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Old 11-09-2008, 01:13 AM   #1
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The Big Three Bailout?

So what's the deal with this..... I hear that the federal government is going to have to issue another bailout worth billions, in form of a loan to the "Big Three" (Ford, Chrysler, GM; for those who don't know) If they don't it will have an even worse effect, and by that I mean all three will most likely go bankrupt, which means no more new Ford, Chrysler, or GM vehicles... which in turn means new car dealers will go out of business, and also all of those OEM manufacturers (the ones that make the factory pieces for the companies...) may not be able to support themselves making just replacement parts for older vehicles. Well guess what effect that would have? (oh right, also the motor company's corporate buildings would go bye-bye...)

The effect: all those workers would lose their jobs, and guess what? no income, no outcome... goodbye economy....

If I'm correct though, if the bailout is issued, they will enforce that the big three will have to start producing cars with an average of 30mpg, and that's not CAFE specs either. Cause, why would they give funds to a company if they continued on their way to bankruptcy by making huge money pits? it'd only increase the length before bankruptcy hits...

I guess that explains why it'd be worth the extra few billion or so.....

(yeah and sorry, I'm just a little irritated because I'm kind of relying on Ford to stay afloat, since they would hopefully be my employer eventually....)


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Old 11-09-2008, 03:39 AM   #2
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I'm pretty sure its only GM thats getting the bailout money, and they were supposedly going to buy Chrysler with it, however those talks have ended.

Ford is no where near as in much trouble as GM and Chrysler are
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Old 11-09-2008, 03:43 AM   #3
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ford is pretty bad but they are not loosing as much as the other two. And ford is starting to turn around because they are making more fuel efficient cars and they are selling good. The focus was selling like hotcakes! not sure any more becasue the economy is in a recession and spending has slowed.

And how does everyone feel about the bailout? I mean essentially people who are doing fine and well are basicly paying for everyone that didnt make smart choices with there money and went bankrupt and got forclosed on.

Side note I want my damn social serurity when i retire! being young sometimes sucks
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Old 11-09-2008, 09:14 AM   #4
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if ford, gm, or chrysler went bankrupt people would still buy just as many cars, so other manufacturers would have to hire their employees or new ones, buy their plants or build new ones, their equiptment, etc.

its sucks tho that companies that pay their employees good and tried to give them retirement cant compete with all the nonunion manufacturers.
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Old 11-09-2008, 09:40 AM   #5
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ford is pretty bad but they are not loosing as much as the other two.
Yes, but I do believe they posted a loss as well in the last quarter.

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And ford is starting to turn around because they are making more fuel efficient cars and they are selling good. The focus was selling like hotcakes!
But are they making a profit from it? From what I understand the profit from Focis is less than the profit from trucks or SUV's. I bought my Focus under the X-plan, so I paid what the car cost the dealer- yet still it was $16k for the wagon- sticker price would've been $19k. That's not much profit as compared to another friend who purchased a fully loaded diesel 1 ton crew cab for $25k under the X-plan. If I had half a brain I should've used the X-plan to purchase a big 1 ton, then sold it to purchase the wagon.

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And how does everyone feel about the bailout?
Do some research on who runs Cerberus (not the owner so much, but the board)- the finance company that owns Chrysler, and has a 51% stake in GM and you'll find evidence of a potential conspiracy to basically rob taxpayers for the mistakes of big money leadership. That's one angle, the other angle is that hundreds of thousands of Americans will be out of work if GM and ChryCo close their doors. That is the real reason that the bail out will go through with writing of the plan preventing GM from merging with ChryCo.

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Side note I want my damn social serurity when i retire! being young sometimes sucks
For what? Grocery money?
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Old 11-09-2008, 10:00 AM   #6
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I think a bailout is necessary. We're looking at large percentage of a major job-producing industry in America potentially collapsing.

An accountant's perspective:

Perhaps the biggest mistake that the three companies made was offering pension plans with defined benefits as opposed to pension plans with defined contributions (benefits plans guarantee workers a paycheck and benefits after they retire, and contribution plans only guarantee a monthly contribution into an investment account while the person is employed).

While benefits plans are more attractive to employees, it puts the companies at a huge risk financially. Each company simply dumps money in an account (I'm sure they use mutual funds or some other type of low-risk investment account) for their future retirees that sits there for decades...and when their projections are off for the amounts they needed and the account is empty, they're screwed. This is the reason they were laying off workers and offering them severance money; because they know they will not be able to afford their pensions. This is also the primary reason for the sale of land rover and jaguar...to get these enormous pension liabilities off of their balance sheet.

Today, less than 4% of companies in the US use defined benefits plans compared to over 50% back in the 60's, and for good reason.

I'm sure the government will be subsidizing the industry soon, some companies more than others, as well as decrease the number of imports coming into the country to give US automakers a fighting chance...and the government will make other demands, like MPG requirements, rightfully so in this case.

I think Ford is great, they just ran very inefficiently for a very long time. Separate operations in the US and Europe, producing totally different cars for the most part, old school manufacturing, and those pensions... talk about expensive! They are obviously changing their ways by combining the operations somewhat and by getting rid of the pensions. Their quality and reliability has also gone way up. If I had any money, I would invest in Ford. They are definitely headed in the right direction, and are predicted to be the next Toyota.

Wow, I didn't mean to write a book... time to go get a life!
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Old 11-09-2008, 10:02 AM   #7
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mm, luckily Ford isn't in the worst position.......but their stocks are crap! last I checked they were around $1.88 a share.... and have been dropping still.
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Old 11-09-2008, 10:06 AM   #8
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You think their stocks are crap, I think it's the best time to buy.
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Old 11-09-2008, 10:08 AM   #9
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^^ yes I know....... but I need a parent to make an account for me :| and they're not too comfortable about it, even though it would be all my money and nothing to do with theirs....
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Old 11-09-2008, 10:12 AM   #10
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With new cars overseas being sold (with profit) for $2500, there's obviously a gap here considering a new focus with factory options can cost you 20 grand
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