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Josh Nelson: Obama Should Use General Motors to Build the Green Collar Economy



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- KillTheMessenger See Profile I'm a Fan of KillTheMessenger permalink

The logically correct thing is to let GM fail. It will make Ford immediately profitable because they will capture most of GM's business. Chrysler get's a fighting chance. The whole operation costs exactly nothing. And if GM goes through a bankruptcy, some of it might even emerge on the other side of that.

A total win-win-win, a choice the US did not have in years. And we are so blind that most people can't even see it.

    Reply    Favorite    Flag as abusive Posted 02:32 PM on 12/04/2008
- New MattInVA See Profile I'm a Fan of MattInVA permalink

What about the fact that Ford will most likely be unable to build cars because they share suppliers, and most of the suppliers could not continue to sat in business if they lost half their orders. It's a complicated situtation, and it might be cheaper to bail out GM then let them die.

    Reply    Favorite    Flag as abusive Posted 03:23 PM on 12/04/2008
- MattInVA See Profile I'm a Fan of MattInVA permalink

To answer Mr. Moore's question as to ""Why would we give them 18 billion when their total value is $3 billion."

This is because GM's revenue for the last twelve months is 165.5 billion dollars. It's market capitalization does not translate to the cost of the company.

Also, please don't make the assumption that green cars = successful car company. Too many people seem to think that all Detroit has to do is made all hybrids or all electric cars and they'll be saved. The problem with that is as of yet, no hybrid or electric car has been profitable. Many automotive experts believe even the Prius is still losing money for Toyota. There seems to be evidence of that since Toyota actually sold fewer Prius in the US this year than last and that November sales of the Prius tanked by 48%.

The way to save an floundering auto company is not by forcing them to sell cars that do not make money.

    Reply    Favorite    Flag as abusive Posted 02:09 PM on 12/04/2008
- KillTheMessenger See Profile I'm a Fan of KillTheMessenger permalink

The Prius is highly profitable, which you can see immediately when you take a look under the hood. There is nothing supercalifragilisticexpealidocious in there. Toyota is just too good a player, so they don't want to admit it. Because if they did, everyone would try to take that part of their business away. Toyota makes fewer of them now because they saw the sales drop coming. They know who bought the car for the green image sake and who bought it out of desperation over gas prices. Look at their pricing policy. They won't give it to you for free or at a loss like most other companies will with most models (especially SUVs). They know that the hard core Prius owner will buy the car no matter what. So they just cut back on production and keep the line profitable. It's called supply and demand. If demand is down, you cut supply. And if that does not convince you, look at their original exponential production schedule. It will tell you how many they expected to sell. One does not scale up like that on a loss leader (at least Japanese companies do not).

But I agree... it would take ten years for any American hybrid to be as successful as the Prius. And that's just not enough by two orders of magnitude to save GM or anybody else.

    Reply    Favorite    Flag as abusive Posted 02:42 PM on 12/04/2008
- New MattInVA See Profile I'm a Fan of MattInVA permalink

What evidence do you have that they are profitable, let alone "highly profitable"?

They would scale up on them if the CAFE credit they get from the Prius helps offset the hit they were going to take from the 200,000-a-year truck plant they opened.

    Reply    Favorite    Flag as abusive Posted 03:25 PM on 12/04/2008
- Hank10303 See Profile I'm a Fan of Hank10303 permalink

The fact still remains that GM is a failed company running on fumes. If the management really wanted to be competitive they should have cut models, dealerships and while increasing mileage annually. They did none of these things. In fact when approached by members of the actors guilde to do free advertisments for green engergy cars GM said not interested. These men are not managers and if we keep giving them money it will keep being wasted. ENOUGH

    Reply    Favorite    Flag as abusive Posted 02:34 PM on 12/04/2008
- Keith52 See Profile I'm a Fan of Keith52 permalink

T the very least GM should consolidate the number of models in a major way. There is so much overlap. Then they should green the entire offering that is left.

    Reply    Favorite    Flag as abusive Posted 01:45 PM on 12/04/2008
- MattInVA See Profile I'm a Fan of MattInVA permalink

Amen!

There is unfortunately a barrier to this. When GM shutter Oldsmobile a few years ago, it cost them billions of dollars, mainly because of laws to protect dealerships. (These are the same laws that prevent online shopping for new cars). These laws would need to be changed in order to shed brands, because GM certainly doesn't have the cash to settle the dealership problem.

    Reply    Favorite    Flag as abusive Posted 02:12 PM on 12/04/2008
- KillTheMessenger See Profile I'm a Fan of KillTheMessenger permalink

Talk about magical thinking here. So if we allow online new car sales GM's business will look better?

Right.