This is only a Preview!

You must Publish this diary to make this visible to the public,
or click 'Edit Diary' to make further changes first.

Posting a Diary Entry

Daily Kos welcomes blog articles from readers, known as diaries. The Intro section to a diary should be about three paragraphs long, and is required. The body section is optional, as is the poll, which can have 1 to 15 choices. Descriptive tags are also required to help others find your diary by subject; please don't use "cute" tags.

When you're ready, scroll down below the tags and click Save & Preview. You can edit your diary after it's published by clicking Edit Diary. Polls cannot be edited once they are published.

If this is your first time creating a Diary since the Ajax upgrade, before you enter any text below, please press Ctrl-F5 and then hold down the Shift Key and press your browser's Reload button to refresh its cache with the new script files.


  1. One diary daily maximum.
  2. Substantive diaries only. If you don't have at least three solid, original paragraphs, you should probably post a comment in an Open Thread.
  3. No repetitive diaries. Take a moment to ensure your topic hasn't been blogged (you can search for Stories and Diaries that already cover this topic), though fresh original analysis is always welcome.
  4. Use the "Body" textbox if your diary entry is longer than three paragraphs.
  5. Any images in your posts must be hosted by an approved image hosting service (one of: imageshack.us, photobucket.com, flickr.com, smugmug.com, allyoucanupload.com, picturetrail.com, mac.com, webshots.com, editgrid.com).
  6. Copying and pasting entire copyrighted works is prohibited. If you do quote something, keep it brief, always provide a link to the original source, and use the <blockquote> tags to clearly identify the quoted material. Violating this rule is grounds for immediate banning.
  7. Be civil. Do not "call out" other users by name in diary titles. Do not use profanity in diary titles. Don't write diaries whose main purpose is to deliberately inflame.
For the complete list of DailyKos diary guidelines, please click here.

Please begin with an informative title:

For years, Democrats outside of Michigan tried to coax Detroit into making more fuel efficient vehicles. The automakers, the autoworker unions, Republicans, and Michigan Democrats all fought those efforts tooth and nail. Successfully.

This is what their success looks like today:

General Motors Corp (GM.N) posted a $15.5 billion quarterly loss on Friday, as North American sales dropped by 20 percent and plunging prices for SUVs prompted deep charges for its auto finance business.

GM shares tumbled 6 percent in reaction to the automaker's announcement of the deeper-than-expected loss, the third-largest quarterly loss in its history.

The No. 1 U.S. automaker also burned through $3.6 billion in cash in the quarter as it reduced inventory of slower-selling vehicles in its slumping home market.

GM ended the second quarter with $21 billion in cash and $5 billion in credit facilities. It said it had provided notice in July that it would draw down $1 billion under a secured revolving loan facility.

It's going to get worse, too. While demand for SUVs and light trucks has collapsed, there are still lots of people out there with leases, and they're turning their trucks in. And given that no one wants trucks anymore, GM is left holding the bag.
On Thursday, GMAC LLC, GM's former financing arm, was forced to write down the value of the GM's lease contracts because of the slumping value of the carmaker's big SUVs.

Under lease contracts, automakers and their finance companies rent vehicles to consumers and sell the used vehicles when the leases expire at wholesale auctions.

But the collapse in demand for SUVs this year has been accompanied by a steep drop in their resale value as consumers flock to more fuel-efficient passenger cars.

The resulting drop in resale values on SUVs prompted a $717 million charge by GMAC and bigger subsidies by GM, which retains 49 percent of the finance company after spinning off the remainder to Cerberus Capital Management.

Too bad Detroit resisted making fuel efficient cars for so long, huh? Now, all those sales are going to the Japanese car companies who innovated in that space. This was all avoidable.

On the other hand, Exxon is doing great, so Republicans are happy.


You must enter an Intro for your Diary Entry between 300 and 1150 characters long (that's approximately 50-175 words without any html or formatting markup).

Extended (Optional)

Originally posted to Daily Kos on Fri Aug 01, 2008 at 11:25 AM PDT.


Your Email has been sent.