Kofi Bofah

Paulson's Message to Detroit: Drop Dead

Toyota just announced they will be cutting production today. I don't think the foreign automakers will pick up all of the slack.

Yes, Detroit has destroyed its own self. But, the situation is even more dire now because people that actually WANT to buy cars cannot get financing. The lending units of the Big Three are shackled, unable to access credit markets for short-term financing in order to function efficiently.

Who in their right mind would loan to these guys?

The U.S. Government is the backstop. The only institution with the cash, credit, and willpower to rescue Detroit.

Chrysler is private, and there is speculation that they will 'merge' with GM.

What do you think would happen to the Midwest without the auto industry? The Rust Belt would be the new Appalachia - without the scenery.

You all bring up many good points that I indeed agree with. But, I think that many are underestimating the fallout from the collapse of the Detroit.

Let GM Fail

Show us some numbers.

How many jobs will be lost? Not just from GM, but from suppliers, etc?

You are writing as if the lost jobs will automatically be replaced by foreign automakers.

Big Three production facilities are typically located in the Michigan/Ohio/Indiana/... Rust Belt. Japanese and German automakers typically locate manufacturing operations in the Deep South.

Obviously, the collapse of the Big Three would be a death blow to the Midwest. Show us some numbers that prove that the U.S. can function as normal with a Heartland that is beyond life support.

Detroit is Hemorrhaging

Detroit, along with the Upper Midwest Rust Belt is in serious trouble. There is no immediate solution to the problem. It is almost like throwing good money after bad money.

The Big 3 miscalculated by pouring so much money into S.U.V. production right before energy costs spiked.

General Motors: The Next Delisting from the Dow?

Interesting article in the Wall Street Journal yesterday. It seems as if the Big Three are also lobbying Washington for a bailout, to the tune of a $50 Billion loan. De-list GM from the DJIA. The company is a shell of its former self. A Dow component should actually represent a blue chip stock, not junk.

General Motors: The Next Delisting from the Dow?

The writing was on the wall when even Kerkorian bailed and dumped the stock...

General Motors: The Next Delisting from the Dow?

Oops, I am a little new to this. I commented earlier:

General Motors stock is effectively worth $0. The fact that the stock trades with any value at all is due to a belief that the company will skirt bankruptcy.

I would argue that Alcoa generates more income from the automotive sector than General Motors.

How about a transport?

UPS, FedEx, or Burlington Northern Santa Fe would all be viable replacements.

ConocoPhillips is strong in terms of market cap and performance; but that would overweight energy with Chevron and Exxon. Likewise with Cisco and Apple [HP / IBM / MSFT / INTC] for technology. Also, Berkshire Hathaway has a relatively small float and will always be nixed.

I think that the call should go down to Fed Ex or UPS. There is little overlap here. The overlap is slight with Boeing [UPS is essentially an airline].

General Motors: The Next Delisting from the Dow?

General Motors stock is effectively worth $0. The fact that the stock trades with any value at all is due to a belief that the company will skirt bankruptcy.

I would argue that Alcoa generates more income from the automotive sector than General Motors.

How about a transport?

UPS, FedEx, or Burlington Northern Santa Fe would all be viable replacements.

ConocoPhillips is strong in terms of market cap and performance; but that would overweight energy with Chevron and Exxon. Likewise with Cisco and Apple [HP / IBM / MSFT / INTC] for technology. Also, Berkshire Hathaway has a relatively small float and will always be nixed.

I think that the call should go down to Fed Ex or UPS. There is little overlap here. The overlap is slight with Boeing [UPS is essentially an airline].