[MauserboyM48]

Ladies and Gentlemen, the nationalization of the Big 3 automakers.

Just some of the latest filth to come from the Imperial capitol.

http://online.wsj.com/article/SB122875608562688401.html

 

[GhostCat]

Of course they're gonna get in on the Deal......and then regulate it to death even worse than now.......

On the other hand, This could be a VERY good investment.....This is the best time to by stock in the BIG-3 ......I just didn't intend on my tax dollars going toward it......but in the end, we MAY get our money back and then some......I stress "Maybe".....

 

[Ben Gunn rev2]

How closely did you read the article? If you had paid attention you would have noticed the phrase 'stock warrants' in there. Do you even know what a stock warrant is? This isn't even close to nationalization. The government isn't buying stock in the auto companies it is just providing them with operating funds in a manner calculated to insure the government does not have any say in running them.

A stock warrant is a contract which gives its owner the right to buy stock at a certain price. Someone who owns stock can vote for company officers and a 20% interest in most cases would be enough to name several members to the board of directors and probably the chairman and CEO and dominate company policy. Someone who owns a warrant has no influence at all. If the stock prices fall they would never be exercised to obtain stock since an outright purchase of stock could be cheaper and if the price goes up they would be sold to recover the money and make some profit.

Frankly, we would be better off if the money were used to acquire 20% of the stock. At least that way we could get rid of upper management and put people in to make decisions based on long term maximization of profits rather than maximum short term gain. This way, the same crowd that made the mess in the first place get to hold on to their jobs.

 

[jjk308 In Memoriam RIP]

Frankly we would be better off with Chapter 11. The auto companies have been running on empty for a long time, draining their huge equity built up when they were the entire auto industry. With the sole exception of Ford, which is much more of an international auto company than the others, although it has made a few honest mistakes recently.

Ford would be just fine if it could get out from under its $80+ hourly labor costs. GM and Chrysler, however, are braindead, execs and unions both, and I see no way they can survive except as new companies with some of the old brand names, retaining some of the more advanced production facilities with new managers and workers.

There are other examples of the same problem, a king of corporate senility, in our economy - like Sears/Kmart, a failed grafting of failed discount/department store chains who long outlived their glory days, supported only by their real estate holdings.

For the US government to try to keep these zombie corporations going is like the taxpayers being chained to rotting corpses.

 

[llamaowner]

jjk308: well said!

 

[thebohunk]

Government regulation.........Killing Detroit since the '60s