$25 bn bailout for GM, Ford and Chrysler rejected
Discussion
The Ben said:
think the car makers have the govt by the bolloc ks..... Could the govt. afford to have 'x' amount of thousand people unemployed plus the suppliers of the companies that will be effected...
Its still a republican government and they are out in January, so I can't see them doing alot to help.The thing is that just giving them the cash will not allow then to restructure as the Unions will not allow them to. As soon as that money has been swallowed up they would be back for more to blackmail congress again.
Best to take the inevitable pain now rather than later.
The only way to gat around that and allow the companies to restructure would be to let them go chapter 11.
Best to take the inevitable pain now rather than later.
The only way to gat around that and allow the companies to restructure would be to let them go chapter 11.
flemke said:
Even if all three were to go "Q", they would continue to produce and try to sell millions of vehicles.
This would be similar to how much of the US airline industry, and the steel industry before it, operated amidst multiple bankruptcies.
I can understand that but surely it will send shockwaves through the system whilst they sort themselves out?This would be similar to how much of the US airline industry, and the steel industry before it, operated amidst multiple bankruptcies.
the knock on effects will be felt by those outside of the automotive industry
sleep envy said:
flemke said:
Even if all three were to go "Q", they would continue to produce and try to sell millions of vehicles.
This would be similar to how much of the US airline industry, and the steel industry before it, operated amidst multiple bankruptcies.
I can understand that but surely it will send shockwaves through the system whilst they sort themselves out?This would be similar to how much of the US airline industry, and the steel industry before it, operated amidst multiple bankruptcies.
the knock on effects will be felt by those outside of the automotive industry
shalmaneser said:
Lord Snot said:
Just to clarify, Why are U.S car manufacturers in so much trouble then?
If I had to hazard a guess, is it because of their European rivals being so far ahead of the game?
bit more complicated than that, pensions etc, but that is essentially it!If I had to hazard a guess, is it because of their European rivals being so far ahead of the game?
sleep envy said:
flemke said:
Even if all three were to go "Q", they would continue to produce and try to sell millions of vehicles.
This would be similar to how much of the US airline industry, and the steel industry before it, operated amidst multiple bankruptcies.
I can understand that but surely it will send shockwaves through the system whilst they sort themselves out?This would be similar to how much of the US airline industry, and the steel industry before it, operated amidst multiple bankruptcies.
the knock on effects will be felt by those outside of the automotive industry
My point was just that having all three go Ch. 11 would not result in the loss of 10% of GDP.
Saving the 3 will cause a lot of pain
If one fails there will be a lot of pain.
How long are the US taxpayers prepared to take the pain for?
I posted earlier there were options
Option 1: Throw cash at them and see it stumble to the next failure in x months time.
Option 2: Throw cash at them with loads of strings attached and oversee the painfull restructure it needs while removing the current management if unions allow.
Option 3: Buy them making it a Nationalised company and oversee the changes
Option 4: Nationalise them and sell off all the assets and brands individually to parties who can fund and manage a smaller more lean car manufacturer.
Option 5: Bush has just a few weeks left in power and as a gift to Obama he does nothing, them fails leaving Obama with the problem.
The assets would be picked over and bouoght by vultures from far and wide.
Obviously the Gov't might not choose to save all 3.
The reason they are in deep s
t is thatthey have HUGE costs of production, HUGE costs of welfare and pensions and a poor range.
For years they have put too much faith in the big pick up and SUV market. Now with fuel and the astronomical price of $4 a gallon
no one wants their products and for the first time in years the Ford F150 pick up has been knocked off the top spot by the Toyota Avensis (IIRC)
Honda Accord and Hyundai are also the cars of choise iirc.
If one fails there will be a lot of pain.
How long are the US taxpayers prepared to take the pain for?
I posted earlier there were options
Option 1: Throw cash at them and see it stumble to the next failure in x months time.
Option 2: Throw cash at them with loads of strings attached and oversee the painfull restructure it needs while removing the current management if unions allow.
Option 3: Buy them making it a Nationalised company and oversee the changes
Option 4: Nationalise them and sell off all the assets and brands individually to parties who can fund and manage a smaller more lean car manufacturer.
Option 5: Bush has just a few weeks left in power and as a gift to Obama he does nothing, them fails leaving Obama with the problem.
The assets would be picked over and bouoght by vultures from far and wide.
Obviously the Gov't might not choose to save all 3.
The reason they are in deep s
t is thatthey have HUGE costs of production, HUGE costs of welfare and pensions and a poor range.For years they have put too much faith in the big pick up and SUV market. Now with fuel and the astronomical price of $4 a gallon
no one wants their products and for the first time in years the Ford F150 pick up has been knocked off the top spot by the Toyota Avensis (IIRC)Honda Accord and Hyundai are also the cars of choise iirc.
Lord Snot said:
Just to clarify, Why are U.S car manufacturers in so much trouble then?
If I had to hazard a guess, is it because of their European rivals being so far ahead of the game?
I take it because they have bought far too many subsidiaries and tried expand to the Point where they're actually competing with themselves, sort of Volvo V50 vs Ford Focus estate same parent company genius If I had to hazard a guess, is it because of their European rivals being so far ahead of the game?
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