The "American Leyland" News Thread

[ja404]

We're already seeing them force out the CEO, restructure the board
- Don't see any problem here, there the ones who allowed this mess to happen even if they didn't directly cause it

...and talking about the right kind of cars for them to build
- Let's just hope that 'right' = 'profitable'

Now that GM is government owned, does that make Ford un-American for being GM's enemy?

[Spectre]

Originally Posted by bartboy9891

It does depend on your definition of safe. I've been in Detroit during both day and night and I never really felt unsafe. But if you wander around in the shitty areas by yourself then you're asking for trouble. The problem is that the shitty parts outweigh the decent parts BY FAR. And all the roads are terrible.

Regardless, there are some good parts of Detroit.

http://www.historicindianvillage.org...ardentour.html

That area has a bunch of old houses that have been restored. Except for some interesting looking houses, you probably couldn't tell the difference between those neighborhoods and any other upscale neighborhood.

The Fabulous Ruins Of Detroit.

[bartboy9891]

Originally Posted by Spectre

The Fabulous Ruins Of Detroit.

Haha, this guy I knew took a large set of black and white photos of rundown places in Detroit for an art class. Everyone thought that he went through all of Detroit to find so many different depressing things to shoot. But he said he only spent a half hour and only walked a mile or two at most

[Spectre]

I wouldn't go back to Detroit without a mechanized infantry company escorted by a couple of platoons of armor with airstrikes and artillery in support.

[Spectre]

From the "Obama Motors" and "BEHOLD, The Imcompetence!" departments via Yahoo/The New York Times:

The 31-Year-Old in Charge of Dismantling G.M.
by David E. Sanger
Monday, June 1, 2009

provided by
The New York Times

It is not every 31-year-old who, in a first government job, finds himself dismantling General Motors and rewriting the rules of American capitalism.

But that, in short, is the job description for Brian Deese, a not-quite graduate of Yale Law School who had never set foot in an automotive assembly plant until he took on his nearly unseen role in remaking the American automotive industry.

Nor, for that matter, had he given much thought to what ailed an industry that had been in decline ever since he was born. A bit laconic and looking every bit the just-out-of-graduate-school student adjusting to life in the West Wing — “he’s got this beard that appears and disappears,” says Steven Rattner, one of the leaders of President Obama’s automotive task force — Mr. Deese was thrown into the auto industry’s maelstrom as soon the election-night parties ended.

“There was a time between Nov. 4 and mid-February when I was the only full-time member of the auto task force,” Mr. Deese, a special assistant to the president for economic policy, acknowledged recently as he hurried between his desk at the White House and the Treasury building next door. “It was a little scary.”

But now, according to those who joined him in the middle of his crash course about the automakers’ downward spiral, he has emerged as one of the most influential voices in what may become President Obama’s biggest experiment yet in federal economic intervention.

While far more prominent members of the administration are making the big decisions about Detroit, it is Mr. Deese who is often narrowing their options.

A month ago, when the administration was divided over whether to support Fiat’s bid to take over much of Chrysler, it was Mr. Deese who spoke out strongly against simply letting the company go into liquidation, according to several people who were present for the debate.

“Brian grasps both the economics and the politics about as quickly as I’ve seen anyone do this,” said Lawrence H. Summers, the head of the National Economic Council who is not known for being patient whenever he believes an analysis is sub-par — or disagrees with his own. “And there he was in the Roosevelt Room, speaking up vigorously to make the point that the costs we were going to incur giving Fiat a chance were no greater than some of the hidden costs of liquidation.”

Mr. Deese was not the only one favoring the Fiat deal, but his lengthy memorandum on how liquidation would increase Medicaid costs, unemployment insurance and municipal bankruptcies ended the debate. The administration supported the deal, and it seems likely to become a reality on Monday, if a federal judge handling the high-speed bankruptcy proceeding approves the sale of Chrysler’s best assets to the Italian carmaker.

Mr. Deese’s role is unusual for someone who is neither a formally trained economist nor a business school graduate, and who never spent much time flipping through the endless studies about the future of the American and Japanese auto industries.

He lives a dual life these days. He starts the day at a desk wedged just outside of Mr. Summers’s office, where he can hear what young members of the economic team have come to know as “the Summers bellow.” From there, he can make it quickly to the press office to help devise explanations for why taxpayers are spending more than $50 billion on what polls show is a very unpopular bailout of the auto industry.

Several times a day he speed-walks to Treasury, taking a shortcut through the tunnel under the colonnade, near the kitchens. The other day he talked about how sharply perceptions of the industry’s future changed after Mr. Obama’s election.

“At the first meeting with Rick Wagoner,” he said, referring to G.M.’s recently deposed chief executive, “they were in a very different place. He said publicly that bankruptcy was not a viable option. It’s been a long process getting everyone to look at the options differently.”

In fact, from before Inauguration Day, few in Mr. Obama’s circle saw any other choice. Every time Mr. Deese ran the numbers on G.M. and Chrysler, he came back with the now-obvious conclusion that neither was a viable business, and that their plans to revive themselves did not address the erosion of their revenues. But it took the support of Mr. Rattner and Ron Bloom, senior advisers to the task force charged with restructuring the automobile industry, to help turn Mr. Deese’s positions into policy.

“The president’s instruction to us was that we had to come up with a solution that would work on a commercial basis, that didn’t involve indefinite federal financing,” Mr. Deese said. “But we didn’t want liquidation, which would have even worse effects. So the question was how do you design a very substantial restructuring, and do it fast.”

Mr. Deese’s route to the auto table at the White House was anything but a straight line. He is the son of a political science professor at Boston College (his father) and an engineer who works in renewable energy (his mother). He grew up in the Boston suburb of Belmont and attended Middlebury College in Vermont. He went to Washington to work on aid issues and was quickly hired by Nancy Birdsall, a widely respected authority on the effectiveness of international aid and the founder of the Center for Global Development.

But he wanted to learn domestic issues as well, and soon ended up working as an assistant for Gene Sperling, who 17 years ago in the Clinton White House played a similar role as economic policy prodigy. Eventually, Mr. Deese headed to Yale for his law degree. But his e-mail box was constantly filled with messages from friends in Washington who were signing up to work for the Obama or Hillary Rodham Clinton campaigns. Mr. Deese chose Senator Clinton’s.

“He was pretty quickly functioning as the top economic policy staffer through her campaign,” Mr. Sperling said. “He could blend the policy needs and the political needs pretty seamlessly.” On the day that the Clinton campaign ended, Mr. Deese left her concession speech and received a message on his BlackBerry from a friend in the Obama campaign urging him to sign on immediately to Mr. Obama’s team.

He resumed his policy work there, and found himself stuck in Chicago — unable to fly to Washington with his dog — as the economic crisis deepened. Finally, one night, he decided to get into his car with his dog and just started driving back to Washington. Tired, he pulled over to catch some sleep in the car.

“I slept in the parking lot of the G. M. plant in Lordstown, Ohio,” he recalled. The giant plant, opened during G.M.’s heyday in the mid-1960s, is where the Pontiac G5 is produced. Under the plan Mr. Deese worked on when he arrived in Washington, Pontiac will disappear.

“I guess that was prophetic,” he said, shaking his head.

[CrazyRussian540]

Originally Posted by Spectre

There's safe parts of Detroit?

Judging by the look of it, its not a bad looking neighborhood. No class either, didn't even leave it on blocks.

[Spectre]

Originally Posted by CrazyRussian540

Judging by the look of it, its not a bad looking neighborhood. No class either, didn't even leave it on blocks.

[Richmondgal]

Does anyone in the Government know how to run a bloody business? Let alone, a Government?

[CrazyRussian540]

Chinese Company Said to Be Buyer of Hummer

GUANGZHOU, China - General Motors has reached a preliminary agreement for the sale of its Hummer brand of large sport utility vehicles and pickup trucks to a machinery company in western China with ambitions to become a carmaker, a person familiar with the Chinese government approval process said Tuesday.

The Sichuan Tengzhong Heavy Industrial Machinery Company Ltd., based in Chengdu, concluded the agreement with G.M., said the person, who insisted on anonymity.

Sichuan Tengzhong is a privately owned company, but Tuesday’s deal required preliminary vetting by Beijing officials, who retain the right to veto any effort at an overseas acquisition by a Chinese company and who give special attention to deals over $100 million.

G.M. announced the deal early Tuesday morning in Detroit but said that the memorandum of understanding would not allow it to reveal the buyer or the price. Industry analysts have estimated that the Hummer division would sell for less than $500 million.

G.M., in a blog posting, said it had seen the report regarding a Hummer buyer but could not comment on speculation.

Sichuan Tengzhong is known in China for making a wide range of road equipment, from bridge piers to highway construction and maintenance machinery. But even before the Hummer deal, the company has been moving more into heavy-duty trucks, including tow trucks and oil tankers.

Sichuan Tengzhong’s offices were closed on Tuesday evening and calls to its headquarters were not answered.

Ray Young, G.M.’s chief financial officer, said Tuesday that the prospective Hummer buyer had asked G.M. not to disclose their identity until the deal was concluded. “It was their preference, and we respected that preference,” Mr. Young told analysts and reporters on a conference call.

G.M. said the deal would save about 3,000 jobs in the United States, including those at its 153 domestic dealerships, and that Hummer would remain based in the United States.

“Over all, we’re pretty pleased,” said a spokesman for Hummer, Nick Richards, without identifying the buyer. “If you think about the qualities we’d want in a new owner for the brand, this buyer really met all the criteria. They’ve got a proven track record in international business, and they’ve got a long-term vision for the brand. They’ve got the capital to invest in more efficient vehicles, which is what’s necessary to grow the brand.”

If the purchase is completed, it would mark the first acquisition of a well-known American automotive brand by a Chinese company, after many months of speculation about when this might occur. Chinese automakers have already purchased the MG and Rover brands, two of the most famous names in British automotive history.

As a Chinese company, Sichuan Tengzhong could face a challenge in presenting the deal to American owners of Hummer. The brand has long sought to emphasize patriotism, stressing that the Hummer H1 was essentially the same vehicle built in the same factory as the Humvee that carries American soldiers into battle in Iraq and elsewhere.

It was Gov. Arnold Schwarzenegger of California who persuaded the longtime maker of Humvees, A. M. General in Mishawaka, Ind., to build a civilian version. As he recounted at a Hummer news conference in 2001, Mr. Schwarzenegger was filming the movie “Kindergarten Kop” in Oregon in 1990 when he saw a convoy of 50 Humvees drive by and decided that he had to have a civilian model of the same vehicle, which became the Hummer H1.

G.M. bought the rights to the Hummer brand in 1999 and began making somewhat smaller Hummers. G.M. initially procured the H1 from A.M. General but discontinued the model in 2006.

Under the preliminary agreement announced on Tuesday, GM will initially continue to manufacture Hummers under contract for Sichuan Tengzhong, which will then market them around the world. G.M. will continue making the H3 and H3T models in Shreveport, La., through the end of next year, for example.

The buyer plans to shift additional production of the H3 from a plant in South Africa to Shreveport, Mr. Richards said.

Sichuan Tengzhong could bring Hummers to the crowded streets of China’s big cities, although the vehicles would face the 40 percent tax that China imposes on cars, S.U.V.s and minivans with engines over 4 liters.

G.M. has not set up its own Hummer dealer network in China, but entrepreneurs already import the vehicles and sell them in the biggest cities.

Copies of the Hummer by Chinese automakers draw crowds at auto shows, although they are labeled as concept vehicles and are not for sale.

G.M., which is hoping to shed unwanted assets and emerge from bankruptcy in about two months, said it expected the deal to close in the third quarter. The automaker had planned to close Hummer if a buyer could not be found. It is also trying to sell Saturn and Saab this year and plans to eliminate a fourth brand, Pontiac, in 2010.

G.M., with 60 percent government ownership, will keep Chevrolet, Cadillac, Buick and GMC.

“Hummer is a strong brand,” Troy Clarke, the president of G.M. North America, said in a statement. “I’m confident that Hummer will thrive globally under its new ownership. And for G.M., this sale continues to accelerate the reinvention of G.M. into a leaner, more focused, and more cost-competitive automaker.”

Once considered the ultimate muscle car, the Hummer became a symbol of what was wrong with G.M. and the American auto industry — big, bulky and gas-guzzling. Sales of Hummers fell 51 percent last year, the worst drop in the industry, and are down 67 percent so far in 2009.

Mr. Richards said the buyer planned to continue selling Hummer’s current lineup as it develops “more efficient” vehicles. The brand would eventually sell trucks fueled by diesel, ethanol and other alternative fuels, he said.

In February, G.M. said it had three bidders for Hummer, which has about 220 dealers globally.

Hummer’s chief executive, James Taylor, said the sale would allow the company to continue to grow and maximize the brand’s potential.

In the telephone conference call, Mr. Young said G.M. had been approached by 16 parties who were interested in bidding on its Saturn division. The group includes financial investors and companies that are interested in distributing Saturn vehicles.

He said G.M. had not set a date when it would winnow down the group to a handful of finalists, or when it hoped to announce a sale. One complication is devising the right operating plan for an independent Saturn, he said.

G.M. said it would work with the bidders to come up with the right idea. He said G.M. was using advisers and that prospective bidders also had retained advisors, but would not be more specific.

http://www.nytimes.com/2009/06/03/bu...o.html?_r=1&hp

Despite hating what Hummer has become (a car for rappers to put 50 inch wheels on rather than an epic offroader), I don't approve of this.

[Spectre]

Originally Posted by Richmondgal

Does anyone in the Government know how to run a bloody business? Let alone, a Government?

No, because if they did they would go run said business and make a lot more money than in civil service.


From the Obama Motors department and CNBC/The Street:

Report: GM's Hummer to China Buyer

Joseph Woelfel


General Motors (GM Quote) has settled on a Chinese buyer for its Hummer brand, according to CNBC.

The Sichuan Tengzhong Heavy Industrial Machinery Co., in Chengdu, is the buyer, reported CNBC.

Sichuan Tengzhong is a private company, but the deal required approval by Beijing officials, who can veto any attempt at an overseas acquisition by a Chinese company and who closely follow deals over $100 million, reported The New York Times.

In a statement Tuesday, GM said the sale is expected to close by the end of third quarter.

GM, which filed for bankruptcy protection on Monday, said the deal is expected to "secure" more than 3,000 U.S. jobs in manufacturing, engineering and at Hummer dealerships around the country. The transaction also includes plans by the investor to "aggressively fund" future Hummer product programs, GM said.

The investor or the terms of the transaction aren't being disclosed by GM under the terms of the memorandum of understanding.

"Hummer is a strong brand," said Troy Clarke, president of GM North America. "I'm confident that Hummer will thrive globally under its new ownership. And for GM, this sale continues to accelerate the reinvention of GM into a leaner, more focused, and more cost-competitive automaker ."

The Wall Street Journal reports GM will continue making Hummer H2 and H3 trucks and SUVs at plants in Louisiana and Indiana for the buyer.

GM had until recently been entertaining offers for Hummer from various parties, including a Chinese investor, the Journal reports, with bids below $500 million.

If a buyer wasn't found by early June for Hummer the brand likely would have been killed in bankruptcy court, said one person involved in the deal. GM named an investor for its Opel brand over the weekend -- Magna International (MGA Quote) -- and is seeking buyers for Saturn and Saab, the Journal reports.

Meanwhile, GM's China operation won't be affected by the parent company's bankruptcy and plans to open a new factory within five years even as the automaker closes U.S. facilities, the unit's president said Tuesday.

GM China is sticking with a five-year plan to double annual sales to 2 million units and roll out 30 new or updated models, Kevin Wale told reporters, the Associated Press reports. He said China isn't included in GM's petition Monday for court protection from creditors and the unit's business plans are fully financed.

Here's an opinion piece from this morning's Wall Street Journal. I've included the graphic from the article:

How GM Lost Its Way
Timid management and coddled workers couldn't compete with Toyota.

By PAUL INGRASSIA

Decades of dumb decisions helped send General Motors to a bankruptcy court yesterday, but one stands out.

The year was 1998, and the United Auto Workers was striking at two factories in Flint, Mich., that made components critical to every GM assembly plant in the country. The union was defending production quotas that workers could fill in five or six hours, after which they would get overtime pay or just, you know, go home.

Most strikes are forbidden during the life of a labor contract, so to provide legal cover the union started filing grievances. GM lawyers contended the walkouts violated the contract anyway and drafted a lawsuit -- the first by the company against the UAW in more than 60 years. But GM's labor-relations department freaked out because the lawsuit would antagonize the union.



Just think about that. The union had shut down virtually all of GM, costing the company and its shareholders billions of dollars, and yet the company's labor negotiators were afraid of giving offense. After heated internal arguments, the suit was filed and GM seemed on the verge of winning. But the company settled just before the judge ruled.

UAW members marched victoriously through downtown Flint. GM executives who advocated a tougher stand got pushed out of the company.

The picture of a heedless union and a feckless management says a lot about what went wrong at GM. There were many more mistakes, of course -- look-alike cars, lapses in quality, misguided acquisitions, and betting on big SUVs just before gas prices soared. They were all born of a uniquely insular corporate culture.

The GM bailout probably will cost close to $100 billion, counting money from the governments of the U.S., Canada and Germany. On paper, the new company should emerge from Chapter 11 fully able to compete in the brutally competitive auto industry. Whether it will actually prosper is far less certain, but some things are beyond dispute. Bankruptcy didn't have to happen and the fact that it did happen is incredibly sad given GM's many contributions to American society and culture.

General Motors invented the modern corporation by developing the concept of giving operating executives power and responsibility to run far-flung operations subject to central financial control. While Henry Ford invented mass manufacturing, GM's long-time president and chairman of the board, Alfred P. Sloan Jr., developed mass marketing: a "car for every purse and purpose," as he put it in the company's 1924 annual report. This meant a hierarchy of brands ranging from practical Chevrolets to prestigious Cadillacs. GM's industrial might helped win a world war and made America rich in its aftermath.

For half a century, between the 1920s and the 1970s, GM seemed to have an instinctive feel for what Americans wanted before consumers themselves even knew it. Chrome, tail fins, muscle cars and even the first catalytic converters that let cars run on lead-free gasoline were developed at GM.

But the company signed generous labor deals during the 1970s, including the right to retire after 30 years with full pension and benefits, partly because it believed the contracts would cripple its smaller competitors, Ford and Chrysler. Then along came Honda, Nissan and Toyota, which didn't have to deal with labor contracts at all. That was the beginning of the agonizing decline.

This fate could have been avoided with better foresight and less hubris, but by 18 months ago bankruptcy was inevitable. GM's U.S. market share had declined to 22% from 52% in the early 1960s. There were too many brands, too much debt, a cumbersome union contract as big as a phone book, and an enormous dealer network built for the glory years of yesterday instead of the market share of today.

The question for Presidents George W. Bush and Barack Obama was whether to stand by and watch, or instead to use the public purse to shape the bankruptcies of both Chrysler and GM to mitigate the damage to a shaky U.S. economy. They intervened, which was the unpleasant but correct decision.

By and large, Mr. Obama's automotive task force has done its job pretty well, forcing the companies and the UAW to make difficult decisions that they should have made themselves long ago. GM will shed four of its eight U.S. brands -- Saab, Saturn, Pontiac and Hummer -- thousands of dealers, 11 factories, and much of its debt. It is no small irony that a Democratic administration brought in a bunch of private-equity types to impose rational management on big business.

That said, a couple of aspects of the GM and Chrysler bailouts could come back to haunt U.S. taxpayers and the Obama administration.

The company that controls Chrysler, Italy's Fiat, is getting a special government incentive -- a potential increase in its Chrysler ownership stake -- to build a small car in America that will get 40 miles per gallon. General Motors made a similar decision to build a high-mileage small car in the U.S. of its own accord, but certainly with an eye toward current political "realities."

Both moves fit the green agenda of Mr. Obama and congressional Democrats. They're also egregious examples of mission creep. GM and Chrysler should get just one marching order from the government: Earn enough money so taxpayers will recover as much as their investment as possible. If the new small cars flop because gas prices drop, the result will be more losses and, potentially, Bailout II.

The other questionable call is the government's big ownership stake in both companies -- 60% of General Motors and a much smaller share of Chrysler. The rationale is reasonable. The government is providing the $50 billion of financing needed to restructure GM so taxpayers might as well get something for their money. But this relegates unsecured lenders to the back of the line behind the government and the union. More worrisome, it invokes the question famously asked before the U.S. invasion of Iraq: You can go in, but can you get out?

The answer will depend on the success of GM, which in turn will hinge on whether the new company can cast off the culture of the old one. One encouraging sign is that, thanks to the labor contract amendments imposed by the Treasury's task force, UAW members will be required to work 40 hours a week before getting overtime pay. Less encouraging is that workers still will be allowed six unexcused absences before being fired. It doesn't take that many at a Honda plant.

As for management, not long ago a group of executives was reviewing a prototype new Buick model, about the size of a BMW 3 Series, at GM's design studios. The sporty styling had been developed in China for sale both there and in the U.S. But the company's cautious product planners suggested conducting customer clinics to gauge reaction to the design and possibly changing both the front and back end. It would have delayed the project and cost tens of millions of dollars.

CEO Fritz Henderson wisely said no. But the very next day the product planners were charging ahead with their clinic plans anyway, just in case the boss wanted to see the results of their research. Maybe the new Buick should be named the CYA. Neither billions in losses nor the brink of bankruptcy, it seems, have been enough to change many traditional ways of doing things at GM.

Heaven only knows what will be enough. But a company with a cautious, slow-moving management and a union committed to defending ridiculous work rules won't have a chance of succeeding. Perhaps everyone remaining at the new GM will realize that. The rest of us can only hope for the best.

Mr. Ingrassia won a Pulitzer Prize in 1993 for covering the last crisis at GM. His book on Detroit's current crisis, "Crash Course," will be published by Random House in January.

Edit: Heh, took me a little too long to post the Hummer story, someone beat me to it.

[THGL]

Originally Posted by CrazyRussian540

...rather than an epic offroader

As a (former) owner of a Jeep, I laugh at this statement. H2's are not much more than rebodied Chevy Tahoes.

[BlaRo]

Man, is THAT a sign of the times.

Is Hummer even profitable, anyway? Why not just shutter the division? And what about the military division, that's already been split off from GM, right?

[Spectre]

There never was a military Hummer division. AM General made the HMMWV, GM just licensed the design of the H1 and the Hummer trademarks from AM General. AM General is the last remaining vestige of AMC, and was formed as the military division of Jeep prior to the Chrysler acquisition.

Hummer hasn't been profitable for a few years now.

[thevictor390]

Originally Posted by THGL

As a (former) owner of a Jeep, I laugh at this statement. H2's are not much more than rebodied Chevy Tahoes.

H1's are the epic offroaders. But the Hummer brand is now more known for the H2, hence the image change. H2's aren't actually that bad offroad either but that's rarely proven.

[Spectre]

Another opinion piece, comparing Government Motors to Amtrak - from Fox:

Little Engine That Could? Government's Role in GM Bears Resemblance to Amtrak Route
Some analysts say they are concerned that the federal government's effort to prop up the nation's largest auto manufacturer is eerily similar to a 40-year effort to revive the nation's ailing railroad system.

FOXNews.com

Monday, June 01, 2009

General Motors is trying to prove that it is the little engine that could. But the bankrupt automaker may never fully climb the mountain ahead of it, if Amtrak is any example.

Some analysts say the federal government's effort to prop up the nation's largest auto manufacturer is eerily similar to a 40-year effort to revive the nation's ailing railroad system. Billions of taxpayer dollars later, Amtrak still needs the government to survive -- and critics say General Motors appears to be headed down the same track.

"I see no hope whatsoever for the situation," said Wendell Cox, a policy consultant who sat on the government-appointed Amtrak Reform Council a decade ago and draws parallels to the GM intervention today.

The Obama administration is committing $50 billion to General Motors -- $30 billion on top of the $20 billion it has already invested. Administration officials will not speculate on when taxpayers may see a return on the White House-engineered investment, but they insist that Washington will cut off Detroit after that and will be a "passive" investor.

President Obama said Monday the U.S. government, which now owns 60 percent of GM, wants to prop up the company and then "get out" of the auto business. Under the restructuring plan, the Canadian government will take a 12.5 percent stake, and the United Auto Workers will have a 17.5 percent stake. Bondholders receive 10 percent.

Critics say this looks like Amtrak all over again.

Analysts said the government's hope of creating an efficient mass transit service through a partial nationalization of the rail system was stymied by its inability to get tough on unions and rein in labor costs. The same could hold true, they say, as the Obama administration deals with the UAW.

Amtrak has fielded criticism over the years for being guided by officials with little or no transit experience. Today, Obama's Auto Task Force has a combined experience of zero years in the auto industry.

With Amtrak, the government got too involved in decision-making, leading to inefficiencies in the system that would never be corrected, say analysts. Since its creation in 1970, Amtrak has sucked up $30 billion in taxpayer money, and the money is still flowing. The original aid package from Congress in 1970 was $340 million with an expectation the railroad would make a profit in five years.

The potential parallels are worth being concerned about, critics say.

"I think the $50 billion might as well be kissed goodbye. I would expect that this is just the beginning," Cox, principal at the Wendell Cox Consultancy, said of the GM deal.

"I think the long-term outcome will be the same," said Ronald Utt, a senior research fellow at the conservative Heritage Foundation. "It's unlikely to ever recover the huge investment that's been made in it, and you will then be carrying this forever and ever and ever. (The government has) been carrying Amtrak now for more than 35 years."

Conservatives in Washington treated Monday's announcement with a hefty dose of skepticism. They called for a clearly stated exit strategy and said GM's success is by no means assured.

"I think that President Obama is planning on staying in the automobile industry for quite some time," Rep. Pete Hoesktra, R-Mich., told FOX News Radio.

"Does anyone really believe that politicians and bureaucrats in Washington can successfully steer a multinational corporation to economic viability?" House Minority Leader John Boehner said in a written statement.

Though the rhetorical question might sound like a recycled GOP talking point, the analysts who spoke to FOXNews.com say the fear is justified. The government will have a hard time resisting getting closely involved in GM management, leading to the kind of problems that dogged Amtrak over the decades.

Utt and Cox said parochial, political interests have driven Amtrak to make ineffective decisions -- like maintaining costly, long-distance lines and setting up inefficient routes that detour through low-population areas.

Amtrak has experienced a boost in ridership recently, which its management attributes in part to high gas prices and better service. Though it is still in the red, Amtrak reported a record 28.7 million passengers in fiscal year 2008, marking its sixth straight year of record ridership.

The company notes on its fact sheet that "no country in the world operates a passenger rail system" without public support.

At the same time, Amtrak reported earning $2.45 billion in fiscal year 2008, and racking up $3.38 billion in expenses. Congress last year committed another $13 billion over five years to the rail service, with proponents of the investment saying at the time that the service had been underfunded for too long and this would finally help "rebuild" Amtrak.

It's unclear whether that will happen. And it's unclear whether the Obama administration will be able to exit its budding relationship with GM as quickly and efficiently as it hopes.

Obama on Monday said the government would act as "reluctant shareholders" and has "no interest" in running GM -- though the U.S. federal government will name a majority of board members.

Obama said the proceedings, though painful for all stakeholders, would "mark the end of an old GM and the beginning of a new GM." He held up Chrysler's quick, month-long bankruptcy proceedings as evidence that such a restructuring can be accomplished and that his critics were "wrong."

Rep. John Dingell, D-Mich., issued a statement saying he has "every confidence" GM will emerge at the top of the global automotive sector.

With more plants and dealerships set to close and more jobs expected to be lost as a product of the bankruptcy proceedings, the auto workers also claims it has made sacrifices -- brushing off suggestions that it stands to reap benefits from bankruptcy.

"We gave Citgroup hundreds of billions of dollars and AIG hundreds of billions of dollars with no accountability," said Brian Fredline, president of the UAW's Local 602 chapter in Lansing, Mich.

With GM, "We know where that money's going. It's going to support American industry and American jobs, and that's how it will be spent. And if you want to get that taxpayer money back, buy a GM product. You'll like it."

FOXNews.com's Judson Berger and FOX News' Major Garrett contributed to this report.

Yeah, we know where that money's going. It's going into the union's coffers.

I tried buying a GM product. I didn't like it.

[MadCat360]

With GM, "We know where that money's going. It's going to support American industry and American jobs, and that's how it will be spent. And if you want to get that taxpayer money back, buy a GM product. You'll like it."

I'll like it? That sounds like a dare.

And the logic there doesn't compute for me. We get our taxpayer money back by... buying a product from a company that we just gave money to? Unless they're paying us to take the cars, then I don't see how we're getting money back...

[Spectre]

Actually, it sounds more like extortion to me:

"If youse wants to see da taxes again, youse better buys dis GM, if youse knows what's good for youse."

[Aston Martin]

I always hate admitting this, but I love the H2.

But a Chinese H4.... I would hate to see the crash test.

[NecroJoe]

The H2 was just ridiculous, to me, but I didn't mind the H3. I was looking forward to seeing what Hummer was going to do with a NORMAL-sized truck.

[BlaRo]

Oh, the irony.