Auto Bailout Crash

Well, we have another example of people wanting a buck. Or maybe $25 Billion. This seems like a really small figure compared to the magnitude of the Big three problems. They ran through $18 Billion in the last quarter. The last quarter included July, and we didn’t see the big downturn until August. What that is saying to me is that it took two months plus a bit of horrible economy for them to lose $18 Billion.

Compare this with what they are asking for. Wagoner said they could be bankrupt by Christmas if they don’t get cash. If the economy stays where it is at now, no better or worse, the Big Three will burn through that money by the end of March. Does anyone think that we will have a massive economic turnaround by then? I don’t. $25 bil will just ward off bankruptcy for 3 months.

GM has been losing market share to the Japanese for a long time. When the economy was flush, they were just getting by. How can the UAW president say the company and the union are fine, it is just a tough economy? GM has been stumbling down the street dead drunk for years. The fact that it is falling is not the curb’s problem. They have a program that is like AA for business. It is called chapter 11. The Unions rode steel into the ground, and now the Big Three are crumbling also. Nucor came out of the steel collapse. Hopefully we will see something similar come out of this disaster.

By the way, I don’t own an American car. There is a great non biased magazine called Consumer Reports. When GM’s cars come up on the reliability reports favorably for a few years, I will be interested. Until then, sorry.

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