RKMBs Forums .::Important::. Politics and Current Events Democrat Leaders Want Automaker Bailout

....who knows what Bush would have done.

Is this yet another example of your selective amnesia where you forget that every Bush "supporter" here was vocally opposed to the bailout when HE was President too?

My point is that you seem to think that bringing up Bush somehow disproves BSAMS's criticism when BSAMS and everyone else here (except you) was pretty much saying "fuck you Bush" at the idea of him supporting an automaker bailout.

...If you think its okay for the President to force people to give up their retirement for a select few that donated to his campaign that's your business.

I didn't reallize the constitution barred Obama from browbeating

More than $180 billion later, AIG is still a toxic economic site.

That's what American International Group Inc. Chief Executive Edward Liddy told a House panel Wednesday, saying the insurance giant has reduced but not eliminated the risk its failure poses to the global economy despite getting more than $180 billion in federal bailout aid.

"The assurance I can give you is we will do everything we can to not require more federal money" but that will hinge on how long the worldwide recession drags on and the condition of the financial markets, Liddy told the House Oversight and Government Reform Committee.

Liddy, who the government installed as head of AIG, said the crippled firm is selling many of its foreign assets to repay U.S. taxpayers, but lawmakers questioned whether the plan makes sense and demanded details.

Liddy agreed to provide portions of AIG's "Project Destiny" restructuring plan to the committee, but said details are sensitive and could hurt the company's ability to sell assets.

"We will work with you to provide everything that we possibly can," Liddy told committee chairman Rep. Edolphus Towns, D-N.Y. Main Street Americans were angered over AIG's secrecy and its payment of millions in bonuses to employees, Towns said.

Congress needs "to understand what the long-range plan is for AIG," Towns said. He asked whether it made sense to sell off assets in a bear market where prices are depressed.

AIG on Monday announced plans to sell its Japanese headquarters to Nippon Life Insurance Co. for $1.2 billion in cash. The transaction is expected to close in the second quarter.

While AIG is working to divest assets, Liddy said, it doesn't intend to sell them at "fire-sale prices." The company plans to retain its U.S. property-casualty and foreign general insurance businesses, and a stake in its foreign life insurance operations.

"How long the plan will ultimately take will very much depend on how quickly and how strongly the global economy recovers," Liddy said. "Because we are all committed to ensuring that the mistakes of the past are not repeated, we must take the time and exercise the diligence to do this restructuring properly."

AIG was nearly destroyed last fall at the height of the financial crisis and became one in a string of corporate calamities and a touchstone for public outrage. The huge volume of credit default swaps -- a form of insurance against bond defaults -- sold by AIG, coupled with rising levels of defaulted mortgage and other debt, threatened the company's existence and prompted the government to step in.

Government aid to the company now totals $182.5 billion. The U.S. has taken a nearly 80 percent stake in New York-based AIG.

Liddy said the company has reduced its exposure to credit default swaps to $1.5 trillion, compared with the original amount of $2.7 trillion.

Also testifying at Wednesday's hearing were three trustees charged with overseeing the government's holding in AIG. They are seeking new board members for the company.

The $450 million in bonuses AIG paid to employees, including to traders in the financial products unit that brought it to the brink of collapse, fueled public and congressional outrage. The Democratic-led House approved a bill in March that would slap punishing taxes on big bonuses at AIG and other companies bailed out by taxpayers. The Senate didn't act on the plan, however.

It was relatively easy for the Obamastration to dispense with a band of rogue hedge funds that were worrying the impending Chrysler-Fiat alliance. Once the names of the holdout creditors were made public, their revolt was crushed by public opinion. They used to be so, so cool, but we all hate hedge funds now.

It’s going to be trickier to solve the looming problem of Chrysler’s and, pretty soon, General Motors’ (GM) dealers. Both carmakers support over-large dealer networks, and both have been instructed by the Auto Task Force to reduce them drastically. Reports indicate that Chrysler will slash 800 dealers tomorrow; over the next few days or weeks, GM will explain how it’s going to go from more than 6,000 dealers now to just over 3,500 by 2010.

Remember when we used to hate car dealers? They were all those … guys … who just wouldn’t let us off the lot … without … buying … a car! GM invented Saturn specifically to deal with this hatred. Of course, our conventional targets of consumer hatred have been revised since the onset of the financial crisis. The slick dude trying to sell you a Chevy looks like a moral paragon next to the mysterious, hyper-moneyed gent from Greenwich with his fancy dancing-number screen, his clever math, and his insatiable appetite for leveraged plunder. Besides, car dealers are often pillars of their communities, lest we forget. They sponsor little league teams. I’ve bought two cars from a dealer who’s considered a hero of the people in Eastern Europe.

The question is: Will the dealers who are about to lose their dealerships merit greater sympathy than Chrysler’s laggard creditors? The National Automobile Dealers Association thinks so. The organization has begun a PR and lobbying campaign to demonize the planned dealer closings.

Dealers are protected by federal and state franchise laws. However, it’s widely assumed that Chapter 11 for Chrysler and (probably) GM will enable these agreements to be terminated with no recourse for the dealers. For GM, with its vast dealer network, this would be a huge plus. When the company killed Oldsmobile in 2004, it had to shell out more than a billion in dealer payouts. Some industry observers see this as an opportunity to completely change the way that new cars are sold, upending decades of franchise statutes.

The renegade Chrysler hedge funds took their whuppin’ and slinked off with their sullen losses. In less than a month, GM’s bondholders may follow suit. Your friendly neighborhood car dealer may not do the same. And it’s worth remembering that in a few years, U.S. carmakers may once again be able to easily obtain loans. But will they be able to convince people to sell their cars?

I realize that you're trying to be clever and score political points while defending Snarf but this comment actually makes you sound as ridiculous and ill- informed as Snarf.

Part of what made Snarf look so stupid here was his attempt to compare the behavior of posters on a private message board to the government. Anyone with even a rudimentary knowledge of civics should have known that criticism or even threats by private persons do not carry, per se, the same coercive power or potential deprivation of rights that such threats, or "browbeating" carry when they come from the head of a government. Therefore, the Constitution generally prohibits certain government actions as being violative of due process, etc.

When the President of the United States uses threats of government action to force a private entity to give up rights under the law and, in essence, that President unilaterally rewrites the law to advance his political agenda and the interests of his largest campaign donors, that's a matter of legal and constitutional concern. We can legitimately differ on whether, under the law, the president has acted properly or not. However, it's still a matter of legtimate controversy over the limits of presidential power, etc.

What it's not, as apparently everyone but you (and Snarf) understand, is the same thing as spirited debate on a message board.

Chrysler's Nardelli: reports on compensation loophole false
By Poornima Gupta

DETROIT (Reuters) - Chrysler Chief Executive Bob Nardelli said on Friday that reports that the company's executives have found a loophole that would help them avoid pay limits mandated by the U.S. government were false.

"I want to assure you that these reports are absolutely, positively incorrect," he said in a memo to staff that was obtained by Reuters. "Chrysler understands the limitations on compensation for senior executives during the term of the government loans."

Chrysler filed for bankruptcy on April 30 after talks with bondholders to restructure its debt collapsed. It also confirmed a global strategic alliance with Italy's Fiat SpA on the same day.

The new Chrysler-Fiat partnership could help the automaker's executives avoid U.S. restrictions on executive pay by having some top Chrysler officials designated as Fiat employees, according to Chrysler bankruptcy documents.

The documents say any of Chrysler's top officers including the CEO can be deemed Fiat employees who are "seconded" to Chrysler.

Earlier this week, local and national media reported that Chrysler had found a loophole to help avoid government-mandated pay limits for executives.

Corporate compensation has seen renewed scrutiny after public outrage over American International Group Inc's decision to pay $165 million in retention bonuses to some employees after accepting $180 billion in government aid to prop up the company.

President Barack Obama has set a $500,000 annual cap on pay for top executives at companies receiving taxpayer funds.

Nardelli said "Chrysler has and will continue to fully comply" with all conditions relating to executive compensation.

The CEO also said in the memo that the automaker has started the process of paying suppliers for invoices that pre-date Chrysler's bankruptcy filing.

"At the same time, we initiated a procedure to move supplier contracts over to the new company established in a global alliance with Fiat once a sale is complete," he said.

Chrysler aims to complete a sale of most of its operations to Fiat later this month.

"Today's announcement that the vast majority of Chrysler suppliers will receive payments for parts they have shipped and will continue business relationships with Chrysler going forward should provide an important measure of certainty and stability to America's auto supply base," an Obama administration official said.

The automaker will mail details to 1,200 of its suppliers on how suppliers can receive payment for pre-bankruptcy claims and how their contracts can be assumed by the new company, according to the memo.

"It is critical to get all of our key suppliers on board to take on new agreements and move business quickly to the new company," he said in the letter.

So now we trust the wealthy executives?

So which report do you believe? The initial one or the latter report, which came about only as a result of the first?

But the first report is a newspaper account of what was in their bankruptcy filing, in the filing they said they would not be bound by the caps. The second report is Chrysler telling the press(which btw you can lie to legally unlike the bankruptcy court) that they wouldn't do that.

I get high while listning to my master Rush!

Whatever.

Do you have anything to copy paste about the bailout Iggy?

GARLAND — Alan Mulally makes one thing very clear: Ford Motor Co., unlike its Detroit neighbors General Motors and Chrysler, is not standing at the edge of a precipice.

"I don’t see any scenario where we wouldn’t be able to refinance, where we would have to take government money, where we would be in any danger" of being forced into bankruptcy, said Mulally, Ford’s perpetual-motion CEO.

Barring an unforeseen event that triggers an even more severe economic slump, Mulally said, Ford "has sufficient liquidity" to ride out the hard times.

Just as important, he added, the stage is set for a Ford renaissance, financially and in high-quality products that consumers will want.

"We’re going to make a profit in 2011," said Mulally, without a hint of hesitation. He said Ford’s vehicles "are going to be best in class, not only in quality, but fuel efficiency and value."

The former head of Boeing’s airliner division and mastermind behind the highly successful 777 jumbo jet was recruited in July 2006 by Chairman Bill Ford to take over management of the faltering automaker.

Mulally initially met with a lot of skepticism, within Ford and on the outside by longtime observers of the U.S. auto industry. But he’s now getting credit for shaking up Ford’s stagnant culture and beginning to reverse the company’s long decline.

Early on, Mulally took a bold gamble and, hocking everything Ford owned, borrowed $23.5 billion. The move has since looked prescient as Ford was the only U.S. automaker not to run out of cash.

"I knew things were going to slow down, were going to get worse, and we had to have cash to keep working on our plan," he said.

Now Ford, in the midst of the recession, will introduce nine new or upgraded products this year while the other U.S. manufacturers are scaling back new product development to save money.

Mulally was interviewed by the Star-Telegram on Friday, while he was in Garland for the opening of the expanded showroom complex at Randall Reed’s newly combined Ford-Lincoln-Mercury dealership.

On a day when Detroit rival GM was notifying about 1,100 dealers nationwide that their contracts will not be renewed, Mulally insisted that no such drastic action is necessary at Ford.

Like Reed’s Garland outlet, Mulally said, many Ford dealers are responding to market forces by acquiring smaller Lincoln-Mercury franchises and combining the three brands into a single, stronger business.

"This is the future of Ford, right here, this opening," Mulally said. "Here is the new Ford going forward."

There will be further consolidation of dealers in metropolitan areas, Mulally said, but it will be dealers doing it, not Ford.

"We do have too many dealers in some areas too close to each other and competing with each other."

What’s ahead

Like their counterpart GM and Chrysler dealers, most Ford dealers in Dallas-Fort Worth have had steep sales declines over the last several years, in some cases as much as 65 or 75 percent. The sales trend lines plunged when the severe economic downturn hit last fall.

Mulally said he believes that the worst is over for Ford.

"We’ve gained market share six of the last seven months. Our products, in third-party evaluations, are getting great reviews."

He expects renewed consumer attention and sales as Ford’s new products come to the market. He calls the new 2010 Fusion Hybrid sedan, "a proof point of the new Ford. It gets 41 mpg, eight more than the Toyota Camry."

"That’s a Ford?" Mulally asked, mirroring consumer responses.

In the works

Asked what products Ford has coming that will excite younger, better-educated Americans, whose auto loyalties lie largely with import brands, Mulally said the Fiesta compact due in the U.S. market in 2010.

"It’s already No. 1 in Europe. It’s going to do great here, too."

Ford has placed European-built Fiestas with 100 U.S. bloggers, who competed to get and drive the cars for six months and blog about their experiences. Mulally said he has no doubt that the bloggers’ reviews will be highly favorable.

"I think within a year you will be able to ask people what their favorite car is and it will be the Fiesta," he said. "And it's not even going to be here yet."

Reed, who also owns Park Cities Ford-Lincoln-Mercury in Dallas and another Ford dealership in Houston, said the fortunes of Ford and his dealerships have gotten a shot in the arm because the automaker has not received any loans from the U.S. government.

"We’re hearing people say, 'I’m so proud Ford didn’t take the bailout money,’ " Reed said. "We’re seeing more Chevy and Dodge trade-ins than ever before. People are seeing that Ford has a lot to offer."