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- Market Currents Poll: Should the U.S. give automakers the extra aid they're asking for or push for bankruptcy? Speak up in comments.
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This news story has 21 comments:
Let the system stabilize itself.
Help the successful business expand, drop the unsuccessful ones quickly. That's the path to permanent recovery.
"Let the system stabilize itself. " is a false statement. The system doesn't stabilize itself. In fact, it can't take big shocks. Sure in the looooong run it will stabilize itself, but as one wise man said in the long run we are all dead.
There would be nothing wrong with GM going bankrupt in a normal economy. It would be a gradual process as GM would continue to lose more and more market share. Once it went bankrupt, the market size would still be there and just some other manufacturer would take up the responsibility of making all those cars. The fired workers from GM could just transfer to these new manufacturers.
This is not the current environment. All car manufacturers are losing money. And this is not because we have invented a new and better form of transportation, its because we are all afraid and uncertain to make a big purchase like a car. Companies are losing money now not because they have bad products but just because there is no demand for ANY product.
They need to renegotiate those onerous union contracts anyway. How many of us have the same guarantees the UAW does (and yet many here have college degrees)? Would not such guarantees hurt the average employer? Surely, that's a rhetorical question.
In this economy, bankruptcy for them is inevitable so just get it over with!
So we can move on and start fixing things. In this environment, we don't have the luxury of waiting to see if the company that drove itself off a cliff can engineer a miraculous turnaround.
but rather than outright liquidation, I'd like to think about selling off assets/contracts/intel... property to groups (investors, employee collectives, etc.) intent on building better products on better terms. Let's take one huge behemoth and cut it into manageable portions--and the new smaller manufacturing entities could adapt and produce...or die.
Again.
And Again.
Take a drive to dealer lots around your town. They are over flowing with vehicles. They can't sell what they have. Chrysler seems to offer alot of discounts. GM is a joke. If you have very good credit, stable civil servant job, and put money down you can get 0% financing and maybe a handful of dollars off the car. Ask for more, and they don't give an inch.
Seems to me that these car companies need to show the government that they can sell cars (even at a temporary loss) and clear out their inventory, rather than "make money" on the car sales right now. That is the experience I have had at GM over the past 2 weeks. They want to sell cars, but on their terms.
Well guess what GM, learn a thing or two about business and get your cars sold at any price to convince the government people want your cars in the first place.
At this point, I think these companies deserve to go under and hopefully new, and better car companies will take their place. Maybe they will also be smart enough to deal with and structure future organized labor deals that look forward decades not months ahead.
On Feb 18 11:14 AM Consider_this wrote:
> Let them bankrupt. The company is the pinnacle of a dysfunctional
> company and must be allowed to die. The management, the unions, the
> retirees, and investors and the debtors are collectively created
> such a monster that it cannot compete and produce. Keep feeding it
> and it'll come back again in n years, and then again. Until we ourselves
> go bankrupt.
>
> Help the successful business expand, drop the unsuccessful ones quickly.
> That's the path to permanent recovery.
An outrageous use of our money. It needs to be stopped.