U.S. government to back GM, Chrysler warranties

[SVT666]

U.S. government to back GM, Chrysler warranties


Current and future owners of General Motors and Chrysler vehicles need not worry about future warranty coverage, the Obama administration says. Buried in the automotive task force?s restructuring plan is a section titled ?Warranty Commitment Program,? which promises warranty coverage for the products of any failed domestic automaker.

The program is designed to encourage buyers to keep purchasing GM and Chrysler cars.

?No American should worry in buying a car from Chrysler, GM over this next period of time,? an unnamed Obama administration official told the Associated Press. The official added that the administration has no cost estimate for what it is calling the ?Warranty Commitment Program.?

Interestingly, the provision seems to cover Ford Motor Company, as well, despite the fact that Ford isn?t currently asking for government aid. The provision states that the warranty program would be made available to any domestic automaker.

[giant_mtb]

Why'd they make it for Ford, too?  I don't understand.  Are they expecting Ford to doom itself, as well?  Or is it just the fact that people have no confidence in the Big 3 anyway, so they figure that saying they're backing Ford's warranties will help them sell?

[Vinsanity]

I wonder how this is going to affect the process of having warranty work done.

So far, I've had to have a differential, catalytic converter, and battery replaced under warranty.

[SVT666]

Why'd they make it for Ford, too?  I don't understand.  Are they expecting Ford to doom itself, as well?  Or is it just the fact that people have no confidence in the Big 3 anyway, so they figure that saying they're backing Ford's warranties will help them sell?

I guarantee you that 90% of the public thinks Ford is eating from the Government trough as well.

[giant_mtb]

I guarantee you that 90% of the public thinks Ford is eating from the Government trough as well.

So I pretty much answered my own question.  Alright.

[SVT666]

So I pretty much answered my own question.  Alright.

Personally, I think Ford should make it clear to the public that they are not taking government bailouts.  Their current Canadian ads are pretty good though, and I have no idea if they are the same as the American ads.

[GoCougs]

How many shops/dealerships are going to tolerate that kind of ridiculousness???

LOL - then we'll have nationalized repair shops, or the force of law to make shops do the warranty work.

I declare EPIC FAIL.

[Xer0]

Personally, I think Ford should make it clear to the public that they are not taking government bailouts.  Their current Canadian ads are pretty good though, and I have no idea if they are the same as the American ads.

From the adds that I've seen, they haven't  And when watching news channels (CNN and the like) the casters seem to accent the "yet" when they mention that Ford hasn't recieved funds so I wouldn't doubt it if the public at large thinks that they are in the same shithole as GM and Chrysler.  Ford is undoubtably in the best position (with the best products, imo) and they should make it painfully apparent.

[NomisR]

From the adds that I've seen, they haven't  And when watching news channels (CNN and the like) the casters seem to accent the "yet" when they mention that Ford hasn't recieved funds so I wouldn't doubt it if the public at large thinks that they are in the same shithole as GM and Chrysler.  Ford is undoubtably in the best position (with the best products, imo) and they should make it painfully apparent.

They don't have enough money to burn on advertising.

[Onslaught]

Will we finally get paid to do warranty work? As it is now it's a joke.

[GoCougs]

They don't have enough money to burn on advertising.

Or hedging against the fact that they'll need it in the future; crowing about not needing it now but taking it later would be a PR disaster.

[SVT666]

They don't have enough money to burn on advertising.

Ford is advertising like crazy up here.

[r0tor]

oh wow it will be interesting if either of the two go under to see how badly the government will get ripped off in warranty work... LOL

[MX793]

Why'd they make it for Ford, too?  I don't understand.  Are they expecting Ford to doom itself, as well?  Or is it just the fact that people have no confidence in the Big 3 anyway, so they figure that saying they're backing Ford's warranties will help them sell?

Should GM and Chrysler fold (moreso GM), the chain reaction of collapsing suppliers could take Ford down with it.

[GoCougs]

Should GM and Chrysler fold (moreso GM), the chain reaction of collapsing suppliers could take Ford down with it.

As the possible last man standing, I can virtually guarantee that for some time Ford has had suppliers beating down their doors to secure contracts and otherwise be prepared to supply Ford should GM and/or Chrysler disappear. By definition, those millions of would-be GM and Chrysler customers will still buy vehicles; mainline automakers like Ford, will benefit immensely, which is a huge bargaining chip to leverage with suppliers.

[NomisR]

As the possible last man standing, I can virtually guarantee that for some time Ford has had suppliers beating down their doors to secure contracts and otherwise be prepared to supply Ford should GM and/or Chrysler disappear. By definition, those millions of would-be GM and Chrysler customers will still buy vehicles; mainline automakers like Ford, will benefit immensely, which is a huge bargaining chip to leverage with suppliers.

Lower cost, renegotiated contract, wow, could be a win win situation for Ford in the end.

[MX793]

As the possible last man standing, I can virtually guarantee that for some time Ford has had suppliers beating down their doors to secure contracts and otherwise be prepared to supply Ford should GM and/or Chrysler disappear. By definition, those millions of would-be GM and Chrysler customers will still buy vehicles; mainline automakers like Ford, will benefit immensely, which is a huge bargaining chip to leverage with suppliers.

Ford doesn't have nearly the capacity to build and sell the same number of cars as the Big 3 sell combined now (even in this slow market).  They wouldn't be able to keep the suppliers in business single handed, at least not unless they underwent a massive expansion in production capacity, and that would not happen overnight.

[SVT666]

Whoever wants to buy a Camaro better do it now.  It's gonna be a collector's item.

[GoCougs]

Ford doesn't have nearly the capacity to build and sell the same number of cars as the Big 3 sell combined now (even in this slow market).  They wouldn't be able to keep the suppliers in business single handed, at least not unless they underwent a massive expansion in production capacity, and that would not happen overnight.

Ford doesn't need to keep the entire supplier production capacity up and running, however.

With that much business just hanging out there, (prospective) suppliers aren't sitting just sitting around.

The market by definition will respond (and my bet has already responded). The supplier collapse scenario is a red herring IMO. Some will, sure, but not all.