I'm not sure if I'm taking the quote out of context but reading that message alone doesn't sound good. I hope it's just a poor choice of words, but to me, it says, "we don't care about GM we just want what's best for ourselves." As if BK doesn't already sound the alarm bells.

On a more selfish note, I would like to see the Camaro built in the USA because the USA has a FTA with Australia. That means we might finally get Camaro in Australia. But I would hate to see our Canadian buddies lose out, one way or the other, due in no small part to the CAW's "poor management" decisions.

 

Wow nova. I appreciate all your insights. But I had to hack quite a while there to winnow your post down to something I could respond to

I agree with some of your points. It's scary and worrisome what the US Gov is doing now to bankruptcy.

But look at where we are now in the USA. You're concerned about death warrants for our manufacturing? Aren't you a little late to the party? I'm not very comfy defending our government's actions of late. But look around you man. If they had not ALREADY intervened, GM and Chrysler (maybe Ford too? due to suppliers) would ALREADY be gone and TRULY liquidated.

I don't like it either, the certain chilling effects coming soon in bond markets. It will be complex and painful to deal with for years to come. But like my Calculus professor used to say.... "what would you like the answer to be?". The solution being put in place will cause some vexing problems. It will give feds untold power to influence and control industry and finance in the USA. (Personally I believe the control will be temporary and will be rejected and repulsed long-term... but that's another thread all its own.) But for now it keeps our industry alive and if it means having an active industrial policy 'overseer' for a while, I can live with that and I don't see that industrial America has a lot of alternatives... for now anyway.

 

There are those who understand cars. There are those who understand business. There are precious few who understand both. I do believe that "nova" is one of those few.

 

I don't understand the beaten wife syndrome that the majority of Americans have with government intervention. Government is the problem, not the solution. The more it involves itself the closer to industrial destruction we come. Government control of the means of production is the worst idea ever conceived by man, and any excuse to justify it is just plain ignorant.

 

I have a brilliant idea...

Why don't we move all of those Camaro plant jobs into the UNITED STATES OF AMERICA? That way we don't have to be ashamed that our sweet ride was made by Canadians (no offense, kinda).

I don't understand why we don't pull the plug anyways and bring those jobs over here. Why are we providing Canada with the economy boost, and not ourselves?

This just doesn't make sense.

Kevin Webb

 

What doesn't make sense is why GM is forced to build the Camaro with UAW labor at $20+ an hour when it could just as easily open a factory in Mexico and pay workers $4 an hour. Damn, that whole competition stuff sucks doesn't it?

http://economy-finance.com/2008/06/0...cut-wages.html

 

There's the spirit . This ain't Mexico, or some third-world country, bud ... no need to be ashamed that your precious Camaro is built here. Heck, all of the 4th-gens were built in Quebec! (that's "almost" reason to be ashamed ) ... but having the new Camaro built in Oshawa is NOT doing any dis-service to the car, or quality, or the fact that it's still a domestic car.

And by-the-by, YOUR economy tanked first, not OURS. Before you go off trumpeting that you're providing us with an economy boost, you should maybe think about how/when/where the troubles all began. The city of Oshawa has been BUILT around GM since GM Canada formed in the year 1918. There has never been anything "un-American" about any of the other cars & trucks that GM ("Canada") has produced over the years. I don't want to get into a pi$$ing match here, but seriously, get over your patriotism for a minute. Your ecomony is in shambles ... I wouldn't be so quick to point fingers and say who else's country you're "ashamed" of .

As far as the CAW and Ken Lewanza, from anything I've read, he's trying to be a strong leader, trying not to budge, trying to keep the members hopeful .......... and yes, I'd say most, if not all, of what he says is pure posturing at its best. The fact is, they've opened the contract TWICE within the last ~year. At the end of the day, the contracts that all of the members have voted on have been the results of an agreement between GM management and the CAW union. Obviously the company agreed to the terms of it, so don't say the union got greedy.

And as for "not sounding the panic alarm yet" ????????????????? Uh, I'd say you already did that, Guy!!!!!

IMO, I don't see the Camaro going anywhere. There is WAY too much love for it here, but regardless of which car Oshawa builds, there is way too much NEED to keep GM in Oshawa. If GM pulls out of Oshawa, it will collapse this area. I don't care what the gov't SAYS, or what the CAW president SAYS, ..... neither party wants to see GM pull out of Oshawa.

But thanks for sounding the panic alarm anyway .

 

Very good post and while your political views are clearly evident I think it sums up the situation with Chrysler pretty well. This will have major ramifications to the future of lending to companies. Particularly troubled companies.

Under normal circumstances group 1 and 2 would get all or most of their money before anybody else got a cent. If they could fully repay secured debtholders then the unsecured debtholders would get their money payed back. Whatever was left over would go to the stockholders. The secured bondholders were offered 20c/$. Those who took TARP money quickly accepted and those who had not accepted TARP money did not. Then President Obama called out the holdouts and basically painted the picture that the greedy holdouts were out to ruin America and some more of the holdouts caved in under the pressure of public opinion.

This sort of thing could have major implications for future lending practices in the US.

 

I'm first going to admit that I'm not nearly as knowledgable as many of you on the topic of automotive bankruptcies. It appears to me that the US Governement is taking an "ends justify the means" approach when handling these bankruptcies. In the end, they want GM and Chrysler to exist and to be profitable entities because that is what's good for the future of our country. The means will involve many parties taking a huge loss, even if unfair or possibly unlawful.

 

What can I say, I was really bored that night



Only reason I'm "late to the game" is I wasn't alive or cognizant of the world at large for most of it. I'm not but 26yo.

Again with the liquidation idea. That has been pushed and pushed by the admin and their pet media for so long that its now dogma. There's no evidence that anybody involved wants to liquidate either company and even if they did there's no evidence that they could. You can't liquidate if you don't have a buyer and in the current economy, there is no buyer for GM/Chrysler or their assets. As a counter example, when Enron went **** up, they were liquidated out of bankruptcy, but the only reason that could happen is there were other companies waiting in the wings with money ready to buy their assets. No buyer = no liquidation...

If they keep pushing this, when they go down again in the future, the only way to bring them back and keep them going will be to make GM and Chrysler employees permanent employees of the federal gov't.

As an example of how great the gov't is at running businesses in that manner, the IRS foreclosed on a brothel in Nevada a few years ago. They were completely unable to make money selling sex and booze. In that light, who here thinks they could make money selling cars...

Yeah they do, its called Ch. 11 reorganizational bankruptcy in which the bondholders would get the good parts of the company and the bad parts would disappear. The entire process is designed specifically to keep businesses going.

Are my love of free markets and rule of law that evident?

Just so nobody misunderstands me, I have no real issue with the UAW or unions in general. In a free market, I believe people have the right to pool their labor and try and get a better deal. The problem I have is with laws and gov't regulation that protect those unions and turn them into a de factor labor monopoly and constrain business from refusing to deal with a union. In a truly free labor market the business could tell the union to go pound sand if the demands are too much, similar to the way the union can strike if they feel they're getting screwed....

I would disagree with that statement. I'd say I've got just enough rope to hang myself in both areas.


I would argue the opposite. If you keep GM/Chrysler going in the same state they are, with large amounts of economic resources tied up in entities that are mis-managing them, then overall you are doing harm to the country. One of the things that makes our economy so vibrant and robust is the relative ease with which economic resources from failed entities are redistributed to give others the chance to manage them.

There are quite a few countries that don't have such an easy process with much more negative repercussions from bankrupcy and typically they are the lower performing more fragile economies...

The unlawful part is my big beef. The two core principles upon which this country was founded are "individual liberty" and "rule of law."

If we ditch "rule of law" then we don't have "individual liberty" because the founding document, the US Constitution, that protects our inherent liberties is itself itself only a law at its most base level. If we can ditch one inconvenient law that easily, we can ditch any inconvenient law.

 

I would just like to say that Nova makes some VERY interesting and very good points in this thread.

I've been feeling for a while now that the Gov't is more interested in grabbing and re-distributing power when it comes to Chrysler and GM, rather than truly having each company's best interests in mind.

 

yes. and well said on the unions too. I also don't like the fact that people are required to be a part of a union. I had a good chance to talk to some old friends in my hometown this past weekend and unions came up because they were both required to join unions for the type of work they were doing and neither were very happy about it.

 

It would suck if they stopped building the Camaro but it would save me $40k in the long run

sean

 

http://www.canada.com/business/fp/or...629/story.html

 

Let's see now... "violation of the law"... does that mean something is illegal... or does it simply imply that the power-brokers at Wall Street aren't getting preferential treatment for a change?

My heart bleeds for them.