Posted on 12/17/2008 9:11:09 AM PST by 5thGenTexan
Heck...we can't sell a house in this economy. Who is going to buy an entire car brand?
Ford and GM are looking at the option of selling Volvo and Saab, respectively. Any takers out there?
A) People didn't buy 5 year 50,000 mile warranties with their airline tickets.
B) Have you driven a Ford lately?
Greed
I hate to bust the “greed bubble” in this thread, but there is a simple business reason for not going into Chapter 11 — and you are beginning to see it now — when suppliers provide parts to go into the cars, and don’t get paid cash-on-delivery, they become creditors, with the possibility that the bankruptcy judge will not require them to be paid in full. So there is incentive to demand cash on delivery, and the car makers won’t have the cash for everyone. Thus any single supplier who demands too much cash up front can shut down the assembly line.
“Chapter 11 negates all contracts even UAW contracts. Democrats dont want to bite the hands that feed them so many voters, so they push for a chapter 11 type situation that isnt chapter 11. They do it with a straight face and so far no republicans have pressed them on this. I think this is because we, the American people, have become the sucker at the table.”
I wish freerepublic had a system like DIGG, so I could vote you up!
B) Have you driven a Ford lately?I drive a four-year-old Ford Mustang.
I’ve flown with a number of bankrupt airlines, eaten at bankrupt cafes and even banked at bankrupt financial institutions.
Chrysler was essentially bankrupt when it won federal help 30 years ago. it thrived well following that time, at least until it went back to the old ways of paying its laborers too much money.
The key for bankruptcy is to reschedule your debts and costs in order to clean out things that are causing you to be unprofitable.
In the automakers’ case, it is an extremely unfavorable labor contracts and too many dealers.
The company does get an exclusive period in which to submit its own reorg plan, and the judge (while listening to any trustee and creditors) gets to decide if it's viable and in everybody's best interest. Of course they're fair game for the creditors' plans if they don't submit intime.
Your second-to-last paragraph sums it up. The companies, customers and the economy would be better off with Ch.11, but the hard reality of getting a company back on its feet is so messy few of the politicians want to let it happen.
There are plenty of potential buyers for Volvo, Saab, Opel, Mazda and whatever other assets GM, Chrysler and Ford have; both strategic and financial.
The issue is always price. If you don’t have cash you have to take what’s offered. Could also spin them off as separate companies as they were originally.
I’d work the deals for the usual 5% commission.
True enough. Do you suppose the US Treasury would take Swedish bonds/notes in exchange for US Dollars? Or could the Big Three just pass the Kroner-based notes to their suppliers?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.