Auto Bailout Fails Hard

BanningZ · 12-12-2008, 04:15 AM

Quote:

(CNN) -- Senate Democrats and the White House failed to find 60 votes to end debate on a $14 billion auto bailout bill and bring it to a vote Thursday night, killing the measure for the year.
Sen. Tom Coburn, center, and other Republican senators raised objections to the auto bailout plan Wednesday.

The 52-35 vote followed the collapse of negotiations between Senate Democrats and Republicans seeking a compromise.

"We have worked and worked and we can spend all night tonight, tomorrow, Saturday, and Sunday, and we're not going to get to the finish line," Senate Majority Leader Harry Reid said on the Senate floor before the vote. "That's just the way it is. There's too much difference between the two sides."

Reid acknowledged the bill would not survive the procedural vote.

Senate Minority Leader Mitch McConnell said the sticking point was the United Auto Workers' refusal to set a "date certain" to put employees at U.S. auto manufacturers at "parity pay" with U.S. employees at foreign automakers in the United States.

Currently, analysts estimate the union workers at U.S. automakers make about $3 to $4 per hour more than the non-union U.S. employees of foreign automakers like Toyota and Honda, according to the Center for Automotive Research.

The House easily passed the bailout bill earlier this week, but it quickly ran into trouble in the Senate, where Republicans objected to several provisions. Negotiations Thursday involved a compromise proposal put forward by Sen. Bob Corker, R-Tennessee, but the senators could not reach agreement.

The collapse of negotiations could possibly doom General Motors to a bankruptcy and closure in the coming weeks, with Chrysler potentially following close behind.

While Ford Motor has more cash on hand to avoid an immediate crisis, its production could be disrupted by problems in the supplier base, as could the production of overseas automakers with U.S. plants such as Toyota Motor and Honda Motor.

The struggling automakers may get some money anyway.

As part of their effort to urge skeptical Republicans to back the deal, Bush officials made clear that if Congress didn't act, the White House would have to step in to save Detroit from collapse with funds from the Troubled Asset Relief Program, according to the sources familiar with the conversations.

One of the sources said that a White House official made it clear to a GOP senator that would be the worst option, because the loan could go to the auto companies with few or no requirements along with it.
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The sources asked not to be named because of the sensitivity of private conversations.

Democrats pressed the White House from the start to help Detroit by using some of the $700 billion for the financial sector, but the White House and Treasury Secretary Henry Paulson refused.

"I would only hope that the president, who has worked so well with us for the past several weeks, would now consider using the TARP money," Reid said after Thursday night's vote.

Watch the market ramifications of the bailout failure »Auto bailout bill dies in Senate - CNN.com

GM says they'll be bankrupt in 20 Days, Chrysler says they'll be broke in March.

Wow The stock market is going to fvcking crash in the morning. Invest in Booze, gold, and fast food, those are the only ones that can save us now.

Your source for doom and gloom-BanningZ

MC · 12-12-2008, 05:03 AM

yea i cant begin to guess what the markets will close at later today. watch out for the roof jumpers

nogoodname · 12-12-2008, 12:26 PM

goodbye GM, it was nice meeting you.....LOL

shumby · 12-12-2008, 03:16 PM

Quote:

Originally Posted by nogoodname007

goodbye GM, it was nice meeting you.....LOL

nogood where you going to get parts for your 6000 now?

dad · 12-12-2008, 03:34 PM

Bailout or bankruptcy , they will still layoff and terminate!

bboypuertoroc · 12-12-2008, 01:39 PM

This is really bad news.

BanningZ · 12-12-2008, 03:13 PM

Quote:

Originally Posted by bboypuertoroc

This is really bad news.

Nope maybe not. Looks like that $700,000,000,000 TARP package that was for the banking and credit crisis may be partially used for the "Big 3."

Good thing we got to vote on all this money we will be paying in taxes.

Quote:

GM, Chrysler May Win Reprieve With TARP Aid After Senate Rebuff

Dec. 12 (Bloomberg) -- General Motors Corp. and Chrysler LLC, draining cash as sales slump, won a reprieve to stay alive until January as the Bush administration said it might finance an industry rescue with funds set aside for banks.

The White House’s reversal on tapping the Troubled Asset Relief Program for short-term aid came a day after the Senate rejected a short-term loan package for GM and Cerberus Capital Management LP’s Chrysler, pushing the companies toward a bankruptcy they said they were working to avoid.

Treasury assistance would be “far more attractive for the industry than the very complex legislation that was being prepared,” David Cole, chairman of the Center for Automotive Research, told Bloomberg Television. “This provides some stability.”

GM, the biggest U.S. automaker, and No. 3 Chrysler welcomed the prospect of TARP funds, the details of which weren’t spelled out. GM said it would trim first-quarter output by about 30 percent, a reduction of 250,000 vehicles, as sales slump.

With GM saying it will run out of cash by month’s end and Chrysler forecast for the same outcome early next year, financing from TARP may help the companies stay in business until the new Congress takes office on Jan. 5.

“Under normal economic conditions we would prefer that markets determine the ultimate fate of private firms,” White House spokeswoman Dana Perino said. “However, given the current weakened state of the U.S. economy, we will consider other options if necessary -- including use of the TARP program -- to prevent a collapse of troubled automakers.”

‘Stand Ready’

The Treasury Department “will stand ready to prevent an imminent failure,” spokeswoman Brookly McLaughlin said in a statement. Secretary Henry Paulson had resisted Congress’s bid to finance an industry rescue with the TARP money, saying the funds were intended only to bolster ailing banks.

GM dropped 24 cents, or 5.8 percent, to $3.88 and Ford Motor Co. rose 12 cents, or 4.1 percent, to $3.20 at 2:58 p.m. in New York Stock Exchange composite trading. GM plummeted as much as 37 percent earlier, while Ford had tumbled 27 percent.

Cole, who is based in Ann Arbor, Michigan, said TARP aid would be “a Christmas present” to automakers that had pinned their hopes for survival on the congressional rescue plan that failed late yesterday.

“It is just great news,” he said.

GM was “encouraged” by the White House’s shift on TARP, according to a company statement, while Chrysler Chief Executive Officer Robert Nardelli told employees in an e-mail that the company was “pleased.” Ford, which wasn’t seeking short-term loans, had no immediate comment.

Avoiding Bankruptcy

GM CEO Rick Wagoner told Congress last week and has said repeatedly that the Detroit-based automaker is trying to avoid bankruptcy at all costs. Lead director George Fisher said last week that GM considered and rejected the idea and it was “way down the list” of alternatives.

Still, GM also has said it will lack the minimum $11 billion needed to pay bills by the end of this month, raising the prospect of bankruptcy should it fail to win a cash infusion. GM reported having $16.2 billion as of Sept. 30.

An attempt to restructure GM in bankruptcy would end up as liquidation, because sales would plummet as buyers flock to solvent car companies, Wagoner has said.

Chrysler has said it will run out of money early next year. It ended the third quarter with $6.1 billion in cash and needs at least $3 billion on hand to operate, Nardelli told Congress on Nov. 18.

Default Risk

The risk GM and Chrysler could default in the coming months “remains very high” Standard & Poor’s credit analyst Robert Schulz said in a statement today. “In addition, we remain concerned about the spillover effects of an automaker failure” on parts suppliers, he said.

Pressure was mounting on GM and Chrysler this week before the congressional failure as both faced demands from a small number of partsmakers for payments in advance because of the bankruptcy concerns, people familiar with the matter said.

Ford, GM and Chrysler are idling production in Canada for parts of January to adjust for surplus inventory, Canadian Auto Workers President Ken Lewenza told reporters at a briefing in Toronto.

Chrysler’s plant in Brampton, Ontario, where the Dodge Charger and Challenger are built, will shut down from the end of next week until Jan. 19. Chrysler’s Windsor plant, which assembles minivans, will be closed from the end of next week through January, he said.

‘Limp Into January’

United Auto Workers President Ron Gettelfinger endorsed the idea of emergency aid from the Treasury’s TARP program or from the Federal Reserve, saying the automakers would be liquidated without U.S. assistance.

“We could work for nothing and GM couldn’t limp into January,” he said at the union’s headquarters in Detroit.

GM’s 8.375 percent bonds due in July 2033 lost 2.5 cents to 14.5 cents on the dollar, according to Trace, the bond-pricing service of the Financial Industry Regulatory Authority. The yield was 57.5 percent.

Ford’s 7.45 percent bonds due in July 2031 dropped 2.4 cents to 22 cents on the dollar, yielding 33.9 percent, Trace data showed.

GM is reeling from almost $73 billion in losses since 2004 and a 22 percent slump in U.S. sales this year. The automaker last month said it lost $4.2 billion in the third quarter.

Chrysler has been battered by a 28 percent plunge in U.S. sales through November, the most among major automakers.

Job losses would total 2.5 million to 3.5 million from an automaker failure in 2009, including 1.4 million people in industries not directly tied to manufacturing, according to a Nov. 4 report from the Center for Automotive Research, which does studies for government agencies and companies.

nogoodname · 12-12-2008, 03:42 PM

Shum, generic brands....LOL...GM parts are too expensive and crapy !!

shumby · 12-12-2008, 03:42 PM

lol i know i know

nogoodname · 12-12-2008, 03:54 PM

so if they go bankrupt, could i get a car for 10 bucks ??

seems fair, they gotta empty the lots so that another company can use the land..lol
and there will be no warranty...haha

onethreefive · 12-28-2008, 01:34 AM

This kind of behavior towards other members will not be tolerated in this forum. Check the OT forum rules.

AK370Z · 12-28-2008, 01:38 AM

Wow! I am very disappointed at this behavior. This NOT the attitude one should have against their fellow forum members. We don't want our forums to become like "other" forums where harassment and name calling are allowed.

Thanks onethreefive.

shumby · 12-12-2008, 03:56 PM

hummmm Z06 for $50?

nogoodname · 12-12-2008, 04:02 PM

^^^^ I wanna go to the dealership and ask....I'll say i got 50 smackaroos in cash money

BanningZ · 12-12-2008, 04:11 PM

12-12-2008, 03:34 PM	#5 (permalink)
dad Grand Prix of Endurance Join Date: Nov 2008 Location: Tennessee Posts: 3,476 Drives: Mulsanne Straight Rep Power: 26	Bailout or bankruptcy , they will still layoff and terminate! __________________ We can do without any article of luxury we have never had; but once obtained, it is not in human nature to surrender it voluntary.

12-12-2008, 01:39 PM	#6 (permalink)
bboypuertoroc Enthusiast Member Join Date: Dec 2008 Location: Get out my way pimpin, HI Posts: 419 Drives: '06 Evo IX GSR Rep Power: 389	This is really bad news. __________________ Evo IX GSR - FPBlack, 30psi... 10's on pump? Let's find out...

12-28-2008, 01:34 AM	#11 (permalink)
onethreefive Retired CIO Join Date: Oct 2008 Location: ______ Posts: 1,366 Drives: _ Rep Power: 259	This kind of behavior towards other members will not be tolerated in this forum. Check the OT forum rules. __________________ resident lurker extraordinaire Support Our Forum Become a Premium Member Click HERE

12-28-2008, 01:38 AM	#12 (permalink)
AK370Z Administrator Join Date: Sep 2008 Location: NJ Posts: 9,930 Drives: 09 370Z MB Sports M6 Rep Power: 10	Wow! I am very disappointed at this behavior. This NOT the attitude one should have against their fellow forum members. We don't want our forums to become like "other" forums where harassment and name calling are allowed. Thanks onethreefive. __________________ The370Z Signature Pictures ll Want to rock our forum decals on your car? Then click here! ll How to Embed YouTube Videos In a Post STOP! (Hammertime) ll Become a Premium Member Click HERE ll F.A.Q. Are You a Nissan Dealer? Click Here to Become A "Supporting Dealer" and Start Listing Your 370Zs In Our Inventory Section My Monterey Blue Z ll My Exhaust --> My Intake --> G3 Nissan's Official Response Regarding Oil Temp Issue: CLICK HERE Need a Set of Cheap Winter wheels /Tires? Then Visit The Banner Link Below and Place Your Order. You'll Help Keep The370Z Alive.

12-12-2008, 04:11 PM	#15 (permalink)
BanningZ A True Z Fanatic Join Date: Nov 2008 Location: nowhere Posts: 5,478 Drives: 06' Nismo Frontier Rep Power: 29	__________________ Become a Premium Member: Click HERE MB 06' Nismo VQ40DE

12-12-2008, 05:03 AM	#2 (permalink)
MC Moderator Join Date: Oct 2008 Location: NC Posts: 3,238 Drives: 2015 GTR NISMO Rep Power: 24	yea i cant begin to guess what the markets will close at later today. watch out for the roof jumpers

12-12-2008, 12:26 PM	#3 (permalink)
nogoodname Lifetime Premium Join Date: Nov 2008 Location: Montreal Posts: 22,357 Drives: E46 M3 Rep Power: 1765	goodbye GM, it was nice meeting you.....LOL

12-12-2008, 03:42 PM	#8 (permalink)
nogoodname Lifetime Premium Join Date: Nov 2008 Location: Montreal Posts: 22,357 Drives: E46 M3 Rep Power: 1765	Shum, generic brands....LOL...GM parts are too expensive and crapy !!

12-12-2008, 03:42 PM	#9 (permalink)
shumby Captin Canuck Join Date: Dec 2008 Location: with your mom Age: 45 Posts: 6,288 Drives: your sister Rep Power: 237	lol i know i know

12-12-2008, 03:54 PM	#10 (permalink)
nogoodname Lifetime Premium Join Date: Nov 2008 Location: Montreal Posts: 22,357 Drives: E46 M3 Rep Power: 1765	so if they go bankrupt, could i get a car for 10 bucks ?? seems fair, they gotta empty the lots so that another company can use the land..lol and there will be no warranty...haha

12-12-2008, 03:56 PM	#13 (permalink)
shumby Captin Canuck Join Date: Dec 2008 Location: with your mom Age: 45 Posts: 6,288 Drives: your sister Rep Power: 237	hummmm Z06 for $50?

12-12-2008, 04:02 PM	#14 (permalink)
nogoodname Lifetime Premium Join Date: Nov 2008 Location: Montreal Posts: 22,357 Drives: E46 M3 Rep Power: 1765	^^^^ I wanna go to the dealership and ask....I'll say i got 50 smackaroos in cash money

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