If you would like to be added or dropped from the Michigan ping list, please freepmail me.
Posted on 11/16/2008 8:30:28 PM PST by reaganaut1
The failure of one or more of Detroit’s Big Three automakers would put a huge initial dent in American manufacturing, but in time foreign car companies would pick up the slack by stepping up production in their plants here, many industry experts and economists say.
Whether Washington should let that play out — risking hundreds of thousands of jobs — is a central question Congress will weigh this week as it hears testimony from Detroit leaders who are pushing for immediate federal intervention, before the next administration takes over in January.
“Barack Obama has made it clear he understands the importance of the industry. The question is, do we get that far?” Ron Gettelfinger, head of the United Auto Workers, said in an interview Friday, raising the prospect of a General Motors bankruptcy. “At this juncture, we are in a crisis that could have a major negative impact on this country.”
But many industry experts say the big foreign makers are established enough to take control of the industry and its vast supplier network more quickly than is widely understood.
“You would have an auto industry in the United States more like that of Mexico and Canada: foreign-owned,” said Sean McAlinden, chief economist at the Center for Automotive Research in Ann Arbor, Mich., which describes itself as a nonprofit organization that has “strong relationships with industry, government agencies, universities, research institutes, labor organizations” and other groups with an interest in the auto business.
The transition to that new equilibrium would surely be painful. The big American companies employ about 240,000 workers, and their suppliers an additional 2.3 million, amounting to nearly 2 percent of the nation’s work force.
The outright failure of General Motors would eliminate the biggest auto employer and more than 100,000 manufacturing jobs.
(Excerpt) Read more at nytimes.com ...
I doubt it, the plants would never close down unless the union thugs walked off, but then the bankruptcy judge could order them back to work are fire them.
Let the dinosaurs go. They’ve done nothing to deserve taxpayer support, which we can’t afford anyway.
If (say GM) declares bankruptcy, the company will not go away or stop production. Instead, it will re-organize itself, close out many of its agreements with the UAW (such as paying employees not to work at the Job Bank), and become a leaner operation, better able to compete with non-union production from Toyota et al.
I think your are right, the ownership will change hands (foreign) and management will be more efficient and employment will drop because the dead weight jobs will end and somebody will get an already tooled factory for a unbeatable price and cars will be sold at lower prices because they would pass the savings to the costumer (I’m dreaming of course)
We have a winner.
The only hope of survival for the Big Three is bankruptcy, in which the onerous union, pension and health care problems would be dealt with judicially.
My guess is that this is why the Dems are so keen on the bailout — they know what Chapter 11 would bring. They’re not about to turn their back on those that toted their water on election day.
Doubtful. Bankruptcy exists so that companies can be restructured. Not all forms of bankruptcy result in the company being dissolved. All the automakes have enormous physical assets and their ability to make parts and cars doesn’t just disappear.
We've watched airlines do it for 15 years. They're still here and we trust our lives to them when we fly.
Getting rid of the onerous union deals will be the only way to save the so-called Big 3.
Who’s buying cars? What slack would there be to pick up?
You are 100% correct.
Chapter 11 is what these companies desperately need to discharge the union liabilities. Chapter 11 will make them stronger because the unions will lose their suffocating contracts.
And now we know why the dems are falling over themselves to get the Big 3 their bailouts. It’s for the same reason they push Universal Healthcare; to get taxpayer monies to pay for the Big 3 ‘legacy’ problems.
If you would like to be added or dropped from the Michigan ping list, please freepmail me.
This is a red herring, too.
Would you be more or less likely to buy a car from a company that's declared Chapter 11?
What about all of the suppliers that are hanging on by the skin of their teeth that might just get 10 cents on the dollar for the money owed to them by the bankrupt companies?
Chapter 11 just delays inevitable out and out failure of Big Three, their suppliers, and all of the service and retail businesses that rely on them.
......in which the onerous union, pension and health care problems would be dealt with judicially......
There is an alternative, the one that will prevail. The union pensions etc will be dealt with legislatively. The problem is not the failure of the companies or the UAW, it is the states....Michigan, Indiana, and Ohio.
Illness of the companies and unions could very well produce death for the states. We discuss daily the Rat wrought destruction but it is not admitted, in fact hidden by the MSM. The degree can never be exposed or the party will fail.That cannot happen. With control of the congress and the Presidency, heaven and earth will be moved to prevent it.
Years ago, I lived in Michigan and worked for a supplier, and know how bogged down they are with UAW agreements.
"With the Big Three auto makers now in a plainly visible death spiral, the automotive bailout debate is kicking into overdrive. The disagreement hinges on whether a bailout is necessary to support an important industry or whether the unprofitable dinosaurs of the past should be allowed to fail as America focuses on an information-age, service sector, and alternative energy future.
"As usual, both sides have it wrong. The government should let the Big Three fail not because we no longer need an auto industry, but because we desperately do. What we do not need is the bloated, inefficient auto industry that we have today. By allowing the Big Three to fail, their capacity will be turned over to new owners who will be able to acquire the means of production at fire sale prices and hire workers at globally competitive wages. The result will be a more efficient auto industry making cars that people around the world actually want to buy at prices they can afford. Such auto makers could conceivably be profitable and could become the cornerstone of a manufacturing renaissance in the United States. In contrast, Ford, Chrysler and GM are never ending money pits that threaten to swallow a good deal of our economy."
-- Peter Schiff
Demand exceeds supply for hybrids. They should retool and make cars that make sense, hybrids or even vehicles that run on nat. gas.
I agree that to give the big three a loan now is just throwing good money away after bad.
Personally I want them to file Chapter 11, go through that route first and THEN see if they might need a little seed money AFTER they show they can at least be competitive and profitable if properly managed, unlike they are currently.
Chrysler paid the money back after the loan during the eighties, if there is a loan in the future after a bankruptcy then make them pay us back, with interest.
We keep hearing from the press and media that 1 out of 10 employee’s jobs in the US rely on the big three. Excluding Michigan, who are these Americans and what are their jobs? I keep asking folks and have yet to find the 1 out of 10. Should be real easy if the stats are as high as claimed.
The press could could be referring to auto shops and mechanics. Well, can’t these businesses work on the so called foreign cars and still stay in business?
Where oh where are these 1 in 10 American workers?
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