Chrysler? Ford? GM? Who will shut down first?

[dd74]

Looks like the Republicans won't give a reported $25 billion out of the $700 billion bailout to the automakers.

http://www.bloomberg.com/apps/news?pid=20601087&sid=amQgpKqvQmb4&refer=home

So who will first shut their doors. I think it'll be GM because of size alone. But Chrysler is also a good bet, IMO.

[onewhippedpuppy]

"Spending billions of additional federal tax dollars with no promises to reform the root causes crippling automakers' competitiveness around the world is neither fair to taxpayers nor sound fiscal policy,'' Boehner said in a statement yesterday.

Damn straight. I have no desire to further enable the US automakers in constructing sub-par cars.

[the]

Originally Posted by onewhippedpuppy

"Spending billions of additional federal tax dollars with no promises to reform the root causes crippling automakers' competitiveness around the world is neither fair to taxpayers nor sound fiscal policy,'' Boehner said in a statement yesterday.

Damn straight. I have no desire to further enable the US automakers in constructing sub-par cars.

Wow, maybe the vault door isn't completely unmanned, as it seemed to be?

[the]

But I still think there will be huge corporate welfare given to GM and the others to maintain (at least in the shortish term) the status quo, and prevent them from truly reorganizing in a bankruptcy.

[onewhippedpuppy]

Seriously, why does everyone assume that they will just close their doors? Big companies never just shut down, especially considering the billions in infrastructure that they have in place. Personally, I think the best thing for the US automakers would be chapter 11 bankruptcy. Yes, there would be job losses, but the company that emerged would be leaner and unencumbered by the current massive legacy costs. If they're smart, perhaps they could dump the UAW as well. This is the only way that the American makers will ever be able to compete. Right now they're trying to swim with an anchor around the neck, it's only a matter of time before they run out of energy and sink to the bottom.

[Z-man]

If any or all three of the big US automakers go belly up, the already fragile US economy may very well be pushed over the edge.

If the government is going to bail out greedy bankers and stupid folks who think they can afford a mortage that's beyond their means, then they have to do something to get the automakers in better shape. The future of the economy depends upon it.

-Z-man.

[the]

Originally Posted by Z-man

If the government is going to bail out greedy bankers and stupid folks who think they can afford a mortage that's beyond their means, then they have to do something to get the automakers in better shape. The future of the economy depends upon it.

-Z-man.

There's nothing the govt can do about it. The govt doesn't know how to build or sell cars.

[Z-man]

Originally Posted by the

There's nothing the govt can do about it. The govt doesn't know how to build or sell cars.

True - that's an internal problem with GM/Ford/Chrysler. But the gov't can infuse those companies with some money so they can figure out how to build and sell cars better...

-Z

[onewhippedpuppy]

Originally Posted by Z-man

True - that's an internal problem with GM/Ford/Chrysler. But the gov't can infuse those companies with some money so they can figure out how to build and sell cars better...

-Z

Is giving them enough cash to operate another 6 mo. really going to make a difference? I think this is throwing good money after bad.

[Porsche-O-Phile]

One way or the other, the UAW has to be killed off. Whether it's done by some sort of bankruptcy with a "new" company coming out of the ashes or by government intervention (never happen) or some sort of buyout, it simply needs to occur. I'd say the blame for Detroit's failure is split more-or-less right down the middle - about half attributable to idiotic, short-sighted and boneheaded upper management decisions and about half to the UAW for creating an entrenched culture of corruption, exploitation, abuse, phat salaries, benefits & pensions completely inconsistent with the value of worker contributions, etc.

So upper management needs to be gutted and overhauled and the unions need to go. I think if those two things can be accomplished (by whatever means necessary), we've got a shot to keep some manufacturing here in the U.S. If not, we're going to lose one of the few manufacturing sectors we have left that hasn't been stolen away by the Chinese...

I disagree that a bailout is the right way to do this though. I think letting the companies go under, shed their union obligations and have someone buy up the pieces and "start over" is the only real way to go. Nationalizing the auto industry will fail miserably.

[the]

Originally Posted by Z-man

True - that's an internal problem with GM/Ford/Chrysler. But the gov't can infuse those companies with some money so they can figure out how to build and sell cars better...

-Z

More money won't help them figure it out.

A year ago, GM was "impervious to failure" because of the billions and billions of dollars in cash it had in the bank.

Look what all that cash got them. $25 billion, or $50 billion, or more, will just get them more of the same.

[onewhippedpuppy]

Funny that other makers are able to profitably build cars in America, and they offer excellent wages and benefits without the UAW's "help".

[Pazuzu]

Originally Posted by dd74

So who will first shut their doors. I think it'll be GM because of size alone. But Chrysler is also a good bet, IMO.

Chrystler is safe, they have the Challenger.

It's big. And orange. It'll keep them afloat.

[dd74]

Originally Posted by onewhippedpuppy

Funny that other makers are able to profitably build cars in America, and they offer excellent wages and benefits without the UAW's "help".

Yep. That was my next question about other manufacturers.

But here's another: can the American automakers legally "drop" the UAW?

[Z-man]

Originally Posted by Porsche-O-Phile

One way or the other, the UAW has to be killed off. Whether it's done by some sort of bankruptcy with a "new" company coming out of the ashes or by government intervention (never happen) or some sort of buyout, it simply needs to occur. I'd say the blame for Detroit's failure is split more-or-less right down the middle - about half attributable to idiotic, short-sighted and boneheaded upper management decisions and about half to the UAW for creating an entrenched culture of corruption, exploitation, abuse, phat salaries, benefits & pensions completely inconsistent with the value of worker contributions, etc.

I agree. When Cerebus bought Chrysler from Daimler, many speculated that since Cerebus was coming in from outside the automotive community, they would have some pull in regards to either tightening the reigns on UAW, or getting rid of them altogether. Apparently, that has not yet happened, nor does it look like that will happen.

My original comments about having the gov't bail out the auto industry needs a little clarification: I think the government's plan to help bankers and folks who defaulted on their loans due to improper planning is not the answer. But that seems to be what the plan is. Therefore, if they are already going to do something that stupid, then why not carry it a step or two further? At least with the automakers, the money will eventually land in the hands of those who are working, or trying to earn a decent living.

Just my $0.42,
-Z-man.

[dd74]

Zoltan - you first have to wonder who within the banking industry will benefit from the $700 billion bailout. I'm certain Paulsen has an idea.

But fundamentally, I agree with you in re. to helping people who are already working, and not a direct cause of their industry's troubles.

[onewhippedpuppy]

Originally Posted by dd74

Yep. That was my next question about other manufacturers.

But here's another: can the American automakers legally "drop" the UAW?

Were I the CEO, I'd threaten to relocate if forced to accept the unions. No outside entity should have the power to dictate what a company can/can't do with their workforce. It's suicide.

[Rikao4]

Burn baby burn....

Rika

[dd74]

Originally Posted by onewhippedpuppy

Were I the CEO, I'd threaten to relocate if forced to accept the unions. No outside entity should have the power to dictate what a company can/can't do with their workforce. It's suicide.

To an extent, haven't many of the companies already relocated, at least with certain large portions of their production?

What I'm talking about is part of the bargaining concerning the bailout (it it were to come) would be, "Yes, we'll restructure, but the unions won't be a part of that restructuring."

Can they legally say/do that?

[onewhippedpuppy]

Isn't union power dictated by the state? Most of the foreign automakers are building plants in the non-union south (Kentucky, Tennessee, the Carolinas, Georgia). If MI wouldn't play ball, I'd just relocate ALL of my operations.