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Originally Posted by Design1stCode2nd
They should have voluntarily done it back in 2006 when they still had the cash reserves to restructure.
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Care to elaborate on this? Because if you're saying GM waited to restructure until after 2006...I think you're pretty wrong. The restructuring, albeit at a baby-step pace, started way back in 2000 when Wagoner was hired. It started with
product. As it progressed, they were even able to sign an agreement in
2007 (the last good year before the recession) that reworked their entire labor relationship. Go figure, when they're about to overhaul the business side of things, the economy tanks.
Quote:
Originally Posted by Design1stCode2nd
But then we don’t do anything until it’s a crisis, from one crisis to the next and we forget about it all when times are good. We learned nothing during the oil embargo and already people are forgetting $4/gal gas of just 8 months ago.
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I was just disussing this with someone. It's the American way and it makes me sick to my stomach. Nothing's worth evaluating/repairing until it's a life-or-death crisis. And when the crisis is over...we do it all over again! What. The. Heck?!
Quote:
Originally Posted by Design1stCode2nd
If you are buying a GM or especially a Chrysler product I’d just make sure you put away a little extra to cover any repairs out of pocket.
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Why? You expecting them to go somewhere?
GM and Chrysler will be around for some decades to come. The difference is how they get over this rough spot. A successful, but insanely risky bankruptcy filing? Or self-help via loans.
A word on loans, and your first point about delaying the inevitable. I disagree completely -- I don't think they would have eventually failed. And here's why:
Underlining all of this is one single point: GM already was in the process of a ~decade-long restructuring effort. It was always due to be 'finished' by 2012-ish. Though they may not have announced it to the world. Now,
If it weren't for the credit crisis,
#1; people could buy cars, and with GM's current portfolio, they'd be selling like mad. This means they make money, which has
everything to do with their restructuring costs and income. Lets face it, all the restructuring in the world won't help if they aren't selling cars. This is one of those things that's not in their control.
#2; Banks would still be loaning. Which they aren't right now.
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Because of the above points, supposing a credit crisis never occured; it would still be evident that General Motors would STILL NEED further restructuring --
but they wouldn't be in their current state. That means they wouldn't need as much money to finalize the BULK of their restructuring already scheduled through 2010. Since they wouldn't have needed as much money (if at all),
they could have gone to banks instead of the US treasury.
Therefore -- the government would have never gotten invovled, and this would be a non-issue. Yes, GM made mistakes. No, they weren't in ideal financial position before this happened. BUT, none of their mistakes were large enough to put them in their current position. The whole problem right now is due to the CREDIT market collapse.
