Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Tenchusatsu who wrote (440963)	12/17/2008 3:33:38 PM
From: tejek	Read Replies (1) \| Respond to of 1584989

Dealers call for Bush to act quickly on aid for automakers But White House says it won't rush a deal BY KATIE MERX and JUSTIN HYDE • FREE PRESS BUSINESS WRITERS • December 17, 2008 With talks over a rescue package for Detroit's automakers stretching into their sixth day, General Motors Corp. and Chrysler LLC dealers said they hope the Bush administration acts quickly to disperse the uncertainty keeping customers out of showrooms. The lack of sales is only exacerbating the weak cash positions of GM and Chrysler, who already have warned that without aid, they could run short of the cash they need to operate by the end of the month. "People will not buy cars when there's a bankruptcy hanging over their heads," said Carl Galeana, who owns Chrysler and GM dealerships in Michigan, Florida and South Carolina. The administration has been weighing several options for lending GM and Chrysler money from the $700-billion financial industry bailout but has yet to decide on strict provisions it's considering for the companies, their investors and the UAW. A plan to provide $14 billion in federal loans to the automakers failed to clear the Senate last week after a similar bill was approved by the House. On Tuesday, President George W. Bush, who has suggested a deal is not far off, told CNN: "We're just working on options." "What you don't want to do is spend a lot of taxpayers' money and then have the same old stuff happen again and again and again," he said. But for dealers, waiting may be the hardest part. "GM is walking around with this giant black cloud over its head, like the Peanuts character," said Frank Ursomarso Sr., a megadealer in Wilmington, Del., who sells both domestic and foreign vehicles. "What we need is some positive news." Ursomarso said he has sold the same number of GM vehicles in the first half of the month as he did in the same period last year, but that the environment certainly felt worse. And, he said, he has had sales fall through because customers who normally could get financing have been unable to qualify for loans. December sales are down Several other dealers also said the uncertainty hanging over the domestic carmakers has hampered December sales, which already were down 16.3% for the year through November, compared with the same period a year ago. U.S. consumers have purchased just 12.3 million cars and trucks, which has the industry on track to turn in the seventh-worst year of U.S. auto sales in three decades. Salt Lake City GM dealer Jerry Seiner said he remains hopeful that something will happen to save the automakers -- and their dealers -- by the end of the month. "Everything's slow, but more importantly unsettled," said Seiner, who noted that December sales at his Chevrolet, Cadillac and Hummer dealerships were in line with the depressed sales levels of October and November. "I just wish they would do the same thing for automotive that they did for the banks," Seiner said. "This is the most frustrating time I've ever seen in my life. Hopefully by Dec. 30, GM gets this stuff done and we can go back to work." The White House, though, has said it won't be rushed. It has said the automakers should only receive money if they can prove they will be viable long-term, and administration officials have been studying conditions proposed by Sen. Bob Corker, R-Tenn., such as steep cuts in debt and forcing the UAW to take stock for payments to the health-care trust fund for retirees. Treasury Secretary Henry Paulson told CNBC on Tuesday that "the autos will get the money as quickly as we can prudently do it" but said funding should be a bridge to put the automakers on a path to viability. "Failure by these companies at this time is not something any of us want," he added. The administration has been flooded with advice on how to craft a rescue. A group of House Republicans urged the White House on Tuesday to not use money from the financial industry bailout; a group of Senate Republicans called for severe restructuring as part of any plan. And Rep. Barney Frank, D-Mass., urged Paulson to keep a provision of the bill that passed the House last week allowing the government to veto any transaction by the automakers of $100 million or more. "Given the serious mistakes that senior auto industry executives acknowledge they have made in the past, such safeguards are absolutely necessary to ensure that taxpayers are protected and that the retooling of this critical industry proceeds as quickly as possible," Frank said in his letter. Agency issues report While federal leaders continued debating the details Tuesday, Moody's Investors Service issued a report estimating the probability of a federal rescue plan for Detroit without a near-term automaker bankruptcy at 25% and the probability of a prepackaged bankruptcy filing coupled with government aid at 70%. Moody's said that a prepackaged bankruptcy "might be the best approach," but noted that "achieving timely agreement from a broad range of creditors for a prepackaged bankruptcy would be highly difficult." The agency said there also was a chance of a free-fall bankruptcy, which "would throw the broader economy into chaos, costing the economy 2.5 million jobs at its peak impact in summer 2010 and pushing the unemployment rate to a depression-like near 11%." However, Moody's pegged the probability of that at just 5%. freep.com Contact KATIE MERX at 313-222-8762 or kmerx@freepress.com.

To: Tenchusatsu who wrote (440963)	12/17/2008 5:33:39 PM
From: Alighieri	Read Replies (2) \| Respond to of 1584989

Al, I read about a great idea for the Big Three bailout. Make them agree to a very generous warranty for every new car sold. Something like 5-year bumper-to-bumper, including brakes, and 10-year powertrain. Have half of those costs paid for by the federal government for five years. That should give the Big Three a boost in consumer confidence along with enough time to figure out how to cover that warranty all on their own (either with a stronger focus on quality or revenue from increased sales, or both). Not a bad idea at all...help them constructively. One of the problems with these companies is that they behave like tramps. There is no theme, nor steadfast culture in what they build and market. They develop short term plans even in the face of obvious long term business factors. Asian makers develop a line up that segments and positions their product, with engines and chassis' that are used and re-used, they launch competently with marketing campaigns that seduce customers, offering warranties that scream "we stand behind our cars because we know how we build them". If GM needs a small in the lineup, they go to korea and buy one from Daewoo and put their sticker on it...you might sell a few cars that way, but you won't build a brand following that lasts more than one purchase. Al