GM and Government Ownership Question

[82-T/A]

Originally Posted by byebyebaby Guess my next car will be either a Ford, or foreign. And I will not buy a hybrid. The cost does not pay for itself in the long run.

I wanted to respond just to this, because Ford has a new vehicle which is actually half-way cool. Ford has a vehicle in Europe (that will be coming here in 2010) that averages around ~60 mpg...

Jalopnik - Diesel Ford Fiesta Smokes Prius, Gets 62.5 MPG - 09 Fiesta

The only reason why it's NOT here now is because it's not being produced here yet. But, Ford is almost complete (they are in the process of tooling) with a factory that they built in Northern Mexico to produce this vehicle.

The EPA has determined that it gets in the vacinity of 63 miles to the gallon on the highway, and 51 miles to the gallon in the city.

Jalopnik - Diesel Ford Fiesta Smokes Prius, Gets 62.5 MPG - 09 Fiesta

It's diesel powered, but several tuner companies have already expressed interest in producing an aftermarket turbo kit for the Fiesta's ECOnetic diesel motor.

For what it's worth, they also offer a gas powered one which averages about 36 miles to the gallon. (25+ in the city, and 40 on the highway).

It's not a hybrid by the way...


The new Ford Taurus is suggested that they will have a performance version that actually gets decent mileage too... minimum 35mpg.

[82-T/A]

Originally Posted by idkfa CNN had that a month ago? General Motors CEO resigns as part of bailout deal - CNN.com 'Requested' typically means forced in any business move. I understand these are not your main points but the media seemingly or purposefully 'missing' these statements seems to be a continuing theme in the posts.

No, YOU are actually missing the point. The news of him being FIRED is not what was missed. What was missed was the fact that the conversion from debt to company SHARES did not make mention of the news.

EVERYONE heard about Rick Wagoner basically getting fired. I'm simply stating (as my grammer clearly said) that days after they converted the debt to shares (IE: 50% government ownership) and it made no mention on the public news. I assume you're going to try to find a link, however keep in mind that what's on the internet, is not always what is talked about in headline news.


Do you understand what I'm saying now? I think you just misread what I was saying.

[idkfa]

Agreed. The 24/hr tv headline news outlets rarely cover anything other than 24/hr coverage of pirates or ebola or whatever the next 'big thing' is.

My media is still newspapers (IT for a major group unfortunately) so I just assume people are still talking about going out to read what the media produces rather than Nancy Grace

Thanks for the clarification.
You think the bond-holders counter-offer has any chance?

[Sydney]

Originally Posted by 82-T/A That means that the Government (which has seats on the board) now can have a controlling decision on the direction of the company. This means that if the Democrat Congress states that they no longer want any vehicles produced that get less than 35mpg, then they will make it so, which means the Corvette will be eliminated. Do you know the history of British Leyland Motors? I suggest you look it up.

Originally Posted by 82-T/A I will never buy another GM car, ever again... or Chrysler for that matter, unless they can free themselves from that 10% government ownership. To be quite honest, I would rather see GM collapse forever than remain as the socialist tortured shell that it is now.

If everyone follows your lead the Corvette and every other Chevy will be eliminated.

[POTFH]

Originally Posted by CavOfficer yet it will die along with the rest of the Pontiac brand, and yet Kia will live.. I will never buy another foreign car in my life, and I look at the percentage of American content on the American cars I do buy, before I make a final decision. We all had better wake up and smell the downfall of our way of life before it is too late - buy American, buy local.

as I have said before Buy California, Oregon, Washington Wine not French

[Snugglebear]

Originally Posted by GS Stage 1 Update: Today's Presidential Speech about Chrysler just completed. Did anyone catch that GMAC will now be the official lender of Chrysler? So how does that work? If Uncle Sam owns more than 50% of GM, how does that translate to GMAC? And in turn how does that immediately translate to Chrysler? Am I still paranoid?

GMAC is majority owned by Cerberus, who are the the majority owners of Chrysler or at least were before the bailout. As part of the original bailout deal with GM the minority stake that GM holds is supposed to be rolled off to Cerberus over the next year or so though I don't know the exact terms. GMAC, around New Years, petitioned the government for its own bailout under TARP and a conversion to a bank holding company in exchange for its own debt restructuring (same kind of deal as with the auto makers - bondholders took a haircut in exchange for some equity and new debt). Thus, the net result is that GMAC is now technically a bank, has been bailed out under TARP, is raising capital on its own through new depositors and credit markets, is majority owned by Cerberus, and will continue to be consolidated under Cerberus as GM rolls off its ownership.

I have not seen anything so far to suggest that the Feds are going to convert their preferred TARP shares in GMAC to common stock, but the possibility always exists under TARP. Likewise I have not seen anything suggesting that the Feds will meddle with GMAC operations in light of the other takeovers. As far as anyone knows GMAC will simply have a solid contractual relationship with Chrysler and GM to provide financial services in addition to their other business (e.g. GMAC banking, GMAC mortgage, etc.).

[GS Stage 1]

Interesting, but if I understand this correctly, the Feds COULD elect to convert TARP shares in GMAC to common stock. Thereby achieving the same outcome they gained with GM? Do you think they will go there?

[Snugglebear]

I don't think they would unless they had something specific in mind. Citi had their TARP shares converted to common stock in order to get their capitalization ratios higher, but that was something they wanted. IIRC AIG was in a similar boat, but was after lower dividend payments (TARP comes with 8-10% dividend requirements as a penalty for using it). Besides, GMAC isn't really involved with big labor or anything green, they're just financial guys for the most part. If anything they may be pressured to make more auto loans available, but that itself is predicated on them being healthy enough to access capital markets at low interest rates, otherwise they simply won't have the cash on hand.

[Pterosaur]

Originally Posted by 82-T/A Why not buy from Ford then? They aren't owned by the government at all.

Because I don't like Ford cars right now...I want to, but I can't. Don't like the styling, not even close. I want to like the new Mustang but it just isn't doing it for me.

My next car could well be the Caddy CTS Sport Wagon, government owned or not. Dealers going to call me when they come in. Hope they got the differential issues worked out!

[njtex]

Originally Posted by GS Stage 1 Update: Today's Presidential Speech about Chrysler just completed. Did anyone catch that GMAC will now be the official lender of Chrysler? So how does that work? If Uncle Sam owns more than 50% of GM, how does that translate to GMAC? And in turn how does that immediately translate to Chrysler? Am I still paranoid?

I absolutely caught it, Obama also mentioned that he will ensure that GMAC will be provided with the needed funds so that Chrysler vehicles can be leased or financed.

Our Administration's reputation is tied to Detroit now and it seems they have a backup plan if Chrysler cars don't start to move again. They're going into the cut rate finance and supported lease business to move the metal with an unlimited supply of tax dollars! I'm sure GM will get the same deal, if not more, because if GM goes down after it's "tweaking", it'll take Obama down with it.

I tend toward financial conservatism so I'd much rather just have them pass a law that all taxpayers must buy and own at least one domestic.

(BTW, how will Ford compete against the upcoming Chrysler/GM/Government "Deal-a-Thons"? )

[GS Stage 1]

Originally Posted by njtex I absolutely caught it, Obama also mentioned that he will ensure that GMAC will be provided with the needed funds so that Chrysler vehicles can be leased or financed. Our Administration's reputation is tied to Detroit now and it seems they have a backup plan if Chrysler cars don't start to move again. They're going into the cut rate finance and supported lease business to move the metal with an unlimited supply of tax dollars! I'm sure GM will get the same deal, if not more, because if GM goes down after it's "tweaking", it'll take Obama down with it. I tend toward financial conservatism so I'd much rather just have them pass a law that all taxpayers must buy and own at least one domestic. (BTW, how will Ford compete against the upcoming Chrysler/GM/Government "Deal-a-Thons"? )

Bingo! I was thinking the same thing. That is why I don't think Ford will be immune to Uncle Sam intervention either, because when the deals start flying from the other two, Ford's bottom line will have to adjust to compete. And I am willing to bet their bottom line doesn't have enough room.

[iainhp]

Our Administration's reputation is tied to Detroit now and it seems they have a backup plan if Chrysler cars don't start to move again. They're going into the cut rate finance and supported lease business to move the metal with an unlimited supply of tax dollars!

What this means is that groups like ACORN are going to put people into cars that they can't afford to make the payments on. It'll be the housing default crisis all over again.

I heard over and over again (months ago when everyone was anti UAW) how one of the big differences between the UAW and Toyota plants in America, and the UAW and GM plants in America, is that GM and the UAW have a long history together, which means that GM is carrying pension plans for UAW members from 20 - 30 years ago, which Toyota does not have to carry (cost must be carried on each vehicle sold). In fact the comments months ago (for right or wrong) generally suggested GM declare bankruptcy and clean the slate with the UAW. Now all of a sudden the Obama crowd are basically giving Chrysler (and probably GM if the news articles are correct) to the UAW with little to nothing done about the pension costs. What happened?

[82-T/A]

Originally Posted by Sydney If everyone follows your lead the Corvette and every other Chevy will be eliminated.

Honestly, I hate to say it, but I hope so. Seeing General Motors as a the tortured socialist shell that it is, is worse to me than having the entire company disappear forever. If I could snap my fingers and put them out of business right now, I would.

I will NEVER buy a car from General Motors, ever again... and I've owned (gonna count... give me a minute)...

13, I've owned 13 GM vehicles... (two of them brand new). I'll never buy another one so help me God...

[kwtoxman]

IMO the conspiracy theorists are out in full force. It is sad to see americans eat their young. As a canuck it seems I have the ability of oversight, but it doesn't really matter. I find it sad to see so many people against GM just because govt tried to minimize the hurt to their economy.

Why don't people wait to see where the chips fall. GM won't survive anyway if they don't build cars that people want. To pre judge them is nothing more than ideological hatred, which our world doesn't need any more of.

[GS Stage 1]

Ideological Hatred? I think you are completely out of line, CANADA.

This is our problem, and it is not HATRED. It is genuine concern that OUR country is turning into something that OUR founding fathers did not intend. PERIOD