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I read one financial paper today that GM sales might be down 50% (!) this month. Are you a GM lobbyist, or marketing guy?
This GM-Chrysler merger is nothing more than "keeping the ship afloat a little longer, while the officers and crew get the safe and other valuables in the lifeboats."
The basic problem with this merger is it doesn't solve the real issue that both companies are struggling with. Neither Chrysler nor GM has a competitive fuel efficient car that is profitable. This merger does not address this problem.
Toyota's sales are down but they are still projecting a $10 billion profit (sign up for Auto News and you can read the article yourself). Even with their pickups and SUVs sales way down, they still make money from the sales of the Corolla and Camry here in the states. Not the case with either Chrysler or GM.
Anyone want to guess how much Dan Quayle's going to make on this? Or his friends? Or the bonuses and stock options that will go around to the executives?
I doubt Cerebus will make much money on this deal. No one knows exactly how much they have lost since last year. My guess is with 100% control of GMAC, they will make back any money they lost. Plus they know how to run a financial company, not so much expertise in the auto industry.
Good tip about clicking on the second line. That works.
<b> insert bold text here </b> for bold
<i> insert italic text here </i> for italic
The buttons are easier for me - thanks OW.
In the news, Market can't support Big Three so says study
You are right things are not pretty and that is what we have been discussing.
The way I read the title of the forum it is about "GM News" as well as "New GM Models"; but that's not so important. What I was just trying to infer is that this economic-storm is a full-blown Perfect Storm.
And things are getting so much worse, so quickly, that GM or a merged Chrysler-GM is not going to have enough time for these new models to make a difference. If GM's sales are really down 50% this month we're not talking losing $1B/month; it will be more like $2-3B/month, and that means GM has months to live (w/o getting many billions from somewhere else). If GM and the economy are down like this all money for new models will almost cease, and with layoffs of 1/3 of their employees, there will be mass confusion and demoralization with those employees left.
GM and Cerberus Capital Management LP, Chrysler's majority owner, seek as much as $10 billion in federal loans and other aid to finance a deal.
Outside investors have expressed interest in the deal, but Cerberus is focusing on lining up crucial government aid, said one source familiar with the situation.
In addition to lobbying top Bush administration officials, GM and Cerberus executives have reached out to both presidential candidates to seek support for a deal, sources say.
The government signaled its responsiveness this week, with the U.S. Energy Department moving to speed up the release of $25 billion in low-cost loans that Congress authorized earlier this year for the auto industry.
While a GM-Chrysler combination would lead to thousands more job cuts, the deal is increasingly being presented as the best alternative to the possible collapse of one or more of Detroit's automakers in a rapidly deteriorating environment.
Industry analysts say the U.S. auto market's slump to its weakest levels since the 1980s is forcing the industry to consolidate.
"A merger of some type is likely to occur because the economics now are not sustainable for three separate Detroit automakers," Patrick Anderson, CEO of the consulting firm Anderson Economic Group, said Wednesday.
GM and Cerberus negotiators have made progress in the talks, reaching agreement on some key issues, said sources familiar with the situation.
Cerberus also is in talks with the Renault-Nissan alliance, but the two sides have been unable to agree on a valuation for Chrysler.
Carlos Ghosn, CEO of Renault SA and Nissan Motor Co., has said publicly that automakers are unlikely to take part in deals requiring cash investments during the global credit crunch.
Last week, Daimler AG said it had written down the book value of its remaining 19.9 percent stake in Chrysler to zero.
Cerberus purchased 80.1 percent of Chrysler in August 2007 from Daimler for $7.4 billion, with most of that money going into Chrysler.
This is sheer, desperate lunacy for GM"
First, I think Ford is quite content being where they are, OUT of this whole mess ( THEY HAVE THEIR OWN FISH TO FRY).
As far as the lunacy, I think you forget that Cerebus, by virtue of their 51% ownership in GMAC is essentially forcing Chrysler on GM by choking off GM's credit supply.
It's as if Cerebus has "kidnapped" Chrysler, and is forcing GM to pay a ransom (49% of GMAC) to save it. Unfortunately, the combined "weight" of their problems may cause the "building" to collape, killing them both.
A deal also could result in a loss of 100,000 to 200,000 jobs at the two automakers, suppliers and other industry stakeholders,
http://www.autoblog.com/2008/10/30/autoline-on-autoblog-with-john-mcelroy/The cynics say that foreign automakers will fill in the gap. But that's not the case. While Toyota, Honda, Nissan and Hyundai are to be commended for building engineering campuses in the U.S., all their advanced technology is developed in Japan and Korea. They are not going to transfer it here. Even the Priuses that Toyota will build in Mississippi will be built from kits imported from Japan. None of the advanced hybrid components will be built in the USA.
The cynics also overlook the fact that if GM were to collapse it would pull dozens upon dozens of critical suppliers down with it. Suppliers who also sell to Ford, Chrysler and all the transplants. A move like that would cripple Ford, kill Chrysler, and damage the transplants."
I'll simplify it:
"
HOWEVER, instead of letting that happen (and the most obvious candidate to go is Chrysler of course) GM is going to BUY them now instead? They should engineer the deal so that Chrysler declares bankruptcy first (can that be done independent of Cerberus? I believe it can), which will allow GM to take possession and just kill everything Chrysler except the few things they want (like apparently the new Ram and the minivan, and Jeep is a salable asset that should actually be worth something even now). With Chrysler gone, lots of folks will suddenly be new GM or Ford customers....
Yes, most of the people at Chrysler would be laid off, but suppliers would be just fine. They would just shift to supplying Ford or GM instead.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Does anyone else notice that the Volt has usually been referred to as a hybrid and now they're calling it an electric car? Or is it just pre-model release confusion going on?
I still find the Volt intriguing in a way. How many additional miles will the Volt go beyond the initial electrically-propelled 40 miles? I have read that it will go 400 miles. More if you add more gasoline, of course. If this car is reliable it will be a nice alternative to ICE-powered rigs for America's motoring needs.
I think John McCain should go to work and put in an additional $2,000 State of Arizona rebate check for Volt purchasers. Add that to the $7,000 the Federal Guv-Mint has offered to pay Volt purchasers and you have a total of $9,000 off of Chevy's $30,000 MSRP for the 2010 Chevy Volt. Any takers out there? It's your chance to help save GM.
2021 Kia Soul LX 6-speed stick
Problem is, Cerebus wants ALL, 100% that is, of GMAC. A "bankrupt" Chrysler corp isn't worth the 49% GM still owns.
Also, if GM/Chrysler were to disappear tomorrow, no longer producing cars, the rest of the manufacturers wouldn't be able to supply the 4.5 MILLION cars these companies will produce this year instantly. More than likely, cars would have to be imported from other countries while the mfrs that are left buy and retool factories to meed the NA demand. I think the question is whether or not the suppliers can afford to lose that type of business for a year or so while they retool w/o going bankrupt.
Does anybody else feel that Ford, more than GM, seems to have a chance here? Rationale:
Better cash position
Better and improving reliability than GM in surveys
Much less bloated
More apparent innovation in their vehicles (Sync communications system; Flex as a more innovative vehicle; Fusion as a leading vehicle; rumored Fusion with a highly capable hybrid system; highly ranked European vehicles heading to the States)
Yes, they want the cars to actually work correctly and last a long time.
AFAIC, weather bankruptcy or merger, when the smoke clears, (which will be years not months) we should see top line world-class products emerge that inspire passion, are efficient and have the highest quality in the world. Oh, and make a profit as well as balance return for the three main branches of business: Stock Holders, Employees and Customers. Not just management of the business and unions.
This is the "nebulous" business model that many corporations fail to grasp. Therefore, resulting in financial crisis. Once one or two of the branches become unbalanced from the others for extended periods of time, failure results.
Now, the industry must be rebuilt. Agreed??
Regards,
OW
General Motors Corp. and Ford Motor Co., the two biggest U.S. automakers, have about a 46 percent chance of default within five years, according to Edward Altman, a finance professor at New York University’s Stern School of Business.
“Both are in very serious shape and the markets reflect that,” Altman, the creator of the Z-score mathematical formula that measures bankruptcy risk, said in an interview with Bloomberg Television. The model shows that these companies are “on the verge of bankruptcy,” he said.
Verge of Bankruptcy
Regards,
OW
No, I think you misunderstand me. Not GM AND Chrysler disappearing tomorrow, JUST Chrysler. And the parts GM takes for its own, like the minivan and Ram programs and the Jeep division, wouldn't be disappearing at all, would they? It's just that in some cases they would have new badges on their noses.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
For the first time in years, General Motors is pulling the plug early on a certified used-car financing program, a GM spokesman confirmed today.
The company is doing so because of a lack of credit funding, said spokesman John McDonald.
GM had announced a financing incentive program through GMAC Financial Services that would start Oct. 1 and run through Jan. 5. The program offered 3.9 percent consumer loans for 60 months on all used models of the Chevrolet Impala and Pontiac G6 sedans and Chevrolet Silverado and GMC Sierra trucks. But on Oct. 17, GM sent a notice that it would end the program Nov. 3, McDonald said.
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As a result, many GM dealers worry they won't be able to move the inventory they built with the understanding that the program would run through Jan. 5.
"It's a tough situation for everybody," McDonald said. "It really shows how pervasive the impact is for this credit crisis. If there's no money to do this stuff, there's no money to do this stuff."
McDonald said GM is studying future incentive programs. He said GM plans a different certified used-car incentive on Nov. 4, but he declined to give details.
"Obviously, the dealers are our customers," McDonald said. "We want them to be successful, but you can't get to the point where you're putting yourself in financial difficulty."
'Bait and switch'
One GM dealer in suburban Detroit said the Impala, G6, Silverado and Sierra make up 50 percent of his GM used inventory. He called GM's move a "bait and switch."
"The market's going to fall on those cars because they're no longer a featured vehicle, and we bought them to supply them through the end of the year. Now what?" he asked.
At Thompson Sales Co. (Buick-Pontiac-GMC-Cadillac-Saab) in Springfield, Mo., the four nameplates make up about 18 percent of the GM used vehicles there. Owner Lynn Thompson bought them at auction for about $200 or $300 more than for what they might normally sell. That's because their price rose when GM came out with the incentive program.
"We pay more at auction for them," Thompson said. "Then they drop the program. We'll sell them, but it'll be a much slimmer margin than it was before."
Dealers concerned for GM
At neighboring Springfield, Mo., dealership, Reliable Chevrolet, managers kept their used-vehicle inventory low, so they do not have a lot of these vehicles in stock. Still, one employee there, who asked not to be identified, said he has never seen GMAC cancel a program this early. He said he takes it as a sign of the severity of GM's financial situation.
"They haven't given us a clue as to what they were going to do," the employee said. "Anything GM does doesn't surprise me right now. I hate to say that. We're in a survival mode right now; everyone is."
Said Thompson: "This is the first time that I can remember they stopped a plan before they said they would, and I just hope they're coming out with a better plan. I'm surprised they announced it so early. That's a concern for me."
He remains optimistic that GM will offer dealers either an early Red Tag program or some other incentive, he said, adding: "I don't think they'll leave us high and dry."
When you rown dealers are crying bait and switch you've got a problem.
Why wouldn't someone (MS, GE, Boeing ...) come in and buy the plants and inventory for $0.25 on the dollar, and run it efficiently? Or Honda, Toyota, Nissan ... buy the plants. Having GM, Ford or Chrysler go out of existence simply menas the owners change, the workers can get rehired at competitive wages, and new owners can setup their supply and distribution networks as they please.
The people who are panicking are those with $ involved. The stockholders, union workers, suppliers, and franchises all are panicked on losing money. It is these groups that want the rest of us to believe Armageddon comes, simply because 1 business ends.
The truth is there ha snever been any business or industry that hasn't eventually failed, and the world keeps right on ticking.
However, if an auto company comes in (say Honda) and wants to build Accords in the Epsilon plant, then they must take time to retool before that happens. The question now becomes can the supplier supplying (GM and Honda starters for example) afford to wait for Honda to put in the order for more Honda starters while they retool the plant for Accords now that they have lost GM's contract as in this example, they no longer exist.
Now if you're talking Honda building GM products, ala my first example, then that changes the game.
Actually, I bet they could. There is quite a bit of excess capacity in the North American auto industry (especially now). Even so, if GM/Chrysler did go kablooey, some outfit would buy up selected assets and start cranking out the existing designs within six months or so.
Now all is fair in love, war and lobbying for government bailouts. But this attempt to align GM with the banks that have recently benefited from Washington's largesse is quite a stretch. We have a well-developed process for helping companies in distress fend off creditors and prepare themselves for a comeback if in fact they have a comeback in them. It's called Chapter 11 bankruptcy, and it is one of the most glorious creations of the American political system. Bankruptcy allows for a moderately orderly version of the creative destruction that makes capitalism dynamic. The willingness of American companies to make use of it is one of this country's great competitive advantages. It's one key reason why, while the next year or two will certainly be tough, we're extremely unlikely to land in a decade-long malaise like Japan in the 1990s.
Bankruptcy - Not Bailout
I believe this is the better way to develop a new company with a far greater chance to succeed. Either way is painful but the more effective way is to end the old structures and product hierarchies and start fresh. That makes Bankruptcy the far better alternative for future benefit.
Regards,
OW
“We outpaced the competition with our sales results in August and September, and fell back with the industry in October. If you adjust for population growth, this is probably the worst industry sales month in the post-WWII era,” LaNeve added. “We believe there is considerable pent-up demand from the last three years, but until the credit markets open up and consumer confidence improves, the entire U.S. economy, and any industry like autos that relies on financing, will suffer.
“We’ll do our part to continue fighting against these significant economic headwinds by bringing consumers the highest quality, most fuel efficient and affordable cars, trucks and crossovers that we can,” he said.
To that end, LaNeve announced that GM’s no-haggle Red Tag Event starts nationwide tomorrow, Nov. 4. The Red Tag Event will provide great deals on most new vehicles in GM’s portfolio by offering a special Red Tag vehicle price and customer cash back. In addition, GM’s recently announced “Financing That Fits” program enables consumers to find financing at affordable rates from GMAC and thousands of other banks, credit unions and financing institutions.
Despite the poor results in October, there were a number of bright spots for individual GM car and truck lines, including:
* Chevrolet Malibu retail sales were up 129 percent. For the month, Malibu total sales reached nearly 11,000 vehicles. For the year, Malibu retail sales have totaled nearly 98,000 cars, up 134 percent from year-ago figures.
* The all-new Pontiac Vibe recorded a 6 percent total sales increase in October. Almost 42,000 Vibes have been sold this year, up 36 percent from the prior year.
* Saab retail sales were up 7.4 percent compared with a year ago, driven by the strong retail performance of the 9-3, which was up more than 16 percent.
* GM sold 44,500 Chevrolet Silverado, GMC Sierra and Chevrolet Avalanche full-size pickups in October, further solidifying its segment leadership.
He can't be serious! I don't see a lick of pent up demand. The last 5 to 7 years have been an overload of new car buying. If they stopped making cars altogether for six months I don't think it would make that big a difference.
GM dealers in the United States delivered 310,008 vehicles in October, 8,700 more vehicles when compared with year-ago performance, outpacing an industry expected to show a volume decline of about 4 percent.
For the third consecutive month, on an unadjusted basis, total sales increased, with October up 3 percent. When adjusted for selling days, sales declined 1 percent. It is anticipated that GM will see its fourth consecutive month with market share above 24 percent. Since August, market share is up more than 1 point, to 25.1 percent, compared with the same three month period last year.
The month's 229,294 retail deliveries demonstrated solid performance despite continuing industry softness. GM retail sales were led by brisk retail sales of full-size utilities, mid-utility crossovers, the Cadillac CTS, and the Chevrolet Aveo, Cobalt and HHR. The Saturn division showed yet another retail sales increase, up 7 perce
And didn't GM lose about $1B in each of Aug. and Sept. So how much does anyone want to guess they lost in Oct.? And if Nov. and Dec. are the same as Oct ... how long until the GM piggybank is empty?
To that end, LaNeve announced that GM’s no-haggle Red Tag Event starts nationwide tomorrow, Nov. 4. The Red Tag Event will provide great deals on most new vehicles in GM’s portfolio by offering a special Red Tag vehicle price and customer cash back.
It doesn't sound like these will be very profitable sales; but I agree they are needed, if for no other reason then to make it look like they've got a good gameplan. Also for an executive to do nothing, is worse then trying something; even if there is no solution short of a miracle.
GM plummeted 45.1 percent from a year earlier. Ford sold 132,248 cars and trucks, down 32 percent. Toyota Motor Corp. outsold Ford on its way to its 23 percent drop. Daimler AG and American Honda were down more than 24 percent, while Nissan, Hyundai and Chrysler were all down at least 33 percent.
Porsche was down 50%
Build a GOOD CAR and they will come..........
“We’ll do our part to continue fighting against these significant economic headwinds by bringing consumers the highest quality, most fuel efficient and affordable cars, trucks and crossovers that we can,” he said.
That we can...leaves a whole lot of room for improvement from my perspective. I believe the competition will continue to erode GM's market share because now people will think twice to buy from a doomed company.
Automakers sold 838,156 vehicles in October, 32 percent fewer than the same month last year and the worst performance since January 1991, according to Autodata Corp. and Ward's AutoInfoBank. The seasonally adjusted annual sales rate of 10.6 million vehicles was the since February 1983.
"It's really an unsustainably weak level for all manufacturers," said Mike DiGiovanni, GM's executive director of global market and industry analysis. "This is clearly a severe, severe recession for the U.S. automotive industry and something we really can't sustain."
The annual sales rate in October 2007 was 16.1 million.
Chrysler's sales tumbled 35 percent and Ford's dropped 30 percent. Toyota's sales fell 23 percent despite its zero-percent financing offer, and Nissan and Honda posted 33 percent and 25 percent declines, respectively.
Overall, General Motors Corp. sold 168,719 vehicles in October, while Ford Motor Co., including its Volvo brand, sold 132,278 light vehicles and Chrysler LLC's sales totaled 94,530 units.
If GM's sales were adjusted for population growth, October would be the worst month of the post-World War II era, DiGiovanni said.
"Clearly we're in a very dire situation," he said. Detroit-based GM said its light truck sales tumbled 51 percent compared with the same month last year, while demand for passenger cars fell 34 percent.
Ether the merger goes through or this ends next year in the Big B.
Regards,
OW
I'm leaning for the Big B, as GM is playing the same game as the others at the bailout window. They have not addressed their $1B/month cash burn rate, they are really just looking to suck down Chrysler's $11B, with an additional $10B (at first they needed to only obtain $5B from somewhere) to get them to 2010, and they're playing the fear tactic. For them 2010 is the magic year; I'm hoping they're not putting all their hopes in Volt, Camaro and the couple of model updates. The most glaring problem with the merger is that they are bringing in product that directly competes with their own and they won't just be able to stop the production with just a flick of a switch. Add in the other attributes (dealers, manufacturing, supplier / employee contracts, design, etc) and it'll be a long, bumpy ride. And with the current crop of execs I don't see them keeping anything but Jeep, the minivans, possibly Dakota. 300/Challenger/Charger are history, Ram would be gone, Caliber no way (even though I prefer Caliber over Cobalt having been in & driven Cobalt in competition and in Caliber multiple times). Lastly, whose to say Chrysler/Dodge buyers would move over to GM product - that didn't necessarily happen when Oldsmobile shuttered.
Companies larger than they have went B, even under and we moved ahead. Yes, it hurt in the short-run, but eventually we moved on. If suppliers have not learned from what was happening during the past 10 ~ 20 years and diversified themselves and provided their offerings / services to other companies then they are already doomed to fail.
I'd say the odds favor a merger slightly more today than yesterday but I believe our Health Car and Banking Crisis is more important than rescuing a few companies who had blinders on for years.
The market should be allowed to work just like in the Lehman Bros. failure.
You gamble, you loose.
I believe the company can be restructured faster if allowed to go B. We would all gain because only good products will survive.
Regards,
OW
2021 Kia Soul LX 6-speed stick
If only one goes bankrupt it will still pull down most all the tier one suppliers and it cascades from there.
I propose that if GM OR Ford goes under most all suppliers to them will go under. Suppliers are on the brink now so a 15-25% decrease would just do them in. Since most suppliers supply everyone, the other OEMs who build in this country will start importing most all their parts and most likely just import the vehicles from their home markets since the slowdown is now global and all plants have lots of extra capacity.
Nov. 6 (Bloomberg) -- General Motors Corp., Ford Motor Co. and Chrysler LLC chief executive officers, who have urged the government to provide billions of dollars of aid, will meet with House Speaker Nancy Pelosi today in Washington, according to people familiar with the matter.
United Auto Workers President Ronald Gettelfinger is also scheduled to participate in the meeting with Pelosi, a California Democrat, the people said.
Nov. 5 (Bloomberg) -- The U.S. Energy Department said today it has set the interim rules for how automakers can apply for as much as $25 billion in federal loans to help cover the costs of producing more energy-efficient vehicles.
``Issuance of this interim final rule opens the process for automakers and component manufacturers to immediately apply for government funding under the Advanced Technology Vehicles Manufacturing Incentive Program,'' Energy Secretary Samuel Bodman said in an e-mailed statement.
The department completed the guidelines in about half the 60-day period required by Congress, potentially giving carmakers quicker access to funds. Members of Congress, including House Energy and Commerce Committee Chairman John Dingell of Michigan, pressed the department to move quickly on the rules to help struggling U.S. automakers.
The three largest U.S. automakers, Ford Motor Co., General Motors Corp., and Chrysler LLC could submit applications for government loans as soon as the rule is published in the Federal Register. The interim guidelines do not limit how much any one loan applicant can receive of the $25 billion.
Also,Toyota reported half of it's expected profits for 2008 evaporated and was quite surprised.
The situation will get worse before it gets better as the recession thickens.
Regards,
OW
No. People will lose their job will lose their current job with their current employer and its inefficient structure - as evidenced by their continued loss of $ even in good economic times. Just as in the computer industry shakeout years ago, companies go out of business, and new ones take the failed ones marketshare.
People in the U.S. will still buy X-number of vehicles, and those plants and workers can build vehicles under new management/owners.
There are many American "brands-only" buyers that would stick with American. Chrysler/Dodge loyalists would move over to GM or Ford. They would then stay with GM/Ford for as long as they are in business, then if GM/Ford gone, they would be forced to a foreign brand. Look at similarities for clothes, appliances and other consumer goods. Some people stayed with the last American brand until there was none, and then had to reluctantly (to them) buy foreign.
There's a teaser email from Wagoner floating around to employees. More cuts probably.
Along the same lines:
"What if" worst case Detroit scenario
The 2.5 to 3 million job loss number we keep hearing doesn't include the impact on suppliers and producers in Mexico and Canada. Thanks to NAFTA, they'll get hit hard too.
"We expect a major wave in supplier bankruptices or a supplier shock," the study says. "The collpase of a domestic market for suppliers, coupled with the reality that few auto suppliers serve export markets, would result in manufacturing utilization rates below 50 percent, forcing suppliers to restructure or liquidate."
The study further notes that the scale of supplier shock would "overwhelm any attempt by the international producers to keep their existing suppliers in business or to find alternative suppliers, in the U.S. or elsewhere."
In other words those vehicles that are built elsewhere (Camry, Accord, etc.) will import both parts and vehicles to meet the US demand in the short term. The big question is would they have any reason to continue expanding facilities here when they could just import from home or even China markets. Why would they? Toyota still imports half their vehicles (at least while they were selling US built trucks, now they may be importing more).
Probably depends a lot on the strength of the dollar vs the yen and the cost of shipping. And the more nebulous political implications of a backlash if the foreign automakers pull back on US expansion.
The study doesn't expect foreign automakers will lay off their U.S. employees through this, and that by the third year after the demise of Detroit automakers, they will be back in full operation and have expanded to at least take up some of the lost Detroit production, about 20 percent of Detroit output, the study estimates.
The demise of half of Detroit's auto industry has the same supplier crisis for all automakers but foreign makers would recover fully by the third year and surviving Detroit companies would restore production to 50 percent of the former combined level by the second year and maintain that level for the third year.
Consumer Choices Limited
Under the harshest of the scenarios, the U.S. consumers' choice of vehicles would be extremely limited for about a year -- limited only to imported vehicles, the study concludes.
This is one study which I believe is similar to projections of the housing markets before September but on the flip side. No study or any of the top brains in Economics or Finance knew what was in store for the economy when the sub-prime bubble burst. This amounts to targeted tactics at it's best to drum up support for the bailout. Either way, even with a bailout the jobs are going to go. The new structure will absorb some but status quo won't continue. As in the Banking Industry, there will be sacrifices. I suspect it will be Chrysler. A new GM would result and Ford could go by mid-2009.
When sales are down and your business is already loosing huge sums of cash ($70B since 2004 for GM alone), there is no way out during a downturn. No cushion to weather the perfect storm. If this recession gets real bad in 2009, no bailout will ultimately change the course of the market.
I would expect a great increase in imports to cover the reduction of product if one or more of the Detroit 3 fail. There is already huge oversupply that during this recession should cover the period of restructuring by the new entities for the auto producer(s) and supplier base. I'm talking global here so re-balancing product in the regions would supply a greater proportion to the U.S.
This period is necessary to change the entire structure of this industry which is just not working efficiently. The huge market will help support the 3 year transition and the industry will be restructured to health once again. It's happening very fast but change happens faster in the global environment.
Doom and Gloom doesn't cut it. It's the circle of business life, brutally efficient as it is. Electronics, computers, steel, textiles have all been restructured in the same way. Out with the old, in with the New. With or without government support, the industry must change. Long time coming.
Regards,
OW
xrunner, I left you a carspace message regarding your question pal from the The Race To The White House forum !!!
"The Rock" :shades: