Will GM be Allowed to Fail?

[85 Cutlass Brougham]

From what we keep hearing on the news, GM is on the ropes and will be bankrupt within the next 6 months. The thing is, will it be allowed to go under, or will the government take the opportunity to take it over and then dictate what it does? I tend to think that Obama and the Dems in Congress will take the opportunity to grab more power and nationalize it like France does with Renault/Peugeot/Citroen. The bigger question then is SHOULD we nationalize failing industries or allow the market to run it's course and take out the stragglers? Is GM too big to fail, just like AIG?

 

[Tony_SS]

If they are to give AIG 150 billion, then why not GM? Even as a loan? Letting them fail would be a disaster, even it's all their fault for mismanaging their own company.

 

[jatguit]

From what we keep hearing on the news, GM is on the ropes and will be bankrupt within the next 6 months. The thing is, will it be allowed to go under, or will the government take the opportunity to take it over and then dictate what it does? I tend to think that Obama and the Dems in Congress will take the opportunity to grab more power and nationalize it like France does with Renault/Peugeot/Citroen. The bigger question then is SHOULD we nationalize failing industries or allow the market to run it's course and take out the stragglers? Is GM too big to fail, just like AIG?

Is GM too big to let it fail? What are the ramifications, considering all the Infrastructure that is connected to GM, factories, parts sources, dealerships and all the small buisnesses that rely on them such as resteraunts, coffee shops etc...
I think if it were to be let go bankrupt it would be another nail in America's coffin causing further uneasiness among Americans and could just further tip us into -- well -- I don't even want to think of it.
What I DO NOT want to see is GM get funding and then buy up Chrysler just to be able to use up it's cash reserves, which has been talked about. And if GM failed anyway it would be a terrible unthinkable waste of 2 companies. If I had to pick and choose I would choose Chrysler over GM. My loyalties tend to go back to my families first buy into Chrysler products in 1969 and 1970, and subsequently became my first cars.

In my gut and from what I have heard, I think Chrysler is in a better position to weather this storm and therefore survive where GM may not. These are historic times and we may soon witness some catastrophic changes in the auto industry. God, I hope I am wrong.

 

[Uncletruck]

I'm not against the government giving money to GM- but if and ONLY if GM sets itself up in to a position where a loan or bailout has a firm plan for future success during the next 20 years. For them to just be given a handout to be able to continue running the way they have been in the past with no solid plan to be able to survive in tough economic times would be insane. The government might as well just put the money in a pile and burn it, at least there would be some heat from it as opposed to nothing.

At least I can feel a little sorry for Chrysler, as Daimler just up and left that company in the high and dry. Daimler loves things when they go well, but when the weather turns they run the other way. Perhaps American companies and their shareholders can learn a valuable lesson from this, that being selling out to foreign companies is rarely a wise move to make.

Ford says they are positioned to handle these tough times. But with their shares heading under 2.00, I'm not so sure about them either.

-UT-

 

[megaladon6]

should GM be helped? yes. should they be nationalized? hell no! everything GM screws up, congress does 10x worse. besides, since they can't get rid of the uniions, due to US law, they can never be competative without some help. but i agree that if they get help they should not be allowed to buy chrysler.
'though if congress really wants to help to automakers, they should drop the excessive safety and emissions requirements.
but chrysler definately shouldn't be "saved". sorry, but they've been bought out too many times already, just before they went bankrupt.

 

[85 Cutlass Brougham]

The problem with Chrysler is they have no good mainstream product lines. Their reputation for quality ( or at least public perception) is somewhere south of Kia. GM at least has a few innovative products in the pipeline like the Volt, and their European models such as Vauxhall and Opel are actually known for finally being good. They can turn it around, but I think Bankruptcy would be their best chance. Then they can cancel their union contracts, cut their dealers and some bad product lines and start fresh. Relocating to right to work states would allow them to pay the same as Toyota, and not have to deal with UAW hassles. Buick and Pontiac are currently nowhere in public perception. Only Saturn, Chevy and Cadillac have a chance at survival. GMC can go away too as it is redundant since all GMC trucks are just badge engineered Chevys.

 

[Blake442]

They can turn it around, but I think Bankruptcy would be their best chance. Then they can cancel their union contracts, cut their dealers and some bad product lines and start fresh. Relocating to right to work states would allow them to pay the same as Toyota, and not have to deal with UAW hassles. Buick and Pontiac are currently nowhere in public perception. Only Saturn, Chevy and Cadillac have a chance at survival. GMC can go away too as it is redundant since all GMC trucks are just badge engineered Chevys.

Exactly. Unions are choking the auto industry, and they simply can't compete with Toyota's labor costs. Bankruptcy is probably their best bet at survival. Buick should've been axed the same day that Olds was, as well as GMC.
So much for those 5 shares of GM stock my grandma got me for my b-day.
But would they still have those hundreds of thousands of retirement plans to pay for every month? Those are killing them too.

You think the economy is bad now, just imagine the sh*t storm if GM, the biggest auto manufacturer in the world, closed its doors for good... I don't think you'd be able to count the number of jobs that would be lost.

 

[85 Cutlass Brougham]

What scares me is Obama's "Card Check" program, which would allow unionization through intimidation. It takes the secret ballot away from workers in choosing to unionize and would give the names and addresses of workers to unions so that they can go and try to get them to sign a union petition. You just know that will end up badly. I really don't want some union thug from the AFL-CIO coming to my door and trying to pester me into unionizing the pizza place I work at. And you just know they WILL use intimidation because it means more money and power for them.

 

[Blake442]

I'd love to see what would happen to Toyota and Honda if they started getting F'ed in the A by unions like the big three have here...

Just imagine the backlash when all those union workers, that don't give a sh*t about the quality of work they do cause they can't get fired, putting together crap for Toyota like what happened here in the mid 70's... it brings a smile to my face to think of...

 

[85 Cutlass Brougham]

Unlike GM, foreign companies can decide to take their toys home and leave. I don't want a situation like that because then I won't have a choice between a good car and an American car. I'll be stuck with an American car since along with that union crap we would probably get some kind of protectionist tariff that would make it unprofitable to sell foreign cars here. I like my foreign cars very much, thank you and the reliability and durability I get out of them. I can't afford to drive unreliable American junk just to support some union slob with no formal education.

You also have to remember that the Big 3 are responsible for under-engineering their products, which is why they tend to be crap (among other reasons). If they worried about long term customer satisfaction more they would not be in the situation they are in now. After all, it takes no more materials to make a crappy car than it does to make a good one. It does, however, take a corporate mindset that has long term growth in mind and not just a "how much sh*t can we shovel out the door today?" mentality.