Petem95

Crashed auto rescue will cause an economic pile-up: US car bail-out - Telegraph

Bailing them out was pointless, and they are basically unviable, and all this borrowing for bailouts is just causing massive inflation, and almost bankrupting countries, but this is going to have a big effect if one or all of these lot go under...

stilover

<< Starts singing >>

It's the end of the world as we know it, it's the end of the world as we know it...........

corradoboy

Their business model is simple. Design and build a vehicle to meet consumer demand at a reasonable price allowing for reasonable profit to finance future development and pay any related dividends. Worldwide economies rise and fall, sometime singularly, occasionally globally. It is up to them to ensure they protect themselves financially from any downturn. If they have failed then they deserve to go. The world's demand for motor vehicles will be met by someone else more capable.

Flatcapdriver

They'll file for Chapter 11, their suppliers will go bust and they'll rise from the ashes in much the same way as their airline industry with the alternative being government intervention - either way it will be costly to the economy and the taxpayer will bear the brunt of it.

Its a loose, loose situation but the ones who really come out of it stinking, are the unions who realise this situation for what it is and are making the most to exploit the situation. What they need is a Thatcher type to bring the unions to heel.

Matteeboy

Or is it a "lose lose" situation?!

So GM - they own Saab, Alfa and Vauxhall. I think they also have a big stake in Fiat?
Chrysler are cr4p so not worried but if Ford AND GM go down, there'll be almost no manufacturers left!

ChrisB

From what I heard this morning, the sticking point was that the unions wouldn't accept a pay cut for their workers. As a worst case ending, isn't a pay cut better than no job at all?

FCD, if the suppliers to big three go bust if they file for C11, how will they make anything to recover? I'd have thought suddenly trying to produce everything a car needs inhouse wouldn't be viable.

In the new issue of Evo, the article on Lotus mentioned that production of the test mules of the new model will be held up as some of the subframes (IIRC) come from a supplier who also deals with Land Rover. As Land Rover had stopped production, the supplier had as well, so Lotus couldn't get any more bits.

Markus

From what I've read, the bailout failed because the UAW (United Auto Workers) union would not agree to bring the wages of it's workers in line with that of Japanese car company workers. My guess is this meant they'd have to lower their wage.

I can see why they are upset, if I was a high school drop-out but was getting $50 plus, an hour, to screw bolts into a car (if I'm not sitting on my **** because the union rep's said "all out" due to the Union getting involved in some matter or other) then I'd be annoyed I had to take a pay cut Sarcasm intended of course. Seriously though, if it were a choice between making $30 an hour, or not having a job, I think I'd take the cut, but alas it's not the individuals decision to make, it's down to the union.

Why not ask the execs at the company to take a pay cut, or perhaps sell their beloved private jets. I thought it highly insulting for them to turn up to request a handout in their private jets. Why not just fly first class, or share a private jet. Oooh, can't be doing that, we're far to big and powerful to have to do that.

What would happen if they were given the handout and still failed? Would more money be pumped into them?

One problem I have with the big three is that they are made up of many marques/brands, which sell very similar vehicles, why not streamline things slightly better, plus reduce the models in the range. Do you really need 20 different variants of a mini van? Do you need the same van, with only slight changes available from Marque A and Marque B? I don't think so.

We all joke about domestic US cars being piles of utter crap, and for the most part, I have to say they are, then again, if you mass produce anything at large levels then you will see more failures than if it's a smaller produced product.

ChrisB

GM paid $2 billion to get out their tie-up in 2005 (Beeb).

And I always thought Fiat owned Alfa...

Matteeboy

$2bn NOT to buy something?
Blimey, hope that business model doesn't spread!

nixxon

The other option was to buy Fiat for substantially more, when Fiat was worth substantially less- well, F all, TBH!

dpb

Why cant they sell 1/3 of the Companies to the Chinkys

Devildog

Unions have to bear a fair amount of the blame for where the big 3 currently are, let alone any further spanners in the works now.

If they enter Chapter 11, they will most likely survive in some form or another, however the billions due to banks and suppliers (globally) which will not be paid will result in a massive domino effect.

So its not quite as simple as letting them go down because they are not viable.

Do you chuck a few billion at them to save the same further down the line? Or do you let them go and pick up the tab for unemployment on a scale America has not seen for years, if ever at all?

Either way, America plc will be picking up the tab...

David Lock

'Cos the front seats are too low...............

Markus

The Big 3 are trying to get a similar bailout plan from the Canadian Government, who are asking for the exact details of what they want, and why, to be make public, so Canadian taxpayers can see where the money would actually go, and I presume, so people can comment on it and a general feeling on wether we think it's a good thing or not could be garnered and then the Government could decide what to do.

Markus

Here's some alleged latest news...
GM to close all it's plants in North America for the month of January. I say alleged as it comes from a spokesman for the CAW (Canadian Auto Workers (Union)) who claims he was told this. I've not seen anything on the Comedy News Network (CNN) about this yet, and I'd have thought they would have been up and running with their "Save the US Auto Workers" campaign by now. Perhaps they are trying to find a way to spin it so they can link this to the war on terror

scoobynutta555

If it all fails because the unions won't accept a deal to match wages of other auto workers then they deserve to be out of a job. We've (Trinity Mirror) been told this year that our wages will be frozen next year AND we still have redundancies across the board. Better to take a pay cut and be realistic in these times.

Plus our company haven't been cap in hand to the gov't for a bail out. It's pretty pathetic really.

dpb

Well wedge them up a bit

- the yanks are full of hot air

LanCat

GM provide free healthcare to their workforce and to those who retired on a GM pension. This adds around $1100 to the price of every one of their cars.
That's just one example of their problems and of course it get's worse with the fewer cars they sell in a recession. You don't have to be smart to figure out what will happen to them.