Big 3 bailout compromise reached - then vote cancelled

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By Thami Masemola
November 20, 2008 10:49 PM
Filed Under: American, Chrysler, Corporate/Financial, Ford, General Motors, Industry

Reaching a compromise key Senators drafted a bill that should see the $25 billion promised in September for factory retooling, being made immediately available as a kind of emergency cash bailout. However, upon the realization of not enough votes Democratic leaders shifted directions and decided to postpone the vote until December 8. In the meantime the Detroit Three must draft a plan which exhibits "viability and accountability," meaning a transformation that would ensure long term competitiveness and innovation.

This follows two days of presentations by the Big Three captains to Washington, which ended with nothing in hand for the worried executives. Time is now running out and any prospects of a bailout have to wait.House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid, D-Nev. said the automaker's plan must be received by Dec. 2. Further hearings are possible in early December with Congress returning to session the week after to consider legislation.

Source: freep.com

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Comments

shadowphantom

November 20, 2008 10:57 PM

I think that the problems of the big 3 started a couple of decades ago. Along with the fact that the vehicles were not desirable or reliable, consumers turned elsewhere to get what they are looking for. I also believe that the big 3 could have avoided this problem long ago but chose not to.

joshg_5

November 21, 2008 12:32 AM

Agreed. Their 70's and 80's success went to their corporate heads, which allowed their Asian and Euro competition to surpass them in every respect. The fact is now though, that there's virtually no difference in quality comparably, but people are to stuck up on German and Japanese engineering to realize the equality in current quality.

I must admit I'd never buy American (apart from a select few models), It'd be a shame to let go of the potential that they may have in the future.

dom6698

November 21, 2008 3:04 AM

The big three have systematically ground down all that is distinctive about nearly ALL of their brands. Their badge engineering policy of taking 2 3 or 4 brands and using a series of one size fits all generic cars with no character barr small differences in engines and styling and trim, which are unreliable and made down to such a penny pinching price. These brands really have been so cynical about the US consumers, for every good American car there is a better Japanese, Korean or European car, and the big 3 should just thank their lucky stars that Americans are such a small minded most of them will buy anything American over foreign on the basis of nationality

sub39h

November 21, 2008 4:45 PM

joshg_5 - have you ever driven a european car? american cars are in NO WAY comparable to european cars when you factor in build quality or handling characteristics.

and dom6698, if badge engineering was such a problem, please explain why Audi is still reporting an increase in sales despite the current economic crisis? they are (and i say this as an Audi owner) "badge engineered" VWs in a lot of respects.

dom6698

November 22, 2008 4:52 AM

sub39h, I'm not talking about the platform sharing used by Audi, the bodies used are always different, I can understand the fact that A3/Leon/Octavia/Golf latform sharing thing because it saves lots of development costs and the cars have different bodies and engines and interiors often. Look at the 1980s Vauxhall Cavalier/Opel Ascona/Oldsmobile Firenza/Buick Skyhawk/Chevrolet Cavalier/Pontiac 2000 or Sunbird/Cadillac Cimarron/Holden Camira/Isuzu Aska 9 name plates for one body - look at pictures and the rear windows are the same, they didn't even bother trying to hide the fact they are all the same car with just a different badge, and after a while that sort of under investment and complacency has just nearly killed those companies

9TNine

November 21, 2008 12:42 AM

I think if they get Government cash they also need a Government representative on the Board (as a watchdog), to veto excessive top management salaries, excessive contributions to their pension funds (which is what the Rover group did when BMW gave them a loan) and any other stupid decision...

joelynn

November 21, 2008 1:59 AM

yeah, Phoenix or Alchemy or whoever it was bought Rover just stole the money, invested a bit in stupid, money wasting projects like the SV, the Cityrover and going to LeMans when they really needed to create a competitative range

eddie

November 21, 2008 2:23 AM

I thought just rental companies bought GM products and now that is not the case so who will buy their products in high enough numbers for them to survive. Look at all the new innovative and high tech offerings by their competition and GM really does not have much to offer.

Iconic

November 21, 2008 3:33 AM

Hey.. let's fly in on our 30 million dollar jets to beg for money!! And they actually had the nerve to deny it was their fault.. No humility. the whole situation makes me sick. let them fade away so the japanese and koreans can fill the vacuum.

Panamera

November 21, 2008 4:20 AM

No, ignorant people like the person above need to be shot. GM makes great cars. i love my H3. the main reason GM isnt getting enough sales is because japanese and euro cars are sold everywhere. while most american cars are sold in america. and the few that sneak out are left and drive only. They would have a much larger market if they produced LHD anD RHD like everyone else.

Iconic

November 22, 2008 4:58 AM

Whoa calm down dick cheney.. you'd like me to be shot?? pretty extreme buddy. Check your facts and you'd realize that you're the one that's ignorant. GM cars actually do well in international markets. It's the US market they constantly struggle in, because they think they can get away with selling crap here. They constantly refused to get on par with their competitors here and A few good cars doesn't mean their entire line up is of any good. Across the board Honda and Toyota make far superior cars. They might make good cars now, but from a business stand point, it's too little too late. Get your facts straight before you start running your mouth.

eddie

November 21, 2008 5:09 AM

Panamera you have a good point. If GM sent camaros over to Europe in the 70's they would have larger buying crowds when they come out with their retro versions later on. Right now the camaro, mustang, charger gang are becoming smaller because it is limited to the USA, but can they have run out of design ideas hence retro, safety skills and tech skills

Iconic

November 22, 2008 5:05 AM

American cars were too damn big back then to sell in europe on a large scale. The US infrastructure was basically built for large cars and open road driving. And have you forgotten about the fuel shortage in the 70's?

hofmeyer

November 21, 2008 9:20 AM

the europeans that can afford to spend huge amounts in the gas tank have enough money to buy something higher up the food chain rather than a 1970's camaro. not to mention that euro cars handle much better since thats what the europeans want. in america roads are straight and fuel is cheap, so we wound up with monster cars with monster motors that can touch the door handle on the ground when turning corners because thats apparently what we wanted. we americans never wanted small efficient good handling cars with decent fuel economy.

Panamera

November 21, 2008 9:39 AM

you're right. americans cars arent meant to be fuel efficient or small engined. they are purposely built with a huge amount of torque. and you cant use fuel expense as an excuse because american cars are dirt cheap and make up for the extra running cost. euros are excellence....most times overpriced because you get a bmw badge. american cars are cheap thrills.

gmfan09

November 21, 2008 4:05 PM

Yea right hofmeyer. If Europeans don't like American cars then why do so many of them buy American muscle when they come here. My dad works for NATO and all of these Europeans come over here raving about American muscle and the go out and buy a Camaro or a Mustang with a V8. ones from Denmark with a Mustang GT, ones from Finland with an 02 Camaro SS, and ones from somewhere I can't remember and he has a Mustang GT. They all rave about their cars and how that can't get that power back home in Europe. The love American muscle cars so don't sit there and say that Europeans wouldn't not buy a Camaro. These are not isolated incidents either every couple of years a new round of Europeans comes over here and they buy big V8s and love them till they have to go back home to Europe and they are always very sad. One guys fighting hard as hell to extend his tour for another two years buy Denmark is just not having it.

smint400

November 21, 2008 12:26 PM

that's why american cars are being eliminated first. they are not economically efficent do drive (when this world is right now is all about clean and green) also in terms of power they are not strong enough to compete against europeans cars like porsche or lambo or even audi today.

joelynn

November 21, 2008 2:35 PM

America has tried to export their cars to europe repeatedly and failed (especially Cadillac) Why? because we demand different things from our cars... American cars don't have the handling, quality, innovation or economy to compete. Not ot mention the frequent lack of diesels. I'm sure they make sense on the straight open highways and cheap fuel in the USA but they dont translate here.

Iconic

November 22, 2008 5:08 AM

Thank you. well said. Not all markets are equal.

radmeister

November 21, 2008 3:29 PM

So they lost the 25 billion $ loan, and now they may lose this original 25 billion for re-tooling. I hope they lose this too. Cmon Bush give them the finger one more time! You did it once let's do it again.

ianton

November 21, 2008 6:39 PM

american cars cant cmpete with eu cars or japanes because 1) they do not have small economical cars and 2) their powerful cars wont compete with eu power cars ie ferrari lambo maserati porshce mercedez aston bentley ecc

November 21, 2008 7:56 PM

Well, American companies owns some great technologies in this respect. But, if you are talking about business. You must concentrate on those demands from different MARKETs. BTW, the BIG 3 seems to have BIG PROBLEM on hiring some "Designers" to provide them new ideas of their vehicle models. They've just been stuck in the glorious past. Let's face the reality!

eddie

November 21, 2008 9:03 PM

If this bailout occurs, I will never buy a Big 3 product again. This bailout is for the wrong reasons.

Panamera

November 21, 2008 10:52 PM

This bailout must and will happen.

dom6698

November 22, 2008 4:57 AM

Unfortunate as it may be, if Ford, GM and Chrysler group all collapse a global ecconomic recession could occur. The amount of job losses would be mind boggling. When Rover went bankrupt they took with them alot of small companies making parts and they were only effectively one marque (two really but the cars being the same) selling in one continent.

gmfan09

November 22, 2008 5:24 AM

I have no doubt that this bailout will happen. There are way too many jobs on the line here. You people are crazy if you think they would all find other jobs with another car maker. or anywhere else for that matter. Their just trying to make them sweat.

9TNine

November 22, 2008 3:27 PM

Well, in my opinion, these guys should really get rid of their company jet FIRST, plus all other extravagances BEFORE receiving any financial handouts...!

Joe_Limon

November 23, 2008 7:16 AM

The ideal case, would be the three not receiving the bail out, then going bankrupt, then going private, then ditch the unions, then restructuring the plants, farming out trivial jobs to local businesses who can do a better job at a more affordable rate (such as janitorial duties). This would provide these 3 giants with a clean start. At which point, we can start arguing about cars again and using the car comparisons to debate which company is better, not a companies financial state.

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