Edmunds CarPool

Wow, I'm under the weather for 24 hours and I wake up to all this news! Crazy happenings. I would maintain my existing confidence in GM even with bankruptcy. In fact, for those savvy buyers, its likely a great time to buy from GM. Take advantage of consumer concern and drive a great bargain!

Bankruptcy gives GM a chance. Without it they have no chance, unless there is endless government money.

But, I do think the auto makers were treated tougher than those on Wall Street. Wall Street should have been treated much tougher. Bail outs without consequences was/is wrong.

"The stakeholders including UAW won't give in without a gun at their head...bankruptcy is that gun."

The UAW was amongst the first to make concessions. The debt holders are the problem.

No one knows how bankruptcy will work. Notic Obama nor any other politician has sited any examples of the type of proceedings they are suggesting for GM. Why is that? Simple, there is no prescedent. This notion of a "quick" and pre packaged filing is nothing more than a pipe dream at this point. The government is attempting to drastically downsize GM and turn it into a bit player in the global market. They are also trying to shape GM in Toyota's image from a product perspective and have them focus primarily on small cars that most Americans don't want to buy. How will GM pay the loans back if the Task Force plans on forcing them (no pun intended) to make small cars that are barely profitable? GM has decided to shed 3 brands and the government is saying they still have way too many brands and models. How small are they trying to make GM? By next year Toyota will be the largest automaker in the US and that is just fine with Obama and others who share his reverence for foreign brands that are known for hybrids and fuel efficiency.

Agree with 1487 comment above. Moreover, I am very upset at the fact that bank bailouts were simply handouts without any stipulations or firings. Everyone seems to be forgetting one important fact that many americans like bigger and more comfortable cars. This is not Europe, our roads are not tiny and impassable by SUVs or trucks. Automakers are being forced into making smaller, fuel efficient cars that won't even sell if gas prices stay at $2 a gallon. Ford, GM, and Chrysler gave consumers trucks and SUVs because there was a demand for it, people bought them and liked them. Toyota and Honda tried to capitalize on that as well, but couldn't compete. While I agree that GM is too big and has a lot of overlapping models, I totally disagree with the ousting of Rick Wagoneer. You can't blame a problem simply on one person. Everytime there is a change in management, it is typically followed by more layoffs, more restructuring, and more problems. At this point, everything is leading towards bankruptcy. I don't see how GM would turn around and become profitable by getting rid of entire divisions and switching to small cars.

The banks were treated too nicely because they have a lot of power over our economy. GM has just enough power to get continuous help, and Chrysler probably doesn't. None of this is about who "deserves" help nor "doing what's right," it's just cold hard numbers; an attempt to minimize the recession and job losses.

And I think Ford is staying out of it not because they're really healthy, but because all they have to do is outlast Chrysler (and maybe GM) and they'll pick up a lot of their business. Also, the Ford family doesn't want to share control of the company with (nor open their books to) the government. It'd be pretty funny if Mercury or Lincoln came out of this as healthy brands.

Now about this Henderson guy... the fact that they elevated an insider to CEO position looks to me like another sign of impending bankruptcy. They'd need an insider if they're about to go through a bunch of paperwork and restructure. If he were there to save the company without C11, they'd be better off with someone from a different corporate culture.

The government wants this to happen out of bankruptcy court but they are making it clear they will provide the financing for chapter 11 if necessary.

Anyone who has read the findings of the Task Force will see that these people have little clue about the auto market. Their analysis of GM's projections make some sense but their suggestions that GM needs to move more aggressively towards small cars and hybrids are at odds with common sense. They also say that GM has to prove it can be profitable under ANY economic circumstances even though Toyota and Nissan are losing money. MArgins in this business are small, even for Toyota. In a recession like this few automakers are equipped to make money. Toyota has deluded itself into thinking more cuts and greater efficiency will make them profitable even if sales stay this low. Its not going to work. Detroit has tried to grow by cutting for the past 25 years and we know the results. Very large companies have trouble thriving when they have to deal with losing a huge % of their business.

At this point, GM is firmly caught between a rock and a hard place.

To avoid Chapter 11, they'll have to give in to government demands to focus on small cars and hybrids.

If they go into Chapter 11, the fact that they've taken government money means that the Feds are a stakeholder and have a voice in the Ch. 11 proceedings. And because of that, there's no way to avoid a dragged-out bankruptcy process.

Given those factors, Chapter 11 is still the preferable option though, because it at least would allow other entities apart from the government to have hands in determining the future of GM.

And if GM is able to emerge from Ch. 11 with even a semblance of its current product portfolio, then my confidence in them would not be shaken by the bankruptcy. Their product portfolio includes some very impressive machines. The Lambda CUVs are outstanding vehicles; as are the Corvette, Malibu, CTS, and G8. If some or all of those can emerge on the other side of Ch. 11 proceedings, then I'd be happy to purchase a GM product.

1487:

GM would be out of business right now if not for the largess of the US government. Everything would be gone.

So if they should be gone and the government says, "We'll give you X dollars but in exchange for this gift/loan you must do Y and Z" then GM has a choice. GM could deny the money and go their own way. Did you look at GM's plan? They aimed to break even by 2014. That's a 5 year plan. Wagoner was on a 14 year plan for break even?!

Looks more like Chapter 11 to me. GM will end up been a small player at the end of all this with no more than two brands. Is sad but the writting was in the wall for a long time.

"But, I do think the auto makers were treated tougher than those on Wall Street. Wall Street should have been treated much tougher. Bail outs without consequences was/is wrong."

150% with you on that mnorm. But I'd go further than "tougher." There are a few folks (cough-Frank Reigns-cough) who I genuinely think should be in leg irons.

But those folks have friends in "high places" and the auto CEOs don't. 'Nuff said.

bdc,

I read the plan. Did you? Did you read the government's assessment of the plan? It made little sense. The break even was not in 2014 and the reason they believed it would take years is because the market is at a 27 year low. They had low end projections and optimistic projects for the future. If the market stays around 10M units for the next 2-3 years it will take GM years to get to break even. If Toyota is losing money how the hell do you think GM is going to make money in this environment? Use common sense.

Without the government loans GM would be in an uncontrolled bankruptcy now, not necessarily out of business. The fact that you act like a loan is synonomous with a "gift" is typical of your simple minded thinking. Banks got gifts, GM got a loan. Period. BTW, explain to me where there is evidence that a lender is entitled to run the business of the borrower. The fact that GM got loaned money doesn't mean that the government has a clue how to run a car company. This is the same government who supports a policy of cheap gas while chastising automakers for selling anything other than compacts and hybrids. If US energy policy is not overhauled GM will be in worse shape in 3 years than they are now after the Obama people finish tweaking the lineup and vanquishing every vehicle not powered by a four cylinder engine. The assessment released yesterday is full of contradictions that reveal it was compiled by people who know nothing about consumer preference or the auto industry in general. It only confirms what many people have been saying, the government is the last entity that knows how to recommend a path to profitability for a private company. The US government can run huge deficits after making bad decisions, GM cannot. The Task Force is applying politically popular remedies to GM's problems without considering their impact on the prospects for profitability.

"The Task Force is applying politically popular remedies to GM's problems without considering their impact on the prospects for profitability."

It is the Bull*&%$ you can Believe in. What did you think was going to happen? Did you think Sierra Club, Green Peace, and Michael Moore were going to let them build what sells? No they are so diluted as to sit on high and command. They are doing it with the AIG mess (they command one thing and then act Shocked the next day)

The fools that are running the show now are talking of limiting pay and regulating compensation. That will gin up the confidence and the wealth generation in industries. We have lived in a fairy tale over the last year. Believing that we can waive a magic wand and our troubles will disappear. We can merely move the wealth around and expect it to always be there.

Wealth is not a birth right. You have to create it. GM forgot that decades ago, and today they are the victims of fools that still have yet to appreciate this basic tentant of life.

But what is gauling is that anyone is surprized. These people have told us for YEARS what they believed. But no one listened to them. Many just assumed that they were really pragmatists. They aren't. They aren't because they don't know the meaning of the word.

Waxman, Pelosi, Frank, Dodd, and the Messiah himself have done NOTHING but demogogue their entire careers. Have anyone of them run a business? Had to make a payroll? Had to budget benefits? NO. None of them.

"the government is the last entity that knows how to recommend a path to profitability for a private company."

From your lips to God's ears. And I do believe you were warned.

"BTW, explain to me where there is evidence that a lender is entitled to run the business of the borrower."

You can if your the Messiah. There doesn't seem to be any bounds to the power this Congress and the Messiah can use.

They proposed to tax bonuses at 90% which violates on its face three different articles and amendments to the Constitution. Not to mention their own stimulus bill they passed mere weeks before. They are demogogues. Their positions will change with the political winds and their methods are tempered only by their calculated evaluation of the publics' relative ignorance.

1487,

Okey dokey. I read the Task Force response and in between fits of laughter I had zero problem with it. TGM is going down in flames and the only part of it that really ticks me off - that the government gave handouts to Chrysler and GM (and the banks).

I don't believe in government loans or bailouts for businesses.

Smile... Wagoner and Lutz are out of work.

"I don't believe in government loans or bailouts for businesses."

But you do believe in the government dictating the means, methods and details of the auto industry?

LOL

Henderson states that bankruptcy 'more likely'
http://news.yahoo.com/s/ap/20090331/ap_on_bi_ge/gm_henderson

" Period. BTW, explain to me where there is evidence that a lender is entitled to run the business of the borrower."

Have you ever followed the stock market? What happens when investors don't like the way a company is run? They remove their investment, the company performs poorly on the stock market and, if the CEO doesn't move to assure investors, he's fired!
Similarly, who has tried to get a loan from a bank for a business? If the bank doesn't like the plan, no lending!
So, yes, investors and lenders have a say in how any company is run!

I haven't read the Task Force's assessments, so I can't say whether their assessment of the market is realistic or not.
But, GM asked Obama for money, he didn't like their plan so he decided that he'd give them the money on condition that the CEO is fired! Let's not pretend like he did nothing unusual here! Brett, you're so quick to call him a fool, but you forget that Cantor and co are even more foolish! Give me a break!

And those who accuse the government of running GM: how can you logically say that when the next CEO is a GM insider, someone who (presumably) knows and understands the auto industry? He simply fired the CEO....he didn't replace the whole board and executive body with politicians.

Besides, I believe just about all of you here are crying wolf. You're all implying that the government is somehow requiring GM to produce only hybrids and compacts.........that can just not be true. (If it were true, GM wouldn't have got pretty much the same CAFE standards as all the other companies.....see THE EDMUNDS' DAILY blog.) All the government wants is for them to be a bit more aggressive than they're in developing greener cars.

Whether Obama's approach to the completely right or not is another matter! And, yes, I would want the bank and financial companies' CEOs to be given similar treatment. And perhaps bankruptcy is on the cards for GM.
But y'all are over-reacting to mostly reasonable demands made by the government, behaving like it's evil or something. If the private people were so right, they wouldn't apprach the government for assistance in the first place!

"But those folks have friends in "high places" and the auto CEOs don't. 'Nuff said."

Surely you're not suggesting that people like Chris Dodd, Barney Frank, THE ONE,(the list goes on) have been influenced by money from Wall Street?

"If the bank doesn't like the plan, no lending!"
Further; If the bank doesn't like management - no lending.
If enough banks say no, because they dislike management - new management, or enough are changed to make them happy.

"If the private people were so right, they wouldn't apprach the government for assistance in the first place!"

You are correct. And if you remember, a lot of us said exactly that last fall. I am not saying that Obama is not correct in denying additional funds. What I am saying is that he is a fool for believing that he and his task force have figured a way out to achieve profitability.

"He simply fired the CEO....he didn't replace the whole board and executive body with politicians."

Yet.

"He simply fired the CEO...."

Only the first time in the history of the republic that a President has fired an executive of a private entity. Your right no big deal.

How private an entity was it, if it was only being propped up with government funds that private investment refused to provide?

"How private an entity was it, if it was only being propped up with government funds that private investment refused to provide?"

A fair point. But you can't have your cake and eat it too. Either the government is running the show or it isn't. I would venture to say that it is. Therefore, even though the government owns NO stock, it has defacto control. However, under the LAW (I know, a pesky novelty at this point) it is a private entity.

Brett,

"But you do believe in the government dictating the means, methods and details of the auto industry?"

No, the government never should have made the loan/handout. That the gov't made the loan AND the company accepted it, gives the gov't carte blanche to do what they want with the company.

GM made their bed. They took the cash. This isn't Pretty Woman. Not every John is gonna be all sweet.

This talk of "the president fired a CEO is unprecedented"...hogwash. The Wagoner and the board at GM took the cash. Had he been a good CEO Wagoner wouldn't have bent over for the government/anyone with cash. Wagoner spent 9 years eroding GM's marketshare and cash. When it was tapped, rather than make drastic changes, Wagoner ran off to find someone to care for him. He sold his soul and GM.

I can't believe all the whining about the big bad government when everything that's going wrong at GM is by GM's actions.

"Have you ever followed the stock market? What happens when investors don't like the way a company is run? They remove their investment, the company performs poorly on the stock market and, if the CEO doesn't move to assure investors, he's fired!
Similarly, who has tried to get a loan from a bank for a business? If the bank doesn't like the plan, no lending!
So, yes, investors and lenders have a say in how any company is run!"

The government is not a shareholder. A bank can deny a loan if they don't like a business' plan- that is fair. A bank cannot fire executives or tell a company HOW to make money. Dont get me confused with the king of Obama bashers (Brett) because I am commenting on one specific policy. Obama and his auto team know nothing about the auto industry- period. The report is about 50% logical and 50% idealogical. The report says that GM needs to focus on vehicles that actually make a profit but it also says GM needs to stop relying on SUVs because consumers are supposedly making a rapid shift to small vehicle. The report makes no mention of gas prices. Perhaps you should read it before backing its findings.

" Had he been a good CEO Wagoner wouldn't have bent over for the government/anyone with cash. Wagoner spent 9 years eroding GM's marketshare and cash. When it was tapped, rather than make drastic changes, Wagoner ran off to find someone to care for him. He sold his soul and GM. "

Typical idiotic rant with no basis in reality. All of the Big 3 have been losing marketshare for years because the amount of competition has been increasing here for 5 decades. I have asked people numerous times why VW, MB or BMW don't have a greater share in Europe than GM has in the US market. I never get an answer. The answer is that the Euro market is very competitive and fragmented. If I were to use your simple minded thought process I would argue that the management of Europe's car companies is largely incompetent because they have allowed American and Asian brands to grab marketshare in Europe. If you read the report then you would note it mentions that lots of progress has been made within GM in terms of reducing costs and increasing design and manufacturing efficiencies. Most of that progress was made under Wagoner and his predecessor. Even Obama himself said that his decision wasn't an idictment of Wagoner's performance. No one on the ATF has any idea how to run GM more effectively than Wagoner but he was asked to step down for symbolic reasons. Henderson is in charge and has been working closely with Wagoner for a while. To expect some drastic, miraculous change just because the head guy is gone is foolish.

carlismo:

No banks refused to provide GM with money- none are lending to companies like GM under these circumstances. GM has never had a problem getting capital before last fall when the credit markets froze and banks got extremely conservative. You sound like the idiots in Congress who criticized Ford's submission for loan guarantees and were told by Mullaly that what was submitted was nearly identical to what they gave to private lenders before getting approved for loans.

"And those who accuse the government of running GM: how can you logically say that when the next CEO is a GM insider, someone who (presumably) knows and understands the auto industry? He simply fired the CEO....he didn't replace the whole board and executive body with politicians."

Henderson is CEO for the moment. Some are speculating the government wants him to run GM through Chapter 11 and he will be replaced by a government approved pick. There is little chance that they want Henderson to remain for the long term. I would expect they plan to put a Wall Street or Silicon Valley type of guy in that position. Also, if you read the report it is clear that the government is condemning GM's position on hybrids and fuel efficient cars and is suggesting that GM's problems correlate with lack of fuel efficiency. The report also neglects to mention the Cruze, the class leading mileage of the Malibu/Aura, 6 speed transmissions or direct injection. In fact, the report suggests that GM is lagging when it comes to implementing technology that saves fuel. One erroneous part of the report says that most GM vehicles are in the bottom quartile of their respective classes in fuel economy and GM has been slow to address this fact. That is a flat out lie and that is likely why no vehicles are actually mentioned.

""He simply fired the CEO....he didn't replace the whole board and executive body with politicians."

They want half of the board to be replaced within the next few months. Also, after the Monday announcement they said the government will be working on the new plan with GM. Up until now GM was submitting plans to the government. So the government is selecting the CEO, changing the board, deciding what vehicles and brands to cancel, making unrealstic projections about what vehicles GM will sell without any regard to gas prices and deciding how small GM should be going forward. If you read the report their primary beef with GM is that it shows a multi year turn around taking place in the midst of a depressed market. GM's earlier report made it clear that the recovery would speed up if the market rebounded at all over the next 3 years. The government is saying the market won't improve and they don't plan on doing much to help it improve and thus GM's assumptions were way off. Also, the gov is saying GM should be profitable regardless of fluctuations in the market even though Toyota is about to post a $4B loss. If the best automaker in the world (per the government) is losing money in this type of market how can GM be expected to mint money in the same conditions? It's insanity.

"I can't believe all the whining about the big bad government when everything that's going wrong at GM is by GM's actions. "

Right, because GM sets trade policy, energy policy, fuel efficiency standards and healthcare policy. They also run the banks and the credit system. No one else has a hand in this. Do you ever think its an amazing coincidence that almost all manufacturing is dead or quickly dying in the US? America's policies are not condusive to breeding a successful manufacturing entity- this is why most heavy industry here has failed or is failing.

Virtually every car company operating in US is posting monthly losses month after month, not just GM, not Chrysler or Ford. Look at Toyota, Honda, etc. It is unfortunate for GM that they ran out of money to keep going and had to go to Washington to get loans (not free money). I bet that if Toyota or Honda would be in the same position, their government would do everything in their power to keep them running at least until the economy recovers. We are so interconnected with suppliers that bankruptcy of one car company (GM or Chrysler) could potentially disrupt flow of parts to Ford, Toyota, Honda, etc.. and create a chain reaction of one bankruptcy after another. And just to point out GM and Ford have number of cars that are as good or better in fuel economy and quality than their foreign competitors. Once GM enters bankruptcy, I don't feel they would ever come out of it as a stronger and a profitable car company.

"The government is not a shareholder...."

Yes, it is.....it is loaning money to GM and has a say in how the company is run; it has a right to say "I don't have confidence in this CEO so if he's at the helm I won't loan you my money". 1487, I don't see why you're making a whole lot of noise about that. They didn't say "we're taking over this company......it's ours." Henderson is already the guy GM had as Wagoner's next-in-command. As far as I know, there are no government appointees on GM's board
Besides, if the government's expectations are as unreasonable as you say, why is GM bothering to accept their money?

"...if Toyota or Honda would be in the same position, their government would do everything in their power to keep them running..."

Toyota, yes. Honda, no. Honda has always been a thorn in Japan's side. Since inception, the Japanese government has been repressing Honda to make way for Toyota. Honda is like the rebel child that infuriates its parents because of it's success via nontraditional means.

"They didn't say "we're taking over this company......it's ours." "As far as I know, there are no government appointees on GM's board."

Please tell me blackadder that you are not that naieve. The Washington Post just announced today that the White House intends on replacing a majority of GM Board of Directors within the next 6 months. How is that not a take over? How it is legal since the Shareholders have not had a vote or the company not been placed in receivership?

This is CLASSIC OBAMA. He says one thing one day, that the government should not be running a car company, and then does the opposite.

1487

You have insisted for MONTHS that the money from the government was just a LOAN. When are you going to admit that not only was it a bailout, but a full nationalization.

And when the Board of Directors is "replaced" with OBAMA appointees, how many do you want to bet have ties or sympathy for the UAW?

How many will have been heads of major corporations or officers in any significant industry? probably not many.

"I can't believe all the whining about the big bad government when everything that's going wrong at GM is by GM's actions."

I would agree with that. The "whining" is not in that the government caused the failure of GM, but that the government has used extra-Constitutional power in its takeover. If you think they will stop there you are fooling yourself.

I think that even the government has figured out that GM and Chrysler will have to go through bankruptcy. Bankruptcy wouldn't affect my interest in purchasing a GM or Chrysler vehicle because I'm only interested in buying their products used after someone else takes the depreciation hit. Buying a domestic brand vehicle new is a sign of financial ignorance. On the other hand, I have little worry about getting parts and service for the high volume platforms like the GM Malibu/Aura/G6.

The bank bailout is a better deal for taxpayers than the GM and Chrysler bailout. Most banks were profitable while GM and Chrysler were losing money even in years of record auto sales volume. Most homes are not in forclosure and revenue continues to come in from good loans and credit cards. In the case of giving TARP money to the banks, the government gets preferred stock with a good dividend in exchange for the money. When bank stock goes up, the government can even turn a profit.
http://quicktake.morningstar.com/Stocknet/san.aspx?id=257797

The government gets nothing to secure their loans to GM and Chrysler. Instead of getting a dividend and likely capital gains, the auto loans only set the government up to make additional loans for at least a few years. In the very real possibility that GM and Chrysler complete the death spiral and get liquidated, the total debt and obligations greatly exceed the value of the assets.

"Please tell me blackadder that you are not that naieve. The Washington Post just announced today that the White House intends on replacing a majority of GM Board of Directors within the next 6 months......"

Brett, assuming the Washington Post is right, I think we should wait until we see who the new board of directors are. If they're mostly people who don't know anything about business nor the auto industry, I'll agree with you and 1487 fully. Until then, I think you're being way too premature in your criticism of the President.

"This is CLASSIC OBAMA. He says one thing one day, that the government should not be running a car company, and then does the opposite."

So far, he's kept pretty much most of his promises! And, as of now, the government isn't running GM......it's the same old people running GM! Why do you keep saying that the government is running GM when this isn't true?

"When are you going to admit that not only was it a bailout, but a full nationalization."

When the board is replaced by government appointees, I'll then say it's nationalization. Until then, it's not. And, oh, I don't see anything wrong with nationalization, anyway: that's the norm in situations like this until the company goes back to profitability. If temporary nationalization is what it will take to get GM back, I'm all for it.

"I would agree with that. The "whining" is not in that the government caused the failure of GM, but that the government has used extra-Constitutional power in its takeover. If you think they will stop there you are fooling yourself."

I think
1. Companies shouldn't ask for money from gov't
2. Companies shouldn't be given money from gov't
3. If Companies take money from the gov't then they deserve to be taken over as they've proven beyond a shadow of a doubt they cannot compete on the open market.

I prefer if companies that cannot compete or secure loans without government assistance do what should come naturally to them: go out of business/fail/declare bankruptcy. This applies to AIG, the banks, Mopar, people with loans they can't afford, etc. The government does not exist to protect businesses and individuals from poor economic decisions.

"Most banks were profitable..." If they were so profitable why did they need a bailout?

Blueguy - I agree. This "too big to fail" is BS.

"You have insisted for MONTHS that the money from the government was just a LOAN. When are you going to admit that not only was it a bailout, but a full nationalization. "

Its not a nationalization at this point. It is a loan. Not sure why I have to "admit" to anything. As usual I don't know what you are talking about.

"Henderson is already the guy GM had as Wagoner's next-in-command. As far as I know, there are no government appointees on GM's board
Besides, if the government's expectations are as unreasonable as you say, why is GM bothering to accept their money? "

GM accepted the terms because no one else is lending money. Under normal circumstances they would have gotten capital from the private sector. I thought that was obvious. GM doesn't necessarily agree with all of the advice they are being given or the direction the government is trying to take. Initially GM was charged with showing a plan that would spell out how the loans would be paid back within 5 years or so. Now the government is using this "viability" requirement as the impetus to remake GM into the kind of company they want to be. This is beyond worrying about how to pay loans. This idea that GM would need an unending flow of taxpayer money is nonsense. If GM can make it through this year one would hope the credit markets would be somewhat normal by the time GM needed additional money in 2010. Obama and Co. are careful to defend what they are doing by suggesting GM will never, ever be able to access private capital in the future and thus will be asking for money every 6 months into the foreseeable future.

"I prefer if companies that cannot compete or secure loans without government assistance do what should come naturally to them: go out of business/fail/declare bankruptcy. This applies to AIG, the banks, Mopar, people with loans they can't afford, etc. The government does not exist to protect businesses and individuals from poor economic decisions. "

It all sounds good but real life doesn't work like that. Americans do not like economic pain and no sitting government is going to do nothing when there is a risk of depression. Allowing banks to fail would only starve many private enterprises from getting the money and credit they need to operate. If people arent borrowing everything grinds to a halt which is why the gov is trying to restore the credit market. Your cut and dry approach probably explains why you arent in any decision making position.

"Blueguy - I agree. This "too big to fail" is BS."

No company is truly too big to fail. The point is that the failure of certain large companies is only going to prolong this recession and make recovery that much more difficult. If a large company goes under there are huge costs to the government. Basically they are saying its better to spend money now to keep these companies afloat and folks working than it is to spend billions cleaning up the mess and supporting hundreds of thousands of laid off workers.

"The bank bailout is a better deal for taxpayers than the GM and Chrysler bailout. Most banks were profitable while GM and Chrysler were losing money even in years of record auto sales volume. "

That is a load of BS. The Banks got money after engaging in practices that got this entire mess started. The banks have gotten FAR more money without having to justify how it would be spent. GM has submitted TWO lengthy reports explaning how they would restructure the company and how the money would be paid back. All of that for a fraction of the money given away to AIG. Only one or two large financial institutions have changed CEOs after getting bailout money but GM was told they had to dump Wagoner if they wanted more than $13B. A loan is a way to make money because interest payments are due. If GM pays the loans back the government will make money. Some of the banks that have gone under or have survived due to government largesse had huge losses in 2008. Chrysler has not been an independent publically traded entity since 1998 so I dont know how you figure that they have been losing money for years. Early in the D-C merger Chrysler was making money while Daimler was losing money. To my knowledge Chrysler was profitable before the take over by Daimler.

"And when the Board of Directors is "replaced" with OBAMA appointees, how many do you want to bet have ties or sympathy for the UAW?

How many will have been heads of major corporations or officers in any significant industry? probably not many."

Nothing that has been done or said so far is pro-UAW. I know its hard for you to escape the fog of right ring conspiracy theories but if you stick to the facts you wont find much that the UAW is going to be happy about. The fact that the government is telling GM to get considerably smaller and "restructure more aggressively" means that they expect more UAW jobs and benefits to be cut. If the government forces GM into bankruptcy the union is going to lose a lot, especially retirees.