DISQUS

Neerav Bhatt · 12 months ago

Duncan thats a stroke of genius, why subsidise GM when you can buy it lock, stock and barrel!

teddlesruss · 12 months ago

I'll co-sign!

Ben · 12 months ago

So who covers the cost of the losses they will incur for the foreseeable future? The AU government? GM lost 4.2b USD FYQ1 and the next 18 months aren't looking good for new car purchase volume. Seems the purchase of the assets is the easiest financially ... it's keeping up with the losses that causes problems.

skribe · 12 months ago

Awesome stuff, mate.

paulzag · 12 months ago

Duncan, what a wonderful idea, please print it out and send via snail mail to the PM, Cabinet, the opposition and main stream media. They pay more attention to communication with stamps as it is tracked and can bite them on the backside in the future.

Sadly the detail of the "$6.2 Billion" is a typical government shell game.

The next Federal election must be held on or before 16 April 2011.

The key measure of the $6.2bn is the new scheme:
"A better-targeted, greener, $3.4 billion assistance program, the Automotive Transformation Scheme (ATS), running from 2011 to 2020;"

So that's if the Labor Party wins the next election.

If we discount that $3.4 billion by the current 10 year bond rate (to cover 2011 to 2020) then discount it again by the current 3 year bond rate before it starts, we get down to between $2.2b and $2.3b in today's dollars (that's not necessarily the best practice but it makes the point).

If you check the ALP web page for the A new car plan for a greener future you'll see the other measures, but they're mostly small potatoes.

Lastly do we want the Australian government owning GM? Have they run any government owned businesses well? Surely the future fund will consider the investment,

US car manufacturers carry a lot of unfunded pension liabilities and have been complaining they cannot compete by manufacturing cars in the USA. Toyota on the other hand has 13 plants in the USA and another being build in Mississippi.

Porsche used that poor sentiment in the investment community to fleece hedge funds of about $40 Billion see http://www.wealthesteem.org/porsche-fleece-hedg...

Guy Chaput · 12 months ago

They should have been making hybrid cars a long time ago and now to come to us with there hands out is a smack in the face!

Caitlin · 12 months ago

Analysts have declared GM worthless - clients and shareholders advised to get out, target price $0. http://ftalphaville.ft.com/blog/2008/11/10/1803...

Brent · 12 months ago

I almost didn't read this for fear of another outline of econ101 that would only depress me about this decision further. Instead I did read it and I'm glad I did. Brilliant. :)

FYI - if you do send it via snail mail to one or multiple departments, it will cost $250 of tax payer money to process it. That's the stat APS quote for the cost of replying to each and every letter sent to a government department.

If it takes $250 to reply to a letter, do you really want them to own and already uncompetitive car company. ;-)

Jeremy LeBard · 12 months ago

Why not just invest in Tesla motors, bring them to Australia and let the old oily car industry collapse? Then set up funds to look after Australian un-employed for 6 months till they find another job. Surely this would be cheaper and better?

Aaron Spence · 12 months ago

Love the letter, although as pointed out above the US$20+ billion in current obligations + ongoing losses would make it VERY expensive.

The other item that only just occurred to me is.... if they bail out the Oz arms of 2 US companies rapidly heading for bankruptcy, they'll just take the money and run. Difficult situation no doubt.

I watched 'Who Killed the Electric Car' recently & was stunned that GM had a fully viable electric city car + infrastructure in some parts of California 10yrs ago... only to destroy it for no obvious reason.... other than stupidity. When I say 'destroy' it, they literally destroyed every one of the vehicles they built at the end of the lease even though hundreds were offering to continue leasing or buy the cars.

http://www.whokilledtheelectriccar.com/

Betsy Buchanan · 11 months ago

How interesting to find so many similarities between Australia and the U.S., most interesting reading you have to offer here. Thanks so much for the insight.
Many thanks,
Betsy Buchanan

paulzag · 11 months ago

Ford, GM and Chrysler have asked Congress for $25 Bn bailout overnight. GM could run out of cash in weeks.

http://news.bbc.co.uk/2/hi/business/7736301.stm

Porsche Blog · 11 months ago

Despite being of the right, the American Government has taken stakes in banks as part of the financial bailout. For an Australian Government of the left to take a similar step in the car industry would not be difficult by comparison

fourby4 · 7 months ago

GM lose too much last year. That bail out is nothing but extra money to pay for their dept.