The three major automakers will be appearing before Congress this Thursday in another attempt to pick the pockets of the American tax payer.
WSJ excerpt tonight…
DETROIT — General Motors Corp., Chrysler LLC and Ford Motor Co. on Tuesday presented turnaround plans to Congress that suggest GM is in a more dire situation than previously thought.
As part of a renewed bid to win backing for a government bail out, GM requested a total of $18 billion in federal loans — $6 billion more than it said it would a few weeks ago — and added it needs an immediate injection of $4 billion to stay afloat until the end of the year.
The urgency of GM’s request stirred up new worries that GM may have to file for bankruptcy protection. In Detroit on Tuesday, top officials from the United Auto Workers union said at a meeting that GM could be forced into a Chapter 11 filing before Christmas if the auto maker fails to get government funding in the coming days, people familiar with the matter said Tuesday.
Two weeks ago when the CEO’s appeared before Congress they were made to look like complete fools (which they are) when they traveled to Washington on their corporate jets carrying a tin cup. This time the CEO’s are traveling to Washington by car. Yes, they are driving to DC this time according to some media reports. I would not be surprised to see CEO Rick Wagoner show up before Congress this week looking like this…
The automakers are crying for Government (tax payer) help. Hey, it was not us that caused the problems at the automakers… they did it all by themselves. They need to file bankruptcy, reorganize under that bankruptcy protection, and then come out bigger and stronger 10 years from now. Getting a Government hand-out would only set the stage for more and more appearances by the CEO’s in Washington in months and years to come for more money.
Want to read what General Motors is going to pitch to Washington on Thursday? Read the full 33 page report by CLICKING HERE (Adobe Acrobat PDF file).
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Make up your mind yourself by reading http://www.house.gov/apps/list/press/financialsvcs_dem/gm.pdf General Motors Corporation Restructuring Plan for Long-Term Viability retrievable with the link provided.
General Motors Corporation Restructuring Plan for Long-Term Viability projects three scenario’s, upside, baseline and downside. For the baseline and downside scenario the expected equity (assets minus liabilities) for year end 2012 estimates GM to be 30.6 and 43 billion dollar negative. No estimate for expected equity year end 2012 under the upside scenario has been estimated by GM. My estimate for equity of 2012 in the upside scenario would be between 20 and 25 billion dollar negative. My conclusion is that under all scenario’s GM will continue to be technically broke by the end of 2012.
All automakers have screwed up in a major way, it is time to clean house. Bye bye GM
Reading the restructuring plans makes me absolutely sick. Management simply procrastinated making hard ball decisions, especially as they applied to contracts with the UAW. The plan touts the compensation sacrifices of management. What a joke. Given the performance of this company over the last 5 years, the compensation should have been reduced dramatically. Lastly, their forecasts are quite optimistic, given the state of the world economy. If I had to make a wager, their worst-case scenerio is probably the most realistic. It will be interesting to see what Congress does with this mess but I’m guessing they will find a way to keep the cash consuming monster alive.
Hi from Germany
I must admit that i am shocked at what your government is doing. It has almost become a joke here in Europe with your government bail out every body.
I agree with Mr. chuck, let them go into bankruptcy. Is that not what the system is for? Lets them clean their house and budget. at the end they will be better off. Stop your bail outs before you bring down the hole world economy.