Bush considering 'orderly' auto industry bankruptcy

The biggest recession in decades. Slipping orderly into depression.

The bush administration is trying to keep you on the edge of your seat and at the very last minute pitch the automakers enough just to get to January 21st.

No matter when it get's done george bush has taken this nation on a nose dive economically. Mission Accomplished.

george bush failed the country. < :-)

adaydream: "george bush failed the country. < :-)"

Sadly, he's trying to take a lot of the world down with it, too.

George Bush invaded Iraq.

Sadly, he's trying to take a lot of the world down with it, too.

George Bush destroyed much of the world.

Moderator: You're on the wrong thread. This one is about the U.S. auto industry.

You know, a controlled bankruptcy might be the best way to go, daydream. It will allow them to renegotiate the things that are dragging them down rather than waiting. I was against it before, but it looks like they'll be able to survive and come back stronger. People just need to know that they aren't going anywhere and they'll continue to buy from them. That was my biggest concern before.

I think it's about time to recognize that America and perhaps other nations are sliding into another Great Depression. The big three American auto companies will go bankrupt. It is no use throwing good money after bad. That is the truth of the matter. People are not buying cars. Banks are reluctant to lend money. People are losing their jobs. Homes are being repossesed. The real question is, how long will the Great Depression last? At least through 2009 and perhaps a year or two longer is my guess.

the United Auto Workers union, who called the idea unworkable and even dangerous.

I'm sure they did. Hehe.

"I believe that good policy is not to dump him a major catastrophe on his first day in office,” Bush said."

This sort of attitude might have been beneficial at various points during the last 8 years.

Mr. Trumvere, at least Mr. Obama will have all the political skill and experience that comes from his emerging from the integrity and with the backing all of his mentors of Chicago politics. In America, we all point to Chicago as a shining example of what all American politics should be like. Even the dead rise from their graves and vote. Several times.

Mr. Bush didn't have that advantage. His obvious loss.

American Enterprise Institute, a conservative Washington think tank.

No, a neo-conservative think tank. There is a big difference.

So far the government has given away billions to rescue financial institutions that are not loaning money. The Fed has reduced the interest rate to near rock bottom and low-rate interest-bearing accounts will be an incentive to dissave or to invest in a market which is still in turmoil. We are desperately trying to encourage the nation to go shopping when that may not be the solution.

The auto industry needs reform. But it would be much better for Bush to keep it on life support and pass the problem on to Obama. This administration has been particularly financially inept and the last thing we need is a bright idea from it at this late date.

what a bunch of bull. I've been approved for a 321k loan at 5% today. I close on the home after the holidays. Banks are lending money to people who have good credit. The reason we are in this mess is because banks were required to lend to people who could not afford the loans they took out. When the government back institutions Freddie Mae and Fannie Mac failed, the banks were left dangling inn the wind. The government had to lend them the money because it was the government that said they'd back those risky loans.

The people who are in deep financial poo right now simply believe its Bush's faulty without looking at all the facts. If you fall in that category, best you start looking at all sides of the argument before you make your next financial move. its your money.

If the big 3 were allowed to fail, those who remained in the industry will have a bigger part to play. The J auto makers may benefit tremenduosly if they can emerge from this financial slump relatively unscathed.

funny those who give us sub-prime loans get a hand out while those who give lots of american jobs can take a hike.

Anyone here work for the big 3? I'd like to know why did you stick around so long, you all knew the dangers of working for these companies for a long time....

Bankruptcy is really the only real solution and the UAW has got to find other means of staying afloat - they have been a big part of the problem for the auto makers over the years. I'd go as far as saying they share 1/3 of the problem.

The big 3 has a lot of overseas holdings they can tap into, perhaps they feel the same as I do about the union.

Give them money for what? to keep an unproductive work force afloat? To continue in the un-innovated ways? To pay of "forced" contracting and forced inflated price indexing fees?

"The biggest recession in decades"

The Barack Obama administration looms.

Vor,

GWB certainly contributed to the problem you describe with his American Dream Homeowners Downpayment Act. As he explained it in 2003:

I am here today because we are taking action to bring many thousands of Americans closer to owning a home. Our government is supporting homeownership because it is good for America, it is good for our families, it is good for our economy.

One of the biggest hurdles to homeownership is getting money for a down payment. This administration has recognized that, and so today I'm honored to be here to sign a law that will help many low-income buyers to overcome that hurdle, and to achieve an important part of the American Dream.

Curious it's gotten so little publicity, don't ya think?

But that was not what did in the financial system. Rather it was mortgage brokers scouring the landscape for everyone with a pulse who could be signed up for a sup-prime mortgage. It didn't matter if the applicant had the ability to repay; the mortgages were sold as "collatoralized debt obligations" (CDOs) to other financial institutions which spread the virus throughout the system. Much more than the above legislation, GWB bears responsibility for not heeding calls to reregulate the mortgage industry as the portfolios of the banks came to contain larger amounts of debt.

Moderator: Back on topic please. The subject is the U.S. auto industry.

VOR,

It's the administration that is complaining that banks are not loaning money. But it's complaining because they're not loaning to businesses. The auto industry would be a business to which the banks--not without good reason--are not making further loans.

Congratulations on your house. But, generally speaking, our country does not need more consumer credit today. Consumer credit was the amphetamine that brought us racing to this disaster. We don't need more of it. Speed kills.

What we need is a reorganization of our life style and values. One way or another, that will happen. Bush is right that the auto industry needs a soft landing, but he is not the guy who should be trying to do the job. He was at sea in trying to figure out how to use the $700B that Congress gave him. He's still making false starts with that. I think he needs to leave further remodeling to the next tenant.

Banks are lending money to people who have good credit.

That's because they were bailed out. So the ailing auto industry has said, "Why not us?" Once Uncle Sam got into this bail-out business, the door was opened to everyone deemed "too big to fail."

The auto industry was certainly a beneficiary of lax credit requirements which enabled people to buy more expensive cars than they could afford. This usually meant bigger vehicles, reducing the incentive for the Big Three to manufacture more fuel-efficient vehicles.

Things came to a head last spring when the price of gas surged above four bucks a gallon. Some of those with gas guzzlers owed more than the vehicle was worth. And dealers had miles of unsold inventory.

Actually the best selling trucks are the cheaper ones. The F-150 is the best selling vehicle in the US and it's in the same price range as a cheap family sedan.

According to a June 2008 publication:

There's a new best-selling vehicle in America, and for the first time in 17 years, it's not a pickup truck. It's a Japanese compact car that can be bought for under $20,000 and, even without its optional hybrid powertrain, squeezes over 30 miles of travel out of each gallon of $4 gas.

The best-selling vehicle in the U.S. is now the Honda Civic.

USA Today explains, "Not only was Ford's F-Series pickup, a longtime sales king, passed by Honda's Civic, the May leader, but also by three more cars -- Toyota's Camry and Corolla, and Honda's Accord." May wasn't a complete loss for U.S. automakers. "The subcompact Chevy Aveo was up 44%, the compact Pontiac Vibe up 72%, and the Chevy Cobalt, up 19%." Sales of Ford's Focus increased by 53%. The newly redesigned Chevy Malibu sold so well that, according to GM vice president Mark LaNeve, "We just ran out of product."

But small and midsize car sales couldn't rescue U.S. automakers from a historic loss. According to the New York Times, May marked the first time that Asian automakers outsold all of Detroit's big three. "General Motors, Ford Motor and Chrysler combined for a record low market share of 44.4 percent, compared with 48.1 percent for 10 Asian brands, according to the Autodata Corporation, the industry statistics firm."

"The F-150 is the best selling vehicle in the US and it's in the same price range as a cheap family sedan."

Price apart, it's a horrificaly un-economical workhorse. I had a F450 powerstroke recovery truck, and even being diesel, was absolutely stinking on juice, despite it looking kinda tough. No wonder the US market is collapsing after the last 20 years of living in Denial.

Now I've got a Euro common rail diesel, albiet less powerful, but far more reliable and 40 + mpg. Stroll on....

No wonder the US industy is down the pan.

USARonin,

It might surprise you to know, but I too am leerly of Obama's Chicago connections. However, so far the only thing that Obama can clearly be said to have taken out of the Chicago political arena is the ability to play hardball. As to President Bush, it is difficult to say (with a stright face) that America would not have benefited from a little more caution vis a vis the creation of catastrophes, no? Aparently, how ever, little has changed on that front as the President has just approved a $17bil loan to the big three. (Nevermind that out elected representitives in the Senate already said "nay" to such a bailout). The demise of Detroit is imminent.