If God had saved the dinosaurs we'd have never gotten mammals.
The Congress is playing God with the auto industry. Sadly we already know how this plays out. Britain in the 1970s tried with predictable results. Funny thing is the US has a vibrant and successful auto industry. It just isn't in Detroit or owned by Americans. Speaking of Americans:
And gosh. Who owns Land rover and Jaguar? Doesn't that tell you that there is a possible happy ending to Ford and GM?
15 comments:
First to say Tata owns Landrover and Jaguar, after Ford and BMW.
Is the happy ending Tata buying GM?
You nailed it Nigel.
Now for bonus points;
Opel is getting bailed out in Europe but:
http://www.forbes.com/markets/economy/2008/11/17/opel-gm-update-markets-equity-cx_je_1117markets09.html
Yup. I hate to see YEARS of bad decisions salvaged. I know the ripples this will have in the economy, but I think it's just delaying the process - these companies have been so poorly run, they don't know any other direction except a nose dive.
Who DIDN'T see the gas crunch coming? Ford wants to be the leader in trucks. Great, let's take over a declining market!!!
When the Prius came out, they couldn't keep them in stock. NOBODY in Detroit seemed to notice though... so let's give them a big bonus and MORE money to flush.
Just disgusted a bailout is even being discussed for them.
The Prius is a lesson for b-schoolers of the future. The stupid bean counters in charge in Detroit and Dearborn saw Toyota selling them for some 20% below assumed cost and convinced their boards it was a good thing for F & GM.
DOW dropping like a rock. 8100 as I type (and in a steep decline), ya think this is the day to go below 8k (and stay there for a while)?
BTW,
Great Britain == Greater Iceland.
If we drop into and can hold to as much as a 7 handle it will be only in passing. Not today I am thinking the 8200 strange attractor still has legs. PPT up to bat in less than an hour. Profit taking on the big "C" daily decline that causes shorts to take profits, etc.
Bankruptcy could actually be a good thing for the automakers. They can break free of oppressive labor deals in court and move production to business-friendly states, automating their factories and integrating their suppliers in the process. They could emerge lean and mean and ready to compete with the Japanese.
Shareholders would suffer, current union workers would suffer, but let's face it: they're in serious trouble one way or the other. Might as well give some new workers, and new shareholders, a chance to revive the American auto industry.
Maybe it's Opel that gets packaged up and sold off?
I've been reading recently about car companies of yesteryear. Many in this country have failed. I'm not sure this should be any different, however the timing may be critical. If they can hang on for a few more years then maybe an orderly unwinding is the way to go.
I owned a GM car once for eight years. After that experience, I am highly reluctant to own another one. I owned a Ford product once for three, but it was really built by Mazda. If I bought American again, it would only be if it shared a Japanese platform like the Pontiac Vibe or some such vehicle.
My current vehicles are all foriegn.
Peculariaris fructus, congressus expletum.
Bankruptcy allows debtor-in-posession financing to be obtained (they owe too much for lenders to let them fail)
Yes, it also gets rid of the current uncompetitive cost structure.
One way or another, however, U.S. taxpayers will be assuming their workers' health care and pension costs.
Ho Ho Ho - It's Santa Flipper Clause
If anybody wants a good read on the auto industry, try Rivethead by Ben Hamper. Wonderful book.
Santa F. Clause
@bill: once again welfare for the wealthy.
Those retirees were paid a large hourly rate and granted pension entitlements that were not earned by the company. If the comanies fail, those future pension entitlements will end up being covered by the taxpayer. Or to put it another way, the companies borrowed against future profits to provide pension benefits to employees. They were not earned at the time.
I am sure it would suck to lose those pensions, but really -- they were not earned in any meaningful sense.
Santa Flipper,
Funny you should mention that book. I just found it Sunday and thought it would probably be a good idea to re-read it.
I definitely recommend it to everyone here.
I recently received a request for proposal from a customer that does sheet metal. When I looked at the company profile, i discovered they only had one customer: GM. It's not just GM that is idiotic in their management, but suppliers that solely rely on them.
I'd rather see Toyota buy GM than Tata. I think Tata will end up buying Volvo from Ford for a song like they got Land Rover and Jaguar from Ford.
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