Can Ford survive a gov't mandated pre-packaged GM/Chry bankruptcy?

[campbell53]

Based on some of what I reading today about what Bush may or may not do regarding the "bailout", if they come back with money only if GM/Chry are sent into bankruptcy, can Ford survive this? Would suppliers receive any/enough help to maintain parts flow to Ford? I personally believe BK is the kiss of death and want to see Ford stay as far away from it as possible.

[FordBuyer]

Based on some of what I reading today about what Bush may or may not do regarding the "bailout", if they come back with money only if GM/Chry are sent into bankruptcy, can Ford survive this? Would suppliers receive any/enough help to maintain parts flow to Ford? I personally believe BK is the kiss of death and want to see Ford stay as far away from it as possible.

 

There is strong rumor going around that GM has a plan B and that is to go dormant in January like it is now and not pay anyone but most critical personnel and try to hold on until Obama and new Congress are in place. Don't know if Chrysler can do that, but looks like GM can and is doing so now. I wouldn't be surprised but disappointed if Bush offers only prepackaged bankruptcy. My bet goes that GM will take its chances with Obama and not Bush and the Southern senators. Chrysler may take or only be offered prepackaged bankruptcy as being private company seems to be a disadvantage in obtaining federal loans.

[davdog]

The d3 are making and have made horrible business decisions. From the days when they could have kept the margins tight to keep new competition's start up costs hard to justify to getting caught with their pants down with the gas crunch and no decent cars in their lineup. How can anyone think that either GM or chrysler will be profitable in the foreseeable future is beyond me. ford is being touted as the one doing "OK" and they lose billions every quarter, which really shows you what shape these companies have put themselves in. We can't keep protecting the weak zebra in the pack.

 

Does anyone really think that with this money either chrysler or GM will be in any better position in 6 months?

[Critic]

Yes, but I also know the winning ticket to powerball 6 months from now, so I'm just holding off buying because of that.

[battyr]

Based on some of what I reading today about what Bush may or may not do regarding the "bailout", if they come back with money only if GM/Chry are sent into bankruptcy, can Ford survive this? Would suppliers receive any/enough help to maintain parts flow to Ford? I personally believe BK is the kiss of death and want to see Ford stay as far away from it as possible.

 

If GM gets some debt and labour obligations written off from a bankruptcy, Ford would be forced to renegotiate their labour deal to stay competitive. As long as a deal can be made so that suppliers won't go under, Ford should increase market share and do quite well.

[battyr]

There is strong rumor going around that GM has a plan B and that is to go dormant in January like it is now and not pay anyone but most critical personnel and try to hold on until Obama and new Congress are in place. Don't know if Chrysler can do that, but looks like GM can and is doing so now. I wouldn't be surprised but disappointed if Bush offers only prepackaged bankruptcy. My bet goes that GM will take its chances with Obama and not Bush and the Southern senators. Chrysler may take or only be offered prepackaged bankruptcy as being private company seems to be a disadvantage in obtaining federal loans.

 

I think GM has already started plan B. A lot of plants are extending the Christmas shutdown.

[davdog]

Yes, but I also know the winning ticket to powerball 6 months from now, so I'm just holding off buying because of that.

 

 

Would you loan money to a company in the shape of any of the D3? It's just prolonging the inevtable. They need to completely transform their structure and $15 billion loan isn't going to allow them to do that.

 

This isn't about the economy as much as it is about 3 companies making bad decision after bad decision for too many years.

[Deanh]

Would you loan money to a company in the shape of any of the D3? It's just prolonging the inevtable. They need to completely transform their structure and $15 billion loan isn't going to allow them to do that.

 

This isn't about the economy as much as it is about 3 companies making bad decision after bad decision for too many years.

hmmm............your last post was #666...care to explain? Also...its NOT just the Big threes bad decision making. its also partly the fact that the Govt laid down a cash highway to bring the inports here, consequently the pie continuously got smaller, states subsidized if not PAID for them to build factories with TAXPAYER money, making THEIR costs of doing business cheaper in comparison, then top it off by demanding ever increasing CAFE ratings that give undo advantages to manufacturers that do NOT appese truck drivers or soccer Mums adequetly....the Feds are as much to blame as the manufacturers themselves, it was basically luck that fell into the laps of manufacturers of small 4 cyl high MPG,,,shame on the big three for catering to people that have different needs and getting caught with their pants down for having their eggs in one basket. Although I will say in Fords case, their current lineup is competitive across the board, and in major areas SUPERIOR! Something that some senators are obviously oblivious too.

[theoldwizard]

Based on some of what I reading today about what Bush may or may not do regarding the "bailout", if they come back with money only if GM/Chry are sent into bankruptcy, ...

I don't know what you have been reading but everything I hear bankruptcy is off the table, at least for now.

 

Even with a pre-packaged bankruptcy, too many people would not not risk the second largest purchase of their life, on a company that may or may not be there in a couple of years.

 

When GM announced that they were going to shut down Oldsmobile, the value of used Olds dropped by at least $1,000 overnight. Would you buy a Saturn, Pontiac or Hummer knowing that the residual value could fall through the floor overnight ?

[Critic]

Would you loan money to a company in the shape of any of the D3? It's just prolonging the inevtable. They need to completely transform their structure and $15 billion loan isn't going to allow them to do that.

 

This isn't about the economy as much as it is about 3 companies making bad decision after bad decision for too many years.

 

Basically what is loaning money? Would that be in the form of buying shares? In that case, YES, Because SON, I've already lost $223,000 in a bath when Ford stopped paying a dividend 6/06. and I've still got over $100,000 in them.

 

Now your just worried about a little bit of money, meanwhile LARGE entity's have Millions in them. and can't get out, without everything coming down around them because of it. NOT to mention the states that lose taxes, from unemployed people and Corporations and businesses that will also not be paying, thus swelling their already depleted safety nets, and it goes on and on, spiralling downward all the time.

 

Perhaps we just need to wait and wait and wait for the TARP funds to trickle down. Reagun said it would happen.

 

Funny how your politics show in your desire to watch it crumble. You wouldn't see it hit you til you picked yourself up out of the dust.

[davdog]

Basically what is loaning money? Would that be in the form of buying shares? In that case, YES, Because SON, I've already lost $223,000 in a bath when Ford stopped paying a dividend 6/06. and I've still got over $100,000 in them.

 

Now your just worried about a little bit of money, meanwhile LARGE entity's have Millions in them. and can't get out, without everything coming down around them because of it. NOT to mention the states that lose taxes, from unemployed people and Corporations and businesses that will also not be paying, thus swelling their already depleted safety nets, and it goes on and on, spiralling downward all the time.

 

Perhaps we just need to wait and wait and wait for the TARP funds to trickle down. Reagun said it would happen.

 

Funny how your politics show in your desire to watch it crumble. You wouldn't see it hit you til you picked yourself up out of the dust.

 

You can't fix something by just pouring more money into it, you're just delaying failure. These companies need to change their business practices now. I have no desire to watch anything crumble but our economy is a lot like nature the stong survive and prosper and the weak get picked off by the tiger. I know that's not a good way to put it but what do you want to do, prop up companies that make bad business decisions just because we don't want anyone to get hurt?

[Deanh]

You can't fix something by just pouring more money into it, you're just delaying failure. These companies need to change their business practices now. I have no desire to watch anything crumble but our economy is a lot like nature the stong survive and prosper and the weak get picked off by the tiger. I know that's not a good way to put it but what do you want to do, prop up companies that make bad business decisions just because we don't want anyone to get hurt?

and what of the 3 odd million that WILL feel the effect?....whom do you blame consumer confidence on? I would say a Govt would be at the top of the damn list wouldn't you? we sure keep piling OUR money into their coofers no? and look at the deficit......Remember Toyota etc are ALSo feeling the pinch, not just the big three, and THEY also use the same suppliers...this truley could be catastrophic....

Edited December 16, 2008 by Deanh

[davdog]

and what of the 3 odd million that WILL feel the effect?....whom do you blame consumer confidence on? I would say a Govt would be at the top of the damn list wouldn't you? we sure keep piling OUR money into their coofers no? and look at the deficit......Remember Toyota etc are ALSo feeling the pinch, not just the big three, and THEY also use the same suppliers...this truley could be catastrophic....

 

Our economy is not based on bailing out businesses that make stupid business decisions.

 

What is a bailout going to change?

[LSFan00]

One way or another the big 3 won't survive the next 4 years without a changed labor contract.

[davdog]

One way or another the big 3 won't survive the next 4 years without a changed labor contract.

 

It will take a lot more then a changed labor contract.

[ANTAUS]

When it's being said that labor contracts will be renegotiated to be more competitive, can "more competitive" be clarified a bit? Like what is the wage they are wanting to settle on? As I'm seeing it, past benefits and pensions are the biggest issues...how can that be dealt with?

 

I'm just seeing this as throwing more money into something that will fail anyways. They are not sustainable in their current form, therefore, what must be given up, for them to be sustainable. And I'm not saying how much money do we throw at them, rather, what needs to change?

[JasonM]

why pour taxpayer money into the coffers of Cerberus?

[davdog]

When it's being said that labor contracts will be renegotiated to be more competitive, can "more competitive" be clarified a bit? Like what is the wage they are wanting to settle on? As I'm seeing it, past benefits and pensions are the biggest issues...how can that be dealt with?

 

I'm just seeing this as throwing more money into something that will fail anyways. They are not sustainable in their current form, therefore, what must be given up, for them to be sustainable. And I'm not saying how much money do we throw at them, rather, what needs to change?

 

 

They really don't have a chance. they would need to pack up everything and get out of the upper mid-west. The host is almost dead and all you hear the parasites saying is when will my XMas bonus arrive in the mail.

[ANTAUS]

A bonus? Your kidding me right? I can say half my friends Xmas bonuses will be that they even have a job by Xmas.

[F250]

why pour taxpayer money into the coffers of Cerberus?

 

Why give a hell of a lot more to the banks and AIG etc?

 

Even the small local banks around here are recieving millions of dollars that they don't need because it is being offered by the government! Hey, free millions! You're a bank, you're entitled! Come and get it! No strings attached.

 

LINK

Edited December 16, 2008 by F250

[F250]

Our economy is not based on bailing out businesses that make stupid business decisions.

 

What is a bailout going to change?

 

The Japanese and German governments have always protected and directly supported their auto manufacturers so why shouldn't America help their own.

[blksn8k2]

davdog, what type of work do you do? And be honest in your answer.

 

I can tell what I do, I work for a company that builds and maintains boilers for electric power plants. Do you think I am worried about my job? You better believe I am. If companies of this size are allowed to just disappear the result will be a much smaller demand for just about every service and consumer good you can name. Why do you think the European, Korean and Japanese governments have already decided to help many of the auto companies based in their countries?

[NickF1011]

It will take a lot more then a changed labor contract.

 

In the case of GM and Chrysler perhaps. Other than the labor issue though, I would say Ford has it pretty much figured out: New product cycles are better, global infrastructure is being reduced in complexity and size, payrolls are down, etc.

[povertyknob]

When it's being said that labor contracts will be renegotiated to be more competitive, can "more competitive" be clarified a bit? Like what is the wage they are wanting to settle on? As I'm seeing it, past benefits and pensions are the biggest issues...how can that be dealt with?

 

I'm just seeing this as throwing more money into something that will fail anyways. They are not sustainable in their current form, therefore, what must be given up, for them to be sustainable. And I'm not saying how much money do we throw at them, rather, what needs to change?

Now you've done it . You've mentioned the elephant in the room. Obligations towards current pensions and health care. Some sort of disposition of those issues would immediately bring costs into line with transplant facilities. What to do? Proponents of bankruptcy seem to believe it's a sound idea to eliminate pensions and health care for Big 3 retirees and offer active workers a 401K and minimal health coverage. Is it really a good idea to dump the retirees on the Federal Government? Those who are gleefully anticipating the demise of the UAW will be unhappy to find how much that costs taxpayers. It will be a huge price to pay for the satisfaction of killing off the Union. I have an idea to make the domestics competitive. The current UAW contract has language starting new hires at $14.00 an hour with a 401K and limited benefits. I can't quote the numbers verbatim , but the top wage would be far lower than the current $28.00 figure. Use the bridge loan to fund current obligations to retirees. Offer active employees two options. Maintain the same wage rate with reduced benefits. Or accept a lower negotiated rate with current benefits. Don't like it? Retire immediately under the current contract. Then hire folks at $14.00 an hour.Use the bridge loan to greatly reduce those dreaded legacy costs. It would allow the domestics to make a profit on the small cars everyone insists they should be building and to compete with transplant facilities operating with little , if any , legacy cost. I believe the Feds are going to do something. Why not something that has a chance of showing a return on investment? Why , indeed . throw money at something with no hope of getting it back? I believe this has a chance to succeed. If you just plain resent the UAW too much to consider this , then consider the alternative- throwing billions down a bottomless hole.

[davdog]

davdog, what type of work do you do? And be honest in your answer.

 

I can tell what I do, I work for a company that builds and maintains boilers for electric power plants. Do you think I am worried about my job? You better believe I am. If companies of this size are allowed to just disappear the result will be a much smaller demand for just about every service and consumer good you can name. Why do you think the European, Korean and Japanese governments have already decided to help many of the auto companies based in their countries?

 

I'm a systems administrator for a marketing firm.

What is propping up going to do for GM or Chrysler unless they radically change how they do business? Is propping them up suddenly going to make 09 a money making year for them? If not how much money will they lose in 09?

 

They refuse to restructure to the degree that will stop the bleeding.

Have we had recessions before in this country? Worldwide?

How long have the d3 been in business? Have they been through any downturns in the economy before?

This isn't a start up going bust in their first year; these are mature companies that should have known better.

I understand that we need to bail out these companies, BUT something needs to change in the way they do business. Are you going to lend money to the guy whose company sells at a loss?