Posted on 02/19/2009 12:15:09 PM PST by Notoriously Conservative
The following post was left as a comment regarding the previous NC post "GM Uses bailout money ." NC isn't offering this as our opinion, and doesn't necesarrily represent our views, we are simply posting it for your consideration.
Let the politicians decide re: GM Bailout. That's why we voted for them.
On the matter of what's needed now to unclog inventories of existing new vehicles on-ground at dealerships and factory lots in the US set to put people back to work at US company owned factories ASAP, I propose:
1. Offer direct federal access to funds to franchised new vehicle dealers for the purpose of accelerating loans for qualified consumers and fleet operators.
Franchised new vehicle dealerships sales actualization requirements must also be taken into account in this matter as they are an integral part of the new vehicle sales "food chain."
If traditional funding sources don't want to, or find they simply can't sufficiently underwrite this business, let's seek out and provide motivated lenders who would then be provided access to special funds set aside by the Fed under special circumstances or rules established for this purpose.
2. Accelerate Special Offers for Fleet Operators to cycle their vehicles
This would include all private as well as public fleets not as yet contemplated by the present plan (i.e., non- Federal Fleet vehicles), to ensure fleets replace their vehicles as they would normally cycle them.
These offers should seek to balance alleviating inventories of existing new vehicles on-ground at dealerships and factory lots in the US, while phasing in offers for more fuel efficient vehicles as the existing inventories of new vehicles are more rationalized.
The offers could include everything from accelerated depreciation, cash incentives to guaranteed residual values.
3. Auto Manufacturer and Parts Supplier Shareholders' Guaranteed Value Plan
This...
(Excerpt) Read more at notoriouslyconservative.com ...
I don’t care what GM or Chrysler do at this point - I will not, ever, buy what they are selling.
I agree with this. If the gov. would give me a 2000.00 tax reduction, I would go buy a new Ford today.
Drill! Drill! Drill!
Maybe they will sell existing inventory at a major loss.
When companies are desperate selling inventory at a loss will at least generate revenue if it’s needed that badly. Inventory is liability, not an asset. Have a 30-60 day 25%-50% off of invoice to move vehicles and generate some revenue...
(I can hope can’t I?)
Um, the chant is “Drill, baby, drill!” ;)
The result, Energy Independence, is what I had in mind, $4 gasoline is going to finish off whatever the stimulus investment revives
Gov’t should buy a Suburban for anyone who wants to buy the gas/Diesel for one.
Without physically relocating, modernizing their production processes and organizational structures, drastically reducing fixed expenses (especially salary and pension costs), and improving the quality of their finished products, American automakers are dead men walking.
You nailed it. As someone in this sector of the economy, the only point I would disagree with is the quality issue. The quality has drastically improved in recent years, although there is still a ways to go. GM is our largest customer, and here is the what I believe is the crux of the problem: It cost them $2000 to $3000 more to make a vehicle than it would Toyota or Honda to make the identical vehicle. The reason? Benefits to retirees. Without concessions from the UAW, and sacrifices by retirees and all workers, their business model is unsustainable. Unless they do that, for them to survive we will be bailing them out in perpetuity. They need to either change or be allowed to die.
The quality issue is related to fixed expenses. The money currently wasted on excessive pension obligations (sometimes paid to people who spend their days surfing the Internet rather than building cars) would be better spent retooling production lines and training employees on lean manufacturing methodology and practice. Unions in and of themselves are not wasteful; it is the UAW’s refusal to accept competitive realities that makes progress impossible.
Yes, it is likely that our automakers are going to die. But, Obama and the Dems will continue to bail them out. So, our money keeps getting flushed down the drain (UAW).
I would much rather the money be given in the form of tax credits to Americans who buy new cars/trucks. One, I would have a new car and a tax credit to show for the money that is being spent. Two, inventories would be reduced at dealerships and ports. Three, auto makers would have a chance to profit from the windfall. Whether they make use of it would be up to them.
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