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Automotive News & Views Do You Favor A Government Loan To The Detroit 3?
3958 messages, Last post on Oct 02, 2009 at 4:52 PM
You are in the Automotive News & Views Forum. Your Hosts are steve_ & claires
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Replying to: tlong (Mar 05, 2009 8:42 am) A sudden death is a big loss. A bed ridden death appears generally to be good riddance from all troubles. |
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That report from the GM auditors says that GM is "highly dependent on auto sales volume" Wow... I never would have realized that an automaker would be dependent on auto sales volume. 
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Replying to: pf_flyer (Mar 05, 2009 12:32 pm) Regards, OW |
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Replying to: pf_flyer (Mar 05, 2009 12:32 pm) No kidding, Captain Obvious!
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Just maybe Detroit should get a meeting with Kia to see what they're doing since 2009 sales for Kia have been a Pleasant Surprise Size would seem to be a big factor. GM is simply going to have to be scaled back to match production with demand. How that happens is the multi-billion dollar question.
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Replying to: lemko (Mar 05, 2009 1:09 pm) 
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Replying to: circlew (Mar 05, 2009 3:46 am) Not that it's a GOOD thing, either........
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Replying to: cooterbfd (Mar 05, 2009 2:28 pm) At the end of the day, however, it is what it is. They need to be cut in less than half....now. Regards, OW |
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Replying to: circlew (Mar 05, 2009 2:41 pm) This would allow the D3 to prove their worthiness by building better products like the Fusion, Lacrosse, and whatever Chrysler could come up with. If they can't, and still go belly up, then the pieces get sold off and the government can recoup some of their loss by selling the proporties and intellectual rights to others.
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It's loan and bond structure is based on them being a 5 million unit company. It has - or had - enough capacity to build this many vehicles. It is closing some plants so the costs associated with these plants are decreasing. But the loans and bonds on these plants don't go away. If they still own the land and plant then they still have to pay taxes to the localities. They have to do basic maintenance to keep the buildings 'salable'. These costs just keep on eating up GM's revenues every month. In the future GM will likely have a 20% marketshare of a 12 million unit market which is 2.5 million units....not 5 milion units. The extra weight of the loans and bonds cannot be made to go away...unless: ..they default and declare bankruptcy thus stiffing the lenders; ..they somehow convince the lenders to convert the loans and bonds into shares, which have no rights whatsoever  ; ..they continue to beg the American public for enough money to pay their bills for the intermediate term, such as through 2020, or ask us for the Chinese Solution: one lump sum to pay off all the lenders in exchange for which we all own the company. IOW nationalization. But they cannot get out from underneath the burden of carrying capacity and indebtedness for building 5 million units.
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