General Motors

[Dutchie]

According to one of our newspapers yesterday evening (I didn't see any news on TV yesterday so this was my only source), that if your government doesn't step in AGAIN, then GM will be bankrupt within a month.

Did any of you hear about this?

I remember on this forum a while back that when it was being discussed about bailing out GM and Chrysler the first time that it would be the worse thing to do, because they would be back for more.
I don't remember who wrote this but they were right.

What are your thoughts and what would actually happen if GM (and possibly Chrysler) goes bankrupt?

[Luv2BeFrugal]

I hadn't heard this at all...but, I'm not surprised. I think it will just screw the economy that much more... I don't think the government should have done the original bail out...let alone another one!

Stupidity. Plain and simple. And we're all going to pay for it in the long run.

[onencgirl]

Why doesn't this surptise me? (sigh)

[Dutchie]

And we're all going to pay for it in the long run.

Too true - if you like you can read my other thread today - 'paying for the bailouts'.

It seems that in Holland will be paying for it very shortly.

[Denvergirlie]

The money given to GM & Chrysler was just a very temporary band-aid.
Their business practices are not going to be fixed with a couple of billion dollars. The UAW (union) walked out of negotions on Saturday, they are unwilling to make any concessions, they feel they've already given up to much already.
Personally I think that the best thing that could happen to them is that the UAW continues to refuse to make concessions and the companies do go bankrupt. Then and only then can GM and Chrysler get out from under these contracts as well as settle with other creditors.

yes, it will hurt a lot of people, all the folks that count on pensions will be hurt, but it really will be for the greater good IMHO.

[monkeywrangler71]

what would actually happen if GM (and possibly Chrysler) goes bankrupt?

My house would be worthless and my neighbours would be hungry.

[mombottoo]

The auto companies were NOT given all of the funds at one time...they have to reach milestones and come back from time to time so the feds can track what they are doing & how they are doing it.

GM is in the process of restructuring...which means they are reducing their work force either through layoffs or buyouts, closing unproductive plants, ending certain lines (vehicles) and negotiating with the union for more concessions, on top of the concessions they have already given.

I am truly amazed by the number of people here who sincerely believe that workers should give up all they have negotiated for and agree to accept a wage that isn't even a liveable wage in this day and age. If you have worked your way up to $25 an hour and your boss wanted to cut your pay to $10 an hour and take away parts of your benefits I'm sure you'd all smile and say "why thank you, I'm so happy to do this for you"... It is unrealistic to expect people to be happy about dropping from $25 an hour to $10 an hour...the union agreeing to allow a cheaper hire in wage for new employees was a concession that will save the Big 3 a lot of money over time. Agreeing to higher copays for medical was also a concession, now they want to do away with retiree health benefits. Those retirees worked for those benefits and to take them away from them now is just reprehensible. JMHO

[justpeachy92]

I saw this on the news the other day. I could be wrong about the amounts here but GM is asking for another 16 billion and Chrysler another 5 billion. My biggest issue is that GM will not be saving American jobs with the money if they get it. The news station said GM would be getting rid of 20,000 jobs in the US. I would honestly prefer to see them go bankrupt if my tax money isn't going to keep someone in this country with a job.

[Pianolady]

Well....there's not a win-win situation here as far as I can see. GM can file bankruptcy and reorganize, probably cutting out at least one division, and some people will lose jobs.

GM can take the gov't. money and not reorganize and go out of business anyway, and everyone loses their job.

GM can take the gov't money, reorganize and cut out at least one division, and some people will lose their jobs.

As far as I can see, they might as well go bankrupt and reorganize, creating a "new" smaller company. Then they can advertise "we're new", come back and look at us, etc. I don't see GM ever recovering without something like this. We might as well skip all the taxpayer $ getting used, and just get it over with.

[Lady_V]

I feel for the workers and their families who depend on GM for income. A lot of people will be hitting the unemployment lines if/when the company goes bankrupt.

I don't want to punish the workers, but would I want more money sent to the high offices of GM? NO!

If someone knocks on your door telling you their family is starving and you give them $100 to help them and they get in to their limo and toss the money out the window as they ride away... would you give them money the next time they came knocking on your door?

The same people are still making the financial decisions. The same mistakes will be made.

[HappyMama]

The money given to GM & Chrysler was just a very temporary band-aid.
Their business practices are not going to be fixed with a couple of billion dollars. The UAW (union) walked out of negotions on Saturday, they are unwilling to make any concessions, they feel they've already given up to much already.
Personally I think that the best thing that could happen to them is that the UAW continues to refuse to make concessions and the companies do go bankrupt. Then and only then can GM and Chrysler get out from under these contracts as well as settle with other creditors.

yes, it will hurt a lot of people, all the folks that count on pensions will be hurt, but it really will be for the greater good IMHO.

It is really sad what is going on today in many businesses and as I put in the other post . We need to help so many not just a few businesses that keep doing the same thing over and over and over and expecting different results.

Many companies including small , self employed and many other manufacturing are going under, these companies are the back bone of our communities as well with no help to them. They have made cuts, gone bankrupt, etc. Some never to return. There was a business article that our standard of living is going to go down, unemployment further, taxes higher, more homeless starving here and we keep helping some companies who should be helping themselves getting rid of the waste, golf courses, jets, parties etc .

Here is an example of one company : That are making cuts and not easy choices.

Office products company Acco Brands Corp., plans dramatic wage cuts for most of its 2,000 U.S.-based employees next month in a bid to improve its first-quarter performance.

The Lincolnshire-based company Monday morning notified employees that for six weeks beginning Feb. 23, they will receive 53 percent of their normal salaries. Afterward, and through the end of June, they will receive 80 percent of their salaries.

The pay cut will affect most of Acco's 750 local employees, which include 500 at its headquarters and 250 at other sites.The cuts will take effect with the paychecks that employees will receive March 6.

"We're highly dependent on white-collar employment," said company spokesman Rich Nelson. "Our customers have significantly reduced their inventory."

"It's an alternative to permanent reductions in force," he added. "It allows people to stay employed but we realize it imposes some hardships as well."

Acco told employees it was finalizing details of a plan that would allow employees facing significant hardships to borrow from their future earnings.

The company, whose largest customers include Office Depot and Staples, is expected to report its fourth-quarter and annual results Feb. 27. For the first three quarters of 2008, the company reported a net loss of $81.2 million, or $1.50 a share, compared with a profit of $13.4 million, or 24 cents a share, for the first nine months of 2007.

America is suffering and will for generations on the taxpayers backs at this rate.

[Contrary Housewife]

I feel really bad for the employees who will lose their jobs, I know it is going to be really rough for a lot of them.

But the sad truth is that the company is not sustainable any longer and can't be run profitably. Their business practices have run them into the ground, and the american economy will no longer support the consumerism and credit-card lifestyle that kept them alive this long.

As a prime example of the mistakes they made, last night they announced they are killing the Saturn line. They took a successful low-cost, quality line of basic family cars and turned them into trendy, ugly, inefficient cars that nobody wants to buy any more. Hello, Stupid!

[Gunny_Frost]

My 2 cents:

NOTE: I worked in the auto industry for 3 years after my retirement (from the Marines) in the management side of the house (non-union). I have seen first hand the good and the bad on both sides.

I am from a UAW town in Indiana. We have (4) Chrysler plants, and (1) Delphi. If the big 3 go away completely, this area could never recover. Folks would walk away from their homes, as this area is of a two tier income level; Auto Industry 50 - 100k annualy and the Service Industry min - wage - 35k annualy. This is a fact of life. But if those auto industry jobs were gone, the folks in the service industry are not gonna be needed either.

America was not built as a "service" nation. But that is what we are quickly becoming. If all production and assembly leave our country for foreign shores then there will be nothing left in this country except service jobs.

Until NAFTA is repealed why shouldn't a company move, if they can make a great deal more money building widgets in Mexico. If a manager can't turn a profit for a company, he is replaced.

I understand the "moral" dilemma of what we should do vs. what we will do.

Anyone who thinks that having GM and Chrysler just fold up and go away and not affecting them is, (IMHO) greatly mistaken. The suppliers, that also produce the parts for the foreign manufacturers would go away also. Now Toyota, Honda, etc: can't get their parts for their US operations. So all cars will be built overseas and imported? (Yes, I know Ford has yet to take a dime, and good for them. But, how long will it be before the burn thru their cash reserves, while America does not buy any new cars? (Sales down 35-56%)

P.S. I got an email last month from a Production Manager with one of the Big 3 asking me if I want a job in March when I got home. I asked him if the company was going to be around in April? It is to bad that I have more job security over here in Iraq than I do in my own country.
Thanks for reading.

[HappyMama]

My 2 cents:


P.S. I got an email last month from a Production Manager with one of the Big 3 asking me if I want a job in March when I got home. I asked him if the company was going to be around in April? It is to bad that I have more job security over here in Iraq than I do in my own country.
Thanks for reading.

I agree about the job security. It is a real shame for Americans today. I know the town you are talking about and it is so sad I agree. This whole economic crisis is going to be affecting many many more home owners as homes depreciate even more, more families and more businesses. May God bless us all.

[Cricketlegs]

My dh is the production manager for our local chevy/ chrysler dealership.

If the big corp closes, so do the dealerships, so do the parts, so do the truckers who haul parts and cars, so do the little guys who make the dang plastic film that covers the new car windows, every one on down the line.

There is more here than "just" the automakers and unions.

There are all kinds of smaller companies doing all kinds of things in connection with the auto industry that will go bust.