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View Full Version : An American Suto Bailout - For France?



MMC
03-09-2012, 08:54 AM
Attention U.S. taxpayers: You now own a piece of a French car company that is drowning in red ink.
That's right. In a move little noticed outside of the business pages, General Motors last week bought more than $400 million in shares of PSA Peugeot Citroen - a 7 percent stake in the company.
Because U.S. taxpayers still own roughly one-quarter of GM, they now own a piece of Peugeot.

Peugeot can undoubtedly use the cash. Last year, Peugeot's auto making division lost $123 million. And on March 1 - just a day after the deal with GM was announced - Moody's downgraded Peugeot's credit rating to junk status with a negative outlook, citing "severe deterioration" of its finances.
In other words, General Motors essentially just dumped more than $400 million of taxpayer assets on junk bonds.

GM has said the deal is designed to give GM access to Peugeot's expertise in small car and hybrid vehicle technology and ultimately allow both GM and Peugeot to save money by pooling their resources. But auto industry analysts find the deal mystifying.
The deal will allow the Peugeot family to reduce its share of the family business. The family, which Forbes estimated to be worth more than $2 billion, still owns about 30 percent of the company. The Peugeots declined the opportunity to buy a piece of GM.....snip~

http://news.yahoo.com/american-auto-bailout-france-100824101--abc-news.html

Why would GM be concerned with The French Auto Industry.? They could have taken in Saturn. Who Penske dropped.

Stoney
03-09-2012, 08:58 AM
Thomas Jefferson should have added a "Wall of Separation" between government and business.

MMC
03-09-2012, 09:03 AM
Plus now Nissan is going to bring back Datsun here in the US. Now how is that going to help our industry. Shouldn't we in truth actually be buying American made in our own Country? How would our Industry look then if all were not into buying Japanese and Korean Cars.

As most cannot afford a BMW or Mercedes.

Stoney
03-09-2012, 09:16 AM
I'd love to have a Datsun 1600 or 2000 roadster.

We can't avoid competing in the global markets and I wouldn't be for it if we could. We can compete with a free market in a free market. Let capitalism work.

MMC
03-09-2012, 09:34 AM
Yes but just how do we compete in a free market? When foreigners make cheaper cars and then will lead the way in cheaper electric cars. Cheaper than what American Companies can make them for? Shouldnt we adopt a policy like Brazil did?

Conley
03-09-2012, 10:01 AM
I spent a few moments trying to figure out what a "Suto" is :angry:. I thought it was some French term. :laugh:

MMC
03-09-2012, 11:01 AM
I spent a few moments trying to figure out what a "Suto" is :angry:. I thought it was some French term. :laugh:

:laugh: Nope nothing more than a common spelling mistake that I cannot correct once done. :grin: but ya gotta admit, suto could pass for something French. Wish I could have said it stood for Sucks-Autos. :tongue:

Conley
03-09-2012, 11:05 AM
:laugh: Nope nothing more than a common spelling mistake that I cannot correct once done. :grin: but ya gotta admit, suto could pass for something French. Wish I could have said it stood for Sucks-Autos. :tongue:

:laugh: I didn't figure it out until I looked at the keyboard and saw the s next to the a.

Stoney
03-09-2012, 07:09 PM
Yes but just how do we compete in a free market? When foreigners make cheaper cars and then will lead the way in cheaper electric cars. Cheaper than what American Companies can make them for? Shouldnt we adopt a policy like Brazil did?

We have artificial labor costs, prohibitive regulations and high corporate taxes. The further we allow them to go the further we will be from being able to compete in free global markets.