What if GM and Ford go bust?

[maxeaus]

For those who would like to know what would happen if Ford and GM go belly up, along with a host of other companies, heres a detailed analysis of the situation. Very interesting scenario.

http://www.businessspectator.com.au/bs.nsf/Article/A-tsunami-of-hope-or-terror-LHRJP?OpenDocument

 

[Web Master]

At least the auto industry produces real, usable commodities for people's daily lives, not like those digital money schemes largely popping up craps at the expense and sacrifice of most people in a society.

Sigh... :yell:

 

[RogueWriter]

As I see it, if they go belly up, let's see, labor contracts ande health programs are no longer valid, so a white knight shows up, buys the company, reduces wages by 50%, drops a gazillion people from the health plan, invests a bit in technology, works out some juicy tax deals from some nervous politicians, starts building efficient cars, maks a fortune, life goes on, though at a much reduced level for current and past employees.

 

[Carlton]

Not every industry has been driven deeply into debt by the power of unions. The UAW have strangled the life out of American automakers. I'm for letting them declare bankruptcy, reorganize, and emerge smaller, more focused, and as free as possible from union contracts. They'll finally be able to compete in the free market instead of waiting with their hand out while the American taxpayer bails them out over and over. The only real solution to the larger American economic crisis is much greater corporate accountability and extensive regulation (including Wall Street financials), with severe penalties for any breach of regulatory policies.

 

[johname]

GM and F should assemble their cars in mexico that will get those companys going again lol

 

[barefoottech]

GM and F should assemble their cars in mexico that will get those companys going again lol

No, CHINA is the future of the Automotive Industry
Woohoo
Great Wall Motors and others will flood the US and other markets with vehicles
over the next few years

 

[maxeaus]

Amazingly India can build a car for $3,000, China not much more. Very tough to compete with the emerging heavyweight economies. Australia just announced a package for it's motor industry and Ford Australia will be building engines to export. Maybe US citizens will be driving Aussie cars?

 

[labrocca]

not like those digital money schemes largely popping up craps at the expense and sacrifice of most people in a society.

You mean like domains? hehe

Interesting read and thanks for posting. Not sure I buy it all though.

 

[-REECE-]

I still can't believe their CEOs had the audacity to beg for money after flying down in their private jets...

Let them go bankrupt.

 

[Web Master]

You mean like domains? hehe

Interesting read and thanks for posting. Not sure I buy it all though.

No. It does not mean domains and domaining. It means the financial absurdity that leads to financial crisis. It also connotes that the US auto industry should get some assistance.

%%-

 

[-REECE-]

Did April Fool's come early: http://online.wsj.com/article/SB122748968154052045.html :?

Wow.. What a bunch of jokers. No wonder they're going bankrupt

 

[uber]

IMHO GM is a pension fund that happens to make cars... time to dip into the nest eggs of all those $71 an hour folks?

The US administration has been nationalizing the economy faster than you can say "Hugo Chavez" (The Economist).

Citibank got nationalized today--the government poured in 27b when its market cap was only 20b. So now the govt. in theory owns over 50% of the firm. That's not some fake ownership either…their first act as new owners was to set the terms of employment for the CEO. The largest insurer is also now government property, along with a long list of other firms. So why stop there? Why not nationalize the car industry too? The GOP is on a roll--before Bush leaves office the administration will preside over most of the American economy, at this rate.

People tend to look only at the Consumer part of the Big Three American auto makers and forget how important those Companies are to US National Security. Do you really believe that the US will be happy that a foreign owned Company is producing the vehicles needed for the US Armed forces ... not likely? Can you see the US getting Tata or Toyota to make the Striker? (Which is ...incidentally made by GM in London Ontario)

From a Canadian perspective: What does it matter to us whether the foreign car company is Japanese or American? Toyota is an efficient, profitable company that was recently expanding its operations in Ontario. GM is a faltering mismanaged firm that has been contracting. Rather than bailing out GM we should take whatever money was on the table, along with all of GM's assets, and start negotiations with Toyota on creative ways to get many former GM employees jobs.

 

[GILSAN]

Good or bad, I'll bet that the Automakers will get their bailout by next week, with some strings attached, hopefully with new management and new designers.

 

[Keral_Patel]

Amazingly India can build a car for $3,000

A new car is coming in market that will be sold at 2000 USD :D

So imagine the costs involved and the profits the company might be taking.

 

[AndyR]

Both companies have european arms that make economical (in the european sense not american) engines. Are pretty fast, go round corners etc.

Therefore put a bodystyle to suit the american market on a european ford, opel or vauxhall subframe and engine.

We will make all you want, you can bolt them up stateside.

andy.

 

[barefoottech]

Amazingly India can build a car for $3,000, China not much more. Very tough to compete with the emerging heavyweight economies. Australia just announced a package for it's motor industry and Ford Australia will be building engines to export. Maybe US citizens will be driving Aussie cars?

Already do
GM division - Holden makes some Pontiac Models for USA market

 

[Jasonn]

As I see it, if they go belly up, let's see, labor contracts ande health programs are no longer valid, so a white knight shows up, buys the company, reduces wages by 50%, drops a gazillion people from the health plan, invests a bit in technology, works out some juicy tax deals from some nervous politicians, starts building efficient cars, maks a fortune, life goes on, though at a much reduced level for current and past employees.

sounds like a huge step backwards for living standards. most couldn't survive and shouldn't accept 50% pay cut. i sure as hell wouldn't.

No, CHINA is the future of the Automotive Industry
Woohoo
Great Wall Motors and others will flood the US and other markets with vehicles
over the next few years

If they make their cars like most of their other goods, i doubt it. they would probably have high levels of lead and other horrible crap wrong with it. China is destroying the enviroment and treat most of their people like crap. Buying japanese cars is one thing, but i wouldn't support china so much as to buy a car from them as long as there are other choices.

 

[RogueWriter]

sounds like a huge step backwards for living standards. most couldn't survive and shouldn't accept 50% pay cut. i sure as hell wouldn't.

They will either have to accept it or move on, if GM wants to be competitive, although with the democrats running things, I am sure every single working american taxpayer will end up being taxed thousands of dollars so that GM can continue as they are indefinately.

Maybe what they should do now is figure out how much this debacle has cost every taxpayer, then give them a credit for that amount on a new car from GM. At least I would get something back for my investment.

 

[maxeaus]

Already do
GM division - Holden makes some Pontiac Models for USA market

Yes i know they sell a couple of vehicles, but with the Aussie dollar at such low levels it would make sense to make more engines here and sell them to the US. But if the US dollar blows out, this may ironicaly save the US auto industry.

 

[AndyR]

Ultimately its down to the american consumer, you will eventually have to go for the 40mpg average (gas) car or better. This means less cubic inches, less or better auto boxes, more engine management and electronics.

The manufacturers will need to produce to beat the japanese and europeans at this or go out of business.