Why do you want bankruptcy for GM and Chrysler?
Will it make GM stronger, smarter?The other day I read that 2 out of 3 Americans want GM and Chrysler to go into bankruptcy? Why?
To punish the UAW? Bondholders? Corporate boards and executives? All of the above?
Ultimately, do Americans believe that bankruptcy will make these automakers stronger? Or, do they hope they will simply just disappear?
Even if these companies successfully emerge from bankruptcy, does it change your opinion about their new vehicles, particularly autos like the Chevy Volt?
posted by Dahcredyns at
8:41 AM
12 Comments:
The people that I know want them to fail because they feel that the Unions tied the companies hands and forced them into this situation. Now it's our tax dollar that's bailing out the unions, not the companies. It's not that GM can't sell cars, it's that each car they sell they make almost no money on because of the inflexibility of the union. How different would GM be taking this down-turn if 4 years ago when Toyota passed Ford as the #2 automaker if the Union would have decided that it needed to be more competitive with Toyota and at that time cut costs? GM would have had money in reserve to weather this kind of storm.
Institutional bondholders have credit default swaps as insurance in case the company goes bankrupt. They will get more back in bankruptcy than with a negotiated settlement. Not that I'm cynical, but they may be the ones encouraging bankruptcy to get the higher return. Ok, I'm cynical.
steve,
i still put a lot more blame on the boards of these companies than on the UAW, but i do agree with your points.
hopefully, gettlefinger's replacement is a lot more progressive and understanding of the dynamic and fast paced automotive world we're heading into in the near future.
we didn't take the emergence of the japanese auto business seriously, yet the emergence of the chinese auto business could be a far bigger threat, at least warren buffett thinks so.
john,
i think you have a right to be cynical, but still what was the last offer from the treasury department, 5 cents on the dollar after the UAW and the government get their share?
what do they have to lose? of course, you have a good point with the insurance angle.
still, the majority of americans have been supportive of bankruptcy since this matter went before Congress months ago.
some of that, I'm sure, is just bailout burnout because of AIG, etc.
nonetheless, i would have predicted mainstreet would have been a little more supportive of the auto industry simply because of its manufacturing importance - and all the mainstreet jobs.
i'm not necessarily advocating that should be the case, but it is what i would have expected.
I don't want to see them go Bankrupt, that would be bad for everyone involved.
I just would like to see them make the hard choices and to the things that they need to, to make the company profitable now. Not waiting on more US Bailout money to get them through the current economic tide waiting for the Economy to get better where their current business model would be profitable again.
I would imagine that many of the people that would have to make these decisions would be putting themselves and their own personal profits on the line, or even out of the picture, for this type of restructuring to take place.
If you did an in depth investigation one would most likely(and quickly) see massive corruption, greed and selfishness on each of the several GM players involved(even Govt that was paid millions indirectly, thru lobbyist, to legislators to look the other way or vote NO on mileage requirements and more).
This flawed template was used year after year after year for 20+ years. It was a sickness and left unattended, became a terminal illness. Similar to the 'global warming' issue that few still its happening, till its too late to save the pt(us as a species).
Fundamentally the public mostly just wants I think, all parties to equally share the pain of its past 'sins'. If it can do that and stay out of bankruptcy and get profitable in couple years, great, if not , so be it.
Chrysler and GM have always looked the other way when people were buying more mileage Japanese cars. The GM management has always snubbed cars that gave better quality and better mileage. That's why they are in such shambles. Look at what Honda, Toyota have done with hybrids. Look at the indian Tata Motors with its small car Nano. Does GM have answers for these?
Rahul
Indian Car Advisor (Carazoo.com)
It isn't that people can't wait for bankruptcy, but that they are sick of the government using taxpayer money to keep a private business afloat.
If the argument to bail them out is to keep people employed, and that, as a country, we can't afford to let this company fail, then we screwed up a long time ago.
I was taught many moons ago in high school that laws existed to keep companies from becoming "too big to fail". That is, if the failure of a single company could have serious detrimental effect on the economy, then that company should not exist it's current form. AIG was there. Now we're saying GM is there.
I'm sorry, but I just don't buy it. I haven't seen any proof that GM going under will be the death knell for the country. I've seen no evidence to suggest that this is the case. The major complaint is that people who thought their job would last forever are waking up to a new reality.
They'll move on. New industry will pop up, cars will still have to be made. People will figure out how to make money.
So long story short. I don't want GM to go bankrupt. I want the government to stay the hell out it.
Indigo Incarnates
I suppose the reason why I'd like to see GM/Chrysler do Chap-11 bankruptcy is so they can be reconfigured as smaller, more viable, and profitable automakers.
I think bankruptcy will make them more financially viable, but do they really have the products they need for the future? That's my worry.
I don't want American automakers to go bankrupt, but these companies have to be accountable for selling HUGE, useless and unwanted vehicles. It seems when the whole world is becoming tech saavy, energy saavy and free thinking-- the US companies stick inside the box. Ugly interiors, cheap components and fuel guzzling engines. Instead of following, why can't the US be technological leaders? Why can't a US company come out with a solar roof like Toyota, or beat the Japanese to the punch with a hydrogen vehicle and a push to motivate commercialization and rollout of the support technologies.
We should be the leaders. Not the rest of the world. And yet, here we are.
So I think the US automakers need to take a seat, meditate for a moment and take a real hard look in the mirror. If they don't like what they see... make a change.
last anon-
Very well put.
Post a Comment
<< Home