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

[davdog]

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.

 

Agreed.

Ford has always had a step up on the others, IMO

Which is why I only drive fords.

[NickF1011]

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?

 

I don't think anyone is saying that GM and Chrysler don't need to change the way they do business. But in their current financial situations, they lack the money to implement such changes.

[davdog]

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.

 

I certainly don't resent the UAW. They took advantage of a situation and got the most for themselves that they could, most people would do the same thing. "No sir I'd like the CD paying the lower interest"

 

The problem is the whole company, including the UAW leadership, should have seen this coming years ago, and you know what, they probably did.

The UAW sells a product to the D3 called labor, and as with most products what counts is quality and cost. The d3 sell a product called cars, and as with most products what counts is quality and cost. The problem is only one has to sell that product in a competitive market.

 

there are going to be downturns in every market and businesses have to be flexible to survive.

what's next, are we going to bail out gateway? Are they even still around?

[NickF1011]

what's next, are we going to bail out gateway? Are they even still around?

 

Gateway is still around. They have left the on-site retail market though and closed all their Gateway stores. Works better that way anyway. Most people shop for computers on-line now anyway.

 

Remember, if the lending situationw was better, I'm willing to bet there would be SOMEBODY out there in the private sector who would be willing to lend GM and Chrysler money. It would come at a cost, but they would probably be able to find it.

[povertyknob]

I certainly don't resent the UAW. They took advantage of a situation and got the most for themselves that they could, most people would do the same thing. "No sir I'd like the CD paying the lower interest"

 

The problem is the whole company, including the UAW leadership, should have seen this coming years ago, and you know what, they probably did.

The UAW sells a product to the D3 called labor, and as with most products what counts is quality and cost. The d3 sell a product called cars, and as with most products what counts is quality and cost. The problem is only one has to sell that product in a competitive market.

 

there are going to be downturns in every market and businesses have to be flexible to survive.

what's next, are we going to bail out gateway? Are they even still around?

I wasn't suggesting that you or anyone else on this particular thread is banging on the UAW too hard. You've made a fair point in saying that obsolete business models can't continue. Ford and Ford-UAW began changing theirs in earnest a number of years ago. While they did recognize the need to change (see 2007 contract) they could not foresee the bottom dropping out of the economy the way it has. Another poster was asking for clarification on what might be done to the contract to make the domestics competitive and I thought I'd throw out an idea,however extreme it may have sounded. Read any auto related article in the Freep and the ensuing comments and you'll see what real UAW bashing is all about. Those are the folks who would likely go ballistic at any suggestion of using bridge loans to get rid of legacy costs , even if that were the best way for taxpayers to get their money back.