What if Bankruptcy.....will imports take over?

[CamaroScotty]

Some think Toyota and Honda will take over.....some are already buying imports because of the fear.....well, this is straight from the imports:

http://www.freep.com/article/2008121...006/1014/rss13

KEEP GM ALIVE!

What really gets me is we bail out other nations.....but we can't help our own country.

[Supermans]

Originally Posted by CamaroScotty

Some think Toyota and Honda will take over.....some are already buying imports because of the fear.....well, this is straight from the imports:

http://www.freep.com/article/2008121...006/1014/rss13

KEEP GM ALIVE!

What really gets me is we bail out other nations.....but we can't help our own country.

This would mean the Japanese market should have already been offering to buy out parts of the big three or help out by buying stocks..However they haven't so far..

[Camaro_Corvette]

Originally Posted by CamaroScotty

What really gets me is we bail out other nations.....but we can't help our own country.

What irks me even more is that some of the countries we bail out, don't even offer a dime to help us out in return.

[Hylton]

PLEASE, PLEASE, PLEASE.......let's not think a bankruptcy means it's all over for GM. There are a few ways to get through this and keep things going even after chapter 11.

[Mr. Wyndham]

But the ways to get through Chapter 11 without sliding right into Chapter 7 are so slim you'd need to be an anorexic swimsuit model to fit through them.:(

I just read an article that was talking about how even the bankruptcy lawyers are hoping this won't happen. It'd be a catastrophe - the industry is too big, and the economy is too poor for bankruptcy to work the way it was intended in this case.

[Hylton]

That's why I believe a pre-packaged bankruptcy is the way to go. In a nutshell it means that anyone who has anything to do with GM agrees to a collective plan and sticks to that plan when chapter 11 is declared.

It is possible to come up with a plan that everyone can live with so that GM can continue to do business but without all the debt and commitments which cause it to burn through 4 billion a month.

[Mr. Wyndham]

But that requires money, right? Instant-restructuring costs to the tune of hundreds of billions of dollars...that aren't loans. That's the numbers I've been hearing lately. Where's it going to come from? And how can we be absolutely sure it will work?

I agree that bankruptcy MIGHT work...under perfect conditions...but given the state of the economy, and the gigantic stigma involved with the bankruptcy label...I just don't see any bankruptcy as worth the risk.

[Hylton]

Yes and plenty more than 8 billion. The key is that GM will be a strong company to go forward after a chapter 11 bankruptcy. Assume it get's 8 billion from the White House, what does that do with respect to going forward? Nothing - it just buys another 2 months of keeping it's head above water. They will still be burning through 4 billion a month after the money and will have to come back to the trough yet again. A pre-arranged bankruptcy can actually put them in a position to make money every month instead of losing 4 billion every month.

[Mr. Wyndham]

Originally Posted by Hylton

Yes and plenty more than 8 billion. The key is that GM will be a strong company to go forward after a chapter 11 bankruptcy. Assume it get's 8 billion from the White House, what does that do with respect to going forward? Nothing - it just buys another 2 months of keeping it's head above water. They will still be burning through 4 billion a month after the money and will have to come back to the trough yet again. A pre-arranged bankruptcy can actually put them in a position to make money every month instead of losing 4 billion every month.

So does their own plan. Without the associated risks of bankruptcy. It puts them in a position to make money at 12 million units a year. Well under the 17 million average for the past decade.

And remember, this billions of month thing is not entirely of their own doing. If the economy hadn't tanked, and nobody expected it would go this poorly, they wouldn't be asking for this loan at all.

[BigRigMike]

The pre-arranged bankruptcy will take time to negotiate, so they would still need money to make it to a pre-arranged bankruptcy.

[Hylton]

Originally Posted by Dragoneye

So does their own plan. Without the associated risks of bankruptcy. It puts them in a position to make money at 12 million units a year. Well under the 17 million average for the past decade.

And remember, this billions of month thing is not entirely of their own doing. If the economy hadn't tanked, and nobody expected it would go this poorly, they wouldn't be asking for this loan at all.

I have studied their plan somewhat and it does not address enough in regards to brand re-organization (Holden, Opel, Vauxaul, Saab and the cost associated with those companies doing their own product design, development, branding, marketing and managing), production capacity (too many factories running at under capacity even in the best of times), union must give further concessions. There are still billions of cost savings to be made imo.

We have to keep in mind that other foreign car manufacturers face the same market conditions yet are still able to make a profit. Why is that? A lot can be said about GM's pensioners/healthcare but that's nowhere near the only problem.

If we all believe in capitalism, then we all agree that every company must be able to stand on it's own 2 feet even at the worst of times. We put money away for rainy days to keep us going. When GM was making money on all the SUV's they were selling, how much money did they bank? Zero - why? Because even in the best of times, it is not able to make a reasonable amount of profit.

[Hylton]

Originally Posted by BigRigMike

The pre-arranged bankruptcy will take time to negotiate, so they would still need money to make it to a pre-arranged bankruptcy.

I agree. That's why I want Bush to hand over the cash now with a stipulation that the next 3 months are spent negotiating a solution to this mess.

[Mr. Wyndham]

Originally Posted by Hylton

I have studied their plan somewhat and it does not address enough in regards to brand re-organization (Holden, Opel, Vauxaul, Saab and the cost associated with those companies doing their own product design, development, branding, marketing and managing), production capacity (too many factories running at under capacity even in the best of times), union must give further concessions. There are still billions of cost savings to be made imo.

I never considered Holden, Opel, Vauxhall in the picture as they were European-only brands that do relatively well. On top of that, much of the designing, development, and engineering work is being done globally; look at the Camaro and Cruze -- that spreads costs over a WIDE table. Saab was addressed in the plan; they want to get rid of it...most likely by selling it off. Same with Saturn.

Anyways, in terms of capacity -- in 4 years' time, they will have reduced the number of dealers they support by 1750, or about 30%. In the same time-frame; they will reduce the number of plants by 9 from 48, or about 20%. For the very reason you brought up: overcapacity.

Without starting another thread...I don't know what more concessions the workers can be expected to give. According to GM's numbers (not the Unions) they can now hire new people to work for LESS than the foriegn people. These new hires will take the places of the 1000s of early retirement buyouts they recently went through.

Originally Posted by Hylton

We have to keep in mind that other foreign car manufacturers face the same market conditions yet are still able to make a profit. Why is that? A lot can be said about GM's pensioners/healthcare but that's nowhere near the only problem.

I agree; there's MANY factors that effect their profitability. But the biggest, by far, has to be the pensioner/healthcare issue. Nearly a million retirees draining pensions AND healthcare from GM? Toyota, etc don't even have 100,000 to deal with. BUT...that's gone in 2010.

Originally Posted by Hylton

I agree. That's why I want Bush to hand over the cash now with a stipulation that the next 3 months are spent negotiating a solution to this mess.

I know I come off a lot of times like there's nothing more to be done. I know that's not true. There is still a LOT that can be addressed. I guess I just don't want to lose sight of the progress that these "dinosaurs" have already made.

[DGthe3]

More can be done, its a question of how quickly it can be done, and how much it can cost. Dealers won't close up shop for free. GM can't simply stop making saturns, or GMC's or any other brand. Most of the 'wasted' money in rebadging goes into facelifts for the cars and a bit more tooling. That said, it is a waste to redesign two (or 3, or 4) cars to compete with each other.

Also, if GM can get a loan to restructure without going ch11, isn't that the best possible scenario for everyone involved (GM, workers, suppliers, government)?