If GM will go totally bankrupt?

[scherry2]

http://news.yahoo.com/s/ap/200...ger_5

[5speed4]

To be honest, I'm not sure what bankruptcy would mean. Would it mean that they basically zero out their retiree pensions/benefits?

[5speed4]

http://news.yahoo.com/s/ap/200...iloutA exerpt from the article:"But the measure needs 60 votes to survive in the Senate, where Democrats will hold a razor-thin 50-49 majority when President-elect Barack Obama gives up his seat on Monday. A furious search was on for a dozen Republicans to break the anticipated filibuster from opponents. Several Republicans have already lined up against it. "Like most Americans who are concerned about the direction of our economy and more federal spending, I must also ask — when is enough, enough?" said Sen. John Cornyn, R-Texas"Two Republicans — Kit Bond of Missouri and George Voinovich of Ohio — said they will back the plan. Several other Republican senators have signaled they might accept a rescue if strict conditions are put on Detroit's Big Three companies, including management and salary changes, union concessions and a commitment to making more fuel-efficient vehicles. "

[scherry2]

Quote, originally posted by 5speed4 »Several other Republican senators have signaled they might accept a rescue if strict conditions are put on Detroit's Big Three companies, including management and salary changes, union concessions and a commitment to making more fuel-efficient vehicles. "so these republicans won't jump on board. whats new.Did the government go after the workers of AIG or Morgan Stanley? did they go after any janitors cleaning the buildings owned by AIG? how about the secrateries? the UAW labor cost is only 8% of the cost of the vehicle.hmm wonder why AIG gets loaned tens of billions and they all go on vacation but the Auto Industry wants the same consideration for something that was caused by AIG and the banking business and they get balked at.

[5speed4]

Quote »did they go after any janitors cleaning the buildings owned by AIG? how about the secrateries?My guess is the janitors and secretaries at AIG don't cost $70+ per hour like a UAW worker, let alone the whole job bank thing, triple-time for working holidays, etc.Quote »the UAW labor cost is only 8% of the cost of the vehicle.Maybe, but the retiree medical benefits alone are another 8-10% on top of that, even with the recent cutbacks for people over 65. The auto industry has become a lot more cut-throat lately with so many more companies (e.g. Korean cars have become mainstream and are even surpassing the Japanese in quality...China will also be entering the market soon). Profit margins are tight. It reminds me a lot of the personal computer industry back during the late '90's. It's going to be sad to see them go, because I really do like GM vehicles. I also have close relatives who work at (or are retired from) the GM plant in Lordstown, OH. I fear for our economy when all those jobs are lost (and retirements cut), but we will survive. The Big 3 currently have ~60% market share combined. All those consumers will have to go somewhere. They'll buy Toyotas, Hondas, etc. and all those companies' American plants will need to hire more to meet the demand. New restaurants, shops, etc. will pop up in areas around the plants to serve the new influx of workers. It will basically result in a shift of jobs from areas around the current Big 3 plants to areas around the Toyota/Honda/etc. plants. Still, it's going to be ugly initially.

[scherry2]

I don't make $70 per hour with benefits. you don't even work in the automotive industry you just know from what you read in the paper. so again your right and I'm wrong.

[joatmon]

I bought my Vibe because it was the best MPG in a US brand car, and it has relatively high domestic content in spite of being a joint GM/Toyota venture. I have not been a benefactor of the fabled godlike Toyota reliability. I'll seriously consider buying a Volt if given the chance, and hope GM lives long enough to sell me one. I can imagine but can't really relate to the anxiety US autoworkers must be going through this fall. I am not one of the people we get here from time to time who hate the US car brands and want them to die. It seems that some sweeping changes are going to be required to keep GM alive, but I don't blame the current GM problems on the UAW. I don't know the economics, but I hope that it all works out well for you and your co-workers.

[Houston]

Unions came into existence only because normal, regular people, most of whom were just like you and me, had gotten the short end of the stick for decades. They were working hard, putting in long hours, and still barely able to survive. The workers chose to band together (unionize) and attempt to make life better for their families and themselves. They succeeded. The middle-class became reality. During the unions' heyday, life for normal, regular workers became by far the best it had ever been and this country thrived. Life was good. Most of you are too young to remember those days. As union membership in this country has decreased the quality of life has also decreased, but it seems many people don't notice the correlation. I'm amazed that so many who are themselves in need of a union so frequently badmouth the very entity that made life so much better for their parents - and therefore themselves - during their growing-up years. Because of this worldwide shutdown, there are people here who blame the unions. No, my friends, it isn't the unions. The people to be blamed are the same ones they've always been: The rich people who run the show, the ones who want to make the most profit by paying workers the least they possibly can. There is no way US workers can compete with foreign manufactures that pay their workers a couple dollars an hour. Who in the US can support themselves, let alone a family, on that? If US companies could get away with doing that here, they would. People have to stop thinking that their bosses care about them. Perhaps their immediate boss (who isn't getting paid much more than they are) does care a little, but it's a sure thing the bosses at the top don't. For them, the almighty dollar is all that counts. The US government just gave 700 billion of your dollars (and your children and grandchildren's) to bail out a bunch of rich people, all of whom should be fired for being incompetent, conniving, and criminals. And yet unions that have done so much for working people in this country still come under fire. People are funny like that.I am a GM retiree who believed GM when it signed a paper guaranteeing me a lifetime pension and medical insurance. They've kept their promise so far, but that's only because the UAW is there watching out for my rights. If GM goes bankrupt, all this goes out the window and what I spent my working years believing I would have will be gone. Millions of others will also be negatively impacted. Many of you are among them, whether you know it or not. All of us should hope the US automakers get that loan.

[5speed4]

Of course I'm reading about it. What else do you want me to do? Interview UAW workers? That would hardly get me an unbiased account. Here is the article I got that from (from Sept 2007):http://www.dailyindependent.co....htmlAn exerpt:"GM said the contract will make it significantly more competitive. The company, which lost $2 billion last year and is in the midst of a restructuring, went into the negotiations seeking to cut or erase what it said is about a $25-per-hour labor cost disparity with the U.S. employees of Japanese competitors. GM has said it pays workers $73.26 an hour in wages and benefits."Remember that GM has to pay the employer share of the FICA taxes (as do all employers) which is 7.65% on top of whatever compensation you receive. Maybe they're including that here.

[5speed4]

Quote »As union membership in this country has decreased the quality of life has also decreased...What measure are you using.? Home ownership rate is the highest ever, more families than ever own two or more cars. Not only that but the cars they do own (including Big 3 brands) are safer, more reliable, more comfortable, more convenient, more efficient and less polluting than ever before. The proliferation of TVs, computers, cell phones, microwave ovens, etc. seems to indicate otherwise as well. Even our air quality is much better than it was back in the union heyday. My sister is a single mom of two kids (her ex-husband is a drug-addict, total deadbeat and pays no child support whatsover and hasn't for over 12 years) working as a school teacher making $42K/year. Yet she lives in a 3-bedroom apt, has 2 cars, 3 cell phones (her and her kids), 2 computers (laptop and desktop), microwave oven, DVD player, 27" TV, and she eats out at restaurants at least 2-3 a week. She has no assistance from the gov't (besides the Earned Income Tax Credit which amounts to only two hundred dollars per year anyway). She does have a student loan ($15K) and a credit card balance of ~$5K but that's not unmanageable. She also has a 403b worth $18K (thankfully she never put it in stocks...it's sitting in a savings account).By 1970, 1980, or even 1990 standards she would be considered extremely wealthy and I don't think she is atypical of living standards today.

[Houston]

What measure am I using? I'm using the one that, since World War II, has never seen US citizens so fearful of their future. You pointed to your sister (there are others) who is doing okay in today's economy, while millions are losing their homes and jobs at a rate far exceeding what's happened in the past. I'm happy for your sister and others like her, but seeing all these houses for sale throughout our country because the owners can no longer afford them tells me life for Americans is not what it was during my good old days. Until relatively recently foreclosures were almost unheard of, but they are now almost everywhere. Your sister owing $20,000 on what she has means she doesn't own it - she only has it. In the old days (if people knew her real situation), she would not have been consider well off. If you couldn't afford it, you didn't buy it. This is why your sister lives in an apartment. Given enough time, though, house prices will come down to where everybody can have one - the only losers being the millions of original owners who paid a higher price. If that isn't a sign of life going downhill, I don't know what is. Your mentioning all these newfangled items that didn't even exist during the early part of my heyday (and that we didn't miss not having) don't count. Back then we enjoyed life much more than those of you who have two or more of each of these newfangled things. Quality of life is not determined by all the junk we have. People have all this stuff today, but are in debt up to their necks trying to pay for it. Life before credit cards was good. I remember driving to work from Kawkawlin back in the early sixties on my way to Buick in Flint and seeing all this black smoke rising into the sky from the various Saginaw factory smokestacks and thinking that it couldn't go on forever. With you, I'm thankful our government got on top of that and made the really big factory bosses stop this practice, because they didn't give a hoot. All these new safety features on automobiles are wonderful, but don't think for even a minute that the big bosses wanted them. There's no profit in that.We're all on the same side here. We all want this country to survive. My kids will be okay, but I'm very worried about my GrandBaby's future. I genuinely believe this country is on it's way out. I'd love seeing anybody - ANYBODY - convince me I'm wrong.

[5speed4]

Quote »What measure am I using? I'm using the one that, since World War II, has never seen US citizens so fearful of their future. I assume you're talking about job security and retirement security, or we can simply call it "livelihood security". That's a concept that is simply not sustainable. It worked for a few decades when the US was THE major manufacturer in the world. For the entire U.S. history up to the start of WWII, job security was practically unheard of, except maybe for those in the military service. At least two things happened to change that: 1) other countries progressed into manufacturing, 2) shipping goods became cheaper and quicker. At that point it became more logical to import than manufacture here. Autos were one of the last manufacturing industries to feel that bite.Like all other species on earth, humans all have to make their livelihood despite factors beyond their control (bad weather, natural disasters, competition from others, plagues, wars, poor crop yields, etc.) getting in the way. Humans have the big additional problem of "consumer taste" to deal with. The UAW expected automakers to shield them from all that (and pay them handsomely, I might add). It worked for 5 or 6 decades. For the first 3 or 4 of the decades, it was because the competition was minimal. For the last few decades it was due to their sheer size and strength. Well, that's gone now.Quote »Your sister owing $20,000 on what she has means she doesn't own it - she only has it.But the $15,000 of student loan is actually an investment that's been paying off for 7 years now and will continue to pay off for her till she's 65 or so (she's 42 now). I might add that my sister is not good with finances (quite bad, really). Her $5,000 credit card debt did not NEED to happen. I mentioned her love of eating out all the time, but she also has to make sure her kids have designer clothes and shoes and she doesn't bargain shop for anything. Her 403b is only there because the school forced her to save it via a defined contribution.

[ou.grizzly]

Quote, originally posted by 5speed4 »But the $15,000 of student loan is actually an investment that's been paying off for 7 years now and will continue to pay off for her till she's 65 or so (she's 42 now). I might add that my sister is not good with finances (quite bad, really). Her $5,000 credit card debt did not NEED to happen. I mentioned her love of eating out all the time, but she also has to make sure her kids have designer clothes and shoes and she doesn't bargain shop for anything. Her 403b is only there because the school forced her to save it via a defined contribution.403b is for non profit organizations correct? So does this mean she works in the health care field? Big difference from the Auto Industry, but they will be hurting also because if no one has money for medical care, they will be cutting back also. Student Loans may be an investment, but you still have to pay interest on them like a car payment or mortgage. All that interest adds up over the years.

[5speed4]

Quote, originally posted by ou.grizzly »403b is for non profit organizations correct? So does this mean she works in the health care field? Big difference from the Auto Industry, but they will be hurting also because if no one has money for medical care, they will be cutting back also. Yes, 403Bs are for non-profits (and for government workers)She's a 6th grade teacher. Schools in the area around the auto plants will have to start cutting back too as people move away. No one is immune from this, it's going to hurt everyone. Quote »Student Loans may be an investment, but you still have to pay interest on them like a car payment or mortgage. All that interest adds up over the years. No doubt, but it's already paid for itself a few times over if you consider that her pay without the education would probably be around $25-30K tops (working retail or waitressing), not to mention the fact that she gets 10 weeks off for summer, 2 weeks off at Christmas, 1 week off for spring break, plus all the other little school holidays. Plus she can go anywhere in the nation and have a potential place of employment. That's not at all true for me. There are only a handful of cities where I can go with my Ph.D. degree.

[ou.grizzly]

Quote, originally posted by 5speed4 »Plus she can go anywhere in the nation and have a potential place of employment. Not anywhere. Schools are cutting back also and not hiring, but firing. Teachers have a union and tenure if my memory serves me correctly. We shall see how that turns out. Depending on how many years she has in and district she works for, she can not be making more than $55,000 a year.

[5speed4]

Yes, she makes $42,000/year. That's anywhere from $12-17K more per year than she'd likely make with no college education, and as I alluded to above, it's got extra benefits in all the time off. You're right, she can't go anywhere and get a job, but she sure has a lot more job location opportunities than most other professions.Understand, I'm not against unions. They have their place. I'm against the UAW. Right now a few hundred thousand UAW workers are holding 3 million jobs hostage. "Give us the ransom money (bailout) or we'll take them down with us."I was thinking about this today, I realized something about what I'd already written in a previous post. The Big 3 hold ~60% of the U.S. market share. That means that 3 auto makers have 50% more U.S. market share than all the others automakers combined (they have ~40%), yet, they can't make a profit on that. I wonder if they've considered letting the UAW go on strike to save money while they bide their time to get through this credit crunch we're in. While they're selling very few cars, the UAW members all are still getting full pay/benefits. That's got to be burning more money than setting idle for a while.

[vibolista]

It's not just the UAW. Management sets the direction a company takes. The bozos in charge of these companies live so far away from reality that they never have a clue what the rest of the working population is going through and what budgetary decisions they have to make day to day. So they miss the big trends. I've always had a fuel sipping car in the garage. In '74 I bought a Civic CVCC and got 40 mpg. In '79 I bought a diesel Rabbit in Germany and shipped it home. This thing got 55 to 60 mpg. It was money in the bank for me. GM, Ford, Chrysler offered nothing like that. Civic was my commuter car choice in the late 80s. In the 90s I ran a 92 Suzuki Swift that returned 47 mpg until 2001. Then it was a used 1999 Saturn SW2 that got an average of 36 to 38 mpg if driven gently. Did get 40 mpg this last summer during the $4/gal gas rip off period. My wife has a Prius. She gets 50 to 54 mpg on a regular basis. GM, Ford, Chrysler still can't match that. Bought the Vibe on a 'special' internet sale last winter. The Saturn is decaying and may not get through our state inspection without a lot of work ($$$$) so I was looking at replacement. Just could not turn down a 14,804 dollar deal on an sticker that pushed close to 21,000 dollars. The Vibe is really a Toyota Corolla and I manage to get around 35 to 37 mpg with it so far, but it's still not a true GM product. In Europe, you can buy cars that are extremely good drivers, in sizes that compare well with a Vibe, and get 45 to 60 mpg, using clean diesel technology. They are not 'bare bones' cars. Some of them are made by GM (Opel) and Ford (Europe). Our domestic car makers have always put their marketing focus on getting folks into 'larger' vehicles, pushing either some form of perceived 'luxury' or more recently the 'Sport' in Utility. The adds have convinced a lot of people that they really need a very heavy truck based 4X4, 7 to 9 passenger vehicle to get them through their solitary commute during the week. And then on the weekends they can always as an average family of 3.6 people, seek the adventure and sport of 'off road' capability when they forge those trails out to those shopping mall parking lots. The parking lots are off the road, right? Their TV ads are really, really good.In the mean time, Toyota, Honda and all the other car makers that are doing reasonably well in these tough economic times, already offer a better product mix for most consumers. But wait! Hold on! Gas prices are back down to cheap. Hey, truck and SUV sales are up! And I just saw an ad on TV for a Hummer sales event. Wow! I could drive anyplace on the planet with that thing. I think it was climbing one of the roads out in the Himalayas! Wow, what sport! Damn, the not quite as Big 3 are on a come back! Never mind.

[5speed4]

You're right that management is not totally blameless, but if you look at my post above regarding all the fuel efficient models GM is putting out (almost all of them are leaders in their class, mpg-wise and are lower priced), they are making progress and have shown that they know fuel economy is a high priority now. True, they have nothing that will compete with the Prius or Civic Hybrid, but compare them to Subaru who has no cars that get over 27 mpg and they're doing fine. [Edited Subarus mpg number...not only are they not over 30, they don't even reach 30.]

[KNINE]

Throwing taxpayers' money at the Big Three will solve nothing. It does nothing to fix their problems. The best thing that can happen to GM is to file Capter Eleven, restructure, and come out leaner and meaner.

[jimincalif]

With GM's domestic cost structure, they are not able to make money on small cars, but they have to build enough of them here to meet their CAFE requirement, so they minimize their investment in cars, build cheap rental fleet cars and try to make money on high margin trucks and SUVs. Worked OK till gas prices killed them.Let them meet CAFE with any car they sell regardless of where built. They could then continue to build high-margin vehicles here and outsource the production of low-margin cars. Yes, it will result in some plant closings and job losses here but it at least gives them a chance to make enough money to survive and fund their retiree obligations without them ending up on the taxpayers.

[vibolista]

It's a sad truth that our car industry is lagging due to labor and management blunders. Maybe we should let the market take care of itself... allowing these old companies survive or die on their own, but our manufacturing pie is getting really small. We need to have some sort of manufacturing base that can make things can be sold, especially to overseas consumers. This keeps our people employed. The saddest thing to see, is our reluctance as a country to stay on the cutting edge of technology, and the loss of some sort of reality check mechanism. We lost a huge steel industry in the last half of the last century because the owners and investors were allowed to milk the bulk of profits, leaving nearly nothing for investment in needed modernization. They made great profit, but they were short sighted and lost the industry to foreign competition. It seems that this same type of death spiral has taken hold of our car manufacturing sector. Business leaders and their stock holders have to start to look a things a little farther beyond that limited next business quarter. It's great to make huge profits, but it's senseless to let an industry crumble and disappear. Once that happens, no one makes anything, no product, no wage and no profit. Where are the super safe, super light weight, super aerodynamic, super efficient diesel/solar/battery (or even Hydrogen fuel cell) powered cars made mostly from composite materials that the world could use to commute in. Why isn't someone already building these in our country, selling and exporting them all over the world. Look at the success of the Prius. We should have developed the Prius. Or at least had something ready to compete and beat it. Instead we had people figuring out how to stretch the frame of a cheap mid-size truck, so we could produce that sterling H3. The world is really clamoring for those in a large way! Excellent move!

[Silversn95]

There seems to be some misconceptions about a few things I've read in these posts:1. Labour and management in these companies are responsible? Sorry to tell you but both or only a fraction of the problem. How about the incredible increase in the price of oil brought on by world wide demand and out of control speculation. Remember that the general feeling was the price of oil was overvalued by some $50 a barrel due to speculation alone. How about the US economy sinking into a hole. How did the automakers and their union make that problem? You think they are also responsible for the sub-prime mortgage and subsequent credit issues? There is a whole lot more going on here than some top level managers at these companies making mistakes. No doubt, some heads need to role at the top of some of these companies but that isn't what got us here or well get us out. Same goes for the union. The UAW gave up a fair bit in the last negotiations. Is there more to give? Maybe, but the end result won't have a significant impact to the companies since labour is only a small percentage of the overall vehicle price. The big change has already been put in place with the two-tier wage system and moving retirement health care control to the UAW (after the automakers set-up the fund by 2010). 2. Why is there this belief that the Prius is so great? Do you realize that Toyota loses money on every single one they sell? If the consumer had to pay the real price of the car and/or not get the government rebate for buying 'green' technology that the car would not sell, period! It would take many years to pay the difference in ownership compared to an efficient 4-cyl sedan. 3. Which brings up another good point, our auto makers are starting to make the most fuel efficient, safe and top rated quality cars available. The problem is there is a lingering perception in the general public that they still make the same crap that was made in the 80's and 90's. Plans are in the works to make them even more efficient, even bringing models from Europe over here in the case of Ford (GM is already doing it with the Astra).4. I'm sick and tired of the media calling what the auto manufacturers are asking for as a 'bailout'. They are not asking for cash money. They are asking for guaranteed loan availability so that they can get loans during the next couple years to see them through these hard times brought on by an economy sinking faster than anyone can plan for. Mullaly at Ford is looking like a genius now since he got money back when banks were still loaning it out and by selling off most of their premium car lines (Aston, Jaguar, Land Rover) while there was someone out there looking to buy them. To top this off I noticed CNN is running a pole today asking if you think the auto industry is essential to the US economy. How on earth are there 36% of people responding NO to this question? Unbelievable!! I'm speechless...

[5speed4]

Quote, originally posted by Silversn95 »1. How about the US economy sinking into a hole. How did the automakers and their union make that problem? You think they are also responsible for the sub-prime mortgage and subsequent credit issues? No they're not, but you have to notice that the Big 3 are, to my knowledge, the only ones in danger of bankruptcy despite selling 50% more vehicles than all the competition combined.

[PopeyeFAFL]

Quote, originally posted by vibolista »But wait! Hold on! Gas prices are back down to cheap. Hey, truck and SUV sales are up! And I just saw an ad on TV for a Hummer sales event. Wow! I could drive anyplace on the planet with that thing. I think it was climbing one of the roads out in the Himalayas! Wow, what sport! Damn, the not quite as Big 3 are on a come back! Never mind. You're quite right, American car makers are 1 revolution behind.Something I will always remember:When it was father George Bush as president, he went to Japan with the CEO's of GM, Ford & Chrysler in order to encourage Japan buying American Cars.So the journalist of Nightline ask the CEO of GM, why GM didn't bother changing the steering wheel from left-handed to right-handed for the Japanese Market (it was the case, then, for some models that was exported over there, I'm not sure about now).The GM's CEO answer was quite eloquent: "If we sell enough of them, we might consider it" in other words: "buy enough of the wrong products, we might give you the right one". Unbelievable.Now, needless to say, that Renault, BMW, Mercedes or other European Car Manufacturers didn't even think exporting their cars without changing the location of the steering wheel (in fact, it is often design from day one, that way in order to be able to sell in UK, Australia, India, etc.).This is what happens, when you only have the American market to serve, you became arrogant.

[Silversn95]

Quote, originally posted by 5speed4 »No they're not, but you have to notice that the Big 3 are, to my knowledge, the only ones in danger of bankruptcy despite selling 50% more vehicles than all the competition combined. Wrong. All the automakers are feeling it on a global level. Sales are down 20% plus in north america for everyone, Honda and Toyota included. Like I stated before, the governments in most other countries that are involved in the automotive industry are forming some sort of plan to help their local industry survive. The only ones we hear about being in danger are the ones closer to home but I'll bet my hard earned cash there are others....just not made so public yet.

[Silversn95]

Quote, originally posted by PopeyeFAFL »The GM's CEO answer was quite eloquent: "If we sell enough of them, we might consider it" in other words: "buy enough of the wrong products, we might give you the right one". Unbelievable. Perhaps what was meant but taken out of text was that there is a major trade imbalance between north american automakers in Japan (due to unfair trade laws) and japanese automakers in north america resulting in very small sales volumes of our cars in their market. Until japan opens their market why should US automakers make that investment?

[vibolista]

The Prius was a profit loss at first, but now, after Toyota has sold over a million of these little units, it might be makin' some mula for them. Producing this car was a large risk for Toyota in the first place. Even the batteries were being built by only one source at first, severely limiting production rates of the car. Now they have several battery sources on line and their Hybrid selection is expanded. Toyota is going to build Prius here in the US (I think sometime in 2009 or 10) and in other countries as well, so they must be losing Billions of Yen on this baby. Prius is not the final answer to autodom, but it has become a very successful transition vehicle that gets its owner quite a few miles down the road from each gallon of gasoline.Our car industry was asleep at the wheel on this one and I do think that arrogance as well as ignorance may have played a hand in their predicament. Sure, there are plenty of other large economic problems we are dealing with, but this recession is now global... so everyone is feeling the pain. Even the Oil producing nations are feeling the pinch. GM, Ford and Chrysler may be building the best cars that they have ever kicked out their plant doors, but they were still not getting a good fix on the economic possibilities headed down the pike at them. The return of cheaper gasoline will probably be a blessing for them in the short term and might help them (and us) pull through this rough patch, but you can't count on that for very long. Anyone think that Oil is going to stay this low for any lengthy period of time? I wish! The companies that survive this global downturn will be the ones that produce the right product for the consumer. I sure hope that the Big 3 survive.

[5speed4]

Quote, originally posted by Silversn95 »Wrong. All the automakers are feeling it on a global level. Sales are down 20% plus in north america for everyone, Honda and Toyota included. Like I stated before, the governments in most other countries that are involved in the automotive industry are forming some sort of plan to help their local industry survive. The only ones we here about being in danger are the ones closer to home but I'll bet my hard earned cash there are others....just not made so public yet.I know the entire auto industry has fallen on hard times, but the Big 3 are the ones who are least able to ride out the crisis (due to labor costs). If it continues much longer, I'm sure we'll see other manufacturers in a similar boat, but from reports I hear, it's a matter of around a month and a half for GM ("may not make it to the end of the year" is what I keep hearing).

[Silversn95]

I tell you, this guy gets it. He knows the auto industry better than anyone else I've heard or read on this subject. Every statement he makes is true. For anyone on this board that doesn't believe what Peter De Lorenzo states below, you need to think hard about how much you think you know from what you here in the media (which is biased) to what you know from first hand experience. I've been in this industry for nearly 20 yrs (including University co-op) and everything Peter states has been spot on. I watched some of the debate and agree with his pessimisim. I'm still baffled that the government can agree to bailout the finance industry and wallstreet with $700 Billion but can't agree to break off a small --------------------------------------------------------New Detroit vs. Old Detroit in Washington.By Peter M. De LorenzoDetroit. In the last week I have done several live and taped radio interviews across the country and with the BBC in London, a spirited interview with Diane Tucker appearing in The Huffington Post entitled, “Journalist to GOP: You're 100 Percent Wrong About U.S. Automakers,” and I have several national and international TV appearances slated for the next few days too. The subject? The looming implosion of Detroit, of course. People want to know the who, what, when, where, why of this whole thing, and they want to know about the cost, both in terms of taxpayer money needed and the real cost to the economy if the Detroit automakers don’t receive these bridge loans.The din out there in the media right now is so anti-Detroit, anti-“bailout” that I welcome the opportunity to present the other side of the debate, even if it appears with each passing day that Detroit is running out of time and unable to break through the negative media clutter that envelopes the industry at every turn. And after that death march of a hearing before the Senate Banking Committee yesterday, I’m even more pessimistic.When Alan Mulally, Rick Wagoner, Bob Nardelli and Ron Gettelfinger sat down in front of the microphones, I knew it wasn’t going to be good, especially when Peter Morici – the relentlessly self-promoting economics professor from the University of Maryland – sat down next to them (more on him in “On The Table” this week – ed). Which Senator was responsible for inviting him is anyone’s guess, but it was clear that this was a setup from the get go. We then had to watch as each of these U.S. Senators spewed their particular brand of inaccuracies and flat-out misconceptions about the automobile industry in their opening statements. A very few were actually worth listening to – and I mean like two - while most of the others were so blatantly self-serving and out of touch with reality that it was painful to watch. And then some acted like they were just hatched yesterday and were so resolute in their lack of awareness about what was going on and why they had to be there in the first place that it was simply appalling . I can’t help but think that when enlightened Americans watched these people in action – the people who were actually elected by us to be in office – that they recoiled in horror at the absolutely stunning lack of knowledge, awareness, sense of place, sense of well, anything that was displayed by these Senators yesterday. Is this really the best we can do? I certainly hope not.At any rate, the message in that hearing room was clear: Detroit put itself in the shape it finds itself in by building bad, low-tech cars that nobody wants. That they were regurgitating the now-obligatory woeful misperception of Detroit that has spread across the country - a Detroit that hasn’t existed for the better part of a decade, by the way - was obvious. The fact that these Senators weren’t aware of the kind of ultra-competitive products that these companies have out now was predictable. And the fact that they weren’t aware of the kind of leading edge technological development that Detroit is actively engaged in was predictable too. Being clueless in Washington isn’t all that uncommon, unfortunately, but when misconceptions, half-truths and flat-out lies get hoisted up the flagpole as Fact, then it’s no wonder that the leaders of these Detroit car companies were on the defensive and unable to score points with the judges.Proof of that was on display yesterday when the senators in that hearing room kept talking about restructuring, as if it was a new-fangled idea that these Detroit CEOs weren’t aware of. And they had to be reminded over and over again that Detroit has been restructuring and revamping since 2000, that Detroit hasn’t been operating in a vacuum, that Detroit does build competitive and class-leading products, that Detroit has pioneered new technologies, that Detroit is a viable, relevant, strategic industry that’s part of the crucial fabric of America’s manufacturing base, that the worst financial crisis in seven decades has wreaked havoc on their ability to do business, and on, and on, and on.Back when things were booming for the domestic automobile industry, the importance of lobbying in Washington and having a consistent and focused image strategy that presented these companies’ positions and outlined their contributions to the American economy wasn’t a top priority. Now that it is, and the Detroit Three are playing catchup - while taking body blows and backed up against the ropes - the Old Detroit is still slamming the New Detroit to the ground.The Perception Gap that exists out there for the Detroit automakers isn’t narrowing, it’s actually growing wider. Because when Americans get what minimal news they’re willing to digest – and only because it’s pre-packaged in carefully doled-out sound bites – then the Old Detroit will perennially overshadow the New Detroit, hands down.Detroit may get help from Washington, but left to their own devices - and timetables - it’s looking like the politicians will come up with something that’s too little and too late to actually make a difference.And that’s a giant bowl of Not Good.Thanks for listening.---------------------------------------------

[ColonelPanic]

The Japanese and Korean auto manufacturers are now saying bail them out.http://www.businessweek.com/gl...ssi_5The article refrences NUMMI, which I hadn't really though of... Allowing GM to die surely spells trouble for Toyota and NUMMI themselves as that relationship would be gone. My guess is NUMMI would either close or have to be absorbed entirely into Toyota's control, either way wouldn't it be a loss financially for Toyota as they lost a partner?

[PopeyeFAFL]

Quote, originally posted by Silversn95 »Perhaps what was meant but taken out of text was that there is a major trade imbalance between north american automakers in Japan (due to unfair trade laws) and japanese automakers in north america resulting in very small sales volumes of our cars in their market. Until japan opens their market why should US automakers make that investment?Why US automakers make that investment? Because the other automakers of the world do it (Mercedes, Audi, BMW, Renault, etc.), they try (and sometime succeed) penetrate the Japan market, but they don't cry like little baby of unfair trade practice, they will gain them over by perseverance and they are not dumb enough to forget changing the steering wheel location.In the aerospace field Eurocopter had built a 20+ years relationship with China, now they are harvesting the results in building some helicopters over there helping reducing the cost. On the other hand, Bell Helicopter try to penetrate the Chinese market, at the first set-back, they packed their stuff and went back home, no perseverance, no long term vision.

[Silversn95]

Quote, originally posted by PopeyeFAFL »Why US automakers make that investment? Because the other automakers of the world do it (Mercedes, Audi, BMW, Renault, etc.), they try (and sometime succeed) penetrate the Japan market, but they don't cry like little baby of unfair trade practice, they will gain them over by perseverance and they are not dumb enough to forget changing the steering wheel location.In the aerospace field Eurocopter had built a 20+ years relationship with China, now they are harvesting the results in building some helicopters over there helping reducing the cost. On the other hand, Bell Helicopter try to penetrate the Chinese market, at the first set-back, they packed their stuff and went back home, no perseverance, no long term vision.First off, you are mixing up too different situations. China has a different set of rules that allows NA car sales in their country with local investment. GM and Ford have partnerships in China and GM in particular has been very successful selling Buicks in China.Japan, not going to happen. Yes Merc, BMW...etc are putting the effort into investing in Japan sales but take a look at their overall sales volumes compared to our domestic automakers and then ask yourself again if it is worth GM/Ford/Chrysler to invest billions of dollars to get a few thousand sales out of Japan. If we could sell 200,000+ units over there then maybe it might make sense and have a business case for it. Like I stated. If the rules change then there would be hope. The rules in China have shown our domestic automakers can be successful over in asia (at the risk of losing control of their designs however but that is another topic....).If you ask me, the billions would be better spend making good cars in markets where trade is not restricted. How can you argue with that?

[vibolista]

That's true. Markets need to be fair, but no other country worth their salt wants their industry to go down the drain like we do. Now, the reason that Wall Street got all that tax money so quickly was probably because Paulson might have a large personal investment in AIG, and to inject fluidity into the banks so they could start to make some loans again. For a little while there after the bid stock drop, if you went to any of the troubled banks, they would not loan any money, and that put a lot of braking action on our economy. We really didn't want to bring business down to a full stop.The only thing I wonder is, since I have a Saturn and a Vibe, does that qualify me for a bailout/loan package from Unkie Sam? I'll take a lot less that $25 Billion. This is the deal here. The whole industrialized world is in this same economic recession funk thing. Manufacturing is slowing everywhere. Consumers have tightened up their spending, so companies that have not set something aside or have structured their product to fill a need during this slow economic stretch will be in trouble for a while. The worst part about this type of situation is the loss of employment that always results. Might be a good time for them to think a little about what comes next, maybe even take that risky step to actually modernize the industry and then get back into the hunt again. I would start with a clean sweep of the present vision-less dunderheads, Wagoner, Mulally and perhaps even Nardelli. Economic cycles have been around for ever, and this little bump won't be the last one.

[Vibe2009]

Quote, originally posted by safooma »IF GM goes bankrupt, what would happen to the warranties on our vibes?A better way to look at this is... if GM go bankrupt and we dont get anymore warranties... I am not paying for my monthly payment anymore!

[kunkstyle]

Quote, originally posted by Vibe2009 »A better way to look at this is... if GM go bankrupt and we dont get anymore warranties... I am not paying for my monthly payment anymore!Have fun getting your car repo'ed then.

[vibolista]

Maybe Toyota will help out with any Vibe warranty issues.