The Case AGAINST Bailing Out GM/Chrysler

[trebuchet03]

Originally Posted by Big Dave

The question is who gets what in a liquidation. I figure Toyota will get GM Powertrain. Engines are Toyota's weakpoint and GM Powertrain is one of the world's two best engine opertaions (Honda is the other one). Corvette will be a rousing auction.

Maybe some Europeans buy Jeep. The Chinese will buy a one of Chrysler's engine plants.

GM Powertrain, Corvette, Jeep and the Chrysler engine plant get moved offshore.

The rest is scrap metal.

I'm sure other industries and universities would be interested in equipment being liquidated....

1 hot chamber die casting rig please

[Duffman]

Originally Posted by trebuchet03

I'm sure other industries and universities would be interested in equipment being liquidated....

1 hot chamber die casting rig please

I'd love a rapid prototyper.

[MechEngVT]

Originally Posted by Big Dave

If it were only so easy.

Eliminating models invites massive litigation by dealers. Just eliminating Olsmobile cost GM $20 bill in litigation.Also the less cars GM/Chrysler?Ford sell, the less profit percar because they have enormous legacy costs (pensions, health care).

I suspect by 2010 there will be no auto industry in the US.

Card-check unionization will drive off the transplants.

All of this is exactly why a Chapter 11 filing is essential for GM's survival. Bankruptcy court protection allows circumventing certain franchise obligations (what cost for Olds), reduction or offloading pension benefits (to the feds, of course), forced renegotiation of UAW contracts for reasonable health benefits (you realize employees don't pay a single dime now, right? how much do you spend on health care), potential to negotiate out the "jobs banks" and for actual wage reduction of present employees, not just new ones (how many new employees have been hired at the competitive wages anyway?)

It's probably too much to ask, but it would be great if the BK judge would just toss out the whole union and make them re-vote to bring it back (probably never happen after GM fires all the old employees that make too much money). Even better if the judge would find a way for someone to file charges against Red Ink Rick Wagoner and every single member of the Bored of Bystanders that allowed GM's slow slide into the abyss, force them out, and get new blood driving the company (this is why "bankruptcy is not an option" because they know it will be the end of their gravy train).

[Big Dave]

Think there would be a backlash...

...about a 2011 Toyota Corvette? Or a Kia Jeep?

About half the time Chapter 11 results in at least partial liquidation.

[NeilBlanchard]

Hi,

What if GM and Ford (and Toyota, Honda, et al) licensed this engine?

Trilobate cams instead of crankshaft

[NeilBlanchard]

Hi,

GM may be out of cash in a few weeks, and they may have to declare bankruptcy to gain some space to reorganize:

Bankruptcy Could Help Fix Carmakers Problems : NPR

(Audio available in a few hours.)

Morning Edition, November 13, 2008 · President-elect Barack Obama wants to give U.S. automakers federal funds. Critics say funding without conditions would be pouring gas into broken down clunker. Paul Ingrassia, a former Detroit bureau chief for The Wall Street Journal, says bankruptcy might be a better option. He tells Ari Shapiro that bankruptcy could open the door to badly needed changes.

[MazdaMatt]

Let em die. While the american car companies are closing plants in my home town and leaving 4500 people unemployed in a town with a population of 36,000... just down the highway 45 minutes toyota just opened up a new plant and is providing a couple thousand jobs.

Let the bloodsucking union die with them.

[Formula413]

Critics say funding without conditions would be pouring gas into broken down clunker.

Bingo.

Originally Posted by MazdaMatt

Let the bloodsucking union die with them.

Because the big three's woes are all the worker's fault, right? Never mind that they've all been asleep at the wheel, getting fat on SUV and truck profits, and totally unprepared for an inevitable shift in the market. Who do these union people think they are, thinking they ought to earn enough to buy a house and raise a family.

[MazdaMatt]

I said the union, not the workers. When i applied to work at a Sterling truck plant the STARTING UNTRAINED wages were $28/hr. Now that I'm an educated engineer, i will have to work for a few years before I make that kind of money. Shame i didn't drop out of school in grade nine and go make 28/hr... i'd be making 40/hr by now... sticking EPA stickers on a window (seriously, i saw a news article about a guy complaining that he is losing his job and he was paid 45/hr to stick EPA stickers (which already had tape on them) to the windows.)

BOO HOO FOR THEM. Let them try to get such cooshie (and well benefitted, paid and pensioned) jobs doing the exact same thing in another industry. All the people working in the production floor at my job make under 14/hr, even those who have been there for 5-10 years... and yeah, they all own houses and raise families.

If these people were working in the auto industry for those wages, the auto industry would still be competitive AND they would have the liquidity to make capital changes to quickly meet the demands of the changing market. Yes, the car industry in N.A. is dieing because of the unreasonable compensation demanded by the auto workers union.

[NeilBlanchard]

Hi,

How much profit did these companies make on each SUV? Where did that money go?

The success of the economy is based on the success of the middle class. Other people's success helps the rest of us. The same cannot be said for company profits -- unless they continue to innovate.

The wages at the non-union auto plants are just about the same as the union ones, I think. The biggest differences come from healthcare expenses, and from continuous innovation.

How many models does Toyota/Scion/Lexus have? About 16 or 17?

How many models does Honda/Acura have? About 10 or 12?

Someone listed 127 GM models...

All companies should use the year that a vehicle is sold as the model year. This takes the pressure off of making change for changes sake. It also (hopefully) will reduce the prevalence of planned obsolescence; and increase the durability and the recycle-ability of the materials used. All these things would greatly lower costs over the long run.

All design changes should be based on functional improvements. Imagine it: higher and higher reliability, better and better efficiency, continuous safety improvements, more and more recycled materials, design changes based on owner's needs -- what a concept!