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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: steve_ (Nov 25, 2008 5:58 pm) |
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Replying to: steve_ (Nov 25, 2008 10:42 pm) 
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If the car industry is headed for 11.5 million units next year, it is not going to be possible for any of the Detroit 3 to hold on, unless perhaps there is much less competition for the few buyers that are out there. Chrysler's financial situation is hard to know exactly, but it seems that they're very poorly positioned in terms of their product portfolio. They have essentially no overseas presence, which means they don't have the ability to drive sales into a growing market like China. I think you'd have to look very hard at any business case around a Chrysler bailout. Allowing Chrysler to fail would free up some buyers, and probably a lot of them would stay with the domestics. GM needs to figure out how to erase about 5000 dealers and 4 or 5 divisions. Having dealers out there selling 10 cars a month isn't helping anybody's cause. It seems unlikely that current management will drive this type of reorg and maybe only Chapter 11 can make it happen. Ford is a bit easier to support. Bill Ford already fired himself as CEO and Ford has made hard decisions about driving production down. They still have too many products and too many dealers, though, and their hybrids are late to market. |
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Replying to: skw0123 (Nov 26, 2008 12:08 am) What would Ford or GM have to offer the Jeep buyer? Right now the only pseudo competitor to the Wrangler is the Toyota FJ Cruiser and it may be scrapped. Dodge Cummins PU owners may grudgingly buy a GM or Ford PU. Mini Vans, who cares they are all about the same. Chrysler still holds the trump card in GMAC. That seems to be a big problem at GM getting anyone to finance their products. Ford is going to be OK with plants like the one in Brazil. I got a feeling that GM or Ford could scrap their US holdings and make money in the rest of the World. The US has them so tied up with back breaking contracts and horrible regulations. GM shed one dinosaur in Delphi. Now it is time for them to file for C11 and get rid of the rest of their dead weight. |
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Replying to: circlew (Nov 25, 2008 5:07 pm)
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| ...if the Big Three just simply shut down for a year - meaning there would be few, if any 2009 models? Heck, things aren't even good for the imports with cars piling up on the docks. They could simply make a go of it with just their NA plants. I see the economy as a gluttonous person who has gorged for years on credit and now has severe indigestion. Let the economy digest what it has already eaten. | |
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Replying to: tlong (Nov 25, 2008 9:26 pm) I stated a bunch of realities in my list of 7 items. You have not countered any of the 7 points with any truth. Seven tenths of one percent of unemployment increase in four years is disaster? Yes, with enough spin I guess! To spin the destruction of America and now hope to say it was contrived, we are really OK, is a bad plan. But it was the plan. $4 gas thew a tire iron in the spokes of that plan. The big 3 are hurt by $4 gas too. They are also hurt by the confidence killing plan that was contrived and executed against our country. Obama owes them the bailout because he got all the union vote and his 'It's the economy stupid' plan has caused their further demise. We have to spend our way out of the mess some say. We will have huge debts. W inherited the tech bubble burst when people carry stock losses onto their tax returns for years. It killed the budget along with 9-11 and the hurricanes. Now Obama inherits the mortgage meltdown and all that does to future federal revenue intake. He has made part of the mess and now has to figure out how to pull the plane out of the dive. For 2 years he kept yelling that the plane was in a dive. Now he's the pilot and the dive has become real. He was expecting the instruments to be found to be broken and the plane was actually climbing.
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Replying to: lemko (Nov 26, 2008 5:41 am) It's not going to happen because fat cats covers and protects each other. If Joe Schmoe makes a financial mistake nobody will bailout him, but if CEO makes a financial mistake he gets medical insurance, pension & etc.
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Replying to: ingvar (Nov 26, 2008 6:27 am)
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Replying to: dave8697 (Nov 26, 2008 5:52 am) I don't have time to go thru your 7 points and verify the numbers, but I certainly give you the benefit of the doubt on most though, as you have a history of posting reliable and sensible views. But I will add that though you may be right on those, there are many indicators pointing to serious, serious problems. Without going into specifics as the holiday errands beckon, I would like to say that we've been thru several weekends lately where the Treasury and the President are on the phone on Sun. nights. Well it's the equivalent of the Cuban Missile Crisis. And when you see the Treasury offering $700B 2 months ago, and $800B the other day, and the Fed cutting interst rates below 1% (they can't go much lower!), I would say the financial folks are desperate. And on a personal basis, I know many people who need next week's paycheck to pay the bills. They no longer have any home equity. Their 401K is down 40%. Food is up 20% this year. And most people around here receive local tax bills that are 10% higher EACH YEAR. And very few people think they'll get the social security amount they are currently promised. If you still think the fundamentals are good, then I nominate you for Optimist of the Year. Ford, GM, and Chrysler need to sit down with the unions, suppliers and banks, and need to say "This is how much is coming in, and that's how much can go out; we need to adjust our budget to make that work."
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