GM in Bankruptcy, dissolution

[Shaun @ Tru6]

If GM were go into bankruptcy, and hopefully not emerge, wouldn't it's dissolution be the best possible outcome for the auto and energy industries?

Unions would be broken

Upstart alternative energy/green car companies would germinate overnight

Ford and Chrysler might consider getting their acts together


Other benefits?

obvious downside would be a huge amount of unemployed workers retraining at low-level service industry jobs.

other negatives?

[KFC911]

Originally Posted by Shaun 84 Targa

If GM were go into bankruptcy...
Other benefits?

The number of overpriced, POS, gas guzzling vehicles would decrease ?

[Schumi]

The POS unions that are swindling GM producing inferior quality cars for wages that are ridiculous to everyone but themselves would take a hit. (I know two engineers who once managed a production line at a not-to-be-named plant. I have heard some bad s%$@.)

+1.

[widgeon13]

Why would it not emerge, bankruptcy (Chapter 11) only protects the company from creditors and allows for restructuring. Most likely the unions would give major concessions to allow GM to continue to operate but in a different form (smaller, more efficient) and the unemployment (as you mentioned) would be monumental, not only at GM but in supplier industries. Think it was on Bloomberg radio today that I heard that the auto industry constitutes 20% of GDP and I would imagine GM is a big piece of that 20%. I'm not an advocate of a bailout so I guess merging with Chrysler might be the best alternative.

[widebody911]

guess merging with Chrysler might be the best alternative.

Kinda like having Alzheimer's and AIDS?

[the]

Originally Posted by widebody911

guess merging with Chrysler might be the best alternative.

Kinda like having Alzheimer's and AIDS?

LOL.

There really is no hope, long term, for GM. A bankruptcy is IMO almost a certainty.

By way of a Chapter 11, they could get rid of a substantial continuing burden on them, ex., pension and union obligations. They could accept or reject contractual obligations, and essentially start over.

Of course, all shareholders would be wiped out.

And, of course, if they continue to build crappy cars, they still won't make it.

But even if they instantly started making only great cars, IMO they can't make it with their tremendous "legacy costs" and other costs and contracts currently in place. It's just far too much money being spent on far too many things that don't make their cars any better or their profits any higher.

[jwhcars]

I think the US auto companies go down the same path the US steel companies did.This will not be the first time the unions of this country have helped to destroy a company. Maybe just maybe the people will learn that over priced poor quality products and over paid employees and management will destroy a company.

[widgeon13]

While I agree that unions are part of the problem, customers beating down the doors for gas guzzling big freakin SUV's and GM and the others delivering them are equally to blame.

I've seen more Ford Excursions, Suburbans and Hummers in the last couple of years and most only have one person at the controls and all that empty space and extra weight. Some folks need those vehicles, but most can do without. In many cases, it's just a status symbol.

[dtw]

Originally Posted by Shaun 84 Targa

If GM were go into bankruptcy, and hopefully not emerge, wouldn't it's dissolution be the best possible outcome for the auto and energy industries?

Unions would be broken

Oooh, now you've done it. You're going to draw the wrath of Soup, your fellow ultralib.

[Por_sha911]

1) don't blame the carmakers for building the gas guzzlers. They built what we wanted to buy. Everyone wanted bigger and more powerful until gas prices went through the roof and now its their fault we bought that monster? Nope. that's just a victim mentality (go listen to "Get Over It" by the Eagles!)
2) If GM tanked (pardon the pun), a lot of secondary suppliers go under. That eventually trickles down to you and me. Also, will people with GM cars loose their warranty?

[juan ruiz]

The amazing story of Toyota, here they are all the way from across the country, making cars here in the USA and outselling all of the USA build cars ? I own 2 fords by the way

[Shaun @ Tru6]

Originally Posted by dtw

Oooh, now you've done it. You're going to draw the wrath of Soup, your fellow ultralib.

hah! I can out-Republican you any day of the week.

[Dan in Pasadena]

I don't discount all the union naysaying. To me, many, many of them have outlived their once-critically necessary role, and now only served to price American products/services out of the marketplace in many industries.

HOWEVER, do you think that old sayings become old sayings for no good reason? The one I am thinking of is, "What's good for General Motors is good for America". There would be hundreds of thousands of workers laid off and many if not most permanently. Thousands of smaller sized business going out of business. How could that be a "good" thing for our economy?

[Shaun @ Tru6]

Originally Posted by Dan in Pasadena

I don't discount all the union naysaying. To me, many, many of them have outlived their once-critically necessary role, and now only served to price American products/services out of the marketplace in many industries.

HOWEVER, do you think that old sayings become old sayings for no good reason? The one I am thinking of is, "What's good for General Motors is good for America". There would be hundreds of thousands of workers laid off and many if not most permanently. Thousands of smaller sized business going out of business. How could that be a "good" thing for our economy?

Too big to fail argument? I'd rather take the big loss now to rebuild our future instead of a lingering painful death.

this country needs to clean house.

[widgeon13]

Originally Posted by Por_sha911

1) don't blame the carmakers for building the gas guzzlers. They built what we wanted to buy. Everyone wanted bigger and more powerful until gas prices went through the roof and now its their fault we bought that monster? Nope. that's just a victim mentality (go listen to "Get Over It" by the Eagles!)
2) If GM tanked (pardon the pun), a lot of secondary suppliers go under. That eventually trickles down to you and me. Also, will people with GM cars loose their warranty?

My point is that there is shared responsibility, they made them and we bought, nobody gets away clean on this one.

I think I used the term "equally to blame".

[Dan in Pasadena]

My suggestion would be that "near death" for GM may have been education enough that full on, true death may not be necessary. Why should the country as a whole take the hit this will drive, when perhaps we can avoid it by some JUDICIOUS assistance, not carte blanche.

[Oh Haha]

One of the local news channels had a piece on the lower gas prices. Around here, regular is averaging about 2.40 a gallon.

It seems to me that just in the 2 minute or so story they ran that folks are going right back to the driving the big SUV's again, now that the price came down.

Didn't anyone learn from what happened and that it will go up again? I can't complain about it much because I have my sports car but at least it gets decent mileage.

We are seeing the effects of GM/Ford/Chrysler laying off. As the food vendor for many of the se plants, we have had to make cuts as well and we fully expect to have to make difficult but necessary decisions in the months to come. Our employees live in the communties we work in as well. They have families to support, just like everyone else. We just don't get the press the UAW does.

[Dan in Pasadena]

Originally Posted by Oh Haha

...It seems to me that just in the 2 minute or so story they ran that folks are going right back to the driving the big SUV's again, now that the price came down.

Didn't anyone learn from what happened and that it will go up again?

People didn't go out and buy them since the price went down a bit. Most of them already had the big SUV's so they keep driving 'em. Who is gonna buy them if they sell them? I agree with the complicity of the people. THings don't sell just because the automakers make them; witness the Edsel, Aztek, et al.

But my real feeling is that if gas were $5 a gallon and STAYED there for 10 years before it dropped back to $2.50-$3.....everyone would go out and buy gas guzzlers if they made them.

[p911dad]

A huge disadvantage is GM makes large capital goods and exports lots of stuff for foreign exchange. GM is not a service industry. In order to make wealth you need something to sell(not services) that is tangible, preferably made from scratch from basic materials. The US currently has lost many companies that MAKE stuff, not just sell financial services or pizza. So we are becoming a service based economy which makes us vulnerable to other countries(like Japan where you send your Toyota payments) and at a disadvantage in world trade. Unions and opinions about them aside, we need every large company we have, especially the ones that make stuff and sell it abroad(like GM, Kodak, Xerox, Boeing, Corning, etc, etc). Like they say, you don't know what you've got til it's gone..

[Oh Haha]

[
But my real feeling is that if gas were $5 a gallon and STAYED there for 10 years before it dropped back to $2.50-$3.....everyone would go out and buy gas guzzlers if they made them.[/QUOTE]

Dan, you understand what I was trying to say. Strange.


You still see the people in SUV's around here driving like they did when gas was $2.00 a gallon.

My wife wants a Saturn Outlook as our next family ride. I absolutely refuse to buy an SUV, though. I've already proven that we can manage just fine with a station wagon.