Obama's auto plan triggers massive DOW fall

[OG Lurker]

Obama has trillions for banksters but has nothing for Auto. There goes our country. Not that I believe in bailouts but with the money they spend for failed banks then to say there is nothing left for the last major industry in America is insane.

 

[Shwuz]

This is probably an ignorant question, but why don't they cut their losses on autos, and retool for wind power? The necessary infrastructure investment would be a huge "stimulus", plus it would contribute to our energy independence. Win/win, right? <img src="/forum/images/graemlins/shrug.gif" alt="" />

 

[GWS]

It's high time to talk about a bailout for the surf industry.

I'm at the center of the spider web here. If I go down, everything goes with me.

Does anybody know which Democrat is the one in charge of signing off on my 3 million dollar quarterly bonus?


<img src="/forum/images/graemlins/village idiot.gif" alt="" />

 

[speedo]

Maybe you were listening to something different. Could you point out where he said that.

President Obama's remarks on U.S. car industry
Monday, March 30 04:22 pm


In recent months, my Auto Task Force has been reviewing requests by General Motors and Chrysler for additional government assistance as well as plans developed by each of these companies to restructure, modernize, and make themselves more competitive.

Year after year, decade after decade, we have seen problems papered-over and tough choices kicked down the road, even as foreign competitors outpaced us. Well, we have reached the end of that road.

We cannot, we must not, and we will not let our auto industry simply vanish. But we also cannot continue to excuse poor decisions. And we cannot make the survival of our auto industry dependent on an unending flow of tax dollars. These companies -- and this industry -- must ultimately stand on their own, not as wards of the state.

That is why the federal government provided General Motors and Chrysler with emergency loans to prevent their sudden collapse at the end of last year -- only on the condition that they would develop plans to restructure. In keeping with that agreement, each company has submitted a plan to restructure.

But after careful analysis, we have determined that neither goes far enough to warrant the substantial new investments that these companies are requesting. And so today, I am announcing that my administration will offer GM and Chrysler a limited period of time to work with creditors, unions, and other stakeholders to fundamentally restructure in a way that would justify an investment of additional tax dollars; a period during which they must produce plans that would give the American people confidence in their long-term prospects for success.

What we are asking is difficult. It will require hard choices by companies. It will require unions and workers who have already made painful concessions to make even more. It will require creditors to recognise that they cannot hold out for the prospect of endless government bailouts. Only then can we ask American taxpayers who have already put up so much of their hard-earned money to once more invest in a revitalized auto industry.

GENERAL MOTORS

So let me discuss what measures need to be taken by each of the auto companies requesting taxpayer assistance, starting with General Motors. While GM has made a good faith effort to restructure over the past several months, the plan they have put forward is, in its current form, not strong enough.

However, after broad consultations with a range of industry experts and financial advisors, I'm confident that GM can rise again, provided that it undergoes a fundamental restructuring. As an initial step, GM is announcing today that Rick Wagoner is stepping aside as Chairman and CEO. This is not meant as a condemnation of Mr. Wagoner, who has devoted his life to this company; rather, it's a recognition that it will take a new vision and new direction to create the GM of the future.

In this context, my administration will offer General Motors adequate working capital over the next 60 days. During this time, my team will be working closely with GM to produce a better business plan.

They must ask themselves: have they consolidated enough unprofitable brands? Have they cleaned up their balance sheets or are they still saddled with so much debt that they can't make future investments? And above all, have they created a credible model for how to not only survive, but succeed in this competitive global market?

Let me be clear: the United States government has no interest or intention of running GM. What we are interested in is giving GM an opportunity to finally make those much-needed changes that will let them emerge from this crisis a stronger and more competitive company.

CHRYSLER

The situation at Chrysler is more challenging. It is with deep reluctance but also a clear-eyed recognition of the facts that we have determined, after a careful review, that Chrysler needs a partner to remain viable. Recently, Chrysler reached out and found what could be a potential partner -- the international car company Fiat, where the current management team has executed an impressive turnaround. Fiat is prepared to transfer its cutting-edge technology to Chrysler and, after working closely with my team, has committed to building new fuel-efficient cars and engines here in America.

We have also secured an agreement that will ensure that Chrysler repays taxpayers for any new investments that are made before Fiat is allowed to take a majority ownership stake in Chrysler.

Still, such a deal would require an additional investment of tax dollars, and there are a number of hurdles that must be overcome to make it work. I am committed to doing all I can to see if a deal can be struck in a way that upholds the interests of American taxpayers.

That is why we will give Chrysler and Fiat 30 days to overcome these hurdles and reach a final agreement -- and we will provide Chrysler with adequate capital to continue operating during that time. If they are able to come to a sound agreement that protects American taxpayers, we will consider lending up to $6 billion to help their plan succeed. But if they and their stakeholders are unable to reach such an agreement, and in the absence of any other viable partnership, we will not be able to justify investing additional tax dollar to keep Chrysler in business.

BANKRUPTCY

While Chrysler and GM are very different companies with very different paths forward, both need a fresh start to implement the restructuring plans they develop. That may mean using our bankruptcy code as a mechanism to help them restructure quickly and emerge stronger.

Now, I know that when people even hear the word "bankruptcy" it can be a bit unsettling, so let me explain what I mean. What I am talking about is using our existing legal structure as a tool that, with the backing of the U.S. government, can make it easier for General Motors and Chrysler to quickly clear away old debts that are weighing them down so they can get back on their feet and onto a path to success; a tool that we can use, even as workers are staying on the job building cars that are being sold.

What I am not talking about is a process where a company is broken up, sold off, and no longer exists. And what I am not talking about is having a company stuck in court for years, unable to get out.

GOVERNMENT WARRANTY

It is my hope that the steps I am announcing today will go a long way towards answering many of the questions people may have about the future of GM and Chrysler. But just in case there are still nagging doubts, let me say it as plainly as I can -- if you buy a car from Chrysler or General Motors, you will be able to get your car serviced and repaired, just like always. Your warrantee will be safe.

In fact, it will be safer than it's ever been. Because starting today, the United States government will stand behind your warrantee.

AUTO SALES SUPPORT

Therefore, to support demand for auto sales during this period, I'm directing my team to take several steps. First, we will ensure that Recovery Act funds to purchase government cars go out as quickly as possible and work through the budget process to accelerate other federal fleet purchases as well.

Second, we will accelerate our efforts through the Treasury Department's Consumer and Business Lending Initiative. And we are working intensively with the auto finance companies to increase the flow of credit to both consumers and dealers.

Third, the IRS is today launching a campaign to alert consumers of a new tax benefit for auto purchases made between Feb 16 and the end of this year -- if you buy a car anytime this year, you may be able to deduct the cost of any sales and excise taxes. This provision could save families hundreds of dollars and lead to as many as 100,000 new car sales.

Finally, several members of Congress have proposed an even more ambitious incentive program to increase car sales while modernizing our auto fleet.

I want to work with Congress to identify parts of the Recovery Act that could be trimmed to fund such a program, and make it retroactive starting today.

DIRECTOR OF RECOVERY

I am designating a new Director of Recovery for Auto Communities and Workers to cut through red tape and ensure that the full resources of our federal government are leveraged to assist the workers, communities, and regions that rely on our auto industry.

Edward Montgomery, a former Deputy Labour Secretary, has agreed to serve in this role. Together with Labour Secretary Solis and my Auto Task Force, Ed will help provide support to auto workers and their families, and open up opportunity in manufacturing communities. Michigan, Ohio, Indiana, and every other state that relies on the auto industry will have a strong advocate in Ed.

 

[OG Lurker]

This is probably an ignorant question, but why don't they cut their losses on autos, and retool for wind power? The necessary infrastructure investment would be a huge "stimulus", plus it would contribute to our energy independence. Win/win, right? <img src="/forum/images/graemlins/shrug.gif" alt="" />

Some are talking about Nationalizing the Auto industry. Taking them out of the hands of the derivatives market i.e. Chrysler and retool to start creating other production. i.e. Tractors for other developing countries. Green technologies if applicable. The problem with so many of these green technologies are really not cost effective. At least not now and they don't come close to replacing our energy dependency.

Infrastructure is needed too. Very important to get us started towards a producing nation. Obama is doing very little to get us moving in that dierction.

 

[Landloct]

Infrastructure is needed too. Very important to get us started towards a producing nation. Obama is doing very little to get us moving in that dierction.

Blatantly untrue. I drove the kids to school this morning and passed at least two new construction zones.

How ***** fast do you expect infrastructure improvement to start?

 

[WarrenC]

GM CEO (I think its the CEO?) was "asked" to step down by White House today I saw

you know its a bad day when....

 

[Landloct]

GM CEO (I think its the CEO?) was "asked" to step down by White House today I saw

you know its a bad day when....

He's probably not going to be getting his bonus, then...

 

[OG Lurker]

Infrastructure is needed too. Very important to get us started towards a producing nation. Obama is doing very little to get us moving in that dierction.

Blatantly untrue. I drove the kids to school this morning and passed at least two new construction zones.

How ***** fast do you expect infrastructure improvement to start?

Did you know our railway system hasn't been updated in over a 100 years? I'm talking about national production. infrastructure is only one cog in the wheel. Infrastructure is a side point and not important if we are producing nothing. Work on production and you will need updated infrastructure.

 

[Clayster]

Obama should have been more circumspect with his comments on a GM bankruptcy. Comments like that have predictable market consequences.

 

[doppelgangster]

Umm, the Dow was down this morning from the get-go, and completely flat since his speech

 

[hmmm]

obama has probably put in more work in these past 3 months then bush did his entire 8 years!

<img src="/forum/images/graemlins/socrazy.gif" alt="" />

 

[Kento]

obama has probably put in more work in these past 3 months then bush did his entire 8 years!

<img src="/forum/images/graemlins/socrazy.gif" alt="" />

<img src="/forum/images/graemlins/grin.gif" alt="" />

 

[OG Lurker]

I'll reply to all three of you. Speedo, Clayster, Doppelpooper.

I don't listen to rush, I read the article from the Wallstreet Journal. Now 10 trillion given to banks, Yes Bush started the ball rolling but if you remember the senate voted down the first tarp bill but Obama, before he took office personally called many Senators and changed their minds. But now talk of having none left for Auto and that they can no longer rely on the taxpayers.

Like I said above, I don't believe in the autobail out. My point is he should be saying the same thing to wallstreet. But he's not.

Clayster you're right. I will also say, judge him by the fruit he bares. He's killing american industry by pumping fiat money into the system with no real plan to rebuild industry.

Doppel, the market was down this morning because he started this talk over the weekend.

From the Wall street journal:

Over the weekend the Obama administration forced out the chief executive of General Motors and said that the best chance for success for the struggling auto maker and Chrysler may be bankruptcy. Treasury Secretary Timothy Geithner meanwhile signaled some banks are still ailing and will need further aid from the government.

Get this straight. I'm not micro criticizing Obama. I'm looking at the macro. He works for the Banks. The banks are looting our treasury. He is weakening our ability to recover from this allowing the banks to rule us. It's called Fascism.

 

[OG Lurker]

Work? are you serious? I see him on T.V. selling his plan to the American people. Using fear and manipulation. He is continuing the agenda of Bush and the their Elite bankster bosses. Give me one example on real policy that he has differed from Bush. Real Policy not stem cell crap.

obama has probably put in more work in these past 3 months then bush did his entire 8 years!

<img src="/forum/images/graemlins/socrazy.gif" alt="" />

 

[getpitched]

obama has probably put in more work in these past 3 months then bush did his entire 8 years!

<img src="/forum/images/graemlins/socrazy.gif" alt="" />

Yeah, takin a great and free republic and turning it into a socialist state against the will of the people is hard work.

 

[Jenks]

obama has probably put in more work in these past 3 months then bush did his entire 8 years!

<img src="/forum/images/graemlins/socrazy.gif" alt="" />

Yeah, takin a great and free republic and turning it into a socialist state against the will of the people is hard work.

Doing anything against the will of a people always is.

 

[jamesgang]

Get this straight. I'm not micro criticizing Obama. I'm looking at the macro. He works for the Banks. The banks are looting our treasury. He is weakening our ability to recover from this allowing the banks to rule us. It's called Fascism.

I thought he was a socialist? From the looks of things he is playing right into the hands of the uber-capitalists of the last century, the banks.

It seems that in modern global capitalism there are two ways to legitimately make money: you can earn it or steal it.

 

[23Chips]

Bro, The One thinks you should go back to lurking.

 

[WarrenC]

obama has probably put in more work in these past 3 months then bush did his entire 8 years!

<img src="/forum/images/graemlins/socrazy.gif" alt="" />

Yeah, takin a great and free republic and turning it into a socialist state against the will of the people is hard work.

<img src="/forum/images/graemlins/applause2.gif" alt="" /> <img src="/forum/images/graemlins/applause2.gif" alt="" />