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FROM CNN's Jack Cafferty:
With President Obama's tough talk for General Motors and Chrysler, a bankruptcy of one or both is now a distinct possibility these days.
If it happens, the ripple effect on the U.S. economy would be serious. Everyone from car owners to dealers, autoworkers, suppliers, lenders - and yes, the American taxpayer would be affected.
The government insists it will stand behind the warranties for new GM and Chrysler cars; but that won't help someone trying to sell a discontinued model. And if either company goes out of business, it could create a shortage of new cars; which would mean it could cost a lot more to buy one.
For Dealerships, bankruptcy could create a problem getting financing to buy the cars they hold in inventory. The government might have to step in here too, forcing taxpayers to dig deeper.
Suppliers could also be in trouble. Only those suppliers which a court determines to be "critical vendors" could get back money. As for investors - forget it. In the case of GM, the shares would become pretty much worthless.
Finally it's possible bankruptcy would cost more than the $21.6 billion the car companies are asking for to stay out of bankruptcy.
Not a pretty situation however you slice it.
Here’s my question to you: What would it mean if General Motors or Chrysler or both go bankrupt?
Interested to know which ones made it on air?
Richard from Kansas writes:
It would mean that we let the free market system work. No need for the government to step in here. Let them fail and someone new will come along buy up their assets for pennies on the dollar and do a better job of being a car manufacturer. It's simple capitalistic Darwinism and we should let it work. It might also send a message to the other car companies to get their act together.
Sharon from Rockford, Illinois writes:
I don't think the people really understand just what this is going to do to our country. They can talk about legacy costs but if these companies go away these costs will now be on everyone's backs. I'm a widow of a retired Chrysler worker. I get a whopping $700 a month for the 30 years and 4 surgeries my husband underwent while working there. He died a little over a year from the date he retired.
Carlos from San Diego writes:
The bankruptcy of GM and Chrysler would be progress for hardworking consumers who deserve better cars.
Joanne from Medina, New York writes:
It could be very ugly for the economy if GM goes into bankruptcy. Let's spend the money to try to keep it from happening, whatever it takes.
Maybe it is time to re-invent personal transportation. Did the horse whip and buggy companies get a government handout in the early 1900s? Bring back the street cars! Sounds like Darwinism at its best.
George from Canada writes:
There's an economically simple yet philosophically complex response to your question of what happens should GM/Chrysler go belly up. To paraphrase an old song lyric: "And the world will be better for this." I've always liked GM's product, but let's get on with a more constructive future instead of beating these two horses beyond death.
Both companies have been grossly mismanaged. I hate to see them fail, because of the workers that will be hurt . In my opinion, either Wall Street or GM and Chrysler have been mistreated. If anyone has been mistreated it , its the taxpayers who have to foot the bill for bad managment.
It will simply mean that the free market has worked. That after 40 years of painfully stupid decisions a bunch of fools will suffer the consequences and others, more worthy and intelligent, will fill the void.
Jack most companys that have a bad history of poor business practices and leadership are forced to rethink their strategy
through Chapter 11 bankruptcy. For GM and Chrysler, its inevitable. Too little is being done too late at this stage of their lives. These two companies should have been restructured 15 years ago. Why is it that Italian carmaker Fiat has to come in now and dictate to Chrysler how to build an efficient vehicle?
It will mean that GM or Chrysler or both will be freed to restructure their companies for the modern era, so that they can survive, and maybe grow. Their laborers won't have it as good, but clearly they have it too good now, seeing as they are bleeding the company dry.
It will mean they didn't adjust to the demands of the marketplace soon enough. They were continuing to crank out gas guzzling SUV's and muscle cars at a time when people were looking for more efficient vehicles. A company that can't identify trends and stay ahead of the curve eventually goes out of business.......thats just the way it is.
If the bankrupt option had have been used long ago GM would be on
the way to recovery as we speak.The good ole boy system prevented that and those are the guys in management that the union should be blaming for their hard times.Now it is the only option left but GM can survive and they do build great products.
Jack to be honest if Chrysler and GM go down we all go down ,except for Chevy and Ford) unless they get a new CEO that is responsible, reliable, a thinker and not a complete idiot when it comes to money.
It means they went the way of Studebaker, American Motors, Packard, and many other automakers. Buggy makers also disappeared because they did not keep pace with changing times. The times they are a changing but the jury is still out on how they will change.
It will put millions of Americans out of work and dimish the manufacturing sector in this country to almost zero. "Made in the USA" is nearly extinct now, soon it will be unknown. The unemployed will include union workers and dealership workers. I will not be surprised if unemployment reaches 15% in this country. And that will be the "offical" number, not the real number which includes those millions who are not included on the unemployment rolls for various reasons.
Jack what it means is that bottom is far from hitting just as of yet. I personally blame the "me" generation of the 80's.
I am a child of the 60's, where it either was taught or otherwise made loud and clear by our parents, that bills comes first, before anything else. But then again I remember the last recession... which looks like most people forgot.
Jack: GM and Chrysler would seek protection under Chapter 11 bankrupcy to reorganize into a smaller more profitable companies. The 600, 000 who have already lost their jobs would probably double to 1.3 million unemployed American auto workers. Some of the unemployed workers would get their jobs back as others retired or the automobile industry, but 75% would have to find employment somewhere, else.
John from Alabama
It would hurt, however it will get our auto industry out of the rut it's in. Let them go. Let the Titanic sink!
So the big auto makers go down and take four or five or six times as many companies down with them. So now its a depression.
I mean it's not like the important people are going to suffer. They have already got their bailouts, payouts, off shore tax shelters and golden parachutes. They will just go hide out in Switzerland or buy stock in Honda Toyota and Hyundai and ride it out.
Considering the impact on the auto company suppliers in particular, it could mean the end of the American automobile industry, and we will have to survive by selling each other hamburgers and junk bonds.
We will be in big trouble.
Oh, it means it would ne be good hmmpph
Only maybe chrysler will go banckrupt, GM might go thru a structured bankruptcy but there is no way their going out of buisness, this is the best soluiton, their are way to many car dealerships anyway, the auto market needs to correct itself, to much supply for the demand, I own a chrysler thats the only scary part
As a citizen that believe in Demovcracy I am very proud of what is happening in Europe. Protesters finally are claiming their rights. I wish American were more brave. All day long, the Media have being bashing the protesters. Shame on you. You are slaves that work for the Big guys. We the people have the right to protest. It is nice to talk about democracy when it is about going to the voting machine as if democracy was just about voting. But when the people take in their hands their destiny, with reason, then it is wrong. The bankers and its servants- News people, politician, etc – think that they will be able to take over the planet. But they will not, because a group of clear people know what is happening and will not allow this to happen. I hope that you, Jack, still stay clear, and in the side of the truth and the people.
Bankruptcy was the answer months ago Jack. It's the answer now. Companies can file for bankruptcy and re-organize without the taxpayers funding the failing company. The problem is that the people making the decisions are not business savy, but politically savy. That's unfortunate for the taxpayers and the businesses both.
I suppose it'll mean that my stock in GM, which I bought a few months ago specifically to support it, will be worthless, huh?
I think that we should let them go bankrupt. This would give someone the opportunity to buy these companies for pennies on the dollar and make them reputable, profitable companies again. It will be painful either way, but do you think that some investor(s) will let the opportunity to save one of the big three for a minimal investment (relatively speaking) slip through their hands? I certainly don't think so and I would jump at the opportunity should it arise if I had the capital to do so.
It would actually reaffirm my belief in our Constitution – equal protection instead of favoritism. If justice is blind, make Detroit adhere to same the laws we must, and let them avail themselves of the same protections we have – bankruptcy not bailouts. Someone will be there to pick-up the pieces . . . maybe the new company could be called "Phoenix" – rising from Detroit's ashes.
Then two failed companies go out of business and we tax payers are not getting ripped off anymore. I drove both brands and they are garbage and the managers laughed at me when I told them two years ago they were going bankrupt.
More crappy Fords on the road
It will happen, we just don't know when. It will devastate the struggling economy. Soon we will be calling 1930's that "Other Depression" and this will be the "Great Depression".
Sad, and it all happened so quickly!
North American will be forced to rely on the Ford motor company to supply North American Cars and we will finally get rid of dead weights in the industry!
We'll be a capitalistic country like we are supposed to be. Let them fail. Opportunistic people will buy up the good models, the bad models will dissolve, and while it might hurt short term, long term we'll be a better country for it. LET THEM FAIL!
New York, NY
Now if he only got religion about the banks . . .
Never happen. Why? Banks are part of the aristocracy. Same as politicians. Not expendable.
Autoworkers are comprised of a few million middle class and lower employees. They’re the serfs.
What is American these days? Delta airlines successfully came out of bankrupcy. Why couldn't GM or Chrysler do the same?
We have heard the pronouncements from the so-called experts about what will happen BUT no one knows for sure. I know that the Government can't continue to carry the AUTO Industry financially for the next 5 yrs. I feel for the employees & retirees plus the ripple effect hitting the connected entities i.e. repair shops, warranty coverage, parts & supply businesses. GM was warned several yrs ago to change their marketing strategy and focus on low gas mileage cars, Hybrids, and smaller vehicles BUT they chose to ignore the warning and concentrate on their GREED, what a price to pay and ex-CEO Waggoner walks away with a nice package & pension in the MILLIONS!!!. Thats why I couldn't understand the righteous indignation when President Obama said he had to go.
It means I would buy a Toyota.
DISASTER Jack !!!!!!!!!!!!!!!!!!!!!!!! Henry Ford built this Country. It all hinges on automobiles and the fuel to drive them. People demand mobility. Building cars means JOBS !!!!!!!!!!!!
It would mean logic and common sense would have returned to the American car industry. Since when was it okay for something "Made in America" to be of such low quality that more and more people would opt to buy something more expensive made in Japan(like a Toyota). The place American car manufacturers find themselves in right now is their own fault. They have lost so much money from building an inferior product that bankruptcy is the only logical solution. This is a good thing. Why? It sends a clear message. It's not enough to just be American. You must also do a good job at what you do.
Why wouldn't these companies merge, combining their assets to make a go at it. Medical Centers have been doing this for years as the health care environment has changed.
It would mean that resources, such as capital, raw materials, natural resources, and employees, are freed up to move into more productive enterprises. The government bailing out failed businesses just lengthens the time it takes for the economy to correct itself, and forces scarce and precious resources to be wasted.
I dont think it would mean anything. I believe the general slack will by picked up by other car manufacturers who are still viable. I think in the short-term prices will probably go up, but like everything else, will stabilize with time...
In short, folks should stop panicking, and smell the roses.
IF GM and Chrysler go bankrupt, it means thousands of jobs would be lost and hundreds of comapnies would go out of business....potentially.
Keeping these dinosaurs operating when they have known for the last 10-20 years they should be changing their business models and offering better products would be a mistake. GM in particular has done nothing to pare down it's product line...continuing to offer models of vshicles that are basically "one-offs" of each other.
The advertising I see on TV continues to promote trucks and SUVs. The days of those vehicles are over....start producing energy efficiant and realistic vehicles or die.
I suspect that, even if they declare bankruptcy, they will stay in business under a judicially supervised reorganization plan. I would expect that the judge would make several substantial changes in the ways they do business, and would require the unions to accept changes to their contracts with the automakers. I wonder whether Obama's threats of bankruptcy are to put unions and bond holders on notice that if they don't cooperate voluntarily, the bankruptcy court will enforce a cram down.
Let them go bankrupt, let the banks go bankrupt, let everyone follow the law of the market, if you can not produce something that the customer wants you should not be in the market.
Being a Ford finance person, I found your article very inciteful. You shed light on all aspects of the situation. What really got my attention was the potential cost for new vehicles, I hadn't thought of that. I love competeing with GM and Chrysler, I wish all of them the best! Blairsville. GA
Jack, I think you're right in mentioning the dealerships and suppliers. Too many people just assume that only the auto workers will be hurt, but the whole chain of suppliers and dealers in the US and Canada will be hurt as well. We'll only be left with one North American car manufacturer in Ford, and they will likely have a harder go of it as some of their suppliers might go down with Chrysler and GM. In other words, the ripple effects make both companies "too big to fail."
The problem is that there is serious "bailout fatigue" right now with the public, and people will likely want them to file for chapter 11. On top of that, the auto industry has been on the downhill slope for a long time, and has done little to turn itself around, and I doubt that things will get back on track.
Still though, I can't see GM or Chrysler being any worse than a lot of the financial companies we already bailed out.
Ever hear of Studebaker, IH Trucks, Nash, Tucker, or American Motors?? Did the loss of the shut down America?
My Gosh, let it be. If they are forced into bankruptcy, it might be the best thing for them and for the whole country. Its time we quit proping up failure.
What happens to a retiree's pension and health care if GM goes bankrupt?
Maybe the 60% majority will think twice at the 2012 elections. O-man may not be the cause of the financial mess but he isnt the solution either.
This means Ford and the other car manufacturers sell more vehicles to take over what GM and Chrysler would have sold to. It also means that the other manufacturers will accelerate introduction of vehicles and reduce maintenance vehicle cost and increase fuel efficiencies. It also means paying off the suppliers to GM and Chrysler along with the cost of giving warrenty work to existing vehicles. Net – two fewer car companies, remaining companies accelerate their own new vehicles, and accelerate selling their cars to the American people who are quite emotional about what car to buy and from what dealer.
I have long said that we must support our own American Companies so I buy only American made vehicles, General Motors and Chrysler. I used to buy American made products but now it seems that other than a few cars, we do not make anything else but babies. I have taken good care of my vehicles and gotten good service out of them. If they go belly up, my next and last car will be a Ford.
Not an easy question, Jack. The Auto Industry is much more than just the car manufacturers; its their suppliers, also. I am torn about GM, on one hand capitalism is about "the survival of the fittest. " On the other hand, there are over 4 million Americans that will lose their jobs, and they do not have the golden-parachute that Wagoner did!
Bankruptcy does not mean that the company goes away. It can restructure under Chapter 11, and get relief from some creditors, as well as abrogate its labor contracts (which Chrysler and GM desperately need to do). So the doom and gloom is seriously premature. And if one or both go away, good riddance. It may be painful in the short run, but in the end, if they can't come up with some viable plan, they aren't worth much, and will be albatrosses well into the future. It's high time the big 3 stop trying to sell us the cars they make, and start making cars we want to buy. All of their whining and complaining about competition is useless. Get out from under those stupid and oppressive labor deals, and start making clean, safe, energy efficient, cool looking cars. For the life of me, I can't imagine why anyone would want to buy a Buick or Oldsmobile.
thanks for posting this question. In the rush to blame and mock the auto industry people forget what will result if the auto industry crumbles.
Studies show that 1% of the jobs in every state are dependent on the auto industry.
this is suppliers, dealerships, etc.
In Michigan intself, the Big Three are large purveyors of scholarships. Ford Motor Company is paying for tuition and thus retraining for laid off employeees.
I bring up Ford because make no mistake, if GM and Chrysler go, Ford will as well because of suppliers. Ford already had to shore up Visteon.
All of those in the West and South who are delighting in the auto industry's troubles... look to the longterm not short term.
Dear Auto Industry,
Am I correct in my prediction that in two years that there will be affordable electric/hybrid vehicles available to the public? I have a Toyota Camrey and am hoping I can get another 2 or 3 years out of it. Just enough time for the economy to turn itself around and the real type of car the public wants and needs.
Impacts will be deep and lasting but I doubt it will cause a total collapse of the U.S. Auto industry. I think a structured bankruptcy with strict government oversight will have to take on a whole new meaning. Either way, it will hurt the economy but I think we can minimize the pain.
Well one thing is certain that the union contracts will be shed and/or severely cut back. This could be a good thing long term for the consumer. You hear studies from time to time stating that "X" dollars goes into each GM car for pension or benefits. The figure usually raises eyebrows no matter who conducts the study. We all would have loved to have worked for Ford on the line from the 60s to 90s but realistically most Americans would agree that union employees are overpaid compared to what the average American with that identical educational skill set.
You can't keep doing business as usual. And the unions are at the center of the problem.
they should go under and rebuild like they should have 10yrs ago,people hate every time you look at a tow truck its a american made peice of crap being towed to the shop.your car spends more time in the repair shop than on the road.the tax payers want a dependable car,without having to have AAA.
Ford( found on road dead) GMC(growing more crap)
Well...nothing out of the ordinary will happen. Don't you get it Jack? Americans are holding on to what they have now. If that doesn't work, they are buying used. My wife just recently bought a 2003 foreign automobile for an excellent price. No one wants the payments, high taxes, and other negatives involved with a new car. It will take more then a car being new to sell in this economy.... IT HAS TO MAKE SENSE ALSO!! Like giving me the option to visit the gas pump when I want to...."Get it" Hint...Hint...(electric car at $15000 dollars)
As long as bankruptcy for GM and Chrysler is used as a means to downsize and shed heavy fixed costs, I think it could be a good thing. However, if it causes them to go completely out of business, they could very well take the rest of the economy down with them. With car sales down about 40% from last year, the auto companies obviously need to produce a lot fewer cars yet still make a profit. A structured bankruptcy could help them achieve that goal very quickly.
If they both go bankrupt, it would signal the end of the manufacturing base in America. Ford would be the last remaining industrial products icon in the United States. It makes you wonder when the American people will realize a lower standard of living.
honestly I don't care anymore. They have not shown to be responsible with any of the bail out money. I really think they need to restructure and turn all operations into focusing on alternative fuels. They should stop building all of their current models and re-tool everything. And i'm not a tree hugger by the way.
It seems that the long history of consessions to trade unions has played a big role in creating such thin operating margins for automakers. If these companies were to disappear, the US would still be a massively profitable auto market with a big production void. Since Americans would do as well as employees of Japanese firms based in the US as they would for restructered US companies. It is possible Japan would build plants in the union free south to snap up the market share while it is for sale cheap.
Atlanta – the next Detroit?
I think it would mean that capitalism works.
It would mean that everything millions of people have been working for, has been through no fault of their own, for nothing. It would mean that greed won. It would mean that maybe it is time to get out the gullitine again and even the score up a bit.
What happens? I do the right thing and buy a Ford.
If we let GM go bankrupt i'm willing to bet that the Chinese would be happy to get their fingers, minds, and money deep into it. Mobile,Al
I don't think we are talking about the kind of bankruptcy where they must liquidate all their holdings and it's a mad dash to sell off everything in sight. This is the fallacy that led us to bail them out the first time. The bankruptcy being discussed is an effort to limit their liabilities and allow a bankruptcy court to eliminate or alter the terms of their debts to give them a chance to become profitable again. These bankruptcies have been done within many big industries and companies came out leaner and more viable than ever. Look to the airline industry, many big names such as Delta have done this before.
We would have saved billions and been considerably further along had GMC and Chrysler done this the first time around. Bankruptcy is not the coffin nail that everyone believes it to be.
I agree with you. why the double standards for the bank and the auto industry?
Political capital. I love Barack Obama, I just hope that he stands up more for the autoworkers.
So what if they do? We fly on airlines every day that have gone through the process. It's a part of the market process for unsuccessful or mismanaged companies to fail or restructure. Truth be told, no company is too big to fail. We are wasting trillions on financial bailouts and still the banks gouge the public with ludicrous interest rates on everything but fixed-rate home mortgages. What good has it done us, the taxpayers? It's time Americans stand up and tell the Congress, "NO MORE! Lower our taxes and stop spending like a drunken sailor! It's our money, not yours!"
It would be about time. As taxpayers, we've propped up these bloated companies long enough. We let the airlines go into bankruptcy, and they are more integral to our economy. They emerged as stronger companies. It's time we let the auto makers experience the same.
Companies go bankrupt, or close their doors all the time. It creates new opportunities elsewhere. It would be rough at first, but there is always recovery. We will not end up all riding around on bicycles. Independent car repair facilities are suffering now; perhaps they would prosper if people can't buy new, and have to fix the old. Don't everyone panic.
Didn't Republicans say to let them go under in December? Only the Bush/Obama administration wanted to bail them out. Folks that was about 30 bill in tax payers money down the bankruptcy tube.
They will be broken up and sold off in pieces. Ford will emerge as the big winner. Good thing they have been working their own problems for the past few years. It will not be the end, just a transformation. This would be Chrysler's second time around. Is there another Lee Iacocca to bring the bank fromt the brink, again. More Cordoba's with Correntian leather, ha ha.
Bankruptcy is what's happening. Why stop it from happening? Let "nature" take it's course and things will come out ... eventually ... in the wash. Bad business decisions have consequences not do-overs.
There is no save game and restore in real life.
Yes it will suck, but it's happening so let it happen and get it over with.
say there were a competitor in the auto industry in the US that's doing ok in these tough times... what would these companies say? if I were them I'd be pissed off, "let them fail."
Red-blooded Americans will have to buy Fords.
I hate how we talk about GM and Chrysler like they're twins. GM has made a lot of effort over the years to streamline their production and improve, even if they still haven't quite made it there. Chrysler, on the other hand, has done nothing but get traded around and stripped of it's value and assets for years. Let's split the difference on these two; let the privately-owned, poorly-maintained Chrysler go bankrupt, and save the public, well-intentioned behemoth that is GM.
Don't forget that the parts suppliers also do work for auto companies that are not in trouble (yet). If GM and Chrysler go under and take a few of the suppliers with them, those other companies are going to be even worse off.
Bankruptcy is exactly what they need to do. They've got to get rid of these outrageous labor deals that are making them non-competitive with the rest of the world...it's either that or subsidize them forever.
Put them on the auction block! Then all our automobiles will be foreign. That is what Americans buy anyway!
That is an excellent question and one that should have been considered before the bailout package was offerred to these companies. Of course we all know that I, the taxpayer, assumes all the risk and will feel the most pain. Just not a good business deal for me and my money.
Businesses come and go all the time. Why should GM or Chrysler be any different? The business model failed as did the leadership at these corporations. While I would hate to think bankruptcy is the only option, the fact is the executives (and union heads) of these companies “fiddled while Rome was burning” rather than spending time figuring out ways to resize, spin-off, streamline, and change direction. Finally, let’s remember that this is America, built by capitalism. Where a need exists, someone will create a business to fill it. I do not think it will be long before we have alternative transportation means available to us, certainly within a time frame that counters a shortage of vehicles.
It would be fair to American the face that economic down fall but it also would be fair to all the other company to have to reorganize and start over.
It would mean that taxpayers would be liberated from another unconstitutional auto bailout.
I've owned many Chevys, Buicks, and Chryslers over the last 30 years with varying degrees of reliability. 3 years ago I purchased a Chevy Equinox and the first foreign car I've ever owned; a Honda CRV.
I'm constantly having to take the Chevy to the shop to get the same things fixed and re-fixed. The Honda runs great. God knows I want to keep buying US cars and support our workers, but what is my motivation, besides keeping my taxes down, if the quality is not comparable?
Unemployment in Mexico would skyrocket...
Well it is indeed horrible future if the car companies do fail but when enough is enough? If we give them money every time and they don't adjust to the future demands of fuel efficient, green cars then they should fail. It is like older workers in any field – science, IT, medicine – if you as an employee don't adjust your knowledge and production to the most current technologies then you will be on the chopping block soon because there's no use for someone with doing it the "old way".
Hopefully GM's powers that be, will come up with something to avoid bankruptcy because no one knows for sure what will happen to the industry. They may file Chapter 11, do a Restructuring and come out of it a better auto industry. This economy has got to recover first because people are losing their jobs by the busloads and no one is investing in anything right now especially a brand new car.
let them go under , yes it will cost more to go bankrupt , but it will just cost way more when they will need 10 bailouts or more , the automotive industry needs to fail , it will allow new people to come in with new ideas , maybe we will need to go back to the horse and buggy , perhaps earth needs a restart.
Jack, the automakers have been lossing money hand over fist for years. I'd call it poor management at GM. The vendors to them have had to have been aware that they were on shakey grounds already.
...Now that they are part of "Obama Motors" it's a make or break deal for them. Their business plan had to have been a joke, for The Big "O" to tell them to cut the CEO.
...Are we again rewarding bad business decisions again with another taxpayer bailout? If so where are my stock share? Oh right the same place as AIG, NO WHERE!
Bankrupt, does not mean out of businees! It means realize the problem, restructure, and DO IT RIGHT!
I think it's time we all realize that bankruptcy might be just what is needed in this case. If this had have happened three months ago the car companies may have already renegotiated the contracts and have begun rebuilding. Instead we keep throwing money at them.
Free market, they screw up they fail and a company that still makes things people need, sorry, want, moves in and fills the space...
While bankruptcy for GM and Chrysler is an ominous reality for hundreds of thousands of employees, it may prove to be the best course of action. These companies can return to profitability, provided they can operate without the legacy costs that erode their profitability and sustainability. These companies are storied businesses that have survied World Wars, a Depression and several Recessions and will survive now if the government gets out of their way.
What will happen is that we will FINALLY be able to move on and stop wasting money bailing out our least profitable least efficient companies only to see them fail anyway. These companies have been in a downward spiral for over three DECADES! I understand the ripple effect and implications on the US GDP as a whole if GM and CHrysler go down, but wasting more money trying to prolong their existence is not the solution either, that only makes it more difficult to move on. Government intervention is not the answer, America needs to get back to being a free market society.
It will be the same in the end no matter bankruptcy or not. A business that is not viable is a business that is not viable. GM has lost 78bb dollars in the last 7 years. at least the banks have been profitable in the last 10 years, even with the latest writedowns. That is why for the taxpayer, at least giving money to the banks there is a shot they can earn their way out of it to pay the money back. with the car companies, it's just money to keep the union going and pay workers that are in furlough. I feel bad for the workers, but that is just the truth.
Let us not forget that for every event in human history, someone benefits. In this case, that somone is other automakers. If Ford can survive during the recession without a bailout, we must assume management at the other Big Two is not worth investing money in.
What will it mean, Jack? It will mean that finally these monkeys will be off our back once and for all and the country can move on.
I believe the failure of GM and Chrysler would move this nation from the observation room into the intensive care unit. The effects would be broad and all Americans would feel some sort of ripple effect directly or indirectly. However, we have to look at this issue in business terms. This is a business and businesses fail. If you market a product that is crap eventually it is going to catch up with you. I don't think the size of the company should matter. Willie's Pit Stop down the street is going out of business because they choose bad business practices. They aren't getting a bailout, so I don't think these two companies should either regardless of their size. Business is Business and if your product sucks then it is no one's fault, or problem to solve, but your own..
It will mean that GM and Chrysler will be able to restructure, drop their horrible union contracts, and once again become successful. It will also mean that we wasted billions of dollars preventing something that should have been allowed to happen months ago.
This question reminds me a little of that scene in Ghostbusters:
"Don't cross the streams."
"It would be bad."
"I'm a little fuzzy on the whole good/bad thing..."
There will be horrible repercussions if the auto companies are allowed to fail. Too many people have too many jobs at stake to allow that to happen. We will certainly be looking into the eyes of a Depression if that many people are put out of work.
By the way, CONGRATS ON THE PEABODY!!! I've done a little happy dance for you all, truly the BEST political team on television!!
It would mean (1) we would have to start buying cars that last more than 10 years (foreign cars) and (2) Ford would see what happens when you continue to build cars that don't last (giving them a chance to change).
Well, it SHOULD mean that they have a terrible credit rating like everyone else who goes bankrupt.....and wait 10 years for decent loans and such. I think it would be fabulous, personally! I don't give me any crap about it will add more to the crumbling US economy...those of who work hard and pay taxes aren't feeling any new effects...we already know what it's like to struggle...welcome to the club, GM and Chrysler, care to give me one of those vehicles I'm paying for?
Maybe it is time to re-invent personal transportation. Did the horse whip and buggie companies get a government handout in the early 1900s? Bring back the street cars!
Sounds like Dawinism at its best.
Let them file bankruptcy. There are procedures where they can restructure or reorganize without using whatever monies us tax payers have left.
This would be terrible! My dad would probably loose his job and I couldn't mooch off of him anymore.
What happens if they go bankrupt??"....welllll....consumers will no longer be at the MERCY OF THE UNIONS!!!...and maybe, Americam cars will be better manufactured, and sold at reasonable prices because the employees will make cars for others as they would make them for themselves.
Jack, you said there could be a shortage of new cars if GM or Chrysler go bankrupt. No there wont be, because the foreign auto makers will be there to fill the void. The truth is, they make far more reliable, fuel efficient, less expensive cars than Chicago. Why should tax payer dollars go to rescue the big three, when they got themselves into this situation in the first place by their poor decisions? I say, let them fail. They got themselves into this, let them get themselves out of it.
Jack, it would only mean a transition to get over, nothing dire. People will buy the same number of cars after GM and/or Chrysler go out of business that they would have before. It would just mean more sales for Ford, Toyota and Honda (all located in the U.S.). Suppliers would supply the survivors, and repair shops would continue to repair the models that are out there. Today, they are asking for $22B, but we know from experience that even if we give it to them, they will be asking for more tomorrow. They are not sustainable companies, so we need to stop propping them up.
Honestly, this is capitalism and GM and Chrysler have been making cars for decades that nobody wants to buy. They are making all their money selling SUV's and trucks, but less and less people want to buy even those products, especially with clearly superior products from Europe and Japan. And the biggest killer is that most of the best Japanese vehicles are made right here in the USA, with UNIONLESS US labor and US parts...with higher quality and higher value than GM and Chrysler cars built in the US. The only decent GM and Chrysler cars are shipped here from Korea and Australia and re-badged. Nobody is buying US cars anymore because the US car companies really need to go out of business and re-emerge as new UNIONLESS companies that produce vehicles we want to buy.
It means the system works. Airlines have been going bankrupt for years but planes are still taking off.
They aren't making products people want, so why are they a company people and government should want to keep around? The infrastructure of GM and Chrysler wouldn't just dissappear. It would be available for liquidation or break up or purchase by better managed companies (maybe foreign, maybe Ford or Tesla or whoever) with better products who can put Americans to work in a more secure way than these two companys have been able to do for years.
Imagine a sudden economic swing to the tune of $77 Billion per year in tax revenue. A sudden influx of jobs number nearly a million. GM and Chrysler have a golden opportunity to invest in a new subsidiary – legalized cannabis – potential retail and manufacturing goldmines. Special trade agreements could be offered at the G-20 Summit as well. Is President Obama listening?
The Vocal Citizen
The statistics show what a detriment this would be to not only the American auto industry, but the American lifestyle. I expect we'll see manufacturers employ the same cost strategies as Circuit City – discount discontinued cars from folded auto manufacturers and raise the retail price and sell at a discount, taking little to no pay cut. This will result in continued consumer resentment and staggered sales. Ignorant to the rich pipeline of GM and Chrylser, as well as blind to the fact that the quality gap between domestic and foreign cars has closed, consumers are going to continue being reluctant to buy. American auto has changed as we know it, whether for the good by creating competition or the bad by eliminating jobs, potential American dreams, and our true American sport – NASCAR.
Jack, if GM or Chrysler (or both) have to fold tent, it would invariably drag Ford along for the ride as well. In addition, the entire network of vendors that supplies any of the 3 would be brought down in their wake.
To top it off, production could grind to a halt for the foreign brands who make cars in this country (Hyundai, Honda, Toyota, BMW, & Mercedes-Benz)... as they use many of the same suppliers that GM, Ford & Chrysler do.
It's more than an automaker or 2 at stake here... its the entire US auto industry!
It would mean that car companies would have to start making cars people want at a price they can afford, pay workers wages that are competitive, give out corporate bonuses that are reasonable, and hand out payments to investors that are sustainable.. In short, car companies might be forced to actually act responsibly instead of giving in to pressure from unions, investors, CEOs and ignoring the people they are supposed to serve- every day Americans who need to get to work.
GM & Chrysler will go bankrupt, but not until after the 2012 election. Obama doesn't have the nerve to disappoint the unions Democrats need to get elected. As usual, the Democrats will continue to disappoint the American taxpayer. Obama is pandering to the special interest groups.
I smell another hiest:
"Give us the money or else. Give us the money or else we will throw everyone out on the streets and crash your economy. Give us the money or else we will shutter the factories and the suppliers along with them. Give us the money or else the cities and states will lose all their tax money. Give us the money or else."
It means new car companies could spring up and maybe offer cars Americans actually want. Plus it wouldn't have to deal with the stranglehold of unions.
We all will be in big trouble. Unemployment will grow. People cant pay the insurance premium...
Why should Ford or GM really care what happens here in the US. They have manufacturing facilities in other countries now, with a much more modern approach, such as the automated plant in Brazil built by Ford. They are taking the money now, and should they have to file for bankruptcy, then, who do you think will be left holding the tab? The Federal Reserve is loaning out trillions of "dollars" to both corporations and banks, but never provides any accounting for it's actions. It's never been audited since its creation in 1913. How does the average American taxpayer know where the money is being sent, and who is ultimately responsible for it's repayment? The "Big 3" car companies have taken advantage of Amerca for a long time, now they are seriously considering pulling up stakes and leaving the sinking ship.
If General Motors or Chrysler goes bankrupt this is the first sign of the end of Americas Leadership in the Industrial Age. An age that has brought great intervention and fortune and won wars for America. One can find it easy to let them fail. However, the long-term ramifications will be horrendous, as foreign auto companies will benefit by the loss of competition, as people are forced to a smaller selection of available autos on the market. These vehicles may be overpriced and surely their quality will be in question. Allowing any of these companies to fail will tarnish our domestic policies and look like America has surrendered its ability to lead the world in manufacturing and employment. No President or Congress should rest peacefully at night knowing they allowed this embarrassing failure of the world’s great industrial foundation!
We , the voters, knew when the first request came in for bailout, that this wouldn't work without the UAW giving some ground on their contracts. We screamed loudly NO! The bail out started with everyone knowing that just as soon as the unions sucked up the billions paid out, the car companies would be back. Sure enough, they're back. Let them declare brankruptcy, reorganize without the back breaking union contracts, and start over.
Let them go under like car companies of the past that the big three destroyed. I ride motorcycles and have since the age of six. I've spent many years without a car, and the ones I've had were classics I restored, and you know, I can still get parts for those. Less cars mean safer roads for us bikers.
Use those billions to help the displaced auto workers.
It would mean that taxpayers would be liberated from another unconstitutional auto bailout.
hahaha...yeah right...taxpayers would be the ones footing the bill for the thousands more people out of work...so you're going to pay for it one way or another... I dont' get why people don't see that.
The Fords also run the Detroit Lions, and we all know how that ended.
If this could mean the end of the road (trail) for JEEP ? I don't even want to think about it.
Frankly I'm tired of bailing all these companies out. Especially after the crap AIG pulled. We're all suffering from the recession. My husband and I were both laid off. Let them go bankrupt already and quit spending tax payers money!
I, like any other sane person, hates the idea of throwing tax payers money at a problem if it can be fixed in other ways. But, I don't think that this can be fixed in another way. I have read posts, and people say, let them go bankrupt and some will "pick up the pieces." Well, a new owner can't instantly cure a lack of sales from a bad economy. People still won't be able to afford to buy a new 15+ vehicle. Especially when tens of thousands more people lose their jobs, and the trickle down effect starts to kick in. You can tell them to build cheeper more gas efficient cars, but they can't do it over night. It takes time for development. Maybe production workers at these plants that make crazy amounts of money should take a pay cut and make what my mother, a production worker, makes, less than $40,000 a year.
If this happens its concivable that ford would be a dominant american car company payving the way for foreign automakers to move in to control the local market. Will Ford learn from the mistakes of GM and Stop relying on big truck sales.
P.S. I guess the promise of an electric car from GM was just hooey!
One more thing.
Everybody thinks that a company can emerge from Chapter 11, no problem. This is dependant upon finding debtor-in-possession financing. If this financing is not available, the company goes into liquidation.
There is nobody willing or able to provide the debtor-in-possession financing necessary for Chrysler or GM. (Aside from the US government of course). Therefore pushing them into bankruptcy without government support would have been catastrophic.
A large percentage of the workforce would be able to go to work instead of waiting in line for warranty work on a brand new major investment that is already giving them ulcers.
Bought the last American car years ago and have no reason to look back.
My husband works for a GMC, Pontiac, Buick dealership as an automotive technican. How will they bankruptcy affect him and his dealership?
What I hear you saying is that if these companies go out of business it would mean that several suppliers go out of business as well as a lot of local shops that support these suppliers as well as many restaurants, gas stations, markets. If everyone is out of work. Who is going to buy a house or a car or any other big ticket item. Bottom line is that the livelyhood of America is at stake. These are basically the only true american product we have. Everything else comes from China.
If the rusties go out of business, maybe the union employees who've had a hand in keeping this country tied to the automobile will pull their heads up from the sand and finally do something with their lives. I can think of at least two areas: health care and education, which has been starved for capital, both human and monetary. These people could actually be making a difference in a more hands on fashion rather than agitating for ever more outrageous pay packages to create ever more ugly and unsellable vehicles. The new Tesla roadster is out and it is GORGEOUS. Yes, it costs 2x as much as the Buick Lucerne, but I'll bet most people would give it go. It gets 300 miles to the charge, and is damn sexy at the same time. No Buick could ever say that.... Prince Philip of Spain was here to offer his country's expertise in running truly first class light rail service, but I doubt the Railway Workers Union would want to work as hard or with such consideration as Spain's workers do.
Maybe it would get the execs and engineers off the golf course and into their offices. Maybe they would finally address the fuel economy issue, the need for better built vehicles. Maybe it would create a can-do atmosphere with the eternally demoralised workforce, Maybe it would scare the hell out of the stockholders, maybe it would wake up the party of business. Maybe, but probably not!! FORE!!
I don't know about you, but I don't want to be *forced* to buy a foreign car. Heck, we're already being forced to buy tons of products made in other countries because then car be made cleaper than in the US. In my opinion it will be a sad day if the largest US auto maker no longer exists. the *choice* to buy an American car will be no more, and for that reason and that reason alone, I believe we should do whatever is necessary to keep these companies from going down with the rest of the USA sinking ship.
It surprises me that, for as much talk and ink that the media has given this issue over the past 6 months, the average U.S. citizen fails to grasp the complexity of the failure of one of the American auto companies on the industry as a whole. The vast majority of the supplier base for the automotive industry does not sell product to only one company. Many may well feel that the failure of GM and/or Chrysler is a fitful ending to companies who made many, many mistakes over the years. But, if we truly believe that their failure will not also effect our ability to buy products from Toyota, Honda, Nissan, BMW, Mercedes-Benz, Hyundai, et. al., then we all need lessons in Business 101.
It simply means that it wasn't possible to get voluntary agreement to changes that can be forced by law in chapter 11. In a larger sense, there is really no difference - GM's reputation is already black and what bankruptcy might force must be made to happen somehow.
If GM and/or Chrysler go bust (more GM) it would be traumatic for sure (though they could come out of it more competitive–but it would still hurt big time). The ripple effect would be significant, and what would it mean to Ford and other (non-US) auto makers building cars in the US? On first blush it would seem an opportunity for them, but would the suppliers of parts etc be able to sustain themselves supplying fewer makers (of fewer cars)?
I would imagine that as we come out of this severe recession, someone will step in to fill the gap as auto sales rise again. And someone will need to fill the gap for producing more efficient, alternative energy vehicles for which demand will increase. Though I assume GM (more so than Chrysler) would have been–if they changed their ways–leading in the production of more efficient, alternative energy vehicles. What happens to that research and development? I think over time the market/industry adjusts, but its all the hurt (lost jobs etc) during the adjustment period that makes all this so difficult. Time may heal wounds but it does not feed the kids.
As difficult and painful as it may be to go through avoiding the inevitable or attempting to prop up a dieing industry is not the answer. Many of industries have come and gone through out the years and many more will come and go in the future. The beauty of our market place is that ideas born from little or nothing can become huge companies...See Microsoft or Google. 25 years ago they were not here but now you can't barely run your computer without them. The same goes for companies that use to be large who no longer exist for whatever reasons. Take World Com, EnRon etc. they all fell victim to greed. We have a country where demand drives success. If you build something people like you will be successful. If you make things people do not like you will not be in business long. So why do we feel the need to support something that is not working right now. If there is a demand for cars, someone or someone's will figure out how to meet this demand because they can make money doing it. It's how we roll here in America. Simple as that.
Good thing! People will buy reliable cars!
A complex problem indeed. There is no simple fix that will please the majority. There are three problems as I see it. Number one is the unions. They dictate to the car manufactures how to run the business. They also tell Washington how to act. Number two is the antiquated business plan of the manufactures. Number three is the use of taxpayers money in vane to try to fix one and two. Time to quite being a SUCKER!
Being a retired autoworker myself, this only goes to prove what I have always said in the past as a worker, the big wigs design them, talk about them, make decisions about the new cars and we just put them together. Why do the American people feel that we were to blame for this? I still buy GM cars, best on the roads, I still believe in this company . I don't know why the many auto workers should suffer for ills of a few at the top. Why are we treated different then the banks? Let GM go under and you will see the depression that everyone now thinks we are in. This is only the tip of the iceberg.
All businesses cyclically fail. In this case it's senior executives greed and an unreasonable union. If foreign cars are made here for a profit, GM and Chrysler must compete. When they fail, there will be a major small business market in replacement parts. Cuba and Mexico have been restoring old chevys for 50 years. Either GM will emerge from bankruptcy with one high mileage model or cars will be foreign brands manufactured here.
If they go Bankrupt, lets lift up companies like Tesla Motors who have a vision for the future of automobiles. They just came out with a plug-in sedan, modeled after their roadster that gets about 230-250 miles when fully charged. Best part, they are built here in the USA.
If only GM had pushed for plug-in technology with their EV-1 they might be the world leader in new automobile technology.
Their assets will be sold off piece by piece to competing foreign companies. We would be witness to more European and Asian companies taking a foothold in the U.S. The loss of the jobs would be a tradgey for many, however, I ask "How long can we hold up failing businesses that refuse to act as visionaries for the future, but instead rely on antiquated technology for continued profits and viable stocks?" There collapse may bring about true capitalism and spur the industry to a more techologically advanced, and sustainable, future.
A structured bankruptcy, including court-supervised restructuring of contracts and obligations, would be a lot healthier than our continually pumping blood into a corpse as we are doing by having the taxpayer foot the comapnies' carrying charges indefinitely. The taxpayer is getting the bill anyway, may as well have some control as well. The court/government can appoint experts to at least TRY to turn things around- and if that doesn't work, nothing else would have worked anyway. Bankruptcy is a no harm-no foul interim solution.
are we prone to socialist? since when the government need to save everybody?
The American car companies may have been making inferior products; this is true. I would ask, however, why they have so much trouble financially? Let me answer the question: Unions. The now decades-old mindset in this country, as it relates to the auto industry, is one of corruption and entitlement. The unions are nothing more than organized crime. Or, put in other terms – organized extortion. The American auto industry is actually an amazing entity. It's incredible to think that it has survived this long while the union workers get big fat wages, pension plans and protection against job loss – regardless of the quality of their work. I don't even know why I am typing this. CNN won't post it on their web site!
So this is the second time we have had to step in and help Chrysler. And GM has had to sell assets before. Why don't we as a nation, let the capitalist market work? To allow the marketplace to arrange and re-arrange itself is a necessary part of the cycle. I think it best to sit and watch what happens. I'm reminded of the spoiled child who always looks to it's parents for help, never quite learning how to be a part of society. These won't be the first American car companies to fold up and probably not the last, if that is indeed what is in store for them.
well it is like all the other tnings that goes thru bankruptcy the airline made it and so can GM. the unions will take a hair cut and the cost of parts will go down, and management will take paycuts and the stock holders are already int the tank. so then they can make cheaper cars/trucks and focus on better built autos.
If either goes belly-up it will be very bad for everyone in the US, for the short term. Tens of thousands more people collecting unemployment checks, from States that already have budget shortfalls. IF GM and Chrysler are able to rebound from bankruptcy, they will be leaner companies. Will they be agile, with marketable products, that any car buyer will buy? Along with freedom from crushing legacy obligations, both companies need new designs and new marketing strategies. Too many cars from GM have no exterior style (Corvette obviously excluded). Too many cars from Chrysler seem niche-targeted and unable to expand beyond the niche.
Its just hard to fathom that a country that invented the automobile is in danger of not even being a top competitor in the market anymore. We may be able to live without Chrysler, but GM is one huge hole to fill, as the number 1 or 2 ranked auto manufacturer in the world. It could also mean that foreign auto manufacturers can swoop in and buy them out, leaving the dominance of the American auto industry as a thing of the past. What a story to tell my kids!
Who cares (other than the employees)? The cars will still need to be built to fill the demand (if there is any), and where better to build cars than in existing facilities. Whoever wants to sell into the North American market will end up building the cars here. They will buy the existing facilities (the newer ones anyway), hire back the employees, those willing to work for only $25/hr and reduced benefits, and carry on. The world will not end. The suppliers that have survived (Darwinism in action) will now have to sell better quality parts to the new companies. BTW – we had always bought NA (Ford trucks, GMC cars) until the last two cars let us down so badly that we have now decided to try Japanese – very happy now.
May not be all bad. Good riddance to the UAW. Guess what, no one deserves 85k / year and lifetime benefits for putting tires on a car.
If any of the major auto manufacturers go under, several parts suppliers critical to the entire industry, will also go under. That means nobody, will be able to build cars. Japanese companies can start importing these parts from Japan, like they used to. However, American companies would simply have to stop producing cars. Most people knowledgable about the industry say that the US auto industry has to swim or sink together.
That Ford Motor Co, would become an even bigger force in the American Auto Industry. Ford has asked for NO government handouts, but every new story reports that GM can't fail because the US Auto Industry can't be allowed to fail. Isn't Ford part of that industry? If GM and Chrysler fail, Americans will survive.
Being a Canadian I say let them go into bankruptcy. Close the doors on both sides of the border. Products are over priced and of poor quality. The hired help from the floor up to the mangtment level are certainly not worth the kind of money that they are paid to do. Ive had Hondas for years and have had no problem with them, pricey but well worth it..
So maybe it is a good time to buy their stock if they are go big to fail. After all of this I am having a hard time wanting to buy another US made car. Thanks for it UAW.
I love GM has to bend but the UAW it just business as usual.
Tony got it right on. Bankruptcy was and remains the answer-they will just re-structure and come back even stronger but hopefully without the unions-the unions & management got them into this problem in the first place but it's just too bad the politicians couldn't see this earlier
I agree with those that say we cannot let GM or Chrysler go bankrupt...but how can we stop it? I also think this is inevitable, and the only question is when.
Why? All this negative publicity is not going to help them sell cars. I already own a 2002 Chrysler model that I regret buying, and I certainly will not be buying an American auto with this dark cloud above.
I hear people suggest everyone buy American, but with this tough economy, people must make financial choices to protect their families. Foreign cars are simply a better investment right now.
Let them fail. They should never have been bailed out in the first place.
You are forgetting that Bankruptcy does not equal dead. Chapt 11 has rules for restructuring and not shredding. Everyone seems to forget this. They technically should be chapt 11 already. We are just delaying the steps needed to fix this. The longer it goes the harder the fix will be. Had they gone chapt 11 when they should have we would already be in a fix mode not life support mode.
That we are finally starting to become a responsible nation again, it has been years since we have taken that path!
If Chrysler goes bankrupt, my husband's pension and health care
go away. Along with my 85 year old mother in law. I am tired of hearing how much the UAW workers are overpaid!! They came to work everyday and did their jobs, the were not the idiots making bad decision in the boardrooms!!! Cereberus purchased Chrysler to split them up and sell them off, they never cared about making cars.
It's really the UAW and thier greed that have brought down GM. I think it's time for a reality check, and maybe bankruptcy will get the point across.
GM makes great cars, they just can't afford to pay 3 times what Toyota and Honda pays it workers to make the same vehicles.
I believe in unions. The cars can't be built without the blue coller workers and they deserve the pay that they are getting. Give the new CEO a chance and see what he can do. If they fail, we will only have the (FORD--fix or repair daily.)
They should get taxpayer money only if they are contractually obligated to produce fuel efficient, non-polluting, safe cars and they REFUND our money by giving one of them to each of us.
Chapter 11 by GM would allow them to restructure the unrealistic and uncompetitive UAW contracts and allow them to compete realistically with overseas manufacturers.
This would force Ford and Chrystler to follow suit by filing for Chapter 11. UAW would be upset, but they have had a free ride for way too long.
Chapter 11 would allow for good business decisions. Bailout money requires decisions to be made by politicians, who are more worried about their political futures.
The cars on the road are not getting any younger. Cars will continue to be bought in the future.
I say let them fail and see what happens.
Let them fail.
Honestly,I would mean that Corporate greed is real and it would show the world how unprepared we have become and how we are not #1 anymore,,,what a shame!! They have no one to blame but themselves!!! Not the American middle class bluecollar taxpayer that has worked to the bone for these companies ,, for their familes,,only to have their time willow away to nothing and their benefits disappear. Amercia is failing.....................
My 90 year father is a retiree of Chrysler, and I hate to think about what would happen to his pension is they went belly up!! Perhaps the leaders of both of these companies need to think less about themselves and more about the people who have spent their lives working for them!!
I recently purchased a used GM vehicle, which still has 70,000 miles left on the powertrain and 10,000 or til the end of the year on a bumper to bumper warranty. What will this mean to me? Will I not be covered if something goes wrong with my car?
It would be a complete financial disaster! Doesn't anyone remember all the fine GM products produced over the years? And they have only been getting better! The buick LaCross is the number one for quality in its class! There is just something about the vehicles GM produces that is exciting. My toaster is more exciting than any of Toyota's models! My family has bought GM cars for over 50 years and I sure don't want to have to by a Ford, but I would by any Ford over those Japanese appliances.
What would it mean if General Motors or Chrysler or both go bankrupt?
Simply that the auto giants would have to restructure and start over like any private citizen filing bankruptcy would have to do...the only difference of course is that unlike the individual taxpayer, the corporation does not forfeit its creditworthiness nor its purchasing power not even a day...
Well I guess this means that my 2007 G6 lease, which I am having a hard time paying since my wife was laid off, will be sent back to the dealer since GM cant stand behind its vehicles and warranties. Have to go buy a 10 year old foreign car probably runs better than any new "American" car, thanks GM
Jack, you are clueless. What do you expect the goverment to do? Just keep putting money into these poorly managed companies? It's not like the financial industry which can correct itself in a short period of time. The US auto industry has been in decline since the 1970's and they just can't get it right. Honda and Toyota are making cars here in the US with American workers. But they don't have the management promlems of Chrysler or GM. The end of GM and Chrysler would not be the end to the US auto industry or the economy. Bankruptcy is the only option after decades of failure at every level.
the "American" auto industry, as the big 3 being "American" and everything else being foreign, is already dead, and has been for some time
most big 3 cars are either assembled in Mexico of Canadian parts or assembled in Canada of Mexican parts...
Toyota, Honda, BMW, Mercedes. Hyundai, Subaru, Nissan, Mitsubishi... all have plants in the US... while GM opens manufacturing plants and R&D facilities in China...
The Republicans in the Senate had this right months ago. We as a nation should have put both of these companies into bankruptcy court months ago before giving them billions. Now those billions will be lost in bankruptcy. It is only through the power of the bankruptcy court that the union contracts and the dealer agreements can be rewritten to allow the US car companies to get to a viable business model.
what is? i think it is to late for that. they are going to. ford will become a even better car and that $40,000 gm hybred is going to be sitting in the show rooms
Investors will lose money. So what; that's what's supposed to happen. There won't be a shortage of cars. Give me a break. Bankruptcy doesn't necessarily mean GM or Chrysler ceases to exist. And even if it does, Ford (and the other company) can build more to make up for the loss (they have shut down factories that can be reopened). Plus, the factories of the bankrupt company aren't blown up or anything. Another company can by them cheap and start producing cars, but without all the baggage. That's how it's supposed to work.
That the warning that Preston Tucker gave us years ago, we did not heed, so now we are totally beholden to countires, and companies that use high job lose to blackmail the country into giving them money to keep failing!
Are we doomed to repeat the past, it sure seems like it!
For new car purchasers, it wouldn't mean much – people will simply buy the Chinese (hybrid) imports that are going to start flooding the US market.
For the US workforce – a continuation of high unemployment and depressed wages.
The people posting to this forum by and large are so uninformed. Everyone talks about the bailout, well I am sorry to say that this is not a bailout, these are government loans being made to American car manufacturers and will be paid back over time as the economy as a whole recovers and consumer confidence rises again. Again, the 17.6 billion or so dollars already provided to GM and Chrysler are LOANS not FREE MONEY. Bankruptcy is not an option as this hits practically every American in some form or fashion whether they lose money in their retirement plans, common stock, automotive related businesses, etc. It also will cause more businesses to fail as the bankruptcies trickle down. The stimulus plan our fantastic President Obama is touting is to help create jobs. If GM goes into bankruptcy, I can guarantee you that the US economy will lose more jobs than the temporary jobs Obama’s stimulus plan creates.
If GM goes bankrupt, or any of the American auto makers, there will be a huge economic impact. Often not discussed in this forum are all the retired individuals from these companies who receive pensions. Can someone tell me what an 80+ year old is supposed to do without an income except social security? These people gave their lives to the company for pensions that were supposed to be guaranteed. The US will face thousands of seniors without incomes, homes or the ability to sustain themselves. This doesn't even touch the number of people who will be out of work in related auto industries (suppliers, after market manufacturers, etc.) and these jobs are usually better paying jobs (better than service jobs). Just what the US needs now- more people on unemployment. The US can either pay to help the companies or they can pay for all those losing jobs to be on unemployment, food stamps and have their families on medicaid. It's not a question of whether to spend the money. It's a question of whether the government should support the car manufacturers or end up supporting their past employees.
It would have been nice if these companies would have woke up when they were slapped in the face in the 70's . When the gas shortages hit they should of realized history always repeats itself. They have no one to blame but themselves.
I like the speech from that movie with Danny Devito called Other People's Money where he talks about the company being dead and buggy whips. GM and Chrysler are our modern day buggy whips. They are dead. People just do not realize it yet. Lets have the funeral and then move on to help the people, towns, states and business hurt when GM and Chrysler go away.
Brian from Virginia
Garnet Valley, PA My family just bought a Chevy Equinox a month ago, and a Malibu Maxx (discontinued model) in 2007. We also own a Suburban, all purchased and serviced at the same dealer. I hate to think of anyone else servicing my cars, the dealership is part of our network of people we depend on and trust.
Since we have Toyotas, BMWs, Hondas, etc being manufactured in the US already, so I don't buy that GM and Chrysler demise will be the end of the auto industry. What this bankruptcy can do is to release the grip the leadership of the big unions have the financial viability of these companies.
Don't get me wrong, for companies that were posting the amount of losses those Detroit companies have in the past few years, there's a lot of blame to go to their executives but the absurd situation where those unions can get priviledges way above what fair in the market. What's more absurd is for them to allow the companies to go under and see the employees they represent collecting unemployment check rather then accepting getting rid of the privileges they accumulated over the years.
It would really be a sad day for America . There will be many more jobs lost , ..... All of the suppliers will also go into a free-fall ........
The republicans will get just what they want , which is the same thing that Rush " the druggie " Limbaugh wants , and that is to have President Obama " fail ", which in turns means that America fails .
The GOP / republican party , will do anything at any costs to regain the majority in the house , and the senate , even if it means the collaspe of our American way of life .
Bah. Let them fail. It's their own dam fault. Ford is doing fine, other car people are doing fine. Let them FAIL if we keep bailing them out, it's like feeding a cancer.
The real questions are: "What is the actual cost to prevent bankruptcy? Is $21.6bn (on top of the $17bn already given) guaranteed to lift the companies out of bankruptcy? What if they keep coming back every 4 months asking for $20bn? Why isn't Cerberus capital stepping in to help Chrysler?"
I have driven a Chevrolet for more than 30 years and have not had any serious problems with any of the vehicles. My first one was an Astro Van and I'm planning on purchasing a new 2010 Camaro. Most people blame the unions, but I say why not look at lawyers who go to court over frivolous law suits and gain exorbitant amount of money from the auto industry over the years. No one takes responsibility for their actions, it has become too easy to blame someone else. Take workmen's compensation, if you get hurt on the job, no matter whether it's your fault, you get paid for your injury. Now how ridiculous is that. We need to change a lot about this country, not just the auto industry. Why didn't we let the banks fail, after all, it was their stupidity that led to their losses, not mine or yours.
With G.M. and Chrysler sinking its just another diversion for the Dems to spend more time and Stimulus on their mass transit system,while the rest of us hone up on our skills shoeing horses to ride in our brand new buggy.
I say let them Fail! They should have done a structured bankruptcy from the start and restructure and start new. This garbage of forcing taxpayers to support a business and keep it afloat is NOT fair to the taxpayers. Our great grandkids are going to be paying for this mess that the government has created!!
Enough handouts from the government with no strings attached! Let the auto companies suck it up and re-organize like many other industries have done in the past.
I believe these US automobile companies are suffering due to inferior quality compared to foreign automakers. For example, the difference between the quality and repair record of Ford and Honda is striking. The US companies do not deserve a bailout because they produce inferior products and should go bust. That is what free enterprise and market competition are all about. I think it is scary for the government to bail out companies producing inferior products.
I am so much worried about my Chrysler Sebring of 2007 model that I purchased only four months ago as a pre-driven vehicle. I also bought the extended warranty from Chrysler. What will happen to me when Chrysler will go bankcrupt ?
let em die! then maybe they'll put out quality cars that actually are decent and run decent! you keep building crappy cars you won't be going anywhere anytime soon!
Why do you think Imports are kicking their butts?
Well I guess our decision to buy a brand new Jeep Grand Cheokee Laredo from Chrysler in February, in part to do our part for the economy, was a bad decision. If the President's new plan calls for the government to stand behind only new, future purchases, then my warranty is now worthless!
What happens when my drive train goes kaput?
I think that sure times are hard but I feel the auto companies shouldnt be bailed out only to continue making the same cars they are making now. Look at dealers' car lots. Do they really sale 100 corvettes a day? I think not. So why make so many? Maybe we should use this to only try and get away from our dependance on fossil fuels in general. The day is darkest before the dawn.
GM and CHRYSLER's LOSS is FORD's GAIN... SO AS OTHER AUTOMAKERS.... Might Have short term impact, making this recession effect more wider... But, as car sale start to rise... It would not make much difference. I don;t think, both (GM and Chrysler) will fail... But if one of them will, and boosting other automakers sale figures...
They have been going bankrupt since the oil crisis of the 1970's. The effect will be that overpaid GM'ers will not be able to make and sell sub-par value cars anymore. Hopefully, they are re-purchased out of bankruptcy (which is what will happen) by an ownership that knows how to run a competetive car company.
Hey, Nick. Toyota's are made in America not Japan. I bought my Honda because it was less expensive than a Ford, not more. And it holds its resale value better. Let capitalism take its course and let them go bankrupt if need be.
The impact would be substaintial to both the car companies and the suppliers alike. However, it would set the pace for the developemnt of future cars that Americans want to purchase. The big three have spent to much time protecting base business and little in the development new products that we desire. If you combine that with payments to uninon workers that are not actually working and you have a system that perpetuates failure and rewards behavior that mitigates a flurishing environment of new ideas and lasting growth.
Let them file and maybe just maybe I will buy an American car in the next 5 years...
They should have not received bailouts in the beginning. Remember Ford was in the worst shape of the 3, but they managed to find a way. The other 2 would have done more to restructure if they did not receive bailout funds. The big picture has however changed.
The economy and stocks are showing signs they are at the bottom and trying to turn around. Now is not a good time to let the bottom drop out of the economy again with 2 big companies going bankrupt and the cascading effects on their vendors. Its a necessary evil but we need to keep them on life support a couple more months to either give the overall economy a chance to turn around and gain momentum upwards thus "minimizing" the bankruptcy impact; or to workout a viable restructuring plan. Think of the economy as a patient that may have just stabilized in critical condition, do you want to start chopping off limbs when you can stabilize them too?
It would mean a lot of really good people out of jobs. The UAW has a bad rep that is really unfair to them...there are a lot of very hard working Americans in those plants – not to mention the technical people, office workers, etc. Let's not forget the small shop owners that depend on all of those workers spending their money... Do we really want to only have the option to buy cars from a foreign car-maker? They may be assembled in the U.S., but the money still goes back overseas... I am amazed that we have come to the point in our country's history where the American people are wanting GM to fail. People really don't understand how much of an impact that failure will have on their everyday lives...think about what the overseas suppliers will charge for their vehicles if they don't need to compete with GM!
When a company files Chapter 11 bankruptcy, their operations just don't end. They continue operating as a company until they are forced to liquidate their assets...which occurs if they don't repay their debt as structured until Chapter 11...but not until.
If they do fail, the demand for cars won't change. Some company must fill that demand need. If both GM and Chrysler go under, they will leave ready and useable infastructure; which an existing or upstart auto company could purchase and use. This infastructure is immobile. If this repurchase occurs, at a percentage of those in the affected area will be rehired to their positions.
If they declare bankruptcy it may be bad...but the world won't implode like the politicians and corporations may like to make you think.
To all those who want the Car Industry to fail:
Think! It is our money but it is a LOAN. Come on give them some help. We gave the Fat Cats a chance in the Wall St. Casino of Greed and the big BANKS-Why not the small banks and the people of this country? Get rid of their Executives. Save jobs, save the everyday people.
Yes, it would be bad to let them go bankrupt, catastrophic even. But what's the alternative? Supplying them with a bottomless pit of taxpayer funds??? No, thanks. I'll take a Depression and bread lines over continuing to reward mismanagement, poor business models, and lack of innovation. At some point, companies will need to learn their lessons. Unfortunately, that time may be right about now.
They should have filed bankruptcy along time ago. Their Unions, Board of Directors and stockholders should have seen this mess years ago and improved their products . No ones to blame here except the auto companies. Let them file, retool, and maybe product a US auto like they used too. I can still buy a Ford.
As you say, "it is possible bankruptcy would cost more than the $21.6 billion the car companies are asking for to stay out of bankruptcy." However, it is certain that succeeding to stay out of backruptcy will cost much much more.
Most people seem to forget how many jobs are actually tied to GM. I think they also forget how many companies have been started by GM and now support many americans and their families, like Greyhound bus line, hughes electronics , avaition companies , delphi, etc..When the USA was involved in WWII it was GM who supplied most of their combat equipment from trucks to tanks.GM has been there for 100 years during most of what I call the Industrial Age, in the forefront, so why should we as a country turn our back on them when they did not turn their back on us. It will cost the US economy more and the US tax payer more to let them go Bankrupt than it will to just help them out .I have said from day one if they go BK the recession may go depression.
Perhaps now that they got rid of the CEO responsible for starting the Hummer line...they will understand that leaner times are upon us Jack!
You people don't know what you're talking about. Government is responsible for the demise of the Big Three. There is not one car manufactured to European standards that would be allowed into this country. Government mandates are destroying our industries.
It doesn't matter. An inefficient company producing a product that people don't want and can't pay for, can not stay in business. End of story. It is a simple law of nature.
Let them go bankrupt. And let Tesla Motors rise out of the ashes, from California
The auto industry should go bankrupt just like any other US company that is mismanaged and operates at a loss. All the politicians are doing is throwing good money after bad with all the bailouts, loans, etc. and we are left to pay for it. What I would like to know is why aren't the American people standing up as one and demanding to know why, how and who is at the bottom of this economic mess we find outselves in. Once again, the American taxp[ayer is left holding the bag while the politicians spend us into complete and total socialism.
Let them fail. The next generation of CEO's will be careful not to let this happen. As long as we bail them out with the tax payers money, these CEO's will come back with the "Begging Bowl"
Let them file and reorganize. Maybe they can get tcontracts with the unions that make business sense. NO company is able to compete when their workers are pulling against them and that is what the unions are doing to GM and Chrysler. IF they went complete out someone would fill the void. There is demand and someone will provide a solution – Toyota, Nissan, Ford, Honda.
If you are not solvent. You have to be allowed to fail. When times like these occur in a free market system, bad companies go out of business and good companies prevail. Bailing out any company is dangerous. The taxpayer should not be liable for any company that made a bad decision, or wrong bet.
All three of the Big Three cannot possibly survive in this environment. Car sales are down soooo much and not seen to recoup any time soon. There's such a backlog of already manufactured cars, I don't think it would be a bad thing to lose one of car companies. At the very least, they need to downsize and reorganize.
I'm an Englishman living in New York...I remember what happened to Briish Leyland in the 1970s. GM and Chrysler's plight is total deja vu I'm afraid. Like BL, GM has made the cars they insisted the market would want. In the 70s it was Toyota and Datsun that killed off BL Cars helped by intransigent unions that voted themselves out of work. Today it's Hyundai, Toyota and Honda. Anyone who thinks the Govt. can successfully revitalize GM & Chrysler with our money should ask themselves when they last saw a Rover on the road!
Detroit is Bankrupt, and the blame lies largely with Detroit's pitiful management. Move on...
America will not be in trouble. Industry no longer drives the American economy. Not too long ago, as the nation transitioned from agrarian to industry, many people voiced the same fears. Economies must change to prosper.
America has been transitioning to a service economy since the 1960s. And the automotive industry will still remain in the United States. Smaller companies, such as Saturn, and foreign auto manufacturers will continue to supply jobs and taxes to our country. The companies that have been run properly and without the crushing oversight of the UAW will remain.
We would have to start from scratch and develop reliable cars for Americans to buy them. It's not about where your car is made anymore, its about the quality of project.
Nothing would happen. Have you all been to Detroit?! Might as well go bankrupt!
Just being sick and tired from hearing "too big to fail" all the time. The only good reply I heard on Comedy Channel, I think. All this is making us "too small to succeed"
let them go bankrupt...This is capitalism my friends..Failure and success. If GM goes there will only be a better car company to emerge from the ashes. I don't care about the effect this will have on the economy. All the employees can go work for the newer, better car company. We do not need to give these people any more of our tax dollars. Wow what a great idea the suburban was, lets guzzle as much gas as possible and see if people will buy these massive hunks of metal. Get a grip, compete with the rest of the world or go under...
If GM goes BK it proves to me we should have never put money there in the first place because poof it's gone and now we are just paying for golden parashutes with the money they will get in the near future.
Maybe if we bought their products instead of foreign ones, then they won't need a bailout. Let's see . . . I can have a new car in my driveway or I can just loan them money hoping to get it back.
Sorry, the "quality" comment doesn't cut it any more as Buick has beat Lexus in quality (JD Power report), and the Chevrolet Malibu and Ford Fusion get better quality markings in Consumer Reports than the Toyota Camry.
This is a bleeding gushing wound. Instead of investing in the old dinosaurs – pay the folks who are out of work unemployment. We will end up there anyway. 18 billion – invested so far - 50000 cash to unemployed autoworker - 360,000 people paid. Get it over with already. The longer this goes on the billions will continue to rack up.
We are and I hope always will be a capitalist country. That being said let them go bankrupt like every other company that seems no longer viable. Yes, it will hurt in the short term but that's the way it is. We will survive as long as we don't let politicians start running our corporations. The fact that our government can force a CEO out of office is disgusting. If we let them re-structure the way it should happen then any good company would force out the dead wood anyway. If they didn’t then shame on them and let them fail again.
Why does everything associate bankruptcy with going out of business? They're two very distinct things. A company can file for structured bankruptcy, clean up its act and come back out of it. LET GM GO THROUGH A STRUCTURED BANKRUPTCY!
Bankruptcy is the process we use here in the US to restructure struggling companies and get them back on their feet. A bankruptcy judge is much better equipped to help them restructure and survive than the US Congress! Why are we treating GM and Chrysler different than any other business? From airlines to trucking companies to small mom and pop businesses it's been proven to work. Not forcing them into bankruptcy where a judge can force ALL parties (including bond holders and other creditors) to strike a plan that has a chance means we are handicapping them. Another example of your Congress using the fear and concern of the citizens to step into an area they simply aren't equipped to handle well.
Jack, It will not happen, especially as it pertains to GM. President Obama is beholden to the UAW and, amazingly as all this unfolds.,Ford keeps going on its merry way selling cars and not taking any dole from the government. Explain that one!! Bill in Minnesota
Bankruptcy is still the best solution. They don't appear to able to reorganize and restructure themselves in any viable way. Sometimes things that are broken really do have to be discarded and not fixed.
I hope they save the legacy cars like Corvette!! It will be sad to see it gone.
Jack, It would mean the American Free Enterprise system works. In case viewers have forgotten, companies that make popular desirable products are supposed to thrive while those that produce products no one wants are supposed to wither and die–unless they reverse course. The former "Big three" automakers have ignored consumers true wants and needs for more than 30 years. They've also failed to learn from European and Asian automakers who have produced cars Americans desire.
The big automakers can't even learn from themselves. if GM had paid attention and sold it's German Opal in the U.S., it might not be in trouble now.
I say let them and their poorly made, gas guzzling clunkers go. The auto workers union will have finally done what I have said would happen for years... priced themselves out of their jobs.
I remember laughing at the low quality of anything with a sticker on it that said "Made in Japan" when I was a kid. Look who's laughing now.
Jack, why do so many say that union workers are overpaid when compared to "others" with similar education and skills? The way I see is that the "others" are underpaid.
It means the creation of efficient public transportation may finally become a priority in the US. We are years behind every other industrialized nation in terms of our public transportation. It's time we get with the program.
I have a leased gm car. What happens if they go bankrupt? Who will take care of the warranty, I know the us govt.says they will be responsible in the USA but what about canada? I have a five year warranty package., so who will be responsible,will i hasve to pay
lease payments on a car that is inoperfable if "say the engine or transmission fails?
The problem is that the small amount of money they are asking for (26.1 Billion) will only keep them afloat for only 2 months, and then they will come back to ask for another 26 billion for the next 2 months.
When you say it will cost us more in the long run, how long are you looking into the future for your comparison, and how much will be given to the autos in that time. I only see 2 months of money...
I have a number of relatives that work for GM and they'll probably be mad at me if they see this opinion.... It would be much better to force GM and Chrysler to declare chapter 11 than to continue to prop them up with taxpayer money. In bankruptcy court they can do a meaningful restructuring of the company, e.g. renegotiating employee, vendor, and distributor agreements and spinning off and/or shuttering unprofitable parts of the business. This process, though painful, won't kill GM or Chrysler and they'll end up smaller, more focused, and more competitve.
The infusion of taxpayer money into GM and Chrysler has basically changed them from public to govermment owned entities. I've yet to hear a rational explanation how this will help them become more competitve vs. their competion. Bailout money doesn't lower production cost, raise productivity, increase quality, or improve marketing.
For a historical reference look at what happened in the 1970's when the British nationalized their auto industry. Let's learn from history rather than repeating it.
Well, considering that the Big Three have been bankrupting America and decimating towns and states since the first oil crisis 30 years ago, it really is time for them to go through a structured bankruptcy and either come out a stronger country or liquidate. Americans need to stop acting like a new car every five years and dollar-a-gallon gasoline is a birthright instead of a privilege. The auto manufacturers created this problem, and the consumers fed the beast. It's time to stop treating the symptoms and correct the cause.
Let's take a big look at the whole situation in perspective........ Ford has 9 or 10 vehicles in the lineup......... and only one model of pickup (granted they did have two with the Lincoln Mark LT, but no longer offer that), Chevrolet/GMC has several different vehicles in the lineup, over 20 diffeterent ones to be exact, and they sell 2 different brands of trucks which are virtually the same which makes no sense.......If they would downsize their lineup and sell a quality product and let things ride i feel they would be ok. There is a reason Ford F series has been the best selling vehicle (NOT JUST TRUCK, BUT ALL CATEGORIES) for over 30 years...... It is an affordable, quality, dependable vehicle. I know some people are going to say that they are junk, or they had one and it broke, well think about how many roll off the line each year, there are bound to be a few with problems, every manufacturer has that.... Dodge/Chrysler..... they don't stand a chance..they fail at designing good looking vehicles and dependable vehicles........
It means that somebody did business wrong, and there's nothing particularly unusual about that. Companies go under all the time. Stuff happens.
It will effect almost everybody that has worked their butts off trying to make a better life for their familys. Nobody even realizes how many businesses in this country is related to the auto industry. The one thing that may come out of this is that the oil industry with their $4 and $5 a gallon gas and that really caused us to land on this slippery slope will choke on their oil. I guess that's what you can expect when you elect two oil people to the white house. I hope Bush and Chaney are proud of themselves.
Bankruptcy would hurt a bit, always does, but guess what most businesses and individuals come out a bit stronger, especially if they learn a lesson. The Unions might not like it, but take a look around, how many unions are in place anymore – with good management behind a company who needs them. Tax payer money does not need to be a bandaid for poor management.
Alot of people are quick to say let the automakers go bankrupt, and the cause is because of the autoworkers with their wages and benefits. People would probably be shocked if they new the wages of the people in their cities. Why not make public what everyone's wages and benefits are.
It will be time to rethink if this companies really are great or simply do a fair job, comparing with imported cars that have better technologies, more efficient engines, they are a big market and generate a lot o jobs, but still their technology is not good for the environment, in the long term this companies are interfering with the future of my children ,cause they are not doing anything to optimize their combustion engines or to eliminate the combustion. After 9 years that GM killed the EV1, they now tell the public that the new Bolt it is a new technology , that it is a lie, what they think that we are fools.
People really need to take another look at American cars. There is this sense–and it is only a sense–that the Toyotas and Hondas are better than the Fords and the GMs on the road. Not true. Go drive a Fusion, an Edge or a Flex. Excellent vehicles. My parents Hondas are dogs, but no one would think to bad mouth them.
There's no way other than bankruptcy to get out of ridiculous retiree benefits. No other solution preserves their industry. Without reasonable – versus excessive – benefits, no amount of restructuring or bailouts can solve the problem. Viritually every American airline company has been in bankruptcy and we all survived. This will be no different and GM / Chrysler will be the better for it.
Brands come and go. Someone will sell the 10 million cars that are sold here each year. Most of those cars will be built here regardless of the name on the trunk. It will remain a volatile market until something is done to price gasoline and diesel correctly to reflect it's scarcity and environmental impacts. At that point all car makers selling in the US will be able to deliver the right cars to consumers. Even Toyota is paying for it's reliance on trucks and SUV's, it just has more cash to weather the storm. If GM and Chrysler can't survive bankruptcy then there really is nothing to "save" anyway.
Let them file for bankruptcy and instead buy foreign cars. Much better quality.
Free enterprise, competition, etc. If they can't run a successful business than let them go out of business. I'm getting tired of being taxed for other peoples mistakes.
Quess the Ford company will be selling all the new cars!
I'm sure that is will be a catastrophe. They consistantly failed to
adapt to the changing market demands for decades. The recsent
fuel hi-jacking sealed their fate. Goodbye, Hummers and large SUV's.
Hello, conservation conscience
buyers are purchasing late model udsed cars instead of new. The uncertainty of the price of gas is the issue. I am surprised Gas is still at the $2 mark. For thise reasons, GM and Chrysler will have no choice but to file for bankruptcy. Obama has stated the government will honor all warranties on their vehicles. This will give GM and Chrysler a chance to regnegotiate contracts and a prime opportunity to get rid of the unions. This will make them better able to compete with the foreign car companies in the US which have no unions. They will be able to produce a vehicle for about $1000 less.
Chapter 11 for both companies would probably be the best approach. What is incredible is that government is so focused on telling car companies how to run them while the banks have free reign on spending and wasting stimulus money on bonuses and "training" trips. The danger in letting the companies go pennies for dollar is the possibility that they'll be taken over by foreign companies like Peugeot or Tata. From human point of view it's much more important to keep the car companies operating than an investment bank in Wall Street.
GM stock is already pretty much worthless. Why does the Government have to bailout dealers? – They sure aren’t bailing out the stockholders and the taxpayer is being burdened enough with bailouts of all the "blue chip" failures. Yes unemployment would go up if GM bankruptcy but it is going to go up in the restructuring that Obama is requiring.
I want to know why GM and Chrysler need bailout money and Ford refuses it? Obviously they are all American car companies could it be that Ford handled their company better? Or refused the Unions that take advantage of companies?
Or could it be Ford still stands by the values that created this great country that you take care of your own and you take care of your responsibilities?????
I think this running to Government for handouts is obsurd and will eventually lead us into a country that is dictated to and owned by these crooks in the house!
What would happen if they went bankrupt? They would fire all of their employees and hire them back as non union members renegotiating salaries and benefits. Unions would be set back years. They would hire only people they needed and would work lean and mean. They would have an advantage over Ford if their cars were durable, fuel efficient and affordable. Car prices would fall and the American people would hurt for a while but better off in the long run. Obama and others would become unpopular and might not get another term. That is my guess of what would happen if these companies went bankrupt.
The auto industry is not only an key component of economy but a defining example of American ideology. To allow the failure of an industry that has supported its country during military conflict in aid of democracy, employed millions of Americans, and provided countless children the opportunity to explore lands never seen on the family road trip is a travesty. When times are hard, we must “ask what our country can do for us”... the auto industry has already proven it can do much for the country.
Let 'em fail. Their problems have been known for years and have been ignored or glossed over by highly paid executives who lavished unsustainable benefits and lifetime commitments to a bloated union workforce. No one bailed out steel, toys, electronics, textiles, shoes, bicycle manufacturing, etc when these industries collapsed and moved overseas. Greed and short sightedness brought this result. The hell with them.
Our entire nation is bankrupt – financially, morally, and in many other ways. I'd worry more about that, than about individual failed corporations.
There is a troubling double standard these days regarding who deserves to survive and who doesn't. Big banks and AIG "can't afford to fail" but the automakers have been told to shape up or ship out. Many people, especially on the right, are salivating about busting unions, but then get upset when Obama forces a CEO to resign. I'd feel a whole lot better if the banks and AIG were given a 60-day ultimatum and if their CEO's were shown the door, but that's not going to happen.
You say it's possible bankruptcy will cost us more than the $21.6 billion the car companies are asking for. $21.6 billion is what they want now. How about 6 months from now? Will they need $50 billion more? It's time to cut bait.
let them fold. they put themselves in the situation they are in now.
Government isn't bailing me out or helping to pay my debts.
They should go bankrupt, a bad business that has failed to correctly read the market or change in the face of adversity should go down. Yes jobs are lost, but however out of the ashes of these badly managed companies will come smaller, more profitable companies that if one fails will less likely impact the overall market. Also the union which has also strangle held these companies with horrendous contracts that increased the cost of cars among other things will be broken, and the union will be forced to negotiate a new realistic contract with these companies. This is the chemotherapy this country needs to remove this cancer that is the current economy is facing. The treatment maybe painful it make me us feel worse at times, but in the end it will be worth it.
It means I'll be mad at the government, and the president in particular. If they let GM go bankrupt, they shouldn't have strung them (and us) along with promises to the contrary. The government's warranty program is just another example of rewarding those who don't deserve it. My wife and I bought a Pontiac in December, but because we acted early our warranty will be worthless if GM goes bankrupt. So much for trying to do the right thing!
Ford has increased its quality to that of Toyota. The new 2011 Tarus has gotten rave quality reviews with Lexus feel. Ford has gotten it right and already gotten better agreements with UAW. The Boss is back. Let GM and Chrysler fold. They will be bought out or split up into pieces for viable car makers like Ford, Toyota, and Honda. Let it happen please!!
Wake up America, all the major airlines went bankrupt a couple of years ago now they are back and seem to be doing ok even in these hard times. GM and Chrysler need to go bankrupt to get rid of too much debt, caused by VERY poor business decisions, like making cars and trucks that were our of date, used too much energy and such poor quaility when they were introduced; the CEO's and members of the boards should be put in jail for theft from the American people.
Jack, they both need to go through chapter 11. They have been complaining that they cannot compete with foreign makers for decades now. Bankruptcy gives them an avenue to pare back their onerous union contracts, since the UAW is not willing to make any meaningful concessions. Detroit needs to be forced to compete, not subsidized with taxpayer dollars. Perhaps in bankruptcy they can be split into separate companies along the lines of their different makes so in the future, we won't have an oligopoly capable of collapsing and taking the whole industry and supporting industries down with it. Bottomline, their business model does not work, bankruptcy is the only way to force any meaningful change, since all the other participants are unwilling to do what it takes. Short-term pain, but long-term gain.
My last GM was a lemon, as was my father's Dodge. They produce an inferior product and we as a country shouldn't support that. Like all companies right now, the suppliers of GM and Chrysler are just going to have to adapt, improvise, and find new buyers of their parts if they want to survive.
I don't know but I wish the shoe would drop and we could move forward it seems this is never ending and only gets us deeper into the business of managing the auto industry, which is realy wrong the government and the US citizen should not be running an auto company.
It would be tough for just about everyone, but it could be beneficial in the long run. If the CEO's of the auto industry and others knew that they would not be bailed out, they might be compelled to do a better job.
I've been involved in a number of company turn-arounds over the last 30 years and you usually have to strip the company down to its core 20% of employees and rebuild from that foundation. That means only holding onto your key technology, your top 3 car brands, your top 20% of dealers and your most productive factories. That is all you can truly afford to hold onto. Bankruptcy is the only way you can get out from under the Bond holder agreements, Union contracts, stockholder expectations, building leases and supplier agreements. Then you start to act like a start-up again and rebuild the company around that core 20% foundation. It will take entreprenuers to rebuild these companies, not government bureacrats or old-time car executives. It is not business as usual any more!!
The cost of GM going under will be much more to tax payers then giving them a LOAN. We are talking about LOAN money, that will come back to the government. If we can't do that then we will pay to cover guaranteed pensions, lose tax revenues from ex-employees and companies that are, and will go under. We will pay more out to unemployment, social services. , universities will loose students, cities will lose tax revenues, endowments will lose contributions, and more, and more.
I wish everyone would look at the WHOLE picture.
Yes, I drive a GM – Park Avenue, 8 years. I get 33 miles to the gallon on the highway and 22 in the city. Perfect comfort, room and no repairs yet. Why are so many people anti GM? Think , Think.
The concept of capitalism is based on companies dying and smaller ones taking it's place. Bailing out these dying monopolies is socialism plain and simple. Let them die. They've made their mega fortunes over the decades and all the support jobs we're worried about will still be needed for the new car companies that replace them. There are too many pockets being filled in Washington. These politicians are not being "lobbied" they're taking bribes to bail these companies out.
It is time to evolve. The managers (I will not call them leaders or top talent) and unions of GM and Chrysler failed to change or modernize their organizations. Inertia, complacency, politics, and greed ruled. I do not want to foot the bill, but they deserve to go down. I understand it will be painful, but it is time to grab some internal fortitude and overcome those challenges. Get moving or die in place.
The reason auto companies may go bankrupt is that because they cannot sell their product: cars, no matter how well they are made. People don't buy cars because they don't have money, not because GM and Chrysler make bad cars but because of money shortage (unemployment, tight banks, uncertainty in the future) and hard times. Until these problems are fixed more companies will go bankrupt. This looks like a vicious cycle that keeps feeding on itself.
A structured bankruptcy for GM in which they would remain in the automaker game and survive as a company and a complete bankruptcy for Chrysler. GM would end up getting bought by an opportunistic billionaire investor for pennies on the dollar and Chrysler would either go completely out of business or a new company, foreign or domestic would take their market share... this would probably be Ford, since they're in the best financial shape of the Big Three automakers... also the government needs to wake up and stop handing money over to companies that cannot survive in today's marketplace... that way the truly well-run American companies will be able to get a larger market share and be allowed to grow and create jobs and eventually pick up the slack left by those that went out of business....
If we bail them out now then what next, more money for their next issue. If they made quality cars that people wanted to buty they wouldn't be in this mess. We wouldn't buy their cars so they are trying to make us pay for them anyway. They failed, it's done, money will only prolong the death. Remember horse drawn carriages, vinyl records, 8 track stereos, etc. Let them fail and American ingenuity will fill the void.
There's a difference between bankruptcy and ceasing to exist; it seems a lot of people are looking at those things synonymously. Most major airlines have filed for bankruptcy, reorganized, and are still around today. It's time for Chrysler and GM to bite the bullet, file, and start looking forward.
What is really sad is all the American people saying "let them go under I will buy a Toyota." That is the big problem in this country there is no loyalty to America and its products. Maybe if more Americans would buy american cars this might not be as big an issue. Many American made cars have great quality even on par with the Japanese cars, but people remember what their parents said when they were young. Some of you have commented on the money a union worker makes, well I am a Ford employee and let me tell you we have given up many things to help the company survive. Our pay has been frozen for sometime now, we have given up our cost of living, holidays, bonuses, and have started paying more towards our medical. The media twists stories any way they can to build the hype. Anyone saying they should let them go under is not a good American.
Let them die. It's how capitalism works. Maybe the next American car company will be founded in a state where there is no UAW presence. Then they can build cars and make money instead of supporting overpaid union workers
Why can Ford survive without government funds, even minimally, while GM and Chrysler are in the toilet even more! If Ford can change and survive then let GM and Chrysler find their own ways
We have to let them die. They are of no benefit to our economy right now and, until they realize the need for drastic changes/restructuring, they will continue to drown us in stress. I see no reason to waste more tax money on them when "common" people are losing their well-being at such an alarming rate.
I'll be more than happy to dig the holes for GM and Chrysler.
Everyone wins with these bailouts. These loans from the government are acting as an immediate form of job creation, an effect the stimulus will take months to produce. This puts people to work and directly helps the economy immediately.
In the long run Chrysler will be purchased by someone again (probably Fiat) and GM will have to go into some form of bankruptcy in order to restructure. So economic Darwinism will prevail.
When is someone going to come out and place the blame where it goes...THE UNIONS!!!! $75.00 per hour to push a button??!! This is crazy!!
Best part of GM and Chrysler going bankrupt is that the grip ( by the privates) of the UAW on the industry will be gone. No more unneeded workers sitting in the union halls playing poker with full salary ... ridiculous work rules ... health insurance forever ... etc ... etc. etc.
Bankruptcy is the answer.
Let them restructure and pay their debts.
Start making cars that are fuel efficient and safe. we have the
knowledge. let them use it.
count how many foreign cars that are being sold in this country
because they are efficient, inexpensive and safe.
why haven't we ,manufactured the same?
we wouldn't have to lay people off if these companies had vision.
let them go bankrupt and start again
shame on them
they let the american people down.
Let GM and Chrysler take its toll. They need to understand failure before they can be winners again. If the government keeps putting tax payers money to GM and Chrysler, it is just the same as prolonging its death. They need to restructure. Convince the Autoworkers Unions they need to change and so forth. Get rid of Saturn and some models from Pontiac (Aztek) sometimes there cars are so very similar whats the point? This is real. No more negotiations. Cut the cancer from part of your body before it spreads everywhere in your body.
Thousands of company's go bankrupt every year in this country, why
are they any different? just because they are larger changes the playing field? let them flop and roll over and see what it's like. Maybe
something will be learned from this.
There could be a good side if that happens.Maybe Groceries will finally come down.
This is a wicked problem- many facets. They built cars people wanted but could not afford from one day to the next because of banking derivative positions few really understand. To the USA – a loss of pride and another industry to fully automated -cheap labor- little financial oversight- and tax incentives in Brazil. To the U.S. worker and all affiliated industries – you will suffer- till they restructure and you- desperate- will capitulate to lower pay and other standards. They outsourced and built more efficient factories – i.e. Brazil – fully automated – little human overhead. But more important – globalization affords off-shore financial havens the ability to hide funds – ride out the financial storm and let the tax payer shovel in real money to replace the claims to wealth via derivatives that cannot and will not materialize. Example: the taxpayer is not getting 80% of Citibank. Citibank got 80% of the american taxpayer- welcome to globalization. See Hidden Treuhand, Austria.
Force the banks to give car loans. We've been pumping all this money into their pockets and they took it and STILL will not give credit. Why then are we giving them money?
Having worked on a GM assembly line for several years, my thought is that one of the worst things to happen about GM going out of business would be taking away the American dream from hundreds of thousands of people who do not have the education to attain middle class. The US auto companies provide so much economic opportunity for those who are shut out of higher paying jobs because of lack of education. GM also provided me with a tuition refund program that enabled me to eventually get out of this feast and famine industry, and I am very grateful for that. This too would be another lost opportunity for Americans. I think it's complete snobbery and short sightedness to applaud the demise of the American auto industry.
From FLINT MICHGAN I say let them die. Restructure under chapter 11. The government has no business trying to run a car company. The taxpayer has no obligation to prop up this dinosaur. Have driven GM products for 30 years. In 2008 I bought a Honda............ Best, thought out, well designed car I have ever owned. GM is already dead, they need to be buried. It's called the free market system.
Please remember we're not talking just about companies. We're talking about people who have worked their entire careers in these companies – now losing everything. It's not just suppliers, either. It's the coffee shops and restaurants near the factories. This is not about a big giant machine. It's about people.
Let them go......free market. Maybe someone can come in and actual make the company work. once the buildingsare cleared. Maybe they can make just green vehicles... I am tired of all the free rides.
They GM and other car companies have seats at the grownup table so they need to start acting like it.
The auto industry in the US will be chopped a good bit, but the jobs void will be filled by windmill and solar panel production as well as installation.
Bankruptcy is not equivalent to going out of business.
I does mean that the labor unions, which have member benefits which are currently unreasonable, will have to accept a compensation package which is more in line with other workers of similar skill. The only way the wages are going to fall into line is if there is bankruptcy, because the union is not willing to make the cuts which are necessary.
Better bankruptcy than a "bail out" which results in General Motors and Chrysler eventually going out of business because the consuming public becomes resentful and does not buy their product.
They've been bankrupt for several years and now we're just subsidizing their poor management decisions.
How many of the top 100 companies from the start of the 20th century are still with us? The simple fact is those companies that can nimbly adjust their business model to match the times, technology and desire of the consumer will remain in business. Those companies that are not adept enough to adjust either die, or will be purchased for their assets by someone else who can capitalize on their infrastructure, talent base and transferable assets.
You cannot bemoan or offset change–doing so only heightens and lengthens the pain of the actual event. Lets move on and invent the next great company, products and place to work! I can't imagine that the legacy costs of the milkman or ice delivery man stood in the way of progress previously–lets go.
i haven't heard this option discussed, don't know if it is an option... but what if they all merged into one giant US car company?
Let them go bankrupt. When I read articles about France buying newspapers and America buying car companies, I wonder what country I'm in anymore. This isn't a socialist state. We're in a democratic republic with equal treatment under the law and minimal government interference in the economy.
People think that the economy should grow forever. Economies always have bubbles. They always burst. Then we rebuild and make ourselves better. Let the companies go bankrupt, let them be rebuilt, and let our country pull itself up by its own bootstraps.
Jack Cafferty sounds off hourly on the Situation Room on the stories crossing his radar. Now, you can check in with Jack online to see what he's thinking and weigh in with your own comments online and on TV.
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