"First, the U.S. Treasury and the Federal Deposit Insurance Corporation (FDIC) will backstop some losses against more than $300 billion in troubled assets.
Second, the Treasury will make a fresh $20 billion investment in the bank. The government has already injected $25 billion into Citigroup as part of the $700 billion bailout passed by Congress in October."
Just what did Citi do with this initial $25 billion that they deserve another lifeline tossed their way while the American auto industry is essentially told to 'come up with a better plan'?
I'm sure Citi officials flew into Washington over the weekend on commerical, not private, planes (snicker).
"Chief Executive Vikram Pandit and other top management will keep their jobs despite the intervention, but the government will have the final say on executive pay packages. More details on compensation may come next week, government officials said.
Not all investors were pleased. "You're seeing an inept management team being rewarded by the U.S. government," said William Smith, chief executive of Smith Asset Management in New York, which owns Citigroup stock".
the only think the Government can do to save the auto industry is outlaw unions.
Or maybe the states of Michigan and Ohio can become "Right to Work" states like the states down south that are getting new foreign car factories built in them.
Don't blame me,
I didn't vote for a socialist.
Maybe the Chinese will follow in Japans footsteps and just start building their cars here and save the cost of shipping them back to us.
Many of the popular "foreign" cars are american built. I just heard a report the other day about how many new factories have opened up especially in the south (where unions don't have the same hold) giving American's good paying jobs.
Keep tapping your ruby slippers together and let me know how it goes.
It won't sink... the Chinese will buy it up and send all the R&D back to China. A few billion would get them alot.
If SensorG is right, prepare for a friendly Chinese Takeout.
Then for some time, we'll get mostly Chinese-made autos.- the Mao, the Ying/Yang, The Magic Lotus, General Tao...
A few years down the road, someone in America with some ingenuity will develop a business plan, secure capital, and start their own small auto manufacturing center that will take off.
Americans, thirsty for an alternative to the Chinese models, will begin to buy these cars, even though they will be cost-prohibitive to some. Workers will begin to buy stock in their employer's company, further securing their interests. The manufacturer will expand production to meet demand.
Another American will seize upon a plan to make an even better auto, so she will develop a business plan, secure capital, and start a little friendly competition with the other American company and the Chinese manufacturers.
The price of all the American auto models will continue to come down and stabilize.
It is all part of the free market cycle.
The Chinese, however, won't allow our cars to be imported into their country...and our legislators will be A-OK with that, unless we vote them out of office.
"It is all part of the free market cycle."
Yes, but we don't have a free market. We have the military-industrial-complex sort of market, and Ike well warned us what would happen if we just let them continue to build upon their horrible advances in socio-economic power from WWII. Hence, all that automotive competition NEVER happened. Competitors to the Big Three have always been either wiped out or bought out.
Any sufficiently large business is Socialist in nature. It acts more and more to STOP the free market from happening. Since company power is roughly proportional to the square of company finances, the bigger it gets, even more power is gathered ... until you end up with our modern economy: Each industry is largely dominated by a handful of giants who grab 80% of that industry's market, and a second tier of a few dozen that takes the next 10%, and then a third tier of every other company (often numbering in the 100s to 1000s) that has to subsist off of the remaining 10%.
This may resemble competition, but NOT BETWEEN THE TIERS. It's almost impossible for a company on one tier to surpass the barriers specifically placed there by the higher tier, in order to join that tier.
Yea- because we've seen that is all the other industries that closed down and moved to China...
Oh that's right, no we haven't, but don't let reality stop you now...
I don't think I've seen so much logic packed into such a short post on this board before.
Be careful Sensor, having this much common sense doesn't fair well in NW Ohio.
Just like any other business that is failing due to poor management decisions, I'm in favor of letting the auto industry sink. What ever happens afterward will likely be a better, more stable company.
Mad Jack's Shack
There was no government regulation that forced the auto companies to produce ultimately useless gas-guzzlers, or to pay bottomless retirement benefits, or to pay executives like gods, or to sign labor contracts without any concern about their inherent insanity. What fucking MORON signed a contract with a stipulation for a "job bank" -- in other words, a program to pay workers to NOT WORK.
So they should fail. I'm not worried about their assets or employees. Someone will bid on those assets and make use of the employees. Of course, the shareholders will be wiped out, but that's how a corporation works. The primary debtors of the companies will get their pennies to dimes on the dollar for the debts that the company owns them, and that's rightful albeit unfortunate. Naturally also, the employees will receive steep pay cuts. Maybe those employees should have saved all those years of bonus checks that they got, eh?
There was no government regulation that forced the auto companies to produce ultimately useless gas-guzzlers, or to pay bottomless retirement benefits, or to pay executives like gods, or to sign labor contracts without any concern about their inherent insanity.
Which Japanese-European automakers don't need to concern themselves with. As recently as 2006, GM spent $5.4 billion in health care that Toyota and others don't need to worry about because of their nationalized system.
Once this country figures out how to fix its broken health care system, if it ever in fact it ever does, many ills will be on the road to being cured. Hopefully by that time there's something worth saving.
... but you have to keep it in perspective that GM is blowing through $1.5 billion each WEEK now. That $5.4 billion it "lost" due to not having nationalized health care would only have delayed GM imminent bankruptcy by 1 month. If GM's finances under the Bush Administration had the same numbers, then the bankruptcy would only have been delayed by 7 months.
In short, it's not just health-care costs that WILL sink this stupid company called General Motors. Overall, GM is a dinosaur that not only refused to change, but what changes it DID encompass were the worst possible ones (primarily deciding to bet the company on SUVs).
Any company that is THIS poorly managed NEEDS to fail.
This site has one up over all other local ones: it has polls.