was interested in their "extended employee discount sale." Essentially, they claimed they were offering all GM products to the public for the same price a GM employee would pay. Not. They had removed the original manufacturer's suggested sale price, that includes a list of all the tits and feathers included with each vehicle. And they had a crew of "hard sales bait and switch" guys come in and conduct the sale for them. The regular sales staff was around, but there was this new crowd of hard-grip handshakers who were in town to help move the 2008 stock as fast as possible. These guys go from one dealership to another (regardless what brand of dealership) and use fast-talking techniques to shoe horn you into something you don't want or need.

    Turned out, after some serious chatting with the a couple of the permanent sales staff who are regulars at my bar, that the prices on the 2008 models they were pushing were actually higher than the manufacturer's suggested retail price. Higher. Yes, that was some "employee discount sale" they were trying to pull of.

    I still allowed myself to be led by the nose from one pressure sales technician to another simply because if I took a test drive they'd give a coupon for a "free frozen turkey!" whether or not I bought a car. We zipped around in a new Lucerne for 15 minutes and I commented how inferior it was to my mother's old 1995 Park Avenue. Yet, the Lucerne, if I were dumb enough to buy it, would have cost the same as a Lincoln Town Car.

    When the last high pressure sales technician (there were a total of three) finally asked me why, after they had done all they could to get me "the deal I wanted" I still wasn't interested in buying, I sat down and showed him a folder of local Elko newspaper clippings offering the exact same model with the same trim and "special features" for almost $2,000 less in an advertisement from three weeks before.

    I hung around until I got my "free turkey" coupon. When I got back to Wells (50+ miles west of Elko) I stopped in at the senior center and gave them the coupon for the free turkey "good at any Wal-Mart."

    Nope. Let the American car industry die the quick death it deserves. After all these years (since the 1950's) they still refuse to heed the advice of Edward Deming who was recruited by the Japanese from the USA to teach them how to implement quality control procedures at every stage of building an automobile. If you want to know why Japan suddenly (over a couple of decades) dethroned Detroit, just read up on Edward Deming. Fortunately, there are some 'Mericuhn manufacturing facilities (Texas Instrument and Intel immediately come to mind) where W. Edward Deming's quality assurance methods, and to a lesser part the theories on quality assurance of Jospeh Juran (Romanian born 'Mericuhn), that have been an integral part of their business models since their inception. Deming's and Juran's theories were put into practice by Japanese manufacturers of other goods, such as cameras, TVs, and of course electronic in the late 50's and throughout the 60's.

    While Deming's methodologies were focused on the manufacturing floor, Juran's theories were implemented at the executive and management level. Yes, quality assurance begins at the management level and in the board rooms of Japanese manufacturing. So you can imagen how resistant 'Mericuhn MBA's are to accepting the idea of a quality assurance culture because until recently (the last 15 years maybe?) graduate business schools in the USA have been rather arrogant regarding the idea that executives and managers may benefit from the same quality assurance scrutiny as the peon slapping tires on Buick before it rolls off the assembly room floor.

    The USA automobile industry just has never found it worth learning and implementing quality assurance short of barely meeting ISO9000 (and on up in numbers) world standards. In the USA manufacturing is still stuck in with the mindset thzt the bare minimum is what's necessary -- no more, no less -- because they've trained the 'Mericuhn consumer to accept the same low quality.
     
    #8 midlifebear, Feb 19, 2009
    Last edited: Feb 19, 2009
  9. transformer_99

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    I figured that employee pricing was a scam. The other day a fellow I know got interest free financing for 5 years and all the incentives to buy a new vehicle. So maybe someone else softened them up with a negotiation process and they caved. Or maybe it's just a year later and the economy has changed that much for them ?

    I just dread the whole negotiation process with a dealership. I really think others get the deal and they cut so low to do business with their friends that when you show up and they don't know you, you become the guy that's supposed to pick up the tab for the tremendous deal they gave to those in the circle of friends ?

    I mean let's face it, auto execs flew private planes to Washington DC for the first attempt for bailout money. They came back weeks later after that was publicly ridiculed in something they simply told their secretary to arrange to get for them off the assembly line, fresh after getting the QC/QA seal of approval ?

    Faceking indicated $ 429 million is nothing to the industry, I'm with him on that, so I figure why even give that to them ? The deal I read about that was cut between the UAW and the Big 3, job reductions, plant closings and future labor at lower wages/salaries. The next gen of autoworker is going to build hybrids and electrics for the Big 3 for slave wages and lousy benefits if they even get them ? The GM project is projected "Volt" to be a $ 40K a copy new vehicle. Looks like a Civic hybrid that's been out for a few years already for design lines ?

    Chevrolet Volt - Wikipedia, the free encyclopedia
    File:Chevrolet Volt--DC.jpg - Wikipedia, the free encyclopedia

    Buyouts for UAW labor is $ 20K cash buyout and a $ 25K voucher for a new car sometime down the road. So those people will still wind up buying a GM vehicle and pay $ 15K for something they will probably be able to get from a Japanese automaker for similar cost ? The $ 25K voucher indicates to me that the low cost Far East labor still is going to be profitable for them that day. They aren't offering it unless they intend to come out to the good on them or the rest of us ?
     
  10. Bbucko

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    The talking point about the high-speed LA/Las Vegas connection? False.
     
  11. Bbucko

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    And what MidLifeBear said is better than I could have put it.
     
  12. ths1973

    ths1973 New Member

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    I'm a libertarian.....so not crazy about bailouts.......without justifying GM's request, I think that the governement's uneasyness with allowing GM to go belly up, is that they hold extensive military contracts... I am not sure that it's really about joe schmo's Chevy Mailibu, at this stage. It would just be nice if a politician would say it like it is, and not sugarcoat the intentions or concerns. :frown1: but I'm no expert, this is just my semi-informed opinion, admittedly.
     
  13. AllHazzardi

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    Personally, I say we let all the companies die. Let them burn to the ground. Why? Because they sucked enough to fail, they should try something different. Let them go bankrupt, and begin a new company under new management for a new product. Stop producing faulty, quick-to-fail vehicles, and start producing something that doesn't drain money from the citizens of a country.

    In fact, we should absolutely say screw you to the banks, because they dug their own grave. The banks, before even getting into the mortgage thing or any other issues, had been charging high enough interest rates on lent money that it crippled the individual economic advancement rate. Had they been charging say, no more than 100% more than they were giving on money deposited(eg, 5% interest on deposited money, 10% interest on lent money), their customer base would not have been as restricted in growth, which would have allowed them to stay afloat even through a recession. Had they kept reasonable difference of interest rates, their customer base would be able to "produce", so to speak, enough money to keep the banks going. Problem 2 is that there are WAY too many banks. This is spreading the profit around way too many companies, which prevents them from making enough money, so as a result they must charge higher interest rates for borrowed money. Then, on a gamble which failed, the mortgage situation happened, and pop goes their bubbilicious bubble. So I say, let all the failing banks fail. In the old days, multiple banks were necessary because we did not have the communication or transportation system to operate one or two banking companies throughout the country. If they are let fail, just use the money you WOULD'VE been bailing them out with to protect the assets of the bank's customers when it shuts down, and have all accounts moved to a non-failing bank.

    You could argue that the failure rate of lending money requires higher interest rates, but truth is, if interest rates charged are lower, the failure rate of lending money goes down.
     
  14. faceking

    faceking Well-Known Member

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    all this drivel... and not one mention of unions or cost per employee...

    US auto manufacturing doesn't need to be #1... so whatever Japan is doing is IRRELEVANT. Take steel,.. we used to be the big kahuna, and the US isn't anymore (think Mittal, AHMSA, etc...), but plenty of US steel manufacturer's are thriving, including some of the originals. So because the US has slipped to number #2 in auto sales, they should be folding altogether?

    How can you be #2 in sales across the world, and not surviving. Thank you unions... I can't wait for the UAW to be dead... all those union heads can funking suffer, they get what they deserve. However, I'm guessing Barrah Obama will float the union $35B to make sure everyone is taken care of through retirement.

    Or better yet... let's have the Federal Government build cars. They ensure oversight, fair hiring practices, safety regulations, clean cars, clean factories, million dollar settlements for spilled hot coffee in the breakroom.

     
  15. jason_els

    jason_els <img border="0" src="/images/badges/gold_member.gi

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    It takes two to tango on those deals. Of course the UAW pushed for the best deal they could get as did the Big Three brass. The fact is the Big Three agreed to pay the UAW what was negotiated. If they couldn't do it then they shouldn't have said yes to the UAW demands. It's up to the executives to accurately project future product demand and costs to the best of their ability and they didn't see it coming even after they almost dropped dead in the 70s.

    And back when, it wasn't that big of a deal. Every company was offering pensions and lifetime health benefits. Unfortunately, costs outstripped revenues when America began to realize that it wasn't all going to be growth, growth, and more growth. Pensions became pyramid schemes and health care costs skyrocketed, outpacing inflation by a huge margin.
     
  16. jason_els

    jason_els <img border="0" src="/images/badges/gold_member.gi

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    Speaking of which, I was in a brand new Cadillac DHS last week and I was surprised at how rank it was. The leather was cheap and it didn't have all the fun gewgaws that the Germans or Japanese put in their cars. It's like someone took a Chevy and tarted-it up. The suspension was harsh and it was louder than I imagined it would be. The plastic was cheap as well.

    Cadillac isn't anywhere near the Japanese or Germans in the quality of their cars. The technology isn't there either. It felt like any other heavy-front ended American car and the seats weren't even comfortable even if they were heated and ventilated. Everything we build appears to be inferior not only in fit and finish, but in engineering.
     
  17. SilverTrain

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    Quite right, Jason.

    It's called the freedom to contract. A hallmark of a capitalistic free market system. I find it amusing to hear all the griping about socialism, and in the very next breath it's time to blame the auto companies and the UAW for engaging in capitalism. It's to the point that the second I hear the "it's the Unions" gripe, I tune out the rest of what will obviously be a rant based on emotion, and not on logic or informed analysis.

    In any event, I have zero complaints about my 2005 Ford. I had a Ford before this one that was also very reliable. Both of them have been just as (if not more) satisfactory than the Toyota I had for many years. The Toyota was a fine car. I liked it. But I love my Ford. And I'm not leading the Buy American crusade. I'm just sayin'.
     
  18. vince

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    When I was in the US recently my Dad kept pushing me to take his Caddy whenever I needed to use the car. I didn't have the heart to tell him that the stench of the leather in in his Seden de Ville turned my stomach. It was overpowering. I don't know what that they treat that stuff with, it didn't even smell real. I just kept on using his 1981 el Camino.

    I don't think it's so much the labor costs that have killed the US manufacturers. It's more a matter of product design and innovation. The writing has been on the wall since the seventies, but with a few exceptions, the auto industry has carried on it's merry way to sell badly designed cars. The market has been exposed to higher quality imports from some time and are somewhat educated now. Faux wood, "Corinthian leather" and handling like a boat, just doesn't cut it anymore. They are better than they use to be, and maybe good enough, but the US makers are still playing catch up.
     
  19. D_Tintagel_Demondong

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    When I was a kid, I remember how Chrysler did this. The basic models were the Aries and Reliant, then there was the Cordoba, then the LeBaron, and the creme de la creme was the New Yorker. They were all the same car, but with different trimmings. They then started it again with the Dynasty archetype. American companies have been doing this for decades.

    The resale value reflects this. The Big Three have been making shitty cars for decades. They still think it's the 80's, and that they have a monopoly in which they can get away with making shitboxes. Even with the high tarrifs, the American people still demanded the better-quality Japanese cars.

    As for the extra $30 billion, I say do it. If GM has to lay off 20,000 people then that money will be going to unemployment insurance. Either way, government support will be needed.

    UAW is the worst thing to ever happen to the American auto industry. Henry Ford paid his production workers so well that they could affort to buy his cars. This wasn't enough for them, and they stormed his home and demanded more! He was deeply upset over this; it was a life-altering experience for him. He felt very betrayed, since he went out of his way to traet his empoyees well.
     
    #19 D_Tintagel_Demondong, Feb 21, 2009
    Last edited: Feb 21, 2009
  20. jason_els

    jason_els <img border="0" src="/images/badges/gold_member.gi

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    I agree. Those Chryslers were junk and looked it on the floor. My grandmother's New Yorker has a 2.2 liter turbo and was reasonably quick but the doors were thin. The seats were cushy but there was no leg room. Without the fake landau roof, it would have looked just like any other K-car on the lot. It had no more room in it than the standard Aries. My grandmother liked that it talked to her but I thought it was ridiculous. The plastic switch gear was cheezy as well.
    I'd rather see the money go to specific re-training and support programs for the autoworkers and their suppliers themselves. Give them some money to live on, pay for their education in new fields, and help them find employment where they can make a living. I think that's a much better plan than giving the money to the management who will use it to fatten their own pockets in the end. Literally, create an, "Office of Displaced Autoworkers," and help the people who will be most hurt by the loss of their jobs. In the long run, it will help strengthen the economy more by creating skilled workers for contemporary employment than pouring money down a rathole.

    I disagree with this completely. The UAW did what they felt they had to do just as Henry Ford did. Capitalism is not about having a self-satisfied feeling that your workers are being paid enough. It's about each party trying to maximize their profit. That includes the investors in Ford and the workers on the Ford line. At the end of the day, they're each trying to get the most from the other person. It's hubris to sit back in your armchair smoking a cigar and thinking about how good you feel about your workers. It's a nice image, but capitalism doesn't have room for nice images and feelings of self-satisfaction.

    The auto industry, almost without exception, has been unwilling to change its practices since its inception. There have been hundreds of car companies in the US, yet few have ever done anything different than the others. Over time they were winnowed away until we were left with three. The US auto industry has shown an extremely poor ability to project future needs and change with the times. Perhaps that was because they were largely unchallenged until the 1970s. Prior to that, foreign cars were niche markets of no real threat. Come the oil crisis and the rise of the Japanese economy cars, Detroit still couldn't get it right. They made some poor small cars cranked out at the last minute and Americans bought them because the Americans of that time had been raised to always buy American. We, their kids, knew better. We saw the Toyotas and Hondas and VWs and saw a better product because the whole idea of buying an American car because it was an American car, didn't have nearly as much influence. It still doesn't and Detroit, despite having some brilliant exemplars in BMW, VW, Toyota, Honda, or even FIAT, still thinks that Americans are willing to accept lower quality just to buy American. It's time for them to sink and allow others to, perhaps, rise in their place.
     
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