Let them all bankrupt

[H]

No Bailout! Just because any of the "Big 3" were to file bankruptcy does NOT mean they will stop making autos. Nor will they lay off every worker or not need their suppliers anymore. It means they will re-structure their company to be more efficient.

 

The Bailout has nothing to do with the economy, automakers or their employees. It has everything to do with the UAW and their support for the democratic party. It is nothing other than another step up the ladder of socialism. There will be no end to this foolishness if this goes through. The "Big 3" must do as we do...Bite the bullett! They will be stronger in the long run.

 

Talk to your Congressman and insist they do not vote for ANY kind of a bailout.

 

 

 

Restructuring under Chapter 11 bankruptcy protection means avoiding or delaying payment to creditors like parts suppliers (many of which are in serious financial trouble, too). What do you think will happen to a supplier already struggling to pay its bills and payroll when it is told by GM or Chrysler that it won't be receiving payment due to a bankruptcy filing? Do you think that supplier will continue to manufacture and ship parts? Do you think GM or Chrysler can keep building cars if they run out of parts? This thing could create a wave of cascading bankruptcies and business failures the likes of which haven't been seen in nearly 80 years. There was an article in the Courier-Journal just this morning about the chemical manufacturer BASF announcing the temporary closure of 80 plants because of "a massive drop in demand in key industries, particularly among automotive", and several others. Once the domestic auto industry goes away, a huge segment of U.S. manufacturing infrastructure and knowledge base will be gone forever. There are significant long term national security implications if the U.S. loses such a large portion of its industrial base.

[scooterbob]

Restructuring under Chapter 11 bankruptcy protection means avoiding or delaying payment to creditors like parts suppliers (many of which are in serious financial trouble, too). What do you think will happen to a supplier already struggling to pay its bills and payroll when it is told by GM or Chrysler that it won't be receiving payment due to a bankruptcy filing? Do you think that supplier will continue to manufacture and ship parts? Do you think GM or Chrysler can keep building cars if they run out of parts? This thing could create a wave of cascading bankruptcies and business failures the likes of which haven't been seen in nearly 80 years. There was an article in the Courier-Journal just this morning about the chemical manufacturer BASF announcing the temporary closure of 80 plants because of "a massive drop in demand in key industries, particularly among automotive", and several others. Once the domestic auto industry goes away, a huge segment of U.S. manufacturing infrastructure and knowledge base will be gone forever. There are significant long term national security implications if the U.S. loses such a large portion of its industrial base.

 

And you would prefer that we bail them out and that the result is to merely delay in Chapter 7 through a bailout (which will end up as a gift and not a loan)? If this is the case, all those suppliers you mention will get nothing. At least, under Chapter 11, they stand a chance of getting some payment.

 

The truth is, as hard as it is to accept, that the auto makers need to get rid of (or at least revise downward) those unconscionable contracts they have made with the union.

 

The bailout may help the union people (workers, nonworkers, and retirees) for a while but it won't last. Bankruptcy will still be the end result so why not opt for the guarded hope of Chapter 11 than end up with Chapter 7 liquidation.

[4chs]

A good read on the automaker bailout.

http://www2.journalnow.com/content/2008/nov/13/domino-effect-feared-if-big-3-automakers-should-co/business-nationworld/

[H]

And you would prefer that we bail them out and that the result is to merely delay in Chapter 7 through a bailout (which will end up as a gift and not a loan)? If this is the case, all those suppliers you mention will get nothing. At least, under Chapter 11, they stand a chance of getting some payment.

 

The truth is, as hard as it is to accept, that the auto makers need to get rid of (or at least revise downward) those unconscionable contracts they have made with the union.

 

The bailout may help the union people (workers, nonworkers, and retirees) for a while but it won't last. Bankruptcy will still be the end result so why not opt for the guarded hope of Chapter 11 than end up with Chapter 7 liquidation.

 

 

 

 

It sounds as if you are not aware of some of the recent contract changes negotiated between the Detroit 3 automakers and the UAW. Last fall, the UAW agreed to a two-tiered wage structure in which new hires in jobs not directly related to vehicle assembly would be payed a substantially lower hourly wage (around $12-15 per hour). This change is expected to result in large labor savings for GM starting around 2011, by which time about 75% of its current workforce is expected to have retired. Another recent development was the agreement to set up a VEBA between the U.S. automakers and the UAW in which the union takes over responsibility and management of retiree health care costs out of a lump sum trust fund payment by the car companies. The Detroit 3 payed tens of billions of dollars into this fund, in exchange for removing the liability from their books (a wise move, in light of the accelerating cost of health care).

 

 

These two contract changes represent significant steps toward becoming much more efficient and competitive with non-union, foreign carmakers, but they will take some time (few years) to bear fruit. Very few capital-intensive industries could survive an abrupt drop in market volume of 25% without major cash flow problems. The cash shortage facing these companies is a very near term problem that threatens their immediate survival.

[PigSkinFan42]

Very interesting thread here and everyone makes some very good points, with that being said say the government does decide to bailout the big 3 where will the government get the money to loan them? The snowball effect that everyone is talking about is still going to happen.

[SKINPIG]

Restructuring under Chapter 11 bankruptcy protection means avoiding or delaying payment to creditors like parts suppliers (many of which are in serious financial trouble, too). What do you think will happen to a supplier already struggling to pay its bills and payroll when it is told by GM or Chrysler that it won't be receiving payment due to a bankruptcy filing? Do you think that supplier will continue to manufacture and ship parts? Do you think GM or Chrysler can keep building cars if they run out of parts? This thing could create a wave of cascading bankruptcies and business failures the likes of which haven't been seen in nearly 80 years. There was an article in the Courier-Journal just this morning about the chemical manufacturer BASF announcing the temporary closure of 80 plants because of "a massive drop in demand in key industries, particularly among automotive", and several others. Once the domestic auto industry goes away, a huge segment of U.S. manufacturing infrastructure and knowledge base will be gone forever. There are significant long term national security implications if the U.S. loses such a large portion of its industrial base.

 

Hey! Times get tough every now and then. Have you ever had to deal with bleak financial times? If you are like most of us, you have. Did you ask someone to bail you out or did you make changes of your own?

 

This is the United States of America. We love our autos as much as anything we own. If any or all of the Big 3 fail, some company will be making cars for us. Some company will need workers to make those cars for us. Some company will need suppliers to build those cars for us.

 

Our need for cars will be met. I guarantee it.

 

The Big 3 and many of their suppliers can survive bankruptcy. Some will fail, that's business. I didn't say it would be easy (should it be easy?)

[HHSDad]

Mark Levin was talking last night about the pay and benefits that UAW workers and retirees receive. Its really astounding. How could any company stay in business paying its employees like that?