raja

Big Three Automakers: Recapitalization or Bankruptcy?

It is only a matter of time. Previously, we thought one of the so-called Big Three would go bankrupt . But now it seems that 2 out of 3 stand a good chance to go bankrupt. We would still have enough auto companies manufacturing cars/trucks to meet our demands. The days of buying/leasing a new car/truck every 3 years are gone. More and more folks will drive their vehicles for much longer 5-7 years (if not 10-12 years). The economic conditions, and the cash crunch will hit the average person like never before. Every thing from salt to steak is costing more. Imagine spending big bucks on a new car every 3rd year. No way that is happenning. Spending habits are changing and are going to be like that for a long long time. This generation gets to experience the worst times like never before in a long long time.

The sins of UAW and their unrealistic demands will rankle them very soon and for a long long time. Bankruptcy is not an option, it is a requirement. Any bail out,half measures or stop gap arrangements will only delay the inevitable, while enhancing the pain as we go further.

By the end of 2009 to mid 2010, I am expecting 2 of the big three to go bankrupt. Take you pick, it does not matter who stays behind to limp back to life