Are the Auto Suppliers Next?
By John Amato Friday Dec 12, 2008 9:39amThe domino effect begins:
As a result, the hypotheticals about the domino effect of the companies’ troubles through the vast network of auto supplier firms — which employ more than twice as many workers as the carmakers — are becoming real.
General Motors and Chrysler, for example, owe their suppliers a total of roughly $10 billion for parts that have been delivered. G.M. has held off paying them for weeks, and Chrysler is paying in small increments. But the cash shortages at G.M. and Chrysler are getting more severe, according to their top executives and other officials.
“I don’t think that suppliers will be able to get through the month without continued payments on their receivables,” said Neil De Koker, chief executive of the Original Equipment Suppliers Association in Troy, Mich., a trade group.
When suppliers big and small start failing, the flow of parts to every automaker in the country will be disrupted because as suppliers typically sell their products to both American and foreign brands with plants in the United States.
As Marcy writes:
Republicans Ask Workers to Give, but Not Small Businessmen or Bond-Holders
The Replicants of the South only ask that the unions be destroyed... Wait until Shelby's pals don't get their parts either.
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I want to make Shelby and his pals pay!!
http://www.barefootsworld.net/prophesy.html
I mean, the market recovered and everything, so, the problem is over. They are going to get their cash and people will start buying cars again.
OK
If I recall correctly, have had more than one record breaking profit year in the last 20-30 years. Where did the money go that they are all instantly bankrupt? Who is providing oversight of this mismanagement of 3 of the biggest companies in the world?
Sorry gang, but if you produce more than you sell, you HAVE to cut back on production, not get loans to keep on producing at the same rate.
Also...might not be such a bad idea to produce PRACTICAL vehicles that consumers want, not gas hawg suvs, sports cars and trucks. Just a thought.
of the massive layoffs coming, but it's inevitable. You can't prop up every failing business. It's impossible. I'm wondering how long my bosses company would survive, if they were bailed out, but kept all of us workers on, even though there was no demand. It would be foolish. They'd lose their shirts, literally. We have no work, I got layed off.
The problem I have is that no matter how much money the Government gives the big 3 the overall flawed business practices will remain in place. Nothing will change. The big 3 will continue to lose revenue at faster rates because those companies just can not compete in the world market place and they know it. Those companies are bankrupt and have low share prices for a reason. Giving them a handout now will only delay the inevitable and they will be right back with hat in hand later on asking for another.
Every auto manufacturer in the world are going through the same thing. Sure the BIG THREE may be the worst but this is a global problem and Shelby's auto companies are in the same boat.
However, many of those companies are also still in good shape eventhough all are affected by the global economic downturn. The balance sheets of those other companies (I.E. Toyota, Honda, etc.) still remain fairly strong and can remain in business eventhough they have to reduce production to compensate for todays reality. The problem with the U.S. big three is that they could not compete even when times were good. This global economic downturn is simply hastening their downfall and no bailout is going to change that.
The big 3 would cease and desist all racing operations.
And focus squarely on staying solvent and refitting the line for 100 mpg cars...Volkswagen is rushing a 130 plus MPG vehicle to start production next year...this situation is bad for the big 3 no doubt...but it's also an opportunity to innovate and become viable once more.
Or am I just pissin in the wind here?
To accomplish that (i.e. 100mpg cars), the government would have to dictate those terms to the companies receiving funds. In other words, Nationalization. Personally, I think that would be a good idea, given the dire circumstances -- it doesn't have to be permanent, just for five years or so, and then renegotiate.
On the bright side, it could lead to a long-overdue renaissance for the car industry. Their old way of doing business is doomed anyway.
In fact, those are some great ideas in my opinon. Now, if the automakers would only act on them that is the real problem. Your right though, this is an opportunity to innovate and become more viable. I just wish the automakers would see that.
Further, I think the automakers would be wise to make their autos not only more fuel effecient but attractive to foreign buyers as well. They need to get out of the myopic American view and see that they have a whole world of buyers out there. Toyota, Honda and they others know this and have acted up on it. Right now, I can step outside and probably count just as many Ford and GM models as I can Honda and Toyota. I bet we can't say that in many European or Asian cities and the reason is, GM and Ford vehicles do not suit their needs. I mean, has anyone actually tried to fuel up a Ford F-150 on French fuel prices. You would go broke trying to do it. Or has anyone tried to drive an SUV through the backstreets of Rome? You would be hard pressed to get a truck of that size through to say the least.
GM is doing very well over seas. In fact they are growing.
Then you have just given the auto executives every reason in the world to move their entire operations overseas. Personally, I seriously doubt that GM is doing that well. If they were then that revenue would offset any losses they currently have here in the U.S.
http://emptywheel.firedoglake.com/2008/12/12/...
At what point the 40 something percent of people in this country who still support their obstructionist loving POS congresscritters are going to wake the heck up.
But no, god and them David Vitter family values are by far and away more important.
I agree with your sentiment, but I'm not sure I'm okay with dogging Vitter. If he likes kinky stuff, that's up to him. But just as I don't like Republicans constantly laying the blame of everything up to and including the kitchen sink on the Clinton blowjob, beating on a dead horse, especially when it's actually a red herring, isn't furthering the progressive agenda, it's hindering it.
It's easy enough to slay these people with science and fact, let's leave it at that.
Because he ran specifically on Clinton's hummer and how anti-family it was. Because his wife said that if he (Vitter) ever did that, she would pull a Lorena Bobbit on him. He did. She didn't.
I could care less what people do in their own lives, but when you are a rabid hypocrite, then I am bothered by it...and I will continue to dog him.
Same with Tappy McWidestance. If he wants to get a hummer in the publipotty, more power to him. That he actively votes against others who are outwardly gay (instead of his closeted varity), then he deserves all the wrath that can be hoisted upon him.
You don't think that many redstaters are voting for the bible and family values? I completely disagree with you on this. It is not dogging the person as much as the hypocrisy that is the person.
The bible and family values are red herrings as well. Legislating supposed morality is a dead end, and causes nothing but trouble.
I'd like to think that if you can't win an argument without resorting to personal attacks (however true they may be) if they don't directly relate to the subject you're arguing about, constitutes an inability to effectively win that argument. I'd rather see progressives rise above the need for name calling and flamethrowing.
The bible and family values are red herrings as well. Legislating supposed morality is a dead end, and causes nothing but trouble.
That IS the point. You cannot legislate it yet that is what they are doing.
Why do I feel I am slamming my head against the wall here??
After losing two elections in a row, the republican party still doesn't f*%@ing get it. They truly are a party of the right wing South. If or when the people in the south ever realize what they have done to most of them, they won't even have that.
been hit. I worked at Dana in Marion, IN until about a month ago. During the summer of '08 about 350 people worked their, excluding management (non-bargaining employees). Now just, a few months later, it's down under 100 people. Throughout August, September, and November they were letting go of about 15-20 people a week. My brother, mother, and myself all got laid off.
What part of deflating credit bubble do people here not understand?
Domino effect. Everything will be affected by a deflating credit bubble. There will be no place to hide.
As for Shelby and his pals, so will you and your pals. GM can't continue to bulid cars at a loss. Reality does not care about ideology, left or right. Deflation is the reality.
The Grand Supercycle.
The 1930's bear market wiped out all the gains of the 1920's disinflationary bull market. I suggest you all read that until you understand it.
When did the the Great disinflationary Bull market begin, this cycle?
1982.
Where was the stock market at that time? Below 1,000.
Where is the base of the Great Bull market? Accross the the time period of 1966-1980.
See where i am going?
Cycles repeat.
Dominoes, anyone?
problem that they are selling at a loss, or the fact they aren't selling because they refuse to budge on the price? Argentina's auto industry has been hit too, and their plan is to sell all their vehicles at cost price. Might not work, but what is more viable? Breaking even or going bankrupt?
Pretty much every depression in the 19th century was due to over-speculation, 1819, 1836, 1873 and 1893, so 1929 was no exception. They often borrowed money on credit to pay for shares, or use the shares they already have to pay for more, and then the house of cards comes down.
So why should the working stiff had to play when he did not play (unless his money market or pension fund did so perhaps without his knowledge.)
Americans don't have the disposable income they had 8 years ago. Most manufacturing jobs have been sent over seas. America doesn't build anything. Most incomes rely on others making money off of something built overseas. It took time to get to the point where American consumers couldn't consume 'American Labled Products' manufactured 'Overseas'.
Someone has to be able to BUY the goods so the CEOs can keep their bonuses.
Very good article by Joseph Stiglitz in Vanity Fair.
The term 'deflation' is more common than 'disinsflation'.
We currently have global deflation which is coupled with global deleveraging.
Crashing credit availability has forced liquidation to reduce debt.
The deflation is also coupled with falling demand.
Falling demand is coupled with falling credit availability.
It is a spiral.
The response to this is a vast injection of liquidity by the world's central banks, with the exception of China.
The US is well in the lead of the money printing shenanigans.
Global deleveraging has resulted in an artificially strong dollar and an even stronger yen.
Once the deflation induced deleveraging plays out, the Fed's (and other central banks) monetary shenanigans will kick in, which in the past has typically been a lead time of 12-18 months.
Then we will be off to races in the Weimar Republic take 2.
It will not be deflation but inflation.
The inflation will be strongest vis a vis China, the Yuan and everything they produce. It will be less against the Euro.
Cycles do repeat but there are different aspects to this one.
We have borrowed and spent, as individuals and as a country. We blew the money on consumption.
The inflated real estate values have come crashing down, with them our imagined wealth.
We have foolishly let our industrial base deteriorate and squandered our resources in an unnecessary 'war'.
Inflation will counter deflation but it will not create real wealth.
How will this impact the plastic industry?
The repugs will be pissed when they can't pump up their girlfriend's breasts
Or their boy toy's penises.
Go to Bank of America and demand a loan. They were bailed out to start lending.
What do you mean I am unemployed so you can't lend me money? I have an idea, hire me, give me a $100,000 bonus and then you wont have to worry about lending me the money. PS, there will be me and my husband going on that junket to Hawaii.
That is EXACTLY what got us into this mess. EXACTLY!!!
What got us in this mess is the orgies of derivatives, in which Wallstreet thought it was a great idea to use bets as real assets. To the point that they created derivatives, which have now more value than the rest of the American economy combined. This is, bets are now "worth" more than real assets.
Had there been no derivatives built on those shady loans, we would have experience a normal correction. A mild recession, part of a normal business cycle.
But it is easier to blame it on poor people trying to get a loan, sometimes just to make ends meet.
In fact the reason why we are going down the toilet, it is because bankers refuse to accept the fact that "bets" are not "assets." So they are unwilling to give that imaginary wealth up. This is what is so fucked up about this situation: we can't ask bankers to give up wealth that never existed (since they assume they are entitled to it), but congress has no issue asking auto workers to give up money they are owed for their real labor.
For such a complex situation, the simplicity of the solution is what amazes me. The fact that a few thousand people (tops) is willing to put 300 million (or more considering the world's population) through the grinder because they are not getting their way, makes me rethink my atheism. I wish there was a hell with a special ring reserved for these people. I can see now why the only people Jesus flipped out against, and got physical with, were the bankers.
May they all rot in hell...
When there are no more spare parts you'll HAVE to buy a new car when your old one breaks down.
Beautiful. Just Beautiful...
You've got to ask yourself. Has the GPO really thought this one through?
first of all, the TARP will probably be used for a "loan". i'm probably wrong but this appears to be a strategy........to take down the unions. this $70 an hour is nonsense. the (R) and the media are doing their
best to blame union workers(the working persons version of too big to fail). GM had their chance to be a
player in the electric car/hybrid almost ten yrs. ago. GM didn't like the small margin. GM wanted to dictate what Americans should buy.....control the market. They did NOT hedge by putting out fuel efficient vehicles like the foreign automakers have done for yrs. This problem with automakers has many
variables credit crisis, fuel prices and consumer confidence. Personally vehicles are too expensive so they have to do leases consequently vehicles are returned and affect the trade values. The automakers want cheap labor on foreign land to produce vehicles. What many don't understand like in JAPAN automakers are subsidized more so than U.S. companies.In addition to that they have NATIONALIZED healthcare. Wages not keeping pace with the cost of living in this country is coming home to roost.
Sorry, but the big 3 in Canada are and always have been subsidized. They also don't have to worry about healthcare because it to is not a problem. Yet they still are saying their Canadian divisions are almost bankrupt just like the US. But you may be onto something. Maybe it has nothing to do with busting unions, but closing down the North American plants, so the labour in other nations can make the product to sell over here. That doesn't add up either. Why? Because the Japanese firms, amongst others, also have factories here employing people directly and indirectly. Maybe it's really a profit margin thing. A brand new Ford crewcab last year was listed basically at 50,000 dollars. What is the actual cost? Why is there no price fluctuations in these vehicles if it's all about supply and demand. Little demand, would mean lower price. We aren't seeing that at dealerships.
Yes you are!!
My local family owned Ford and GM dealerships have the same sticker price they had before. OH you mean those miniscule "cashback" programs that do nothing to stimulate sales?
Im sorry but this is not entirly true alot of the reason they killed the electric car stems from Goverment not being able to generate a solid tax base to replace the taxes on fuel for cars.Think about it for a minute people if We eleminate fossil fuel cars and the Goverment depends on the tax base of the fuel for highway projects and other programs and the average person just hooks up a solar charger for his car how will the powers that be get there Welfare checks for there bridge to nowhere.
You raise a good point, just like to add the tax on cigarettes and booze. The taxes on the windfalls from the $4.00 gallon of gas last July told the oil companies to drop the price. The station down the street (Shell in Denver Colorado) now has regular unleaded at $1.49.
The Energy companies can manipulate the price. We in America have become dependant on the use of energy. We can control how much we use, but the fact is we use it. The cost in part determines how much we use and what we don't spend on other things.
Wages have to go up, or the cost of living needs to come down. It is that simple. GREED drove this country to the point we are at today. And that shovel is working overtime.
Taxes are a part of the picture, How those tax dollars are spent is the problem. Wars are not profitable for America anymore. They provided high dollar jobs for defence contractors, but that doesn't provide infrastucture.
Taxes on manufactured goods works when things are built in America and when the taxes are used to build America stronger.
until wages go up, until there is an increase in unions and union membership, and until the people are no longer forced to rely on loan shark credit to consume, we will continue on our downward spiral.
The idea that the problem with the big3 is that the union members are over paid is jaw-droppingly wrong. yet, this coming from the lips of the neoliberals is hardly surprising.
low wages are the problem, not the solution.
Anyway, I never heard anyone in the media nor in congress discuss how much the rank and file financial employees made per year in their decision in whether or not to give in to the wall street blackmail bill. I would surmise it is a bit more than the UAW’s $29/hour.
The same companies that manufacture parts for the automotive industry also manufacture parts for airplanes, sewing machines, dishwashers, lawnmowers, and everything else that is manufactured using parts.
The WHOLE manufacturing sector will go down!!!!!!!!!
My advise,close down every plant associated with the auto industry for a couple of weeks and the employees and the unions should load up busses with workers and there families and head for DC,line the streets in front of the capitol with signs and demand these idiots in the senate do something either get back every dime they gave to the banks and Wall street for there corp. welfare or find a way to help the average working American.And to the people who keep insisting that the big 3 only build cars people dont want that is a load of crap,most Americans were demanding the big SUVs and trucks until the over inflated price of fuel started hurting there pocket books.as for the imports sure they build a decent product but it isnt that much if any better than the new big 3 products,I own a car service and I have used every kind of vehicle You could imagine and I have had just as good of service out of the American cars I have bought as the imports and alot less cost for maintence on the american brands then the imports.
So the vehicles are as reliable and the demand was there. So why bail out just the US big 3? The other supposed "imports" also are made in North America. Are there employees jobs not just as valuable?
The "imports" are having huge problems as well.
They haven't asked for a bailout and they don't have the overhead in health care costs.
What F*cking healthcare costs do the Big 3 have in Canada? Are you selective in your thinking, or just attack all who's opinion actually is based in fact. The Big 3 are begging Canada for handouts as well. They are a separate division from their US parent companies. Gawd, are you really that stupid?
The foreign makers haven't asked for any bailout. They are subsidized by their governments already. Recheck your facts.
Big 3. Asking for handouts. In the US. Also in Canada. Same threats. Same dire predictions. Same begging for billions. Recheck your facts before calling people stupid.
I didn't call you stupid. I asked if you were. You answered.
You obviously arent that familiar with how these import car companies were subsidized while looking for a location for there plants,they have been given long term tax abatements from both federal and state taxes the state or county Governments in alot of these case gave them the land to build there plants on local sales taxes and property taxes were eleminated so Yes they were given help alot more than they give the big 3
GM, Chrysler and Ford all benefited from these same subsidizing in other nations. What, now they can't compete on their own soil when other companies get the same subsidies?
The working class should start showing their teeth. Because if we don't we are going to continue being taken advantage of.
Stop the whole country, let the Wallstreet people know we are playing hard ball. Because sure as fuck, they did have no problem raping us a few weeks back.
Let them clear their own garbage, fix their own cars, grow their own groceries, and cook their own meals. I am sure they can use their imaginary work, since they can create money from thin air. I am sure they can use their super powers to concoct physical goods and wealth out of thin air too.
of a General Strike.
Shut the fucker down.
Put the fear of God into Washington, D.C.
A couple million bodies marching on congress will do the trick.
Money can be made selling the torches and pitchforks.
And there can be some great night-time parties on the mall.
I'll drop everything and catch the Acela to D.C. when the G.S. is finally called.
yet to come. The rich and powerful have completely f*cked up the system with their corruption and greed. It may have to come to that, because there is no fix for this. It's the workers that will get hit here regardless of who did or said what. No sales, no jobs. Period.
But I live waaaaaay down in florida...and can't afford to get to DC...even IF I had a car.
Are you earning less than $30.00 an hour, set a week when all of us don't show up. If every worker said enough is enough, set a day lets say April 15th, and stop working for one week or one month until Wages go up.
I don't know who is next, but I do know many who were first to go out of business and there was no one there to hand them any money. Local restaurants here are long gone. Lots of locally owned stores here are long gone. Sometimes I think there are more empty stores that open ones. I guess they were too small to succeed. I really don't see the difference if you lost your business because the economy sucks or if you lose it because the a big company failed. The pain feels the same no matter the source.
Much is being said about union wages a lot of it is negative linguistic framing.....surprise. Past management of the automakers made the deals with labor yrs. ago when the "BIG 3" were the dominate players. The automakers did NOT adapt. Many of their vehicle lines were/are inferior. Look at the relative
depreciation value. They did NOT care. They were making so much money with parts and labor. Again they did NOT hedge with a prius type competitor instead they produce that fxxking HUMMER. Because the
public wanted it.....bullshit. They marketed that vehicle along with a NICE tax cut in conjunction with the war hysteria. This is another example of putting the burden on middle america. Those automakers had a lot to do with making the middle class. I say give them a loan with strict "strings".......fuel efficient and lower carbon footprint vehicles produced in the UNITED STATES.
we've been living beyond our means for decades. It had to come to an end and that ending will not be pleasant no matter what congress or the prez does.
morning that a 3 million jobs loss would be a conservative number, that up to 10 million jobs could be effected with the ripple through the industry. He told me even the local clothing stores and cleaners could be effected. His words, do not underestimate the cost of a lost of the American auto industry, it and it's sub relations are the biggest industry in the world.
the automakers have a big multiplier effect on the economy. this could take this recession very deep.
everything runs on computers now...big 3 gone, suppliers gone, the techs who support those industries gone
im one of those guys...one of my biggest clients is a supplier to the auto industry...i lose him, im done
hey buddy...can you spare a dime?
Yup. Figure out everybody you do business with on a daily basis. On a weekly basis and on a monthly basis. If those people don't have people using their services, whatever they may be (you used local clothing stores and cleaners), if they have no business or if their business drops off by 20% or more or even less they go out of business and then the people they do business with lose a customer and you can see how this thing snowballs. This is why the people like Shelby and his cohorts are so far off base. They are not deep thinkers and they think they don't care about the BIG 3 but they sure as hell better start caring.
A freeman became a serf usually through force or necessity. Sometimes freeholders or allodial owners were intimidated into dependency by the greater physical and legal force of a local baron. Often a few years of crop failure, a war or brigandage might leave a person unable to make his own way. In such a case a bargain was struck with the lord. In exchange for protection, service was required, in payment and/or with labor. These bargains were formalized in a ceremony known as "bondage" in which a serf placed his head in the seigneur's hands, parallel to the ceremony of "homage" where a vassal placed his hands between those of his lord. These oaths bound the seigneur to their new serf and outlined the terms of their agreement.
However in the updated ceremony; I had to pee in a cup, sing a contract which stipulated that any IP (intellectual property) I came up with during my employment (even if done off the company's clock) belonged to my employer, and then there was a celebration in which every new employee was expected to work for 60+ hrs a week on salary.
This is, for the privilege of a paycheck. Some of us, in the tech industry, have to give unrestricted access to our private lives... it is none of my employer business if I do drugs off the clock, and whatever ideas I come up off the clock are mine not theirs, and I should not have to work 20hrs free to make someone richer.
we're in RIGHT now...is the kind that breeds civil unrest...
My tinfoil hat alarm is goin off like mad...but doesn't this fit in nicely to the whole "buush is lookin for a reason to declare martial law" conspiracy theory that's been runnin rampant on the intar-web?
Seriously....if the big 3 go under, and millions lose their jobs...that's gonna be like puttin fire to a bone dry powder keg.
Not good.
but it's hard to imagine things developing that rapidly (prior to Jan 20th). B.O.s gonna have to earn every penny of his paycheck.
.
after all, civil unrest is reaaaaaally bad for bizness. And his cronies are here to make money, not to gain unrestricted power.
Bush is done, he is leaving, there is no doubt he is bored with the whole DC scene.
What he is doing, is basically running a scorched earth campaign. This prick is leaving such a shit plate for the new president to clean up, for what seem to be just shits and jiggles.
And STILL the 27% r's say bush was a good presinit.
assholes in any society.
Looking at Bush's approval figures, we can estimate that percentage to be 1 out of 3.
Bush Moves Toward Martial Law
if this were only the case.
i 100% agree that this environment breeds unrest but it seems that somewhere along the way american citizens were castrated. from illegal war, to torture, to loss of habeas corpus, to a wealth transfer from taxpayers to wall street, etc. the majority of americans have sat idly by and watched the country morph into some bizarro form of america.
there will be a breaking point eventually (i hope). but--after all that's been done--i really wonder what will prove to be the straw.
As long as people have their creature comforts...fast food and the teevee...I doubt anything will stir our lazy (m)asses of the couch.
Well tanks rolling down our streets might get some folks riled up...but by then...it may well be too late.
required to declare martial law and stay in power...if he's doin this purely out of spite...should he not be removed from power ASAP?
I mean...that type of behavior is...sociopathic at best!
... the same people who have been telling us impeachment is 'off the table' will counsel just a little more patience. 'We should focus on the future, not the past,' and 'It's not about settling scores.'
Is there not a legal means of removing a mentally ill president from power, especially if he's fuckin shit up as bad as he is right now?
I mean...he's totally destroy(ed)ing this nation! What is it gonna take to get him locked away in a padded cell?
i was listening to public radio last night. they were interviewing a couple of huge auto dealership owners in the metro i presently live in. they said customers with high 600 to low 700 credit scores were unable to get car loans. the foreign dealerships have money to lend. look at infiniti 0% loans with money down i guess
there is approximately 700 domestic dealerships in the country.
Dealers (foreign or domestic) don't give loans or finance... banks do.
what...........some automakers have their own financing. i've been told that by several people in the business....VW credit,GMAC.......infiniti is nissan financing....who said "give loans"
to qualify for their own loans. GMAC would never loan money to an individual that handles responsibility the way they do. Their credit score is probably lower than mine, and I'm a bankrupt with no loans or credit.
And Tyler, auto companies do finance their own stuff. They have their own credit ops. Just like Nordstrom or Marshalls does when they hand over a credit card. Only with a car (or house or fur or boat -- big ticket items) it's called a 'secured loan,' whereas credit extension is known as an 'unsecured loan' (because generally you cannot seize the goods upon payment default)
is not associated with the dealer.
In most cases they are a proxy between the dealer/customer and a bank/financing institution.
I think holding laws forbid a corporation to have things like its own real bank. In Japan is different, I know Mitsubishi has its own bank for example. But in the states, they have to operate as independent entities.
gawd forget it...........geeze. not sure but i believe equity firm cerberus owns chrysler and a large portion of GMAC
They own most Chrysler shares, and a portion of GMAC.
Cerberus has like $100 billion in cash.
Basically, they bought Chrysler for pennies from Daimler, and now they want the taxpayer to float their investment. Sometimes there are no words.
Revolt.
but they ARE associated with the car company as owned subsidiaries, and if they issue a credit card (like I'm sure they do) they are officially known as a no bank bank.
That subsidiary of the auto company is spotting the loan from the automakers' pockets, not an independent bank's
I worked [in credit] for years at Nordstrom, which is also became a no bank bank as of 1991 or 92, when they started to issue Visa cards as well. That's why they moved to CO. WA state did not allow no bank banks.
From the GMAC site:
"Founded in 1919 as a wholly owned subsidiary of General Motors Corp., GMAC was established to provide GM dealers with the financing necessary to acquire and maintain vehicle inventories and to provide customers a means by which to finance vehicle purchases. The company's products and services have since been expanded and now include three primary lines of business: automotive financing, real estate financing and insurance."
it is stunning to listen to the blowhards in the msm bandy back and forth about 'legacy costs', the amount of money UAW employees make, the need for some dolt like jack welch to be named car czar, etc.
the notion that further reducing wages, busting unions, and forcing the big 3 into bankruptcy seems absolutely nuts. but, then again, it provides an opening for corporations.
if 3-10 million MORE people lose their jobs how do the masters of disaster think that will effect people's ability to pay off their loans and mortgages?
what the msm and the govt-corp is suggesting will make matters much, much worse.
of course, this might be intentional, as they assume they can put back a new-corporate-controlled humpty dumpty back on the wall.
into the ground.
I would not trust any of these corporate hacks to have a remote idea of what the f*ck they are doing.
At some point, we need to realize that the majority of the business establishment are "winging" it. Until we know that, we are useless to fix this shit. Because we will continue allowing incompetent dolts to be in charge of things.
I think there is some sort of denial mechanism, that kicks in the back of our heads, that sort of makes us believe that there is some Machiavellian back story. In which business people do know what they are doing, even if it is super evil and that. When the reality is that, as Occam's razor suggest, the simpler explanation may be the correct one: they just don't know what the f*ck they are doing.
This is a great article to get an insight on the utter cluelessness of Wallstreet:
http://www.portfolio.com/news-markets/nationa...
They don't know what the hell's gone wrong. They just want to continue doing the things that have made their lives so cushy for the past few decades.
Burn the rich!
personally i do think there is an ideological push to force labor flexibilization on any remaining unions, and this can be facilitated thru--to steal from naomi klein--shock.
and, no doubt, the (supposed) wise leaders of the corporatocracy have led us down the path to ruin. and you could point to countless examples of the clueless-ness of wall street and corporations. yet, somehow they laugh all the way to the bank, as the rapidly rising income disparity gives us all nosebleeds.
i don't see some sort of illuminati plot here, but i do see this as the continued outflow of washington consensus policies that have--for decades, across the globe--used economic ideology in conjunction with disinformation to skew policies to favor the rich.
but the effort to deregulate/lower labor costs, is in itself misguided.
So you reduced your labor, by paying slave wages, that sort of maximizes your profit. So far so good, now the people with slave wages can't afford what you are selling. So in the end there is no profit.
I think the sheer greed is what makes them so dangerously shortsighted.
dangerously shortsighted. the entire system is deranged.
one reason why the IMF forced/blackmailed developing countries to open their markets to direct foreign investment was to give a place for global capital to flee to as they destroyed everything around them. and, eventually, you run out of un-fucked areas. you run out of markets to "open" (see, steal).
the idea that the ruling class is smarter, wiser, more prescient than the rest of us should be laid to rest, by anyone still fooled. they are just more greedy and have the power and connections to profit off that greed.
really, though, we can see what happens when the rubber hits the road. when global capital was humming along the ruling class preached market fundamentalism (however skewed it was), and the danger of state intervention--as this allowed them to heap more treasure onto their pile of riches. now, not so much. they are in trouble and they simply pull the marionette's strings and have the state intervene on behalf of their affairs.
What is the crux of the problem? Is it building green cars like the foreign auto makers are doing in the South? Are all other Northern employes' receiving equal monetary wages, dollar for dollar as our southern neighbors?
Does the automobile supply chain in the parts manufacturing sector, both wholesale and retail (OEM & after market) target the same customers in their business plan(s)?
Has the past and current operating cost(s) of the automobile manufactures been exactly the same, similar or skewed?
As many often tend to do, I believe we rush to judgment and paint our view(s) with a broad brush, mistakenly hurting the innocent in our opinion(s) and action(s).
So as I began, what is the crux of the problem? I myself would say it stems from money, fair enough? Therefore, I would look too see if we have had any problem(s) with our monetary system for starters, taking into consideration its history. Yes, I would start there and move forward systematically pinpointing what I would consider flaws.
I would continue with "individual" bipartisan thought, often called an open mind. When you restrict your thought(s) with limited consideration, you not only hurt the innocent, you hurt the whole being.
I'll end with my opinion and limit it to the subject in question. All things being equal and that includes financial intervention, many more then the auto suppliers are next, because if we like it or not we are one! If we continuously stereotype a problem with narrow review and apply corrective cures on same, we will most definitely toss the baby out with the bath water. No matter what happens, I wish my best to all. That is the one thing I'll paint with a broad brush!
GM sold 51% of it's stake in GMAC to a investor group led by Cerberus Capital Management. GMAC is struggling also they provide the backing for dealerships who also need credit to put vehicles on their lot.
GMAC is trying to get in a position for TARP money. The bottom line loans aren't being made. Nobody trust anyone......those credit default swaps have had far reaching effects in the trillions.
sounds a wee monopolistic, no? You manufacture the item, own the dealerships, finance the buying of...at least some kind of conflict of interest...
like wal-fart. china sells cheap money buys treasuries........china ships to wal-mart and we buy their crap. this country does NOT produce trade out of balance. by the way i believe wal-mart in china has some union labor. shareholders want more DARWINIAN..capitalism CHEAP Labor
Monopolists are monotheists.
How will this affect subsidiary businesses
Like streetwalkers
When there are less cars at red-lights
With doors they can lean upon whilst making their spiel?
the poor hookers...it's sad really...
I hope they don't do it because so many jobs are at stake. But when has the republican party given a damn about American workers anyway? Never, and that is a fact! It is for that reason that they lost the election, and are losing elections in every state in the country. They have lost touch with what it is to be an American. Oh they are very in tune with what it is to be a corporate American, or a rich American ... but that has nothing at all to do with what it is to be an American. They spew rhetoric daily about being patriotic when their actions in relationship to the car manufacturing industry borders on treasonous. Since when is it patriotic or wise to allow an industry that during WWII made all the difference as to winning and losing the war to fail? Since when is it patriotic or wise to allow three million American middle class jobs to be jeopardized? I wonder how long it will be before the American people forget again how little regard the republican party has for their well being? It is sadly true that middle class America is too forgiving, and we will eventually be right back where we have been politically for the past eight years, or elect a democrat like Clinton who also didn't care much about middle class jobs. Had the Clinton administration really cared about the middle class and the poor, we wouldn't have had welfare reform and Nafta signed into law while he was in office.
"How you define an American car is one of the great conundrums of this world," said Dutch Mandel, the editor and associate publisher of AutoWeek.
Fewer than half of the parts on some Big Three vehicles are made in the U.S.
http://www.cnn.com/2008/US/12/12/american.car...
What jobs?????
Go ahead, US and Canadian gov'ts SHOULD bail them out quickly. Save those jobs. Oh wait, what jobs?
http://news.sympatico.msn.ctv.ca/abc/home/con...
They've already decided to lay off. Go ahead. Throw money at them. It isn't going to do anything for the workers at all.
We shouldn't be concerned. After all, those suppliers are supported through loans from the banks. And the banks have tons of money to loan, don't they?
Then will be PepBoys, AutoZone, NAPA,.....
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