Author Topic: What if?.... (Read 3615 times)

Shane · « **on:** November 09, 2008, 10:12:26 am »

What if one or more of the American car makers actually does go bankrupt? There is talk that GM could go bankrupt next month. Ford's now in trouble too. Chrysler on the edge. Many can't believe it could actually happen, but it's happened before in the American car industry.
They all make good cars and trucks, many I would buy. What if you bought a car from one of the above three and they went bankrupt? What happens with warranties, parts, dealer service, dealers etc? I'm seriously asking this, because looking to buy a new car and for the first time I'm nervous about American automakers and if they will actually be around down the road. Pardon the pun.

FlatBlackCaddy · « **Reply #1 on:** November 09, 2008, 10:20:01 am »

I think many people are confused about this.

IF gm(the most likely of the three) files bankruptcy it would be chapter 11. To my understanding this would allow them to CONTINUE to sell cars and trucks as well as parts. While some dealerships would close there would still have to be enough open to sell and service vehicles.

Either way filing bankruptcy doesn't mean everything up and disappears and there is no trace of the automaker.

TBR · « **Reply #2 on:** November 09, 2008, 10:21:43 am »

GM needs to declare bankruptcy, it needs to be a leaner, meaner company to survive in the new automotive market place, something it can't be as long as it is saddled with the UAW and legacy costs.

FlatBlackCaddy · « **Reply #3 on:** November 09, 2008, 10:22:51 am »

Quote from: TBR on November 09, 2008, 10:21:43 am

GM needs to declare bankruptcy, it needs to be a leaner, meaner company to survive in the new automotive market place, something it can't be as long as it is saddled with the UAW and legacy costs.

The current leadership also needs to go.

the Teuton · « **Reply #4 on:** November 09, 2008, 10:23:33 am »

Someone just put the UAW out of its misery, give workers <$20/hr. like they most likely deserve, and ramp up production investments rather than cutting things like grab handles (which are missing in ~~a lot of~~ most GM vehicles) because costs are killing them.

the Teuton · « **Reply #5 on:** November 09, 2008, 10:24:35 am »

Quote from: FlatBlackCaddy on November 09, 2008, 10:22:51 am

The current leadership also needs to go.

Lutz and Wagoner aren't that bad; neither is Mullaly.

TBR · « **Reply #6 on:** November 09, 2008, 10:24:38 am »

Quote from: FlatBlackCaddy on November 09, 2008, 10:22:51 am

The current leadership also needs to go.

I don't think the current leadership is really a problem, it was the leadership of the '80s and '90s that got them into this mess; there is only so much Wagoneer can do with a turd. But, if there heads must roll to keep the UAW happy, then so be it.

TBR · « **Reply #7 on:** November 09, 2008, 10:26:45 am »

Quote from: the Teuton on November 09, 2008, 10:24:35 am

Lutz and Wagoner aren't that bad; neither is Mullaly.

It would seem especially foolish to let Mullaly go, he hasn't been around long enough to make a difference.

Once his plan to consolidate production across the world gets implemented (something that might prove difficult considering the financial condition of Ford N.A.) the company should be much better off. Remember Ford of Europe is very profitable.

FlatBlackCaddy · « **Reply #8 on:** November 09, 2008, 10:28:49 am »

Quote from: TBR on November 09, 2008, 10:24:38 am

I don't think the current leadership is really a problem, it was the leadership of the '80s and '90s that got them into this mess; there is only so much Wagoneer can do with a turd. But, if there heads must roll to keep the UAW happy, then so be it.

I'm sorry, but rick is pretty shitty. He has had plenty of time to right the wrongs of past leadership. My feelings of lutz are based on his utter lack of knowledge about what younger and more "advanced" buyers want in a vehicle. His contempt for the customer also pushes me over the edge. Everyone says that these guys need more time, that the changes required are drastic and take time. Nissan was on deaths door, ghosn came in and instigated a 3 year turnaround plan, by year 2 sales were up and cash was flowing in. The financial turnaround was complete a year early. Rick has had 3 times as long to accomplish half as much and he can't even come close.

TBR · « **Reply #9 on:** November 09, 2008, 10:30:51 am »

Quote from: FlatBlackCaddy on November 09, 2008, 10:28:49 am

I'm sorry, but rick is pretty shitty. He has had plenty of time to right the wrongs of past leadership. My feelings of lutz are based on his utter lack of knowledge about what younger and more "advanced" buyers want in a vehicle. His contempt for the customer also pushes me over the edge. Everyone says that these guys need more time, that the changes required are drastic and take time. Nissan was on deaths door, ghosn came in and instigated a 3 year turnaround plan, by year 2 sales were up and cash was flowing in. The financial turnaround was complete a year early. Rick has had 3 times as long to accomplish half as much and he can't even come close.

You make a good point.

But, to be fair Nissan did not have the inflexible and high cost structure GM has.

FlatBlackCaddy · « **Reply #10 on:** November 09, 2008, 10:32:31 am »

Quote from: TBR on November 09, 2008, 10:30:51 am

You make a good point.

But, to be fair Nissan did not have the inflexible and high cost structure GM has.

No they didn't, if they did it may have taken an extra year or two to combat that. Still that puts the timeframe within ricks duration of leadership.

TBR · « **Reply #11 on:** November 09, 2008, 10:34:08 am »

Quote from: FlatBlackCaddy on November 09, 2008, 10:32:31 am

No they didn't, if they did it may have taken an extra year or two to combat that. Still that puts the timeframe within ricks duration of leadership.

The UAW cannot be so easily defeated.

Shane · « **Reply #12 on:** November 09, 2008, 10:34:14 am »

Quote from: FlatBlackCaddy on November 09, 2008, 10:20:01 am

I think many people are confused about this.

IF gm(the most likely of the three) files bankruptcy it would be chapter 11. To my understanding this would allow them to CONTINUE to sell cars and trucks as well as parts. While some dealerships would close there would still have to be enough open to sell and service vehicles.

Either way filing bankruptcy doesn't mean everything up and disappears and there is no trace of the automaker.

Thanks for the explanation...I don't know alot about bankruptcy.
It makes me wonder then how many people choose something else other then GM, Ford or Chrysler because of all the rumors and lack of knowledge about bankruptcy.
I feel a bit more confidant now if I buy American.

GoCougs · « **Reply #13 on:** November 09, 2008, 10:36:49 am »

We first have to ask ourselves what would be the purpose of a reorganization bankruptcy. Typically this is done to stave off creditors - renegotiate terms, rates and balances for outstanding debts, to give a viable business a chance to right the ship.

This is not Detroit's problem. Their businesses are fundamentally flawed - too much power given to the UAW over production, too much pay and benefits to UAW members, too much retiree benefits, and poor/lackluster product in small/medium car, truck and SUV realm.

FlatBlackCaddy · « **Reply #14 on:** November 09, 2008, 10:37:22 am »

Quote from: TBR on November 09, 2008, 10:34:08 am

The UAW cannot be so easily defeated.

Let me put it differently to get the overall point across(that rick is NOT worth keeping).

Take GM at the moment rick was put at the helm, now pretend someone like ghosn was put in place instead of rick. How do you think the company would be different. Ghosn would have gotten somewhere, rick couldn't even maintain. Instead he stood there as GM plummeted at an increasing speed.

GoCougs · « **Reply #15 on:** November 09, 2008, 10:44:34 am »

I think the more appropriate question is, How much worse would things be if Rick W. weren't at the helm? Probably a lot worse. He has gotten fairly large concessions from the UAW, and under his tenure GM's best vehicles ever have come to market.

One of the fundamental flaws of Detroit is lousy product. No manner money or UAW concessions is going to allow Detroit to catch let alone leapfrog the Japanese in just a matter of a few years.

The other primary issue remains is that the UAW still has a say on virtually all things production - when/how to retool lines and open plants, the level of factory automation, how(where) to source parts, and all the rest of it.

the Teuton · « **Reply #16 on:** November 09, 2008, 10:49:09 am »

Ghosn is a kickass CEO. But there are only so many of him to go around.

Let's look at everyone in the industry with some clout:

Wiedking - Porsche - He only has to work with 3-4 platforms and a lot of shared parts in a specialty manufacturer with an awesome reputation. The cars practically sell themselves.

Pieche - VW - He had no sense when it came to how much things cost. He didn't care. As a result, we have Bugatti and the Phaeton.

Zetsche - Mercedes is doing reasonably well, but buying Chrysler was a massively terrible mistake.

Nardelli - Chrysler deserves to go under with him at the helm. He nearly killed Home Depot, and now he's doing the same at Chrysler.

...I guess the point I'm trying to make is that there aren't too many good auto execs. In the book, "The Six Men Who Built the Modern Auto Industry," the author writes about Lutz (bringing Chrysler into the modern era), Iacocca (need I say more?), Ghosn, Reitzle (Where has he been since leaving BMW?), Honda (dead), and Pieche, among a few other less significant leaders. There aren't too many dynamic leaders left with enough spunk to change things.

Shane · « **Reply #17 on:** November 09, 2008, 10:50:54 am »

Quote from: FlatBlackCaddy on November 09, 2008, 10:28:49 am

I'm sorry, but rick is pretty shitty. He has had plenty of time to right the wrongs of past leadership. My feelings of lutz are based on his utter lack of knowledge about what younger and more "advanced" buyers want in a vehicle. His contempt for the customer also pushes me over the edge. Everyone says that these guys need more time, that the changes required are drastic and take time. Nissan was on deaths door, ghosn came in and instigated a 3 year turnaround plan, by year 2 sales were up and cash was flowing in. The financial turnaround was complete a year early. Rick has had 3 times as long to accomplish half as much and he can't even come close.

Totally agree. I've been a GM in fan in the past, but they drive me nuts with their ways. Yes, there has been some improvement in the style department creating cars people lust after.
But they always seem to lag behind the curve. They don't sweat the details. Here's just a little example. The Saturn Sky. One of the most eyecatching designs on the road. I opened the hood on one and observed raw welds in the engine compartment. It looked like it had been put together in someones garage. This had just arrived off the truck. It shows the mixed messages of GM.

GM still has an amazing misplaced arrogance. And I think it's spearheaded by Lutz. He's from another century when American carmakers were king. That's yesteryear. GM needs a younger, dynamic leader.

FlatBlackCaddy · « **Reply #18 on:** November 09, 2008, 11:12:56 am »

Quote from: GoCougs on November 09, 2008, 10:44:34 am

I think the more appropriate question is, How much worse would things be if Rick W. weren't at the helm? Probably a lot worse. He has gotten fairly large concessions from the UAW, and under his tenure GM's best vehicles ever have come to market.

One of the fundamental flaws of Detroit is lousy product. No manner money or UAW concessions is going to allow Detroit to catch let alone leapfrog the Japanese in just a matter of a few years.

The other primary issue remains is that the UAW still has a say on virtually all things production - when/how to retool lines and open plants, the level of factory automation, how(where) to source parts, and all the rest of it.

I get tired of people using gm's own shittyness to show the great leaps forward rick has achieved. It doesn't matter how much worse it would have been. So ricks great achievement is that it took him twice as long to run the company into the ground as it would have took if some other idiot was at the helm. As far as GM putting out the best cars it has ever put out that is yet another pathetic excuse. Sure GM has put out it's best cars ever all that proves is how shitty gm was in the past. When the "best cars ever" still aren't hands down class leaders(hell some of them are lucky to be mid pack and competitive) then that is NOT i repeat NOT A ACHIEVEMENT.

Shane · « **Reply #19 on:** November 09, 2008, 11:57:13 am »

Quote from: FlatBlackCaddy on November 09, 2008, 11:12:56 am

I get tired of people using gm's own shittyness to show the great leaps forward rick has achieved. It doesn't matter how much worse it would have been. So ricks great achievement is that it took him twice as long to run the company into the ground as it would have took if some other idiot was at the helm. As far as GM putting out the best cars it has ever put out that is yet another pathetic excuse. Sure GM has put out it's best cars ever all that proves is how shitty gm was in the past. When the "best cars ever" still aren't hands down class leaders(hell some of them are lucky to be mid pack and competitive) then that is NOT i repeat NOT A ACHIEVEMENT.

You are so right!! It puts GM's product comeback into perpective.
It's all relative. I mean anything would have been better than some of the
absolute Soviet level crap they were putting out. So is that really success in today's automotive marketplace? I don't think so. They are just playing catch-up.
And the problem is with top management. Honestly, these people are so buffered from the real world, I can't imagine they actually get it. No more excuses of giving it time. Time has run out and now it's time for new leadership.

GoCougs · « **Reply #20 on:** November 09, 2008, 12:39:40 pm »

Quote from: FlatBlackCaddy on November 09, 2008, 11:12:56 am

I get tired of people using gm's own shittyness to show the great leaps forward rick has achieved. It doesn't matter how much worse it would have been. So ricks great achievement is that it took him twice as long to run the company into the ground as it would have took if some other idiot was at the helm. As far as GM putting out the best cars it has ever put out that is yet another pathetic excuse. Sure GM has put out it's best cars ever all that proves is how shitty gm was in the past. When the "best cars ever" still aren't hands down class leaders(hell some of them are lucky to be mid pack and competitive) then that is NOT i repeat NOT A ACHIEVEMENT.

You can't go from junk to class leaders in a decade. It's simply impossible. The design and life cycles of automotive platforms simply prevent such a thing.

Now add the morass of the UAW having a say in all things production (which in turn drives product design), and you have a company that will take 20 years to fix.

The fault lies completely at the feet of (past) management, and their decision to give so much power to the unions.

In hindsight Rick W.'s only recourse would have been to break the union when GM was strong enough to weather the storm. Of course the board would not have approved such a thing.

FlatBlackCaddy · « **Reply #21 on:** November 09, 2008, 12:52:19 pm »

"You can't go from junk to class leaders in a decade."

Hyundai has almost achieved that, they went from junk to highly competitive product while bringing the brand it's models and transaction prices up to the levels of the japanese.

Once again, gm couldn't even accomplish half of what hyundai has down WITH TWICE THE TIME.

If result flowed out of GM as freely as excuses they wouldn't be where they are now.