The Plan

[dazzleman]

Do liberals even believe in evolution anymore?

First, save all the dying species on the earth for fear that without even one, the whole food chain will fail.   I know life's been hell for me ever since the demise of the Dodo bird.

If they truly believe in the survival of the fittest, then some companies will fail and the stronger ones, the ones with foresight and good leadership will survive.  You can not bail out everyone. 

If my dealership fails, then all my customers will go to the next dealer.  With all the extra business, they will need more techs and service advisers and the jobs will be filled by those who lost their jobs elsewhere.  Not to mention a larger building, so contractors go back to work to enlarge the other dealer.

Right now, my dealership and the nearest other Ford dealer are running out of work by 2-3pm and what we do have is mostly oil changes and tire rotations.  It isn't enough for both to survive. They have already started laying off office personnel.  With a bailout though, we can delay the eminent failure of one or both for another year or so....or business can return to the levels it was one year ago.  (Though two years ago was even better).

In most cases, that's all bailouts really do -- delay the inevitable.

[FoMoJo]

One thing to keep in mind: Ford only requested a credit line and not a loan. They say that they might not need the money but they'd like the option to be available if needed.

I'm kind of an optimist and I'd like to believe that thats the case and its not some PR line.

Most of us remember that Ford mortgaged the house when credit was available a couple of years ago.  That's what's carrying them now.  As well, going back at least 7-8 years, after the foolish Nasser was booted out and Bill Ford took over, they started some serious restructuring with plans to be profitable within a stated number of years.  A lot of the ground-work had been done by the time Mulally joined the company and, seemingly, he is part of the answer...inspite of the failed economy.  They just might make it and Mulally may even get to keep his big salary.  If he does, he'll have earned it.

[FoMoJo]

A little more news...

Situation is far worse than we thought... teetering General Motors Corp. says it needs $12 billion in cash -- a third of it by the end of this month -- and a $6 billion credit line to make it into next year.


I'd sure like to see what's in their plan details...Four quick thoughts to the most detailed corporate striptease this town has ever seen: It's far worse than many thought, especially at GM. Second, "the Big Three automakers" are not a monolith mired in identical dire straits, as the Senate Banking House Financial Services committees will see later this week. Third, members of Congress hoping for an easy call on the Detroit loan package won't get one -- and some of them are likely to be scared stiff after they read the automakers' plans, particularly GM's 37-page doozy that could have been subtitled "Prelude to the Apocalypse."

[FoMoJo]

I guess the UAW got a copy of the plan...UAW leaders meet at 10 a.m. on domestic auto crisis.

Even they must accept that the party's over.

[SagRacer]

I don't care about $1 salaries, grounding jets, and all that crap. I want to see improvements in areas where is really counts. I want to see more efficient manufacturing, more flexible factories and plants, cutting costs where is doesn't matter but keeping the product a quality product. Things like that show me that the company wants to change. The things they said tell me that they want to get back to where they were before and then go back to those bad habits.

Translation: Get rid of the UAW.  I agree 

[3.0L V6]

The plans laid out by each respective company don't go far enough. The bull with the electric cars is just an early 1990s redux.

They need Chapter 11 to fix themselves.

[r0tor]

I just read some highlights of the propsals from the Big 3...  This has just gotten rediculous. 

To please the grandstanding congressmen, Chrysler has pledged no raises or merit bonuses for any North American salary worker.  Good f'in luck to them retaining any kind of worthwhile engineer if your promising no salary increases AND cutting their performance bonuses.  Cutting the CEO pay to $1?!?!?  Good f'in luck getting any worthwhile replacements if any of the CEO's quit and their replacements can only be paid $1 a year.

GM and Chrysler WILL kill themselves with their own proposals.  Ford is about the only one that stands a chance (particularly if they get all of GM's customers)

[Laconian]

There is no engineering culture left to kill at Chrysler.

[Vinsanity]

Pontiac

Pontiac will become a “specialty niche” brand, according to Henderson. This likely means the brand will be trimmed down to core performance models and that the volume models, G5 and G6, will probably not be replaced. Speculation earlier today about the future of the slow-selling G8 leads us to believe it will probably not be replaced, either, and the automaker has reportedly canned the next-generation Solstice.

“Pontiac will be more of a high-value performance brand, like Corvette to Chevrolet,” Mark LaNeve, GM’s North American vice president of sales, told the Detroit News.

So basically, Pontiac is the brand that should have the Corvette and Camaro? Good luck with that, GM.

[Madman]

They need Chapter 11 to fix themselves.

No, that's the last thing they need.  Would you buy a car from a company in bankrupcy?  Of course not.  Neither will anyone else.

"Well, Mr. Customer, there's a pretty good chance we won't be around to honour your warranty and service your car in a couple of years.  Oh, and good luck getting parts, too."

Talk about a tough sell!  Whether these fears are justified or not, that's what the buying public will believe.  Chapter 11 will completly annihilate any chance for these companies to be able to sell cars and continue to survive.


Cheers,
Madman of the People

[TBR]

Right, because a government bail out just fills people with confidence.

[sportyaccordy]

Ford management knows however that Mullaly would make as much or more at dozens of other Fortune 500 companies.

Why would anyone hire the dude... he has shown his strength as the leader of a company

[SVT666]

Why would anyone hire the dude... he has shown his strength as the leader of a company

Mullaly is doing a great job so far.  I think Ford is in the best position of the domestics because of him.

[SVT666]

November 2008 Mustang sales now have the official title of being the worst month for Mustang sales ever in Ford?s 45 year history of producing the Mustang.  November Mustang sales shattered the previous months record low of 4,686 which was last month by just over a 1,000 units.  With no end in sight for these record monthly sales low, I fully expect to see an even lower number for December.

Sales of Mustangs for November of 2008 were 3,667 compared to 7,352 from November of 2007 showing a 50.1% decrease in sales from the previous year. Year to date Mustang sales are 87,224 compared to 126,311 for the first eleven months of 2007, which is a 30.9% drop.

[Madman]

Right, because a government bail out just fills people with confidence.

Millions of people bought Chrysler K-cars despite the "bailout" of the early 1980s.  The buying public will have much more confidence in a company with the government standing behind it than one that is allowed to fall into bankruptcy.

Cheers,
Madman of the People

[3.0L V6]

Millions of people bought Chrysler K-cars despite the "bailout" of the early 1980s.  The buying public will have much more confidence in a company with the government standing behind it than one that is allowed to fall into bankruptcy.

Cheers,
Madman of the People

I only suggest Chapter 11 because it allows GM to void contracts without penalty. GM had a miserable time killing the Oldsmobile line because they had to pay off everyone involved. Now, imagine trying to get rid of Hummer, Pontiac, Saturn and whoever else, and GM can't possibly afford it.

[Colonel Cadillac]

Why would anyone hire the dude... he has shown his strength as the leader of a company

He did a phenomenal job at Boeing.

[JWC]

No, that's the last thing they need.  Would you buy a car from a company in bankrupcy?  Of course not.  Neither will anyone else.

"Well, Mr. Customer, there's a pretty good chance we won't be around to honour your warranty and service your car in a couple of years.  Oh, and good luck getting parts, too."

Talk about a tough sell!  Whether these fears are justified or not, that's what the buying public will believe.  Chapter 11 will completly annihilate any chance for these companies to be able to sell cars and continue to survive.


Cheers,
Madman of the People

I wouldn't think it would matter.  A judge or a trustee (in a case this big, more than likely in will take several to oversee a reorganization) will control what gets paid and what will not.  A judge would also decide what and who had priority.   I'm sure the  two priorities are labor and consumer rights.   GM would commit suicide by canceling warranties or offering warranties that are not competitive.

If the deals are good and warranties stay in affect, people would continue to buy GM vehicles.

[MX793]

Do liberals even believe in evolution anymore?

First, save all the dying species on the earth for fear that without even one, the whole food chain will fail.   I know life's been hell for me ever since the demise of the Dodo bird.

If they truly believe in the survival of the fittest, then some companies will fail and the stronger ones, the ones with foresight and good leadership will survive.  You can not bail out everyone. 

If my dealership fails, then all my customers will go to the next dealer.  With all the extra business, they will need more techs and service advisers and the jobs will be filled by those who lost their jobs elsewhere.  Not to mention a larger building, so contractors go back to work to enlarge the other dealer.

Right now, my dealership and the nearest other Ford dealer are running out of work by 2-3pm and what we do have is mostly oil changes and tire rotations.  It isn't enough for both to survive. They have already started laying off office personnel.  With a bailout though, we can delay the eminent failure of one or both for another year or so....or business can return to the levels it was one year ago.  (Though two years ago was even better).

Would a bailout of the manufacturers really even help the dealerships if nobody is buying any cars and nobody is taking their car to the dealer to be worked on?

[JWC]

Would a bailout of the manufacturers really even help the dealerships if nobody is buying any cars and nobody is taking their car to the dealer to be worked on?

Ford has been closing dealerships for over two years now.  It is one of the reasons they are in better shape than GM and Chrysler.  Ford began with company owned dealerships.  Then as smaller dealerships or dealerships in questionable market areas came up for renewal, they just wouldn't renew the contract.  A small town dealer not far from us met this fate. 

A local Ford dealer principle was killed in a car wreck.  The franchise was in his name alone. He had been working on having his son's name added to it, but the paperwork was not finished. Upon his death, the franchise contract was technically terminated.  The son tried to keep the franchise, but Ford refused to renew it.  The dealership closed and 30 people were out of work.  While this dealership didn't sell very many Ford automobiles, they were the most experienced truck dealer and service department in our area.

A well run service department could stand on it's own even without new vehicle sales.  I've worked at dealerships that were filing bankruptcy and the service department kept the dealership standing and paid the bills.   It was our lack of credit that finally shut the door.   We couldn't buy supplies and parts without credit and no one was going to extend credit to the current owner. 

With that in mind, Mercedes had developed a plan in the 1990's to install central sales offices and have satellite service departments in outlying cities.   GM and Ford could do the same. In North Carolina, it would probably be something on the order of, keeping the sales showrooms in areas like Raleigh, Charlotte, and Wilmington, but have service departments in areas like the Outer Banks, Greenville, and New Bern.   You could have a small showroom and one or two sales reps on hand with a couple of demos.    You could pick the colors and options you want and the car could be shipped to the satellite office.

[dazzleman]

JWC, you're exactly right about Ford closing dealerships.

There was a Ford dealer near me, Miller Ford, that was closed, with the customers advised to go to a Stevens Ford a few towns up.  My understanding is that Stevens Ford, together with other Ford dealerships in the area, paid Miller to stop selling Fords.

Miller is now totally devoted to Nissan.  They used to also sell Buicks, but they stopped that close to 10 years ago.

[S204STi]

One problem I see with GM dealerships is the sheer redundancy of so many vehicles means that you can basically take your car to any GM dealer for repairs without a hitch.  This also means that the Chevy, Cadillac dealer literally 100yds down the street competes with my GMC, Pontiac, Buick dealer.  I am constantly working on Chevys and various other GM makes, and I am sure many of our customers go to the other dealer as well.  It's an honest problem.

[JWC]

When I worked for a GM dealer in 2000, GM's policy forbid the crossing of car lines for warranty.  If you had a Pontiac, you had to go to Pontiac; Buick owners had to go to Buick, and so on. This requirement was probably due to pressure from dealers.  The requirement allowed dealers to develop a relationship with the customer.   There were exceptions, but it required a GM rep's approval.

When I went to Ford, there was no such requirement.  A dealer could do warranty work on any vehicle in the Ford family of cars.  To me it was a much better idea.  If we sold a Lincoln Town Car, we could do warranty work on it and that maintained the relationship with the customer.  The down side to that is that it made the Lincoln dealer nine miles away, useless.  It weakened the market for the Lincoln dealer. 

If Ford doesn't do away with Lincoln or Mercury, it should at least stop the separation of franchises.   The local L/M dealer is also a Chrysler dealer.   Ford could consolidate the sales of its cars to one dealership in that town by allowing the much larger Ford dealer to start ordering and selling L/M vehicles.

It would be more profitable for the dealers and allow Ford to cut back on it's dealer support network without completely losing a franchise in a town.

[Tave]

One problem I see with GM dealerships is the sheer redundancy of so many vehicles

I can't imagine how their lineup could possibly be successful in a bear market. It simply isn't feasible. A little forsight and we could have avoided a lot of this mess.

[280Z Turbo]

I wish those hypocritical politicians had the tables turned on them. I'd like to see them explain why the national debt is over 10 trillion.

[JWC]

I wish those hypocritical politicians had the tables turned on them. I'd like to see them explain why the national debt is over 10 trillion.

Their answer would be simple:

Republicans

[3.0L V6]

Their answer would be simple:

Republicans

I think it has more to do with having the same party control both the legislative and executive branches of government.

But I digress, as this isn't a political topic.

[Nethead]

From www.jalopnik.com, who says they got it from the Wall Street Journal website:

Report: Chrysler Hires Bankruptcy Firm Jones-Day
By Ray Wert, 1:10 PM on Fri Dec 5 2008, 568 views

The WSJ is reporting Chrysler hired bankruptcy firm Jones-Day "several weeks ago" to "prepare for imminent financial failure."

All we have so far is directly from the top of the WSJ web site:

"Chrysler several weeks ago hired the prominent law firm of Jones Day as bankruptcy counsel, suggesting the auto maker is preparing for imminent financial failure should its efforts to obtain federal rescue funds fall short."
[via WSJ]

[TBR]

I think it has more to do with having the same party control both the legislative and executive branches of government.

But I digress, as this isn't a political topic.

I think it has to do with all politicians being conniving villains more concerned with winning the next election than actually doing what's best for the country.

[SVT666]

From www.jalopnik.com, who says they got it from the Wall Street Journal website:

Report: Chrysler Hires Bankruptcy Firm Jones-Day
By Ray Wert, 1:10 PM on Fri Dec 5 2008, 568 views

The WSJ is reporting Chrysler hired bankruptcy firm Jones-Day "several weeks ago" to "prepare for imminent financial failure."

All we have so far is directly from the top of the WSJ web site:

"Chrysler several weeks ago hired the prominent law firm of Jones Day as bankruptcy counsel, suggesting the auto maker is preparing for imminent financial failure should its efforts to obtain federal rescue funds fall short."
[via WSJ]

Well, that should be the proof Congress needs.