Felix Salmon

What is Thomas Lauria playing at?

The Detroit News today bellyaches about how the Chrysler bankruptcy deal “may make raising cash more difficult for companies”. I have no idea where they got this idea, but it’s ludicrous. As the WSJ story on gadfly lawyer Thomas Lauria notes, Chrysler’s secured creditors are getting significantly more out of the existing bankruptcy deal than they would without the government throwing in its billions.

Managing expectations at GM

Mark Wolfinger asks a great question:

How can GM expect to sell ANY cars now when they are promising better cars soon?

Quote of the day, Hummer edition

“They’ve got the capital to invest in more efficient vehicles, which is what’s necessary to grow the brand.”

Your taxpayer dollars at work

No, this is not a parody. It’s real. If you thought a nationalized manufacturer had any hope of being inventive or avoiding the easy and obvious path, maybe it’s time to think again.

Why the government is keeping GM alive

Robert Reich has come over all faux-naive about the GM bankruptcy and bailout:

Why would US taxpayers want to own today’s GM? Surely not because the shares promise a high return when the economy turns up…

Will smaller cars mean fewer accidents?

Ryan Avent — whom I’m sure has driven much more than I have — has an interesting take on the psychology of the automobile:

Chart of the day: Car ownership

Light_vehicle_sales.PNG

Many thanks to PeakVT, in the comments, who links to this particularly ugly chart which does do what I wanted and show how the number of cars per 1,000 population has evolved over time. The lines are sales figures; the darker line shows that we’ve dropped from selling almost 60 cars per 1,000 population per year to selling about 35 of late. The black squares show that we now have about 780 vehicles per 1,000 population, up from about 750 ten years ago.

Whither new car sales?

The NYT has an interesting chart showing light-vehicle sales, on a seasonally-adjusted annual basis, every month since 1976. The chart would seem to imply that a large uptick in vehicle sales is in the offing. But there’s one other chart I would like to see total cars per household (or per person) in the US. Was there a significant increase in cars per household as America suburbanized and moved into bigger homes with bigger garages? And if we’ve reached a far-too-high number of cars per household, how long will new-car sales have to remain near current levels before we get back down to a “new normal”?

When bankruptcy is good for bondholders

I’m fascinated that after roundly rejecting GM’s offer to swap their bonds for equity in the existing company, GM’s bondholders seem to have embraced with alacrity GM’s new offer to swap their bonds for equity in a new, post-bankruptcy company. It’s increasingly obvious, it if wasn’t clear all along, that the old exchange offer was in neither GM’s interest nor in that of the bondholders, and that bankruptcy is necessary to allow GM to shed certain obligations — especially obligations to its dealerships — which would otherwise hobble it for the foreseeable future.