Tom Lindmark

Cash for Clunkers Meant for Detroit, Not the Environment

Sorry, they anticipated that. You have to have owned the car for a year and have insured it for a year.


On Jun 20 06:29 PM Chancer wrote:

> I have not seen any details, like a requirement that you had to own
> the clunker for a set period of time.
>
> I could buy a clunker for $500 or less, and get up to $4500 in voucher
> value for a new car. Right?
>
> I have a low mileage(43,000) 2000 Camry that Toyota dealer offerred
> me $5,000 cash for with no expiration on the cash offer.
>
> I could sell Camry to dealer for $5,000 cash.
> Buy clunker for 500
> Get a voucher on trade-in for 4,500
> Buy new Scion for 16,000
> Net cash cost 7,000
>
> Or just keep driving Camry for another 10 years, since I drive it
> less than 5,000 miles per year. I also have a backup 1992 Toyota
> 4WD pickup with 100K miles that I drive less than 1,000 miles per
> year.

GM's Use of Bailout Money: What Else Aren't They Telling Us?

There are two issues here. One is the support for Delphi and the other is the manner in which Delphi is being supported.

It was always a foregone conclusion that Delphi would be bailed out in some manner. That's not in dispute nor is it the point of the article.

The use of government funds to support a leveraged buyout of Delphi is the issue that troubles me. If it was necessary to "save" Delphi, it would have seemed more appropriate to do it head on and reserved the profits, if they ever materialize, for the government. This appears to be an out and out government subsidy for a PE firm.


On Jun 08 01:49 PM TomWilkinsonatGM wrote:

> Sorry, this post is a little bit of "fire, ready, aim." The potential
> for GM support for Delphi's emergence was discussed on page 33 of
> GM's February 17 viability plan, and has been a subject of discussions
> with the Task Force ever since. There are plenty more details in
> the 8-K GM filed on June 5. So to imply that all of this is a dark
> conspiracy is just plain wrong -- it's there, online, in documents
> filed with the SEC and posted on the GM Investor website.

The Man Behind the GM Solution

Heck of a comment. Thanks for leaving it. If you want to email me with some more thoughts sometime please do so.


On Jun 01 11:23 PM Delfin J Beltran MD wrote:

> As in many test questions, the clue to the answer is in the question.
> The Washington power lies in its ignorance. Washington is ignorant
> of the real world because the system relies on the training received
> under the genius politicians who are only concerned with re-election.
> A parallel exists in the healthcare industry. Since the 1956 NIH
> takeover that converted medical schools from the place to learn the
> fundamentals of human existance, disease and therapy, into government
> funded centers to train researchers to obtain more government grants
> for the survival of the school. Eight years as a clinical faculty
> in a famous center dedicated to create the future leaders of healthcare
> was a learning experience that contributed little to my personal
> ability to care for the needs of patients - it just wasn't one of
> their goals. Government usurpation of human effort profits only the
> politician. D J Beltran, MD

PIMCO's Bill Gross Sees a Bleak Future

I'm surprised Seeking Alpha doesn't have a spam filter for this. Seeing more and more of it. My little wordpress site catches this stuff. There must be a way for SA to do it.


On May 31 09:51 PM dcb wrote:

> this is a link showing cetins nailing address. does does anyone know
> how to jam a site. perhaps we as a community should consider engaging
> in sabotage because he doesn't have a problem doing it here.

PIMCO's Bill Gross Sees a Bleak Future

Phil,
I tend to agree with you. I too have seen too many end of the world cycles that turned out to be bumps in the road. This one is a big bump but I suspect that somehow enterprising Americans will figure out a way to get through this one, reinvent some businesses or invent some new ones and send us off on another good track. The only thing that can probably keep that from happening is too much "help" from the government class.


On May 31 12:47 PM Phil Trupp wrote:

> Bill Gross is a conventional corporate thinker. As such, he is hardly
> a reliable prognosticator. Still, there are bits and pieces of wisdom
> in what he says, truisms we all know. He takes into account the obvious
> indicators upon which other writers have elaborated, but he has failed
> to see that action at the surface of the financial world almost never
> reflects what is happening in the deeper, more opaque reality of
> the ever-shifting world economy. The superficial (read immediate)
> problems of the dollar will eventually be resolved out of sheer necessity.
> Rates of global growth, nation by nation, are cyclical and are at
> the mercy of unpredictable shifts in power and the often shocking
> events of realpolitik. There's an old saying: "Bulls slowly climb
> the stairs, bears jump out the window." Mr. Gross has done the latter.
> Paul Krugman is right behind him, falling through space into a world
> he has predicted will be a sunless abyss. Not long ago, he said if
> we knew what was really going on in the economy, we'd buy up all
> the canned goods and head for the bunkers. Forgive me for having
> lived too long and having seen too much to wear the sandwich board
> that cries, "REPENT OR PERISH!" We will work our way out of the current
> crisis as we have worked through others, and we will do so by the
> efforts of pragmatists, not hysterical "prophets."

Can GM Really Abandon Trucks and SUVs?

One of the most misunderstood things about CAFE standards is that they do not allow any car company to import cars in order to meet the standards. It is known as the "two fleet rule."

Only domestically produced automobiles are used to compute compliance with the law. GM could import Opels - a very popular, fuel efficient car it makes in Europe - to its heart's content and it would have zero effect on its compliance with CAFE limits.

The law was written in this manner to protect U.S. labor. Legislators recognized at the time they wrote the law that without this provision the manufacturers would just import autos that they already made overseas in order to meet the standard. In effect, the "two fleet rule" is a job protection provision.

Note that this applies to Toyota as much as it does to Ford or GM.


On Apr 17 12:37 PM Toddms wrote:

> From Miken : "It's very difficult for a car company to profitably
> build these small cars in the U.S., so the logical thing for the
> multi national companies to do is build them elsewhere and bring
> them in. That not only applies to the UAW companies, but the Toyota
> Yaris, Prius and Honda Fit are built outside this country and imported.
>
>
> So, as often happens, the government is working at odds with itself.
> They are driving auto manufacturing away, while pretending to help
> preserve jobs."
>
> Probably one of the most poignant comments I've seen, and a point
> missed almost entirely in the media and by the govt. This is truly
> the heart of the matter.
>
> Lindmark has another good point - GMC buyers pay a premium over
> Chevrolet buyers for the presige and quality (percveived or real).
> Same reason Honda sells an Accord for more by calling it an Acura
> TL. Same for Nissan/Infiniti and Toyota/Lexus and Ford/Mercury/Lincoln.
> GM's unique problem is that instead of 2 tiers which is reasonable,
> GM had originally 5 tiers from Chevy to Pontiac to Olds to Buick
> to Cadillac. This is the "excess brand" problem - there just isn't
> enought room for that much differentiation within one company using
> the same platforms and powertrains. But getting rid of GMC on the
> same principle would be a giant error - it is already a proven success
> (moneymaker).
>
> Another comment - with as much public outcry as we seem to hear about
> needing higher mileage cars, it has been a fact ever since CAFE kicked
> in around 1977, that trucks have been the most profitable vehicles
> assuming reasonable fuel prices. The public (and govt) seem to vote
> one way with their mouths and another with their pocketbooks, and
> then bad mouth the auto companies for obeying market forces. If
> GM, Ford, Chrysler had been really savvy, they would have stopped
> making the unprofitable small cars in the US completely as Miken
> suggests, and gone to importing them from low wage countries ala
> the Chevy Aveo. How would that have gone over in the press, or with
> the UAW for that matter? GM could have just paid the CAFE fines
> like BMW and Mercedes do, as a cost of doing business. This would
> have made way more sense than building 300,000 Cavaliers a year at
> a loss of $2000 each (just 1 of many examples) just to avoid a few
> million $ in CAFE fines. Instead GM kept the jobs in the US and
> met CAFE standards, even if the prime motivator was to appease the
> UAW, it is what everyone wanted at the time. But as they say, no
> good deed goes unpunished...
>
> We are the only country that has anything like CAFE - everyone else
> manipulates auto purchase behavior (ultimately fuel consumption)
> via fuel taxes. But we seem wedded to the bass ackwards CAFE approach
> which does nothing but confuse and inflame the public and cause our
> manufacturers to make ridiculous business decisions, while doing
> nothing except encouraging people to drive more, while not conserving
> fuel.

Can GM Really Abandon Trucks and SUVs?

samroll and mcl_mixer,

I appreciate the comments but you may also want to do some research. Here is a point at which you might want to start. It's from the WSJ. Facts and figures.

As a lifelong truck salesman, he wonders if the task force appreciates the deep loyalty of GMC owners. "There are many GMC drivers who would never buy a Chevrolet," he said.

In the American truck culture, there's a belief among many owners that GMC pickups are higher quality than Chevrolets. GMC's Sierra tends to retain a higher resale value than a Chevy Silverado with identical options.

Amid the 2008 sales slump the Sierra outperformed rivals. While sales dropped 26% for the Ford F150-350, 30% for the Toyota Tundra and 25% for the Chevy Silverado, the GMC Sierra saw only a 19% drop, according to Autodata, a market-research firm.

On Apr 17 12:13 AM Samroll wrote:

> Poor, poor research on this article. As the poster above stated the
> exact same models are made by Chevrolet. Getting rid of GMC is simply
> getting rid of inefficient duplication of models. Maybe this is why
> the government thinks GMC should be dropped? Try understanding something
> about the auto industry before you write your next article about
> it.

The GM Poker Game - Is Obama Bluffing?

Randy,
I don't think that very many people hate the UAW, What they might not like is the UAW or executives at AIG or CEO's of companies that refuse to make sacrifices while asking the taxpayer to help them out.

When anyone loses his or her job, it is a negative for the country. The fact that they belong to the UAW doesn't make it a bigger or smaller tragedy.

The fact that others might be assisting their auto companies doesn't necessarily mean it's the right thing for the U.S. to do. We aren't talking about assisting the entire industry just two of its weakest players.


On Mar 31 04:47 PM RandyFLA wrote:

> If GM and Chrysler go into bankruptcy, expect 12% to 13% unemployment.
> Please answer me, why do most Americans seem to hate the UAW. It
> will soon be that anyone can start a union anywhere in America, with
> no secret ballet. When a UAW loses his/her job, all Americans suffer.
> Does anybody understand this? Europe, Japan, Canada and many other
> countries are supporting their auto companies, is it un-American
> to support ours?

GMAC: Why the Bond-Exchange Silence?

Uncle Bubba,

The Fed's approval of the GMAC application to become a bank holdiing company was conditional upon GMAC achieving certain target capitalization levels. They need to do the debt swap in order to meet those levels. So far as I know, they have not announced that they have achieved that threshold.

The ad you saw for GMAC accounts with FDIC insurance was for GMAC bank. A small bank that GMAC has operated since 2001. It is not pertinent to the move by GMAC to become a bank holding company and gain access to TARP funds.