OK, Here Is Your Bailout Bucks!

[Daryll40]

OK, let's say the Feds are willing to give the bailout provided a reasonable restructuring plan is submitted. The plan must include all options....union issues, pension issues, product issues, dealership issues etc.

I realize that right now the big 3 are locked into a union contract, pension obligations and dealership franchise agreements. But in bankruptcy, the alternative to a restructure with bailout, those go away and the counterparties get bupkis. So let's assume those interests come to their senses and realize that they have to accept part of a loaf instead of the current whole loaf that will become no loaf otherwise.

 

 

If you were the head of Ford, what would the Ford "dream restructure" look like?

 

P.S. I tried to edit the grammar in the original post from "is" to "are" but it won't let me edit the topic. Sorry for the bad grammar!

Edited November 16, 2008 by Daryll40

[ironhorse]

OK, let's say the Feds are willing to give the bailout provided a reasonable restructuring plan is submitted. The plan must include all options....union issues, pension issues, product issues, dealership issues etc.

I realize that right now the big 3 are locked into a union contract, pension obligations and dealership franchise agreements. But in bankruptcy, the alternative to a restructure with bailout, those go away and the counterparties get bupkis. So let's assume those interests come to their senses and realize that they have to accept part of a loaf instead of the current whole loaf that will become no loaf otherwise.

 

 

If you were the head of Ford, what would the Ford "dream restructure" look like?

 

 

How does dealer franchise agreements effect the factory? Dealers are the factory's customers.

[theoldwizard]

How does dealer franchise agreements effect the factory? Dealers are the factory's customers.

There are 2 - 3 times as many F/L/M dealers as there are Toyota/Acura. This is a big cost for Ford in "servicing" those dealers. (Printed material, training, etc, etc) Unfortunately, Isee is no way out of this mess, short of letting them go out of business (which is happening) or buying them out (not enough cash to make happen).

[theoldwizard]

OK, let's say the Feds are willing to give the bailout provided a reasonable restructuring plan is submitted. The plan must include all options....union issues, pension issues, product issues, dealership issues etc.

I realize that right now the big 3 are locked into a union contract, pension obligations and dealership franchise agreements. But in bankruptcy, the alternative to a restructure with bailout, those go away and the counterparties get bupkis. So let's assume those interests come to their senses and realize that they have to accept part of a loaf instead of the current whole loaf that will become no loaf otherwise.

UAW has already taken their stance ("We gave already") and I don't see that changing short of bankruptcy.

 

Pension obligation are now controlled by federal law (the Pension Protection Act of 2006), which Ford and others are already lobbying to have modified.

 

Dealers have contracts just like the UAW, which are not going to get broken without going into bankruptcy court.

[battyr]

IMHO - Any rescue plan should:

 

1. Apply equally to all auto companies. The Government needs to rescue the whole economy, not a dying GM.

2. Require equal equal capital investment from the private sector. The government should not own equity in auto companies.

3. Company should have a plan with required cash savings such as concessions from the union, or suppliers, or sale of some asset.

4. Company should have a plan to control cash flow enough to guarrenty that they won't go into Chapter 11 for atleast one year.

5. As long as the company has a plan that could work, don't restrict what they spend the money on. Let them spend it on what they need to.

 

I can see a plan where GM would get $10 Billion from the Government, $10 billion from Nissan and the Saudi's, $10 billion from management, the Unions and suppliers, and $10 Billion from selling something divisions.

 

Combined with other cut backs, that could give GM $50 billion. This should give GM another year and the government will still have money for other companies. After the first year the auto companies require a recovery in the rest of the economy to survive.

 

The Fed. Government needs to spend huge to save the economy, but they also have to be fair and get the biggest bang for the buck.

[ironhorse]

There are 2 - 3 times as many F/L/M dealers as there are Toyota/Acura. This is a big cost for Ford in "servicing" those dealers. (Printed material, training, etc, etc) Unfortunately, Isee is no way out of this mess, short of letting them go out of business (which is happening) or buying them out (not enough cash to make happen).

 

Ford makes money "servicing dealers" nothing is done for free....DEALERS PAY for any service.