Posted on 11/12/2008 5:58:26 AM PST by tobyhill
As General Motors burns through cash, edging its way toward possible financial collapse, a growing number of analysts have said bankruptcy might be inevitable. GM insists such a move is out of the question, and as the debate roils, people on both sides point to two past scenarios for lessons.
One is a story of success. Several major U.S. airlines have operated under Chapter 11 bankruptcy provisions. United Airlines has been through it. US Airways and Continental Airlines filed twice. Both Delta Air Lines and Northwest Airlines, which are in the process of combining operations, emerged from bankruptcy court protection last year. Labor contracts were renegotiated, and everyone, from baggage handlers to pilots, took pay cuts. Yet through it all, travelers continued to book tickets to fly.
But another was a disaster. Daewoo Motor -- South Korea's equivalent of Chrysler -- could not stay afloat during the Asian financial crisis. In 2000, burdened by $16 billion in debt, it filed for bankruptcy. About 7,000 workers lost their jobs, and many suppliers buckled. Daewoo was sold off in pieces to other automakers, including GM. Because GM's purchase did not include Daewoo's U.S. distribution network, many dealers lost their franchises. Its global brand all but disappeared.
(Excerpt) Read more at msnbc.msn.com ...
I think that in the Obamanation of the next four years, it will be very hard for the non-union auto manufacturers to remain so.
Write your senators and congressman.Make phone calls no more bailouts. Tell your friends to do the same!!!!
Include my link for the jobs bank story. That ought to infuriate anyone who reads it.
If GM fails, won’t the price of imports go up?
“The union’s chickensssssss, are coming home,..... to rooooooosssssssst.”
In part but the designers deserve a ton of blame. Decades of poorly engineered products in mainstream segments drove people to the Japanese. Those people are now happy and are reluctant to return to the American fold. And can you blame them? GMs are solid enough now but in most passenger segments they don’t make a compelling case to switch back. To win people back the cars have to be clearly better than Honda and Toyota. Just as good won’t win satisfied customers of Japanese companies back.
Atlas Shrugged?
My family history is research and design, they have so much on back shelves that could impress the heck out of moneyless customers, but they think falling apart almost free to produce crap is the way to go.
Just a for instance, on a dirt floor factory in frogland 1955, Citroen Id 19 = front wheel drive with center pivot hydraulic steering, giant inboard disc brakes with auto-hydraulic anti-lock (also easy to change pads you could replace yourself in 5 minutes), hydroneumatic suspension that used the rear pressure to assist braking (instead of being thrown forward in a stop the rear lowered like in a speed boat when you close the throttle), crumple zones, protected gas tank, etc. & etc. and on and on.
I don't mean to bore anyone, I just wanted to point out how far out of line production development has been for over half a century.
What would happen if GM were to cancel all union contracts effective close of business today. All employees would be eligible for rehire at substantially the same wages provided they were non-union.
I would predict that mass chaos would occur for a few days then the employees would trickle back in and eventually GM would thrive.
Thoughts?
That doesn’t surprise me. I remember hearing rumors of exremely gas efficient cars. That doesn’t bore me. It would be great if companies could be built by a group of people who put these ideas to work and then you have people who invest in these companies to develop these products. I by no means have the money to do so but I would invest in these companies instead of the stocks. Everything is controlled by government, lobbyists and these large companies. There has to be some creative way to build other companies. I believe the heart of the American people is hardworking and good. We just depend on goverment way too much. I don’t have a degree in business but isn’t most of it just common sense.
I don’t believe in these bail outs. Why give them money when obviously they are not doing their jobs?
Being inside these giants, I always cringed when I was given that lame a$$ "please the stockholders" excuse, sadly and with great effect, it really was used to shut down people with good ideas.
"what's a matter with you, we can't build a good car that will last forever, blah, blah blah, ....the stockholders".
Along with the good research, what began to take priority, was finding out how to precisely manufacture annoying features like doorhandles that become sloppy at the same time other annoying things would happen to make the new cars more attractive.
That's just wrong, no matter the blah, blah, blahing stockholders.
We have unsuccessful Soviet style manufacturing of Automobiles in Michigan
what do you mean by that?
That's as simple as I can make it.
Yours is another angle of the same object - Communism. Sort of like the four blind men describing a elephant.
However, I am agreement with you. A part of that is the rescue of UAW, a staunch Socialism ally, and as is true with Communism in general, they and their government allies caused the problem that now needs a cash infusion.
As you know, they engineering of the Freedie Mac/Fannie Mae debacle , was to crash the economy, which the had described as awful even while it flourished, to ensure election and to also gain ownership in the banks and other financial institution who accepted their money. They also expect to own the houses and real estate they “rescued.”
Cloward-Piven
Largely, but with a liberal sprinkling of Saul Alinsky and George Soros thrown in.
Also flying under the radar has been a concerted drive to sign up young minority groups to SS disability benefits. I have seen it in two Texas cities, one large (Dallas) and the other small (Georgetown). Overflowing waiting rooms and long lines outside for days and days. Each minority applicant was accompanied by an adult minority "counselor" with briefcases and folders in hand.
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