MERGED: Has anyone read this (bankruptcy) about GM?

[Mr. Wyndham]

Originally Posted by Design1stCode2nd

I’d say the current economy is merely the last straw. I don’t see Honda, Toyota, BMW or any other manufacturer close to filing chapter 11. They are all operating in the same economic situation. They don’t have the baggage that GM has but then who is responsible for that baggage in the first place (rhetorical question obviously).
Reasonable question. Unfair comparison...Honda, BMW are tiny companies compared to GM...and Toyota has the Japanese gov't on their side. What does GM have? A rep, and a bunch of people (seemingly the gov't, too) wishing death upon them.
In addition, it's crazy easy for foreign companies to do business and sell things in this country whereas domestic companies (not just the big 3) are being thrown under the bus....

What has brought GM and the rest of the big 3 to this point is years and years of mismanagement and short sightedness. There were a number of years when gas was cheap and profits huge but we all knew that wouldn’t last forever. Same thing with housing. You just knew that was going to pop and people were going to be in trouble. And here we are.
Agreed.

Allowing GM to continue as it is now without a chapter 11 restructuring is folly. We have an opportunity to remake the North American auto sector where the big 3 can be profitable and have a future. It’s time to hit the reset button and start over.
Does it not phase you that the "destroy" button is wired into the "restart" button? GM going Chapter 11 is not the rosy field it seems to be.

Originally Posted by trm0002

Because GM was losing billions of dollars a quarter BEFORE the economy tanked. "Bailing" them out won't stop the fact that they were already losing money to begin with.

Were they losing that much $$ before gasoline shot up so quickly? It was an outstanding one-two punch. First gas prices doubled in less than a year, essentially killing all their profitable vehicles while they were in the middle of an expensive restructuring. And then the economy tanks while they're not making as much money as they used to, and they get dragged even further down...

[Moose]

Originally Posted by Design1stCode2nd

Chill man, no reason to go bashing especially since it makes you look like a tool.

Question was would you buy or not. I can’t justify spending $35k for a car from a bankrupt company regardless which one it was. Wouldn’t buy a BMW, Toyota, or whatever if they were bankrupt.

You do know that Ford has controlling shares of Mazda right? And that many of the platforms used by Ford are designed by Mazda. Hell my 92 Escort had a Mazda engine. You also don’t see Mazda going bankrupt do you so obviously they must be doing something right.

*TIMEOUT*

These are tough times, what with the economy, the automanufacturers, etc., and consequently, passions are a little more volital. So lets be civil and respectful.

[The_Blur]

Originally Posted by MrIcky

I don't quite understand why you're throwing this around here. The people on this site are here because they want a Camaro. I drive a Dodge truck and a Ford Fusion and I'm looking forward to a Camaro. That doesn't mean I don't appreciate foreign cars- I used to own them. I said to myself many years ago that when domestic automakers could match foreign quality- I'd buy domestic. So now I buy domestic.

I don't want GM to fail. However I don't want to give GM money unless serious strings are attached to correct those things that make them unprofitable. I know, you'll say we're not giving GM money, we're making them a loan. As I've posted elsewhere, I think you're delusional if you think that. The history of government loans to companies to prevent bankruptcy is that the government can never call the loan due because the company will just file bankruptcy at that time. So if you want me to both buy a GM AND make them a donation at tax time, I want to make sure they're going to use that money wisely and not just band-aid a sinking ship.

Let's throw out the political rhetoric. We all believe in a free market, but are you willing to accept that foreign workers and companies will take over if we don't act? Are you really so idealistic to believe in a capitalistic market that works against you? Other countries are injecting lots and lots of money into their markets. The US is holding out on GM because we're too stubborn to help the millions of Americans that will lose their jobs because a corporate mammoth is collapsing.

You want to make sure they use that money wisely. They will. They don't want to lose their jobs. Do you want to lose your job? Think about it. They're just like us. They want to put that money into their basic operations that they simply can't fund right now. If they can get through 2009, then they will have significant cost reduction in 2010. They need just a little bit of help through the next year.

We need to stop being stubborn and start supporting our country. Everyone else is supporting theirs.

[Camaro_Corvette]

Yes.

[The_Blur]

Let's not forget that bankruptcy has the same impact on people off of these boards as it does to Camaro5. People panic and won't buy products from a company that may not exist to provide warranties or replacement parts. If GM files for bankruptcy, then we can say goodbye to the most successful company in cars. I hope you guys aren't in any of the fields that depend on the American automotive industry.

[Mr. Wyndham]

Originally Posted by MrIcky

As I've posted elsewhere, I think you're delusional if you think that. The history of government loans to companies to prevent bankruptcy is that the government can never call the loan due because the company will just file bankruptcy at that time.

Chrysler paid their loan back way back when...

[Hesh]

Not only yes but HELLYEAH!!!

[trm0002]

Originally Posted by Dragoneye

Were they losing that much $$ before gasoline shot up so quickly? It was an outstanding one-two punch. First gas prices doubled in less than a year, essentially killing all their profitable vehicles while they were in the middle of an expensive restructuring. And then the economy tanks while they're not making as much money as they used to, and they get dragged even further down...

Yup. They haven't turned a profit since 2004.

link-> http://www.gm.com/corporate/investor...ings/index.jsp

[Mr. Wyndham]

Originally Posted by trm0002

Yup. They haven't turned a profit since 2004.

link-> http://www.gm.com/corporate/investor...ings/index.jsp

Thanks for that...never seen it before...

thoughts: Does it strike anybody besides me as odd, that they lost 10 billion in 2005, then only 2 billion in 2006? Then, we can see in 2007, as gas started to go up and their restructuring was in full swing (AND that ~43billion accounting shift, or whatever it was), they plummetted in 2007...damn.:(

[The_Blur]

Originally Posted by Dragoneye

Thanks for that...never seen it before...

thoughts: Does it strike anybody besides me as odd, that they lost 10 billion in 2005, then only 2 billion in 2006? Then, we can see in 2007, as gas started to go up and their restructuring was in full swing (AND that ~43billion accounting shift, or whatever it was), they plummetted in 2007...damn.:(

This year would have been profitable had the market not flopped.

[trm0002]

Originally Posted by The_Blur

This year would have been profitable had the market not flopped.

No it wouldn't have. Market didn't flop too bad in first two quarters and look what you got. Losses of 3.25 billion Q1 and 15.4 billion Q2. The market not taking a dump would have just prolonged the inevitable.

[MrIcky]

Originally Posted by The_Blur

Let's throw out the political rhetoric. We all believe in a free market, but are you willing to accept that foreign workers and companies will take over if we don't act? Are you really so idealistic to believe in a capitalistic market that works against you? Other countries are injecting lots and lots of money into their markets. The US is holding out on GM because we're too stubborn to help the millions of Americans that will lose their jobs because a corporate mammoth is collapsing.

You want to make sure they use that money wisely. They will. They don't want to lose their jobs. Do you want to lose your job? Think about it. They're just like us. They want to put that money into their basic operations that they simply can't fund right now. If they can get through 2009, then they will have significant cost reduction in 2010. They need just a little bit of help through the next year.

We need to stop being stubborn and start supporting our country. Everyone else is supporting theirs.

This is to both this and Dragoneye. I believe that at the end of the day, financing will have to be made available to GM.

The Government did something drastically different with Chrysler than what is proposed with GM. They gave Chrysler loan guarantees totalling 1.1B-which is different from a loan. The US basically became Chryslers cosignator. They then turned Chrysler into a basically a forced pseudo-chapter 11 bankruptcy reorganization with an actual law (Chrysler Corporation Loan Guarantee Act of 1979).

Through the pseudo-CH 11, Chrysler was able to discharge 400 million in debt outright (so private business made Chrysler a nice fat donation). Then they converted several hundred million dollars worth of debt into special issue stock with no dividends the had no options to call due or redeem the stock for several years. Then they used the loan guarantees to get further funding from private business. Then they fired nearly half their employees (20,000+ out of 40,000+). Then they cut all their product lines to just a few which they could sell profitably. I'd be willing to support a more Chrysler-esque plan.

"They want to put that money into their basic operations that they simply can't fund right now." <===this right here is the basic problem. They can't fund these components of their business because there are flaws in their basic cost structure. We can give them $25Billion dollars and it won't correct the flaws. Therefore, eventually, they'll need another $25Billion.

So again, "So if you want me to both buy a GM AND make them a donation at tax time, I want to make sure they're going to use that money wisely and not just band-aid a sinking ship."

[diddiyo]

Originally Posted by Design1stCode2nd

I can’t justify spending $35k for a car from a bankrupt company regardless which one it was. Wouldn’t buy a BMW, Toyota, or whatever if they were bankrupt.

the car i will be buying next year is my first major investment. i've been saving for it for a long time and i want to make sure to get the best out of it and feel like i made a safe decision. i obv love the camaro, but i just do not feel good about buying a car whose manufacturer went bankrupt.

[MrIcky]

I just found this succinct little history on the Chrysler Bailout: http://uspolitics.about.com/od/econo...lerBailout.htm

I remembered it as 1.1 from economics- they had 1.5B- but the point is- the Gov't wasn't printing the money.