The government does not own GM, YET is the key word. Yes it's the shareholders that own them, but soon the government will step in and take equity stakes like they have in AIG, Citi, ext. It will not be long before it's the government who has majority stake in the company, and yes, OWNS it. No one in their right mind would invest in GM stock with any serious $$ right now. It's a sure fire way to loose all your $$ invested. Therefor it will be the government who will soon own it; as the government has unlimited amounts of $$$ to buy equity(yes UNlimited, as they can print as much as they like). With their endless financial backing of the company they will NEVER go under no matter how much money the company looses; and it will loose billions EVERY year.
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If you think they are loosing a lot of $$$ now, just wait till the government runs it! That's when you will see truly how bad a company can be run in the red.

Hey darius, did you happen to notice that "own" was in quotation marks?
Do you know what that means?
Maybe you're not old enough to remember a common phrase that went "I own your a**".
I can explain that if you want.

"...this is what happens when the citizens of this country become divided and can't come to common ground." --Matthew516

Agreed. I place the blame for this almost entirely on "the press" for believing they are doing their job by lazily giving voice to "both" sides of the debate. That might work if were only two sides and if either of those two sides happened to be right.

GM and their ignorance and lack of responsibility over the years has opened a huge can of worms with this move. They've opened the door for every company out there to be subject to govt. control! This is a major slap in the face to America. If the mighty GM can be minimized to this, anyone can! This country is in freefall..... this is what happens when the citizens of this country become divided and can't come to common ground. The parasite has crept in and it's name is The United States Government. (Our new boss) Sad!

mark707~ The citizens own GM?? What are you talking about? No offense, but, you're watching way too much TV!

There are unintended consequences whenever government picks winners and losers in an otherwise free market. Giving a "leg up" to a loser just helps them continue to climb the ladder while stepping on the heads of others.

It makes no difference how noble the justification for getting the government involved. The oligarchs on the inside will always figure some way to game the situation. Demanding concessions and requirements is the predictable consequence to subsidizing failure. That's the slippery slope.

mark, your description is correct, except that the government doesn't "own" GM, the shareholders do. The Government can exert only as much control as GM is willing to allow. Besides, all the bleating about Government control by some is silly. GM is probably going to be broken up into a smaller GM, and the Government is just acting as the bankruptcy (chapter 11) lender, without calling it a bankruptcy.

To add to the last post. When the government tells you how to run anything lookout. Those companies that were stupid enough to rest on their backsides were left behind. So goes the rest of the economy. If you do not provide a service people want you go out of business.

We don't own GM! Wake up and smell the lies. You and I will never see the money returned or make a profit off of the companies. They will go bankrupt. Where will the money come from then?

The US Government did not go to GM and "take them over".
GM went to DC and begged for billions of dollars.
Then GM went back and begged for more billions.
The third time GM asked for even more billions.
OK, the Government said, "if we're going to keep giving you all of this money, we are going to make some rules".
Rule number 1: Wagoner goes, and can take his $20 million or so with him.
The US citizens now "own" GM and we make the rules from now on.
When GM pays back the billions (never) they can make their own rules and even hire Wagoner back if they want.

Wait for it people their is more stupidity to follow from our puppet president. Puppet you say? Well it seems whoever gets ahold of his strings can pull him anyway they want. Why does he not just have a daily call in and have people vote on whether or not he should wear a red or black tie? Man alive is he an idiot. Which is really amazing that a person with a law degree could be so foolish. Oh that's right, Bill and Hillary have law degrees as well. Well what do you expect from a liberals and socialists hell bent on taking our country into the toilet. Put the rain gear on now! Darn it, we're already circling the bowl and we've a crappy future ahead.

spacejam, regardless of your feelings about Wagoner, it's not the govt's place to be hiring and firing in American business. Put the shoe on your foot. If you owned your own business and were a very "stupid" business owner, would that give the right for the govt. to tell you to step down??? I'm not pro or con in regards to Wagoner, but, be very cautious of the media and the opinions formed towards people, they may not be accurate. Just a thought.

Or is it FEELING? I'm sure you have an opinion! "This stinks of socialism"

matthew516:
"When people of authority start doing stupid things without even batting an eye and truly believing in what they're doing, we're in trouble." I couldn’t have said it better myself, referring to Mr. Wagoner!!!!

zoom..you make a good point. The point I was making is that our govt. isn't God. What Obama did with Wagoner isn't something the govt. should be meddling in. Uncle Sam has no business making business decisions for American companies, especially when their track record SCREAMS of their inability to get things right in their own sector! What you're saying makes sense, but the reality is, our govt. is employed by the people of this country, they don't employ us, therefore it isn't their job to play the "king"....we've been down that road before!

darwin1: When you have to resort to name calling it only shows your IQ!!!!LOL

darwin1: OK and your ponit is!!!!

Spacebrain keep talking. Elections are coming up again.

Zoom: Who on this post has been deleted (Suggest removal) more than once!!!!! If you don't like what you read then move on!!!!!

Zoom: please name the person your typing about!!!

...or spam the comments...

How many times can a person have posts deleted before their account is closed Gazette?

Obama is seeking out the bad inputs and replacing them with new inputs(inputs that add up right)!!! I will tell you that if the new inputs don't add up right he will replace them again until he gets good inputs(that add up right)! once agian it's common sense!!!!!!!

darwin1:
"This stinks of socialism” OBAMA WANTS “NEW GOOD NUMBERS” AND IF THAT MEANS GETTING RID OF THE PEOPLE THAT HAVE “BAD OLD NUMBERS” CALL IT WHAT YOU WILL! THIS COUNTRY OR ANY COUNTRY HAS TO HAVE GOOD VIABLE NUMBERS TO WORK WITH! THESE "OLD NUMBERS" I TALK ABOUT ARE INPUTS FROM PEOPLE THAT HAVE ENTED "BAD NUMBERS"!!! UNTIL THE BAD INPUTS ARE GONE YOU WILL HAVE JUNK NUMBERS!!!! SO OUT WITH THE BAD INPUTS AND IN WITH THE NEW INPUTS!!! THAT IS NOT CALLED SOCIALISM; IT’S CALLED COMMON SENSE! THIS ALSO INCLUDES THE HEALTH SYSTEM!!!!!! IT'S COMMON SENSE PEOPLE!!!!!

"In the last few months, Toyota, Honda, Mazda and Nissan have replaced their leadership. They didn't wait years or even months after losing market share and profits. The Koreans (Hyundai and Kia) don't even wait for a downturn. They unceremoniously dismiss their U.S. operations leadership when things are going well.

BMW, Mercedes and Volkswagen have replaced their leadership. BMW went through a transition after problems with British Rover; Daimler (Mercedes) after problems with acquisitions related to Chrysler and Mitsubishi; and VW has had good old power struggles leading to a sort of Coups des Bosses.

In Dearborn, Mich., home of Ford Motor Co., even company namesake Bill Ford stepped down and brought in Alan Mulally from Boeing to be the new CEO. Chrysler stole Jim Press from Toyota to try and save its day.

Throughout all these changes whirling around the worldwide automotive globe there's been one constant - Rick Wagoner of GM. I find it hard to understand why or how. I think he might really be Superman from Krypton."

http://www.washingtontimes.com/news/2009...

Our Federal government, as bridge loan banker to a behemoth business entity in distress, put a condition on its money: Rick Wagoner cannot continue as CEO of General Motors. It’s what any banker would ask for, under the circumstances. Don’t make too much of it.

"the auto industry is responsible for providing 1 out of every 5 jobs in this country..."

Not anymore, unfortunately, and not for a long while to come. Besides, there are still a bunch of other auto companies that aren't asking for government loans, and aren't on the verge of bankruptcy. The industry won't cease to exist if GM and/or Chrysler complately fail.

The government HAS bailed out GM and Chrysler. Twice! I would hardly compare a total collapse of the financial system to the failure of GM and Chrysler. Without a functioning financial system, there would be no functioning auto industry, or any other industry.

The US was founded on the belief in an elected government, as opposed to a hereditary monarchy. This is not the same thing as freedom FROM government. It is instead a different view as to how government gets its legitimacy.

In fact, the constitution lays out a rather sweeping set of powers for the federal government, including the regulation of trade with other nations, regulation of commerce between the states and so on. The government was also specifically empowered to create a post office.

The notion that America was founded on the principle of freedom from government has little basis in fact.

Zoom, people are making the assumption that GM is the only company in trouble, and they are not. If, and it looks likely, the recession drags through the year, Ford will request the $9 billion with their name on it the government is holding. Toyota , and Honda, have gone to government owned banks at least twice this year for loans. Germany has given money to the auto manufacturers, as has China. For the last four months, at least, GM has outsold all of their competitors, that doesn`t remake them, but it puts the lie to "they don`t make anything anybody wants." They have lost market share, so have all the domestics until the recession hit, and Ford is picking up share for about the last five months. The transplants are taking share because people like what they build, and listen to all the negativity about American manufacturers. GM is not going to be saved by outselling everyone now, but people should realize that even in this tough time they are number one again for a while.Just be ready if they go bankrupt because the recession will become a depression. All manufacturers of autos will feel the heat, unless they can manage to do it very, very, fast, and that is probably not in the cards. Used cars are being priced higher now, if GM goes the new car prices will skyrocket because even in a 8.8 million auto sales year, the others cannot tool up fast enough to make up the difference.

rummage..the auto industry is responsible for providing 1 out of every 5 jobs in this country. That doesn't mean the automakers deserve our sympathy nonetheless. The govt. has opened a can of worms by bailing out these other companies and not the auto industry. The more frightening question to me is, since when does the U.S. govt. start dictating who get's hired and who get's fired with the American companies??!!! This has a socialistic feel like never before in the U.S. While I think Obama actually means well, I think he's a great example of how the principles of freedom that have made this country great have been erased from the public's conscience. When people of authority start doing stupid things without even batting an eye and truly believing in what they're doing, we're in trouble. What Obama did with Wagoner just violated a huge principle that our govt. was founded on...the govt. wasn't put in place to make decisions for it's people or be it's savior! It was put in place to protect it's own people from it's govt!! This is a sad time for America.

"Geez, a company facing bankruptcy, in the worst market in decades, and they manage to outsell Ford, and Toyota by almost 20%! Oh, they make vehicles nobody wants too!"

What time frame are you looking at? One month? It doesn't matter how many cars you sell if you can't make a profit doing so. GM has made little to no profit on North American operations for years, and has lost market share every year since Wagoner became CEO in 2000.

As the old adage goes, "what comes around goes around"; just some food for thought (YNWIM)!!!!!!!!!!!

To be honest, I don't really know what any of this is all about, but all I have to say is, the way I see it, General Motors asked for assistance from the government, which in return opened the door to the government's involvement. Therefore, if this has taken place, I believe it was at the hands of General Motors, being they were the ones who invited the involvement in the first place. As I said, I am not even going to try and understand exactly what is happening, because as far as this stuff, it is all getting to complex to handle, in my opinion. I really don't understand why it is so important to save the auto industries? I agree that the jobs lost is detrimental, but why?

When Kerkorian pulled all his shares out of GM that was a good indicator that trouble was coming soon! Believe me Kerkorian knows his balance sheets!!!!!

kiowamohican:
"The numbers do not lie at all. All you have to do is know how to read a financial balance sheet, and you could have predicted GM going bankrupt back when the stock was in the $30 area." Your right the numbers don't lie at all, but the people entering the numbers that "they" came up with is another story!!!!! OH and I have read many balance sheets!!! Balance sheets are only as good as the people that came up with numbers to enter!!!

iLIKEturtles:
"Be careful what you say about Obama- he was the unions choice. You can't have it both ways." Your right he was the union’s choice, but everyone including unions can only look at the bottom line! When the "old bottom line numbers" came out it didn't look good to anyone with common sense! We NEED good "new numbers to work with" that's common sense! Until "good numbers come out they will fall! I think that " good new numbers" will be available soon, providing no one enters bad numbers!

crafty:
You make a good point. My assertion has always been that the government WANTS the autos to ALL go bankrupt. That way they can take them all over, nationalize them, and push a massive government agenda. I know that may sound conspiratorial, but socialist agendas do not happen over night. You need mass crisis, and villains, to pass it off to the public as "the only option left". Look where we are heading. You all have the "crisis" with the credit melt down, and the CEO's and executives of corporate giants are being made out to be your villains. So low and behold, here is your good hearted, benevolent, government to save the day.
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Spacejam:
The numbers do not lie at all. All you have to do is know how to read a financial balance sheet, and you could have predicted GM going bankrupt back when the stock was in the $30 area. You simply have to know how to read between the lines and analyze raw numbers on publicly disclosed financial balance sheets that the SEC requires all publicly traded companies to put out every quarter. And then not buy into the HYPE that is thrown at you by many charlatans who don't know what they are talking about, or are trying to push an agenda. Many years ago I was telling everyone that Enron was going to go bankrupt, and everyone laughed at me. It was no stroke of genius, all I did was look at their balance sheet. It's really not rocket science. For starters GM has an EPS of NEGATIVE 50 right now! That alone tells you it's pretty much cooked, without even going much further into the numbers. You can go a lot further, however, if you really want a good laugh at just how screwed they really are.

creature, at the time the batteries killed the electric car. They were dangerous, unreliable, and had a tendency to explode. At the same time, the Bush administration pulled the funding for developing "green" technology. The EV-1 had a $34,000 price tag, and that would have meant selling each one for a big loss. The new Volt has about a $40,000 price, and $9000 of that is the battery. There are some niche makers out there, like Tesla, but at $58-100,000 they have a limited market. If the government had paid to develop batteries and drive technology like the Japanese did for the Prius, we might be driving an electric car now.

creature, you are right about bankruptcy. However, this is why I don't understand why we can't keep giving them loans until the economy recovers. When the economy was good GM made profits and so it is logical to assume they will make profits again and when that happens we will get our money back with interest. If we let everything fail then we will fail to get our money back.

Automobiles are highly regulated durable goods that are capital intensive. People always mention the Japanese forgetting that they have always been subsidized by their governments and large banks, and where they have plants in the US by the states they are in. Socialism isn't just here its everywhere. What do you think SS is?

pharm I think it's safe to say GM has had fairly good sales up to the time the gas prices went through the roof. GM quality has improved and gets better. All my vehicles have been GM with the exception of 1 dodge ram. Only two were crap. 86 Camero and 89 Beretta otherwise no complaints. Tough times and bad economy doesn't mean the taxpayer bails you out. Swim or sink. It's the American way. Rick knew the days of cheap oil were possible and never did anything except kill the electric car.

Geez, a company facing bankruptcy, in the worst market in decades, and they manage to outsell Ford, and Toyota by almost 20%! Oh, they make vehicles nobody wants too!

RetiredAirforce, sorry to see you got caught in the "Car And Driver" April Fool`s joke about Nascar and Obama. Could happen to anyone!

darwin1 your point is valid that until a default occurs the taxpayer is not out but from the looks of things if I was a betting man this seems highly probable. Especially since the new CEO mentioned yesterday that bankruptcy was likely so the company could be viable and move forward. The general feeling from the talking heads on TV was this statement is suppose to push the UAW and Bondholders into further cuts and agree with the Obama plan. Might be the biggest game of chicken ever.

A great article from December 12, 2005 Business week talked about the very things that are happening now. Titled What If GM Did Go Bankrupt.
http://www.businessweek.com/magazine/con...

I was just pointing out that no matter what happens we the tax payer are on the hook. If the pension is already short by 11 billion now according to a Barrons article published today http://online.barrons.com/article/SB1238... and the company goes belly up we will have to fund it all.

Another article mentions the hourly plan alone has $66.5 billion in obligations as of Dec 31. http://www.pionline.com/apps/pbcs.dll/ar...

Of course it’s going to be much less than what the retirees were promised. Too bad for those that worked their entire life and were promised some financial security. I’m not interested in funding my neighbors retirement either. Better news is if Chapter 11 happens Rick only gets about $833,000 of that 20 million but again we are holding the bag in all cases.

Socialism is alive and well in the USA.

Until the loans are defaulted on the taxpayer hasn't paid anything and since governments unlike people live in perpetuity those debts like the ones incurred to defeat the Nazis can be spread out over a long period of time. However, we know from the past that when the economy picks up again those debts will wither under our economic growth.

RetireAirForce, your analysis on unintended consequences is spot on but a bit myopic. Ford is better managed so how is it that GM looks better even after restructuring. Management didn't restructure GM the government did. This in essence is the problem with GM. GM couldn't even get a Bob Lutz car to market quickly. So irregardless of labor contracts and restructuring GM could still be a mismanaged company. Also, there are more than just two stocks, so a comparative analysis seems contrived.

Something the tax payer can look forward to is a bailout of the pension fund for GM. 49 billion owed already with more to come. What a joke the country has become. The next round of buyouts will be coming from the taxpayer. The 20 million for Rick from the taxpayer. When does it end. For those who say the money comes from operating funds or GM Pension fund that is incorrect. The money GM is using to operate comes from the Government backed loans that most likely not be repaid under chapter 11. Pension fund was already at 100% prior to the most recent buyout. How about covering the warranty on the vehicles Obama promised. This rat hole is getting deeper by the day.

Oh no. Obama has gone and stuck his foot in it this time. After booting Wagoner (and soon most of the board and many others) he has also ordered GM and Dodge out of NASCAR by seasons end (to receive any more money). No more votes from race fans.

“didn’t see Ford taking the money and Obama is not telling Ford what to do!!!”
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The actions Obama takes with GM will have a drastic effect on Ford; it’s product, board, bond holders, and investors. Ford and UAW negotiated a contract to allow Ford to be competitive with the competition based on current rules and P&L’s of all companies. The restructuring (lets just call it what it will be; government controlled bankruptcy) will change the playing field; not through competition but through government intervention. This will lead to the sole remaining US car company not taking a bailout today instead needing a bailout further down the road. Why? The government action will lead to unintended consequences (as most do). These will be a altering of the product line not by consumer or company decisions but by government decisions. After the restructuring of GM it will be a better investment for fund managers and stock traders (lower debt & same sales = better investment). The better the investment in GM looks the worst the investment in Ford will look; driving the price of Ford down and with it the ability for Ford to garner capital for future product lines and improvements. The only way Ford can get back to a level playing field will be through the same action GM took---not good.

smartypnts50:
"Now we are sliding down that slope and the govt is now telling private companies who can work there," You seem to forget that Mr. Wagoner came begging the taxpayers for money and he got it along with the taxpayer being the "top" share holder!!!! I didn’t see Ford taking the money and Obama is not telling Ford what to do!!!

It was a slippery slope when the govt stepped in with the bail out money for private companies. Now we are sliding down that slope and the govt is now telling private companies who can work there, Obama also wants to set salary limits. How far are you Obamamaniacs going to let him go? When will the rally be to burn the constitution? This is getting really scary. Is this how Hitler did it?

GM STOCK WILL CONTINUE TO FALL ALONG WITH THE REST OF THE "BAD NUMBER INPUT STOCKS". THE LYING , CHEATING, AND STEALING MUST STOP AND NOW BEFORE IT'S TO LATE!!! SOME SAY IT'S ALREADY TO LATE!

EthanolStinks: WHAT YOU POSTED IS ONE OF MANY END RESULTS FROM LYING ,CHEATING AND STEALING!!!!

Doesn't break my heart that Wagoner is gone. He is going to get 20 million, retire, and live off the interest - Oh so sad? I think Obama should let him retire with full GM benefits like the rest of the retirees, but force him to give back the 20 million to GM to restructure. No one deserves 20 million! If Wagoner really cared about GM, he would give that 20 million he will be getting and give it to GM and not so he can live off the interest. Shame on him!

PLEASE EXCUSE MY TYPO'S

The only ones in the market today are the “SHARKS” (PEOPLE THAT ENTERED BAD NUMBERS) that have money to spend and pry on the weakness of those how don't have enough money or knowledge of the past "OLD NUMBERS” VS the “NEW NUMBERS” common sense people!!!! STAY OUT OF THE WATERS UNTIL WE HAVE VERY GOOD NUMBERS TO WORK WITH!!!!!!!!!!!!!!!

People that want or wanted to invest in the market would if they had "good numbers " to rely on!!!!

OUT WITH THE OLD NUMBERS AND IN WITH THE NEW(NO LYING, CHEATING OR STEALING NO EXCEPTIONS) THATS THE ONLY WAY!!

My same solution works for banks as well! Banks are one of the biggest culprits that toke advantage of the loopholes! The banks that did use the loopholes will and should be caught in the stress test. You just watch, wait and see how many banks get "caught-up in the stress test”!!!!! Then what Bail them out!!! I don’t think so!!!!
Like I said NEW NUMBERS not old!!!!
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Solution: separate the two (Old numbers and new numbers) then we have a good start providing no one enters bad numbers (laws are required)! I know we already have laws just for entering bad numbers! I can tell you there were some many loopholes in laws (regulation) that the average person could elude them and that’s what they did! We need to have the knowledge (and should have had the knowledge) of past loop holes to close them and make sure the “smart person” can’t get through them! One might say that impossible, but I would beg to differ!!!!

so if the govt. owns GM, that means Toyota, Chrysler, and Ford will all be competing with their very own US government. companies over seas will raise their prices and tariffs, for the same reason.
Filing chapter 11 would be great for GM. They could re-negotiate their contracts, especially those with the union.
-Wait, Obama doesn't want that, he owes the UAW BIG, and he's gotta repay that debt, doesn't he?
I would rather buy a vehicle from a "bankrupt" company, than the US Government.

As for why GM is in this situation in the first place, First, the Union, and ensuing benefits. Also they were making the vehicles people wanted, suv's, the media and left wing Global Warming scare ruined them. That movement ruined many companies.

I feel a little confused...what happens to the laid off employee(who didn't take a buyout and didn't retire)...if GM goes into bankruptcy in any way, what happens to their pay, benefits, pay towards education, etc? How are health benefits affected for retired workers or laid-off non-retired workers?

History can teach us a lot, but when Lying, cheating and stealing was the norm of the past how in the world can you compare the two? (Old numbers and new numbers)!!!!! It's all common sense!!!!!

Lie, cheat and steal! When the NYSE puts in bad numbers it kicks out bad numbers! I laugh when brokers go back to charts in history to try and figure out where the market is going. The same brokers that put in the bad numbers try to compare the numbers of old to the numbers of new! What a JOKE!!!

Good points darius.
It has now become great populist thing to hate those evil bastard, CEO's. However; when it's the government who makes reckless decisions, well; then that's OK. Most of these government bureaucrats have no idea how private industry works. GM's problems were there well before Waogner. It will be comical to see the excuses given when GM continues to fall under the guide of the brilliant, benevolent, government leadership. Has the government ever run anything profitable? Look at the post office, or their own cafe on capitol hill. They loose millions running a cafe, no joke!

EthanolStinks:
I thought I was the only one who was booking wagers on here! HAHA
You should just short sell the company like everyone else is doing who thinks it will be bankrupt. Stock was down another 20% today, CHA CHING!
It's really a quasi bankruptcy right now. The wall street journal has all ready detailed how what is going on right now is simply a bankruptcy, that's not being called that simply for political reasons.

creatureinthefreezer:
Yep; you hit it right on my friend. China is sitting upon massive leverage over the US now, and literally can pull all the strings on our economy. They could totally screw us if they stopped financing our debt, as then we'd be forced to print the money like a banana republic. However; China buys our debt simply to artificially prop up our US dollar, that way they can just obliterate us with the massive trade gap they have over us. As a strong dollar is, of course, very advantageous to a foreign countries exporting goods to the US, and very bad for the US to export goods to them. It really comes down to if China's economy can sustain itself, and not rely so heavily on exporting goods. If they decide to stop buying our T-Bills, we are pretty much screwed. Really a great position our leadership has put us in. We are now totally at the mercy of Chicoms who are the biggest financiers of our reckless deficit spending.

I like turtles too. Except for the snapping kind--they're mean:(

I’m glad to see him go. He has been a disaster all throughout his tenure. And on a personal note; the answer to “Who Killed the Electric Car?” Wagoner!

I am neither Dem or Rep..I am a Free American.
These are some of the promises Obama was elected on. But what did we get?
1. Make Government Open and Transparent
2. Make it “Impossible” for Congressmen to slip in Pork Barrel Projects
3. Meetings where laws are written will be more open to the public
4. No more secrecy
5. Public will have 5 days to look at a Bill
7. We will put every pork barrel project online
ALL BROKEN PROMISES. YOU GAVE YOUR WORD MR. PRESIDENT NOW KEEP IT!
Liberty is under attack and the giant is awakening.

Wow. I feel much better now. Just knowing all those bureaucrats are on the scene now will help me sleep soundly. I'm sure that they will be more effective than the highly admired Rick Wagoner of 30 years experience on the front lines. AMERICA, have we lost our minds?
WHY are we letting the government take over the direction and leadership of our private industry?.....CB

Truthfully, I don't believe there ever will be a solution. Many of the ideas written here have potential but until that time when our elected officials get off their power grab, they will be ignored. Why solve a problem if it can be used to keep getting elected to solve the problem? Wish I did have a logical and practical solution but I don't. I just plod along hoping that somewhere there is one. As long as we do not require our elected officials to actually do what they say they are going to do, there will never be a solution. So keep coming up with the answers and maybe there will be solution----but it is going to take a long time.

The day is coming very soon when China and the other nations will not be buying our debt. In fact recently China expressed serious concerns over the amount of debt the U.S. is generating and the effect it will have on the dollar which lowers the value of the T bills purchased by China. China will stop buying the debt and will cash in the T bills and what then??? No money to pay them back, no money for social security or Medicare, the military will have nothing to pay the solders or even buy the spare parts for the equipment, no money for the states as they all depend greatly on Fed dollars. Within a few short months it will be riots in the streets. Massive inflation on all items and devaluation of the currency like what happened to Russia after the Soviet Union collapsed 1989-90. The rubel became worthless and it took a years salary to buy a loaf of bread. Get ready folks the future is not bright and we will all be left holding the bag.

http://chrisbrady.typepad.com/my_weblog/...

Devilsadvocate:
That's not true. The government can print as much money as they please, whether it's $500 billion to bail out the failed auto's, or the $10 trillion it will take when social security goes bust in a few years. It's just one giant game now, but the government NEVER runs out of $$$$ as long China, Saudi Arabia, and others finance your deficit spending, or your federal reserve can simply print it if foreign countries won't finance the trillions. No granted, down the road you will have a situation of a total currency collapse, and mass inflation, but hey who looks down the road any more?

RAF:
I agree with your assessment; however, it should be pointed out that it is no longer "tax payer money". The tax payer $$ has long been pissed away. All these bailouts are being entirely financed on MASSIVE deficit spending, and the federal reserve $$$$ printing. It's literally becoming to the point of being monopoly $$$ to these clowns on capitol hill.
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The long term ramifications of this are going to be a total disaster. The TARP bill will go down in the history books as the worse bill ever passed in US history (beating out prohibition). As it set the stage for ZERO fiscal responsibility, and having the government step in to prop up any failing industry. Propping it up with $$ they don't even have.

We all need to face facts here. GM has over $500 billion in debt/obligations. This is a huge amount that the government can't make up. GM needs to go into a managed bankruptcy in order to sever contracts and debt obligations. Only after unloading the debt will they be able to consider going back to normal operations. Bankruptcy will likely mean the breaking of sub pay, health benefit, contracts etc. There doesn't appear to be any other way. Although government money now, might delay the inevitable, it surely will happen.

Roadmaster-"US Constitution Article I, Section 8 gives the Congress the power to regulate commerce. You should stop listening to Crazy Michelle Bachmann (R-MN)."
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Perhaps if you are going to quote the Constitution you should also read it first. Your quote is not complete. Article I, Section 8 states the following full quote "To regulate commerce with foreign nations, and among the several states, and with the Indian tribes;". It NEVER states your perception.

"Everybody has the answer but nobody has the solution."
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The solution is get taxpayer money out of it. If the business is insolvent taxpayer’s dollars should not be wasted. Now the government has decided to back/honor warrantees by these companies...where will it end? In the broader scope of this countries financial problem this is pebbles in a game judged by boulders. Problems like this one (GM/Chrysler) will not be solved by throwing more money at them. Like all companies the market (people like you and I who purchase goods) will decide not the government what businesses are successful. By involving taxpayer’s money it only prolongs the inevitable and wastes precious resources that should be used in other areas. GM has received 13.4 billion already and is asking for 16.6 billion more. That same 30 billion could support 200 thousand people on unemployment for three years and pay them $50,000.00 a year, 250 thousand people for three years paying $40,000.00 a year, 333 thousand people at $30,000.00 a year, and half a million people for three years at $20,000.00 per year. If we are going to use taxpayer money to “bailout” it would be better used to bailout the taxpayers! To those that continue to think throwing more money at the problem will fix it, why does putting more holes in the levee not stop the water?

"The board has recognized for some time that the company's restructuring will likely cause a significant change in the stockholders of the company and create the need for new directors with additional skills and experience," Kresa said in a written statement. GEE the whole board recognized for "some time" that change was needed! WOW they have the power to make the change, so why didn't they make change? It's about time some one did!!!! It was obvious they (board) recognized it but choose to do nothing about it!

usaret: I gave my solution where is yours!

Everybody has the answer but nobody has the solution.

andre_linoge--- The govt. can be as intrusive as it wants to be in the private sector when the private sector is knocking on the govt. door asking for billions... The private sector came knocking to the govt.. not the other way around..

Is it possible for the reporter to get a Judge's view and go beyond speculation? This is a constitutional issue and a bad path to start down as a Republic.

ljs64: I thought you didn't care! " who cares"

ljs64: Let me stress ANY OUTCOME!

ljs64: “How does this affect the retirees or the laid of employees??”
Only time will tell! I'm most certain that the people laid off or retired from GM do care about any outcome that affects GM! GM Bankruptcy could affect retirees!!

"GM CEO Wagoner forced out as part of gov't plan"

How does this affect the retirees or the laid of employees??

Please tell me spacejam.

ljs64: Obviously the people retired or laid off from GM ( or other interests) in the surrounding area (Or our nation)!!!! If you don't care then don't bother posting!!!

"What would happen to you if you don't pay your tax and debts?"
Ask Timothy Geithner what happens!!!

Who cares!

So, I'm to believe that the federal government which runs a deficit no matter what political party is in power, is now suddenly able to give financial advice to the financial, auto and any other industry?

It's time the people started paying attention to how their taxes are spent and hold their representatives responsible. What would happen to you if you don't pay your tax and debts?

I would put Kerkorian in charge of GM, he has "been there done that". He also knows the auto industry inside and out!!!!

When Kerkorian pulled all his stock, this should have been a red flag to other shareholders and the board members indicating problems on the horizon!!!!!

creatureinfreezer:
Yes; what you said is accurate, and why anyone who is holding GM stock, is out of their mind, and has no concept of how bankruptcy works. As it's the common share holders who are the 1st to be wiped out to pay off debt, and restructure in bankruptcy. What is happening here is not technically bankruptcy, but it's along the same lines. You simply have the government backing the loans instead of a private creditor(s); as zoom mentioned in his post. That brings up the obvious point. That being: why on earth the tax payer should be backing GM and Chrysler when NO private entity wants ANY part of financing their debt. As they know their investment would be BEYOND junk loan risky; and wiped out in no time. When it's the government (tax payers) money, no one cares any more; as there is literally an endless supply now as we are borrowing it from foreign countries, and printing it non stop.
.
As I have posted on here, and on many blogs; GM stock will go to ZERO; it's not a matter of if, it's just a matter of when. It's the short sellers dream equity, making many lots of $$$ similar to how MCI and Enron did many years ago, when many shorters were laughed at when they predicted the total collapse.

andre_linoge: Please read the first line where I said the power comes from the Contract, NOT the Constitution.

LInk to the story
http://online.wsj.com/article/SB12384160...

My understanding is the bondholders along with creditors are first in line. The common stock holders get wiped out as in Zero, Nada, zilch so this is probably why the bondholders don't want to consider stock as an option. The UAW is playing chicken and if the company goes BK all that stock is worthless. This is a big shell game and if guess wrong there will be hell to pay.

GM`s bondholders refused to take 33% for their debts, they think the government will get them more. If GM goes bankrupt, they could get less, even nothing, according to a judges decision. The UAW, agreed to take half of their debt from Ford as stock, but not as of yet at GM. The union has a fiduciary responsibility to the workers, and retirees in the health care program. There has to be some difference that we don`t know about, numbers of retirees, or something else, that is keeping them from making the deal Ford got. That is the only hang-up in the negotiations between GM and the union.

I didn't know we had a constitutional scholar posting on gazettextra.

andre, you are correct. The government can't just take over a business. The problem with your argument is that the government has not "taken over" GM. The government has not forced anything on GM they didn't agree to. GM is free to refuse the help. They are free to declare Chapter 11 at any time. The government is not doing anything different for GM or Chrysler than a traditional creditor would do, except that no other creditors will loan GM and Chrysler any more money. The Legislative Branch wrote laws to provide loans. It's that simple. It is well within a creditors rights to demand management changes as a condition of a loan.

US Constitution Article I, Section 8 gives the Congress the power to regulate commerce. You should stop listening to Crazy Michelle Bachmann (R-MN).

dg468, Ford has their name on $9 billion of loan money, but they haven`t requested it yet because they borrowed $23 billion in 2007 just in case. If the sales stay low the rest of the year, they will be asking for the money. Auto manufacturers all around the world are borrowing, not just GM and Chrysler, it is because of recession, and credit crunch. People are scared to finance large purchases, cars, houses, etc.

andre_linoge & lil_joe:

The power to do this comes from the Contract for the loan, not the Constitution. Keep in mind Pres. Obama was just elected and not yet sworn in when this loan package was written & signed into law. In fact, Pres. Obama didn't even have a chance to vote on it since he'd resigned his Senate seat before the bill hit the Senate floor.

The aid package to the US auto manufacturers is not merely a government back grant or loan. The auto manufacturers had used up all manner of privately funded credit. Their stock prices were in the tank and even in boom times, there's not a bank on the planet that would have written them a loan. They asked the Federal Government for financial assistance in the form of cash to keep their debtors at bay. This was done as a last ditch effort to stave off a complete collapse of the industry as a whole.

In a normal loan, you define the terms of the deal in a pretty straight forward manner: how much money is being loaned, at what interest rate, for how long, any repercussions should the above terms not be met and what sort of collateral is being used.

In these loans, given the weak nature of those borrowing the money had to meet further conditions. Any auto manufacturer taking the money (GM & Chrysler did, Ford did not) would have to present plans on rebuilding their respective companies. They would also have to take significant steps in that direction. GM, in this instance, failed to meet the terms laid out and Mr. Wagoner was pushed aside.

Like it or not, the boys in Detroit are playing with our money and now have to play by new rules. They knew what they were getting into when they signed on the dotted line.

MiltonRedman: If the failure of auto companies was inevitable because of the economy and gas prices, then why is Ford doing ok?

Nero

I'd like to believe thats true in all cases, But isn't getting a federal grant or loan or any sort of government aid package going to get put you in the same place as the auto industry? After all you ask for and take the money.

Why didn't they "fix" the banking industry then? They got billions too did they not? If you get a loan from a federalized bank aren't you beholding to the state also? The precedent is set and they reserve the right to dictate.

justsaynotomath is back to their political delusions again. Bush stole the office...brilliant! Get some original information that is actually true. Please don't speak until you have some logical explanations of how and why things happen. This was nothing more than Wagoner being a sacrificial lamb to make people happy when in reality GM failed (like most other auto makers) because of the economy and gas prices. GM would have fallen whether Wagoner is the CEO or not.

Ok futureGMretiree - you sit and wait it out. Better go stand outside the plant right now so you can be the first one in. Let us know how that works out for you. Denial is not a river in Egypt.

lil_joe, the Federal Government can't just walk into any business and take it over.

Remember, the auto industry execs all went and asked for help. That help came with conditions. Given that the conditions were not met, some manner of action was called for. Weather or not this is the correct action can be debated, but the Federal Government was well within the bounds of the agreement GM signed when they asked for Mr. Wagoner's resignation.

From Bloomberg: "GM’s Wagoner May Get $20.2 Million in Pensions". When GM emerges from it's structured bankruptcy the retirees will find themselves without health insurance. Better hope Obama can find a way to provide universal healthcare to all Americans.

FutureGM, Hate to tell you this but this is just a ruse to get into the UAW contracts to gut them. And to make it look like they're "doing something". We "must all make sacrifices", remember?

Thats what you think. Last time they said they were closing everybody went to Ft Wayne and we made it here. So I am going to stay here so I will be back soon. The company is just trying to get use oldies out then the new workforce But Im not going to transfer and lose my job here

So.... what keeps the Government from doing the same thing to you or any business?

916WI- you are absolutely correct. Thank you for a great post.

FutureGM.......Sheridan and the task force did not get Wagoner fired and they're not going to retool the plant for a small car, when they already have much more modern facilities set up and running that produce the compact cars. I'm sure that Obama as well as every president that has sat before him, have made statements to the crowds they were speaking to in order to secure votes. People have to let go and start moving toward the future......

Oh yes - I am sure the strong and mighty GM task force convinced President Obama to keep the Janesville GM plant running and he also took direction from them in regards to Wagoner. Do you REALLY believe that tiny little Janesville WI is THAT important? Thousands of people in this country are losing jobs - but I bet the President wakes up every morning and listens to what the Janesville GM Task Force has to say. Give me a break! How small minded and egocentric can you be? Expand your mind, read a book - leave the city limits!!!! There is a whole big world beyond Janesville!

FreedomSpeaks- Who is saying were happy GM is failing? Who in their right mind would want a large company to fail in their own community? Just because we are fed up with people like Rick Wagoner and are glad that someone like him who poorly ran a company is gone, doesn't mean we wish the worst. Maybe the new man in his shoes can make some proper changes. Your right, gas did effect some of this, but it didn't close it down. Employee salaries and the union had just as much of an effect on it. Gas went back down. I remember hearing rumors of this plant closing many years ago for many reasons. It's unfortunate that when gas went up, we built the most expensive to drive vehicle in this town. GM should have been preparing better for the future, however. They didn't and it's sad.

"Just who the heck does the President think he is to dictate to GM?"

The U.S. is now the only creditor willing to keep GM afloat, or help them resturucture. Where is your outrage at GM for asking for government help in the first place? You are clueless.

Just who the heck does the President think he is to dictate to GM? Oh, a dictator! Obama is setting the stage to nationalize GM much like Hugo Chavez nationalized the oil industry in Venezuela. People in this country NEED TO WAKE UP! We are on the verge of LOOSING OUR FREEDOM. This administration is doing harm we will not recover from unless we first take the congress away from them and then repudiate the socialist agenda.

creature, I understand your idea, but with GM in debt to the tune of $46 billion, a lawsuit for a couple hundred million dollars wouldn't even get them to glance this way.

Hoping they return to Janesville is lame. Use some leverage like filing a lawsuit against GM for the toxic waste all over the site. GM should clean up the site otherwise Janesville will have the problem before any company will even consider the property. Put the problem back on GM. Clean up of the site could run over 100million easy. Tell GM either you re-tool and put jobs back in or you'll pay $$$$$$$$. What does the state have to lose at this point. Nothing.

"This is not capitalism, It's Socialism with the government in control of our businesses."

What is it called when the business ASKS for government help, and agrees to the conditions? Asking the CEO to step down is not Socialism, it's protecting our tax money.

I believe Obama he said we would be building cars in Janesville for another hundred years
the Task Force got them fired and we are getting a Small Car So keep the work force here

Freedom.....There is no way that GM is going to change their mind with regards to shutting Janesville assembly down. They have made it clear that there are more plant closures to come. It is unfortunate, but people have to let go of this idea and come up with a plan to move ahead. It's on a completely different scale, but Beloit has made strides after losing Beloit Corp. Janesville should be able to put itself in the same position.....

Did anyone listen to Obama today? At least he gave hope to the autoworker and their famlies.

"WOW! Obama basically fired the head of one of the largest companies in the world!"

I think you mean 'used to be' one of the largest companies in the world. The amazing thing is that GM's market capitalization (value of stock) is now only $1.75 billion, but their debt is now more than $46 billion. Truely sad.

You people still don't get it. GM & the union are not the problem. Janesville made the most money ever for GM and had the best work force. They were closed because of gas prices. The city will miss the money the plant poured into it. So now the rest of us will have to make up the difference. And it's going to be hard on $10 an hour jobs with a city council out of control. And more & more places laying off. But all you people that are so happy that GM is going down, wait till the end of the year when the employee's start to run out of unemployment and they can't find jobs. Then we will see how Janesville is doing? They will follow like every other auto plant city and fall. The signs are all ready starting to appear unless you have your head in the sand. Let's hope GM does change their mind and bring something back to Janesville or we are looking at least a recovery of 5 to 10 or more years.

A major creditor, in this case, the federal government, has every right to ask for a change in management. This is nothing new in the business world. The fact is, GM has too many dealers, too many brands, and too high legacy costs for the size of the current market. Wagoner and the Board of Bystanders couldn't effect the change necessary to avoid asking for government help.

And the best part of this is that Wagoner doesn't get a golden parachute! That is the way all these CEO firings should go. You f'up, you get kicked out with no compensation (yes I know he gets GM executive retirement, but that is no where near the golden parachute he would have gotten).

About time! I thought this guy was a joke in 2002. Giving the reins to the COO was a bad move though. He also should have been fired.

What about firing the head of the union too? They have been unbending with the company when it comes to getting back on track. They won't budge! I think this is wrong anyway, I don't think our government should be doing this. They should have let them go bankrupt, and let the chips fall where they may. This is not capitalism, It's Socialism with the government in control of our businesses. God help us!!!

They give bonuses to the AIG execs and fire the GM exec! Is there politics involved??

They give bonuses to the AIG execs and fire the GM exec! Is there politics involved??

"Given the history, a change in management could hardly hurt and might do some good," Sen. Charles Schumer, D-N.Y., said Sunday.

That is true about politicians above all else, especially Congressmen.

futureGMretiree - I seriously hope you are kidding.

I think the Janesville Task Force had him fired
Now we can get our new product

Clearly, the President had no choice. The publics is clearly intolerant of incompetent CEO's getting billions in bail out money and rightly so. Now that he is gone, the government can invest money into GM without the appearance of propping up an idiot.

Good for Obama, he did what GM shareholders should of did years ago!!!! Any other failing company would have got rid of their CEO when losses started occurring in good times.

About time. He should have been ousted months ago!

WOW! Obama basically fired the head of one of the largest companies in the world! I think this is kind of scarey but the board should have done this on their own.
On a side note- the $20 billion borrowed from the retiree's pension fund. Does government have to pick up this tab as well? If so this should be considered fraud- someone should be accountable!