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View Full Version : Economics GM to create more jobs; reported fifth straight profitable quarter


Amnorix
05-10-2011, 01:23 PM
Good news for GM, and for the economy. It's not at all clear, of course, that the US will get its entire bailout investment back, but in the long run it may well be fairly clear that the move was the correct one in light of the extremely shaky state of the US economy at the time and the (crossing fingers) sustained return to profitability of GM.


NEW YORK (CNNMoney) -- General Motors will invest $2 billion across 17 auto plants in the United States in a move that's expected to save or create 4,200 jobs, the automaker will announce Tuesday.
GM CEO Dan Akerson will make the announcement at a factory in Toledo, Ohio, where a new 8-speed transmission will be built, according to the automaker. GM will invest $204 million in the plant, and will add or save about 250 jobs.

Announcements of other plant investments will come over the next several months, the automaker said, as tax and incentive plans are negotiated with city and state governments.

Since emerging from bankruptcy in July 2009 (http://money.cnn.com/2009/07/10/news/companies/new_gm/?iid=EL), GM has invested $3.5 billion in moves that, according to the automaker, have created or retained 9,500 jobs, not including Tuesday's announcement.

Earlier this month, GM reported a $3.2 billion quarterly profit (http://money.cnn.com/2011/05/05/news/companies/gm_earnings/index.htm?iid=EL), the automaker's fifth consecutive quarterly profit and its biggest in 11 years. It marked the first time since 2004 that all three major U.S. automakers were profitable at the same time.

Since the bankruptcy, GM has benefited from the combination of drastic cost reductions and a much improved, and much leaner, product line-up (http://money.cnn.com/galleries/2011/autos/1105/gallery.high_mpg_american_cars/?iid=EL). Before bankruptcy, GM sold eight different brands of cars in the United States. Now it sells just four: Cadillac, Buick, GMC and Chevrolet.

http://money.cnn.com/2011/05/10/autos/gm_toledo_jobs/index.htm?hpt=T2

Chocolate Hog
05-10-2011, 01:32 PM
I'm going to go out on a limb and say GM down sizing to only making 4 different cars has a lot to do with it. Why the fuck did it take 3.5 billion of taxpayer money to figure this out?

Pants
05-10-2011, 01:33 PM
rexcjake is on his way back, fellas!

mlyonsd
05-10-2011, 01:34 PM
$204 million divided by 250 equals about $816,000/job.

Those better be some awesome transmissions.

RedNeckRaider
05-10-2011, 01:35 PM
$204 million divided by 250 equals about $816,000/job.

Those better be some awesome transmissions.

LMAO

BucEyedPea
05-10-2011, 01:51 PM
$204 million divided by 250 equals about $816,000/job.

Those better be some awesome transmissions.

:LOL:

Amnorix
05-10-2011, 02:08 PM
I'm going to go out on a limb and say GM down sizing to only making 4 different cars has a lot to do with it. Why the fuck did it take 3.5 billion of taxpayer money to figure this out?

Going through the bankruptcy process allows for decisions that are NOT possible outside of the bankruptcy process, most particularly the ability to reject executory contracts and avoid lease obligations with more than one year to go.

You can imagine how complicated a web of contracts GM had, with dealers, suppliers, plants, autoworkers, etc. ad infinitum. Going through bankruptcy to separate the wheat from the chaff was critical. The problem was that without US financing, putting together a package to allow GM to exit from bankruptcy expeditiously (or at all) was not going to happen. Letting GM languish in bankruptcy, even with DIP financing arranged, was going to be a tremendous drag on an already shaky economy.

BucEyedPea
05-10-2011, 02:17 PM
Bankruptcy clears out bad debris and allows for renewal with new growth or even new players. We will never know who may have bought GM and got it cheap. Even Chrysler had a buyer which never happened as the govt crowded that deal out. Instead it set a bad precedent for taxpayers to bailout debris with a national industrial policy. ( socialism ) That bailout being claimed as successful also is a fairy tale.


The Chrysler Bail-Out Bust (http://www.heritage.org/research/reports/1983/07/the-chrysler-bail-out-bust)

BucEyedPea
05-10-2011, 02:22 PM
Ignorance is strength.

Chief Henry
05-10-2011, 02:34 PM
Ignorance is strength.



Thats for dam sure...original poster has never met a GM bond holder.

CrazyPhuD
05-10-2011, 02:40 PM
Countdown to GMs new bankruptcy in 3...2...

SNR
05-11-2011, 02:30 AM
rexcjake is on his way back, fellas!
Damn, I was just going to post this

mikey23545
05-11-2011, 05:46 AM
Wow...Who would have thought that designing the world's first electric powered Edsel would bring about such a huge turnaround...

Amnorix
05-11-2011, 06:55 AM
Bankruptcy clears out bad debris and allows for renewal with new growth or even new players. We will never know who may have bought GM and got it cheap. Even Chrysler had a buyer which never happened as the govt crowded that deal out. Instead it set a bad precedent for taxpayers to bailout debris with a national industrial policy. ( socialism ) That bailout being claimed as successful also is a fairy tale.


The Chrysler Bail-Out Bust (http://www.heritage.org/research/reports/1983/07/the-chrysler-bail-out-bust)

Your article refers to the late 70s Chrysler bailout, as I assume you know.

I would agree, however, that bailouts are as a rule of thumb a bad thing and to be avoided if/when possible. To have let GM fail when the economy was also so shaky, however, would probably not have been the best move.

Amnorix
05-11-2011, 06:56 AM
Thats for dam sure...original poster has never met a GM bond holder.

Don't need to meet one to understand what happened and why they're not happy.

stevieray
05-11-2011, 08:07 AM
let GM fail that's not up to the government, the success and failure of GM is of their own doing..

notorious
05-11-2011, 08:17 AM
that's not up to the government, the success and failure of GM is of their own doing..

This.


By bailing them out, they also closed the door to another company that would have filled it's place.


If I get into trouble with my business, I want bailout help, even if I run it into the ground by making retarded decisions and having a horrific business model.

Cave Johnson
05-11-2011, 10:07 AM
Bankruptcy clears out bad debris and allows for renewal with new growth or even new players. We will never know who may have bought GM and got it cheap. Even Chrysler had a buyer which never happened as the govt crowded that deal out.

Cerberus bought Chrysler in 2007. How'd that "renewal" and "new growth" work out?

Molitoth
05-11-2011, 10:10 AM
Ok GM, now get the oil companies to allow you to release an energy efficient vehicle without petro.

Cave Johnson
05-11-2011, 10:10 AM
$204 million divided by 250 equals about $816,000/job.

Those better be some awesome transmissions.

LMAO

:LOL:

GM invested in a plant. What maroons.

BucEyedPea
05-11-2011, 11:54 AM
Cerberus bought Chrysler in 2007. How'd that "renewal" and "new growth" work out?

I was referring to the govt bailout in the 1980s with taxpayer money—not private money. I wasn't implying all businesses are successful or that businessmen don't mistakes either. They do but those making them should pay the price. Using tax payer money to prop up unsuccessful ones is unfair to the taxpayer and should not be. It's also not free-market capitalism. It's state capitalism or corporatism. So, renewal doesn't mean that a bad company is saved and stays in business longer than it should. It means unsuccessful businesses die out, which is necessary to serve the public, and gets replaced with other businesses, other business models or a new alternative for a product. Your argument is a save the horse & buggy one. You don't understand markets or business.

ChiefsCountry
05-11-2011, 12:19 PM
Get the damn autoworkers union out of there and the profits would increase greatly, not to mention cars would be cheaper.

mlyonsd
05-11-2011, 01:28 PM
GM invested in a plant. What maroons.

No, we invested in a plant.

Cave Johnson
05-11-2011, 01:29 PM
No, we invested in a plant.

So GM definitely isn't paying us back?

mlyonsd
05-11-2011, 01:30 PM
So GM definitely isn't paying us back?

Nope. Not all of it.

The Mad Crapper
05-12-2011, 04:16 PM
ROFL