Government Motors

This divvying up of a company looted by Obama and his thugs just turns my stomach. I hope my Suburban lasts to the end of my days, because I sure ain't replacing it. Or buying any of its fascist products.

"The auto industry shall produce a car for de volk... er, I mean, shall produce de Volt."

Can I just ask why the small trucks now are less fuel efficient than they were thirty years ago?

I had a 1985 Nissan diesel,the vehicle was a rust bucket,but the motor and four speed standard transmission ran forever,and got me about 35-40 highway mpg.

Now the options in small trucks give you a bare 25 mpg in a 4l gas motor,or you can get an underpowered four cylinder that's gutless and has no towing capacity.

Whatever happened to the auto industry concentrating on fuel economy? They want us to save the bloody planet but offer no decent choices for tradesmen who need a fuel efficient truck or van.

Another bailout! Screw 'em, let 'em go down before they get another cent of our money!

The UK government subsidised the UK steel industry for many years.
It never did recover. Finally the UK gov't tired of flushing money down a black hole.

A precedent.

Not only that dmorris, why is it that Volkswagen is the only automaker that's actively promoting small diesels in North America? Why can't I get an SUV or truck in a 4 or 6 cylinder diesel?

For the first time in my life I purchased a GM vehicle, in May. No particular reason other than it suited my needs, was at a goofd price and the reviews on the vehicle were solid. It was not a NEW model, but the model was about 3 years old.

Anyway. While I am happy with the vehicle I can say that while GM ha shut the factory to new orders in early May, Ford was still accepting Factory orders into June. FOrd had better control of its inventory and therefore costs. Better able to take advantage of what customers want etc. Unfortunatlewy FOrd didnt have what I needed....the FLex is just too ugly for us and we needed more than a 5 passenger vehicle.

Anyway. Good vehicle, reasonable price, but clearly there are still issues within that company that need fixing, and soon.

The 1st time around in this discussion, I said the elephant wasn't going to change it's direction. It just flailed around looked for a scape goat, in Canada that happened to be about 240 small dealers that larger dealers blamed for their own poor management woes. Well guess what, the problems are still there, unaddressed. Cutting dealers only cut into the bottom line. Think about it, how does eliminating infrastructure in which you don't own a bolt in solve financial problems? It can't, especially when it was GENERATING income!

And we are surprised because...?

Breaking news from Ontario as to another grant etc (election shortly?). Can't they move these old plants to say Regina?

http://www.cbc.ca/news/canada/story/2011/07/05/toyota-plant-upgrade.html

Could it be that the oversupply is due to the fact that, much like in case of the government mortgage business, nobody knows how to run a profitable company.
After all the government does not need to make a profit, if things don't work out, the politicians just suck more money out of other people.
Problem solved.
What problem?

Lev, the oversupply is due to the fact that GM has done nothing to update its light truck line for at least five years. Ford and Toyota have been beating them in these products for years. With highly limited development funds, it's dumped a disproportionate amount into frivolous things like the Volt and not on the real moneymakers, trucks, SUVs and sedans. GM lost the notion of how to be a profitable company long before the government takeover. That just finished off whatever remained.

dmorris: think "emission controls".

LS: the upgrade in Ontario is over $500 million, 80 per cent of which is Toyota's own investment. Ontario is giving a grant and Ottawa is giving a 30 year loan. And since Toyota was the world's largest and most successful car company in the world up until early this year there's reasonable prospects of it being paid back with a large net return. Given the distress of Toyota plants in Japan over parts availability, new car and truck lines will be going to plants that are being re-equipped and re-tooled.

And what do the Toyota plants in Ontario assemble? Nothing much, just Corolla, Camry, RAV4 and Lexus. Merely Toyota's most successful products. And how much of this gets gobbled up in wasteful union benefits? None. Toyota's plants aren't unionized, which is why CAW hates them.

cgh, is it not at the orders from the current White House occupant that the investment was diverted to Volt?

Isn't there a large stock of these vehicles that have no buyers?

In general, you have a point, though the interference by the current president is large part of the problem.

Lev, all true. Political interference has made things much, much worse. My point simply was that like Chrysler, GM is a company which is slowly going to zero. It's not really an auto manufacturer, it's a retirement plan with a sideline in building cars and trucks.

Best thing that could happen to it is a bankruptcy followed by purchase and re-start of the plants. Who loses? GM shareholders, bond holders, and CAW. Who wins? Everyone else.

cgh, you hit the nail on the head, absolutely.

Sales down?

There was some stupid schmuck on the radio (last month) that advised people to hold off on their truck purchases until better incentives came around.

I AM so wishing I could remember his name and the station it was on.

Lev, it's important to remember that the federal government had absolutely no choice in the matter. Once Washington indicated it was prepared to bail out the whole company, Canada had to match it, or the entire GM production would have migrated to Michigan. Remember, Obama is looking to 2012, and Michigan is a must-have state. (A first term President starts thinking about the second term election the day after he takes office, if not sooner.)

In that event, the Tories lose the next election. Remember, all those GM workers live in all those ridings that the Tories need to form a government. Particularly when you add in all the parts manufacturing companies that are then out of business.

And the Liberals and Dippers trigger an immediate federal election accusing the Tories of causing the greatest industrial collapse since the Great Depression (which it would be). With the end of GM it's the end of any hope of a Harper majority and end of Harper. The Tories would have been in complete disarray with a huge split in caucus over this and with a leadership crisis on their hands going into a losing election.

It would have handed the Opposition exactly what they needed; a solid reason to bring down the minority Tory government. Even worse, the Opposition could have rammed through a bail-out package on their own, which would have caused the immediate fall of the government by passing an expenditure bill to which the government was opposed.

In large part the Opposition lost the last election because Harper was far too smart to ever give them that kind of opening.

So, the Tories cough up the dough to GM. The message to CAW is "keep your yaps shut during the next election, we bailed you out, you slime". And CAW did. By and large it kept pretty quiet during the spring election, knowing that the Tories had done it a big favour. He also gets McGuinty to keep the Ontario Liberals quiet during the election as well. Dalton gave zilch support to Ignatieff during the election. Again, he owed the Fed Tories too much.

Once Washington declared its intentions to take over GM, all of our options became bad ones. The only question was which was the least bad.