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The Morning Dump

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December 09, 2008 – Comments (5) | RELATED TICKERS: EPG , KKD , GM

A Car Czar.  This sounds so completely stupid. According to this NY Times article, "Car Czar" is the unofficial name given to the “one or more officers” expected to fill the job of overseer to the auto industry.

And what are the job qualifications the Government is looking for? According to the NY Times the legislation actually calls for someone with “appropriate expertise in such areas as economic stabilization, financial aid to commerce and industry, financial restructuring, energy efficiency and environmental protection”. Sounds impressive.

And what is the job description? To quote the Times “The car czar would also have the power to convene meetings of an array of interested parties in the auto companies, including unions, creditors, suppliers, auto dealers and shareholders”. Sounds awesome.

I have a better job title. I say we call it the Office of the Know-it-all Butt-inski. That title covers both parts. And why should I make fun of such an important oversight position? Because besides making sure donuts get to his meetings, Mr. Know-it -all Butt-inski has the authority to “demand repayment of the emergency loans” should the companies fail to submit long term reorganization plans by March 31st.

Dear NY Times. Thanks for the in depth analysis.

Dear Congress, if you have to lend them this money, because they desperately need to spend it right now, it will not be there in March if you want it back. So make sure the guy you appoint is good at choosing donuts, because that is all he is going to do besides calling a few meetings and giving you someone to complain about for not doing their job.

Just make the decision. Lend or do not lend. You can pretend you can control how they spend the cash, but you cannot. If you insist they spend it in the USA and they want to spend money in Africa, they will just shift other moneys there. Think SSI if you cannot figure out how.

You can say they have made bad decisions, everybody else does. But compared to Wagoner, you do not know diddly about the car business. That is why he testified and you listened. And based upon the crap you are legislating, I think he did the better job.

If you want warrants, go for it. Set your interest rate. But do not pretend you can run a car company.

 

Shares of EPG, converters of BS into saleable products, are expected to crash with this load of crap being dumped on the markets.

Shares of KKD, converters of dough into pastrys, are expected to rise on the increased number of meetings.

5 Comments – Post Your Own

#1) On December 09, 2008 at 3:00 AM, jgseattle (29.67) wrote:

The politicos hove to make it look like the taxpayer is protected.  As you said the car czar is a joke.

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#2) On December 09, 2008 at 5:44 AM, dshuang (34.53) wrote:

Great post.  Wouldn't EPG do well because of the sudden abundance of input (BS) causing their input prices to drop and thus expanding their profit margin?

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#3) On December 09, 2008 at 8:01 AM, devoish (96.22) wrote:

jgseattle,

The politicos hove to make it look like the taxpayer is protected.  As you said the car czar is a joke.

Like the way Christopher Cox made it look?

dshuang,

Excellent anal ysis. The concern is that such a high volume of low interest BS will give competitors a chance to load up and drive down margins. It could take years to flush them out of the markets.

ps. wheres my recs? I am trying to keep this daily dumping going until Jan for the two cents the Fool is giving away and to see if I can do do it. And even after the first week I have a newfound respect for the Fools who post every day.

So post up, and get your two cents in.

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#4) On December 09, 2008 at 8:32 AM, TDRH (99.48) wrote:

"If you want warrants, go for it. Set your interest rate. But do not pretend you can run a car company." Nicely put.

The government cannot run a donut stand, let alone a manufacturing process as complex/integrated as an automaker.

This is an instant replay of 1978, though at that time the Big 3 had the Congress' undivided attention.

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#5) On December 09, 2008 at 8:57 AM, Gemini846 (45.83) wrote:

I went to a chevy dealer over the weekend while my wife was at a birthday party just for s&g. I asked him what kind of quality improvements have been made in the last 4 years. I asked him if they still use plastic breaks that melt after 30k miles. I asked him if they still have interior molding that comes apart after 2 years. (He said that was all fixed lol.) I asked him where was my incentive to buy one of these instead of a corolla. "support america" ROFL

American car companies can't compete w/ the Japanese any more. They aren't in the same league. They need to do what the Koreans and doing now and what the Japanese did back in the early 80's make a bunch of cheep small cars that will either prove that they are quality or that they are still making piles of rolling doo doo.  They only have one place they can compete, and $2000 isn't going to cut it. They need to be on par w/ Hyundai and Kia for price which is about $6000 cheeper than a corolla.

To GM: Quit stuffing the car full of crap I don't need. Make me a base model midsize I can buy for $12,000 and then we'll see. There isn't enough incentive to get me to take a chance on those cars right now, and I think until this labor situation, legacy costs and all that garbage gets taken care of by bankrupcy or otherwise they will never have a chance to show it to most american consumers. The number of Hyundai's on the road is proof enough that price sells. Every time I turn around I see another Santa Fe. You're telling me we can't make a car here at home that is less expensive than the Koreans?

 

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