Why AIG Gets Billions, GM Gets Scorn

Why no GM bailout

The problem with GM is that without major labor concessions, they cannot survive no matter how much money is loaned to them. Their legacy issues as well as current labor expenses are simply too high to make GM profitable. AIG on the other hand does not have an active business operational problem. Their mess, an horrific one, is actually one Congress helped to develop with subprime loans. Once the bad business practice has been stopped, and it has, the basics of the company are sound. That is just simply not so for GM.

I want to see GM bailed out but I would like to see GM go through a re-structuring that is the equivalent of Chapter 11.

LJB of FL @ Dec 13, 2008 22:32:39 PM

GM retirees

They shot themselves in the foot several decades ago. Now they want me to shoot myself in the foot. Their greed past and present has created this situation which they have to be held accountable for. If they think GM is such a worthy borrower the UAW should lend and or buy the company with their adequate resoures. The workers then would have their menu of benefits and pay to select from. Everybody would be happy and GM could tell everybody to get lost. What a deal for everyone.

short of funds lender of SC @ Dec 13, 2008 21:56:48 PM

Auto bailout

It doesnt seem like a lot of money to me. What GE is asking for. Ten billion a month to occupy Iraq, to kill, and destroy. Ten billion a month for more than 5 years, think about it.

Just think what five months of that kind of money would do for the Big Three

Where do we get these congresmen. Yes I know

Steve Brody of @ Dec 13, 2008 18:10:26 PM

PS: Rick - I Don't Mean to Be Impolite

Rick:

Your anger is understandable and justified. Don't get me wrong.

But half the problem with this country is that too many people are using convenient logic - and US News is the place to get them on the right track - not perpetuate skewed logic.

Rob

Rob of CT @ Dec 13, 2008 17:58:50 PM

Your Argument is Flawed

If you are correct - that Suits get the money - then why was Lehman allowed to die ?

Because Lehman's books were incomprehensible. Too many inscrutable and unsaleable derivatives on their books as assets that were anything but.

GM's books are not incomprehensible - just comprehensibly horrible - and Washington can see that.

AIG's books - while comprehensibly horrible - and if allowed to fail - would further lock-up the credit system.

And that would bring down the rest of the banks in America - and Detroit too.

Got it ?

Rob

Rob of CT @ Dec 13, 2008 17:47:42 PM

AIG/GM

This article has committed the "sins of omission " in regards to it's ridiculous copmparison of AIG's situation and GM's. GM is regarded by Auto Industry Analysts as a Health and Pension provider that makes cars on the side. For every 100 active GM employees there are over 300 retired workers recieving significant pensions and health benefits. This huge Legacy cost is killing the company and GM and the UAW knows this. AIG on the other hand is a Trillion Dollar entity that is currently in the process of selling off its Subsidiaries to repay the Tax payers with interest. The company was taking down by only one of its divisions( Financial Products ) and has many viable/profitable subsidiaries that generate Billions of dollars of revenues. I own a 2008 GM Yukon that I am very happy with and I want the company to survive but this is not an " Apples to Apples " comparison.

John M. DeGeronimo of NY @ Dec 13, 2008 15:20:09 PM

Your job pays for the war

Why fight? Let them both go broke. We are going to have a recession anyway. But the next time some president proposes invading some country but refuses all requests to estimate a price tag, remember that it could be your job that pays the price.

James Fox of PA @ Dec 13, 2008 13:58:06 PM

Screw Joe the Plumber says GOP

Right now, those autoworkers are American Taxpayers. I'd rather have them working and paying taxes than collecting unemployment, welfare and food stamps.

The Republicans have once again campaigned saying they are for working people, only to turn against workers right after the election.

This is not the right time to put any more taxpayers out of work, despite not liking the way they tend to vote. It's times like this when it's not hard to understand why union workers tend to vote for Democrats.

Rather than trying to cut the pay of those workers, Republicans ought to be trying to increase the wages of the rest of us, including those underpaid folks manning the japanese plants in the southern states.

I don't think the UAW is good, but I wonder where was the outrage when Bush and Paulsen gave Goldman Sachs $10 billion only to have them the next week hand out $6.5 billion in bonuses. Republicans also didn't blink when they gave Citigroup $50 billion only to have them lay off 75,000 workers.

dmjakers of IN @ Dec 13, 2008 13:27:07 PM