Rumors In the Car Business

I don't get it. What cars has Ford made since 2003 that have sucked? When they re-designed the F-150, the Explorer and the Expedition, they came up with GREAT concepts. The Focus is a great car, though I'm a little biased. They phased out the Taurus and came back with the Fusion and Five Hundred which was re-named the Taurus. Fords cars and SUV's are great - their prices are OK and Ford Motor Credit spikes the residuals on the leases to give you cheap lease payments.

2003 was a little late in the game. Ford is the one American auto company taking a more progressive approach. The big three waited far too long to step up their game though. I disagree that Ford's product is great. Good at best.
 
Won't happen on the Unionization thing edit, because those companies will increase operations in the already number of "right to work states" they are in now. The Tariff issue however, could apply to everyone, including GM, Ford and Chrysler. As I said in my previous post though, while all these are suggestions are decent on the surface, if you want to level the field and allow the big three to compete them you cannot exclude these Union contracts. Let's be honest here for once, while it's all well and good that a UAW worker may make 33.00 an hour on the assembly line and add to the benefits, retirements, healthcare you end up around 85.00 and hour it is in the end a detriment to the survival to the company itself. So I ask you what good are all these benefits and salary if you don't have a job to get them, or the company you work for no longer exists? See what I mean? at some point the UAW needs to see that the survival of the companies that the workers they represent work for may mean to compromise.

Navy, I think you and a lot of folks on the board would like know why the US auto industry is tanking, now I am not at liberty to talk about GM or Chrysler, but I think I can show my point using Ford as an example. First off, we absolutely need to allow Ford to go through a chapter 11 reorganization as the problems with Ford are not structural or operational as much as they are financial.

I have pulled all the data from this analysis from the latest Ford 10-k available at:

form10k.htm

While the Automotive side lost $5B in 2007, Ford has a plan to address these shortfalls and prior to the collapse of the financial industry, would have had the capital to implement the changes and return to profitability. There are 3 things that are killing Ford now:

Ford Motor Credit
Stock Market Collapse
Post Retirement Benefits

For the past 5 year FoMoCo has relied on FMC LLC to keep its head above water as the rise in oil prices killed its truck sales. As FMC’s asset values increased and its loan portfolio expanded, Ford was able to leverage its assets for increased capital spending and providing dividends to (partially) offset the drop in FoMoCo's share values. When the financial crisis hit, the value of Ford’s assets backing debt crashed and the company’s Debt to Asset ratio skyrocketed leading to a reduction in credit rating at the same time capital markets contracted in general. It’s kind of a perfect storm when the (paper) value of your assets goes down at the same time creditors are calling in loans.

FoMoCo suffered from the general downward of the financial collapse, especially as it appears Ford will not be able to barrow additional funds to cover its operational costs. It’s a catch 22 in that FoMoCo's ability to barrow is (in part) based on the value of its stock (market cap) while the value of the stock plummets because Ford can’t get credit. Same thing happened to Chrysler in the early 80’s.

Another impact is that, as securities tank, FoMoCo is under an obligation to fully fund the employee pension plans which hold securities as assets. Because of the market decline, Ford is forced to pump additional capital into the pension plans (per the PPA of 2006) in order to keep them funded, that pulls even more capital from the corporate coffers.

This is a bit of an oversimplification but here is an example:

If in 2007 the plan required $100B in assets and the plan held $105B in assets there is no required plan contribution.

Now if the assets held by the plan have dropped by 12% due to the financial crisis that would mean the same assets are now worth $81.9B requiring an employer contribution of $18.1B to fully fund the plan as required.
Ford needs to find the money to fully fund the plan at the same time it’s in a cash crunch to cover its operating costs.

Another thing is that Ford actuaries probably estimated a 4.5% increase in the value of net assets for 2008 so Ford’s financial planning has been based all year on a growth model rather than a contraction model.

The last big problem is the healthcare costs associated with providing benefits to current employees and retirees. Per the 2007 10-k FoMoCo was forced to spend $4.1B just to cover costs of separated employees. That does not include benefit costs for current employees but COBRA for employees subject to termination and retiree medical. In every other industrialized nation these costs are picked up by the federal government, in America they remain a significant hindrance to our competitiveness on the world stage. The benefit obligations stem from various collective bargaining agreements entered into over the past 50+ years so even if the UAW wanted to renegotiate or eliminate the benefit costs it’s doubtful that they can (see the latest 8-K filed by the Ford Mo Co)

Any one of these would mean problems for Ford, but all three combine to put FoMoCo on the ropes with only one viable alternative, chapter 11.

Under Chapter 11 FoMoCo (at the order of a federal judge) would be granted the ability to hold off creditors until new sources of revenue could be freed up. It could Freeze pension plan contributions and renegotiate UAW contracts.

A government bailout / loan would be effective in the short term to solve liquidity issues, but it would not address the larger issue that the current UAW contracts combined with the rising cost of healthcare and extended life expectancies will continue to hamper Fords efforts to compete on the world stage.
 
Consumer Reports

Green car - Toyota Prius
Small sedan - Hyundai Elantra SE
Family sedan - Honda Accord
Upscale sedan - Infiniti G35
Luxury sedan - Lexus LS 460LFun to drive - Mazda MX-5 Miata
Small SUV - Toyota RAV4
Midsized SUV - Hyundai Santa Fe
Minivan - Toyota Sienna
Pickup truck - Chevrolet Silverado 1500 Crew Cab

ConsumerReports.org - Top Picks 2008

Ford's three brands-Ford, Lincoln, and Mercury-continue to pull away from the rest of the Detroit automakers. Almost all Ford models are now average or better, with the exception of some that are truck-based. Excluding those, Ford's reliability is now on par with good Japanese automakers.

BEST WORST

Lexus LS 460L 99 Jeep Wrangler Unlimited Sahara 17
BMW 135i 97 Hummer H2 23
Infiniti M35X 97 Hummer H3 (5-cyl.) 27
Porsche 911 Carrera S 96 Jeep Liberty Sport 27
Infiniti M35 95 Smart ForTwo Passion 28
Toyota Sienna XLE (4WD) 93 Dodge Nitro 33

Until such time as the American car companies do something about the products they put on the market as compared to the competition then they will continue to lose Market share no matter how much money is tossed their way. The only bright spot recently has been Ford which seems to have brought their quality level up. Now all they have to do is engineer a car people want besides the F-150.
 
Navy, I think you and a lot of folks on the board would like know why the US auto industry is tanking, now I am not at liberty to talk about GM or Chrysler, but I think I can show my point using Ford as an example. First off, we absolutely need to allow Ford to go through a chapter 11 reorganization as the problems with Ford are not structural or operational as much as they are financial.

I have pulled all the data from this analysis from the latest Ford 10-k available at:

form10k.htm

While the Automotive side lost $5B in 2007, Ford has a plan to address these shortfalls and prior to the collapse of the financial industry, would have had the capital to implement the changes and return to profitability. There are 3 things that are killing Ford now:

Ford Motor Credit
Stock Market Collapse
Post Retirement Benefits

For the past 5 year FoMoCo has relied on FMC LLC to keep its head above water as the rise in oil prices killed its truck sales. As FMC’s asset values increased and its loan portfolio expanded, Ford was able to leverage its assets for increased capital spending and providing dividends to (partially) offset the drop in FoMoCo's share values. When the financial crisis hit, the value of Ford’s assets backing debt crashed and the company’s Debt to Asset ratio skyrocketed leading to a reduction in credit rating at the same time capital markets contracted in general. It’s kind of a perfect storm when the (paper) value of your assets goes down at the same time creditors are calling in loans.

FoMoCo suffered from the general downward of the financial collapse, especially as it appears Ford will not be able to barrow additional funds to cover its operational costs. It’s a catch 22 in that FoMoCo's ability to barrow is (in part) based on the value of its stock (market cap) while the value of the stock plummets because Ford can’t get credit. Same thing happened to Chrysler in the early 80’s.

Another impact is that, as securities tank, FoMoCo is under an obligation to fully fund the employee pension plans which hold securities as assets. Because of the market decline, Ford is forced to pump additional capital into the pension plans (per the PPA of 2006) in order to keep them funded, that pulls even more capital from the corporate coffers.

This is a bit of an oversimplification but here is an example:

If in 2007 the plan required $100B in assets and the plan held $105B in assets there is no required plan contribution.

Now if the assets held by the plan have dropped by 12% due to the financial crisis that would mean the same assets are now worth $81.9B requiring an employer contribution of $18.1B to fully fund the plan as required.
Ford needs to find the money to fully fund the plan at the same time it’s in a cash crunch to cover its operating costs.

Another thing is that Ford actuaries probably estimated a 4.5% increase in the value of net assets for 2008 so Ford’s financial planning has been based all year on a growth model rather than a contraction model.

The last big problem is the healthcare costs associated with providing benefits to current employees and retirees. Per the 2007 10-k FoMoCo was forced to spend $4.1B just to cover costs of separated employees. That does not include benefit costs for current employees but COBRA for employees subject to termination and retiree medical. In every other industrialized nation these costs are picked up by the federal government, in America they remain a significant hindrance to our competitiveness on the world stage. The benefit obligations stem from various collective bargaining agreements entered into over the past 50+ years so even if the UAW wanted to renegotiate or eliminate the benefit costs it’s doubtful that they can (see the latest 8-K filed by the Ford Mo Co)

Any one of these would mean problems for Ford, but all three combine to put FoMoCo on the ropes with only one viable alternative, chapter 11.

Under Chapter 11 FoMoCo (at the order of a federal judge) would be granted the ability to hold off creditors until new sources of revenue could be freed up. It could Freeze pension plan contributions and renegotiate UAW contracts.

A government bailout / loan would be effective in the short term to solve liquidity issues, but it would not address the larger issue that the current UAW contracts combined with the rising cost of healthcare and extended life expectancies will continue to hamper Fords efforts to compete on the world stage.

I think I have advocated in my previous posts that Chapter 11 is a very good way for the automotive companies to go as a long term solution to the problems they face. IMHO it would give them the ability to emerge as leaner and more competitive companies in the market place. IMO the bailout solves nothing other than to provide a short term fix , for a problem that requires a long term solution.
 
I think I have advocated in my previous posts that Chapter 11 is a very good way for the automotive companies to go as a long term solution to the problems they face. IMHO it would give them the ability to emerge as leaner and more competitive companies in the market place. IMO the bailout solves nothing other than to provide a short term fix , for a problem that requires a long term solution.

I don't agree. Chapter 11 would require layoffs and the big concern with the automobile industry is 2 million jobs go with it, including businesses reliant on the auto industry to survive.

Unless any plan deals with job protection, it would fail in terms of our economy's needs right now, in my opinion.
 
Navy, I think you and a lot of folks on the board would like know why the US auto industry is tanking, now I am not at liberty to talk about GM or Chrysler, but I think I can show my point using Ford as an example. First off, we absolutely need to allow Ford to go through a chapter 11 reorganization as the problems with Ford are not structural or operational as much as they are financial.

I have pulled all the data from this analysis from the latest Ford 10-k available at:

form10k.htm

While the Automotive side lost $5B in 2007, Ford has a plan to address these shortfalls and prior to the collapse of the financial industry, would have had the capital to implement the changes and return to profitability. There are 3 things that are killing Ford now:

Ford Motor Credit
Stock Market Collapse
Post Retirement Benefits

For the past 5 year FoMoCo has relied on FMC LLC to keep its head above water as the rise in oil prices killed its truck sales. As FMC’s asset values increased and its loan portfolio expanded, Ford was able to leverage its assets for increased capital spending and providing dividends to (partially) offset the drop in FoMoCo's share values. When the financial crisis hit, the value of Ford’s assets backing debt crashed and the company’s Debt to Asset ratio skyrocketed leading to a reduction in credit rating at the same time capital markets contracted in general. It’s kind of a perfect storm when the (paper) value of your assets goes down at the same time creditors are calling in loans.

FoMoCo suffered from the general downward of the financial collapse, especially as it appears Ford will not be able to barrow additional funds to cover its operational costs. It’s a catch 22 in that FoMoCo's ability to barrow is (in part) based on the value of its stock (market cap) while the value of the stock plummets because Ford can’t get credit. Same thing happened to Chrysler in the early 80’s.

Another impact is that, as securities tank, FoMoCo is under an obligation to fully fund the employee pension plans which hold securities as assets. Because of the market decline, Ford is forced to pump additional capital into the pension plans (per the PPA of 2006) in order to keep them funded, that pulls even more capital from the corporate coffers.

This is a bit of an oversimplification but here is an example:

If in 2007 the plan required $100B in assets and the plan held $105B in assets there is no required plan contribution.

Now if the assets held by the plan have dropped by 12% due to the financial crisis that would mean the same assets are now worth $81.9B requiring an employer contribution of $18.1B to fully fund the plan as required.
Ford needs to find the money to fully fund the plan at the same time it’s in a cash crunch to cover its operating costs.

Another thing is that Ford actuaries probably estimated a 4.5% increase in the value of net assets for 2008 so Ford’s financial planning has been based all year on a growth model rather than a contraction model.

The last big problem is the healthcare costs associated with providing benefits to current employees and retirees. Per the 2007 10-k FoMoCo was forced to spend $4.1B just to cover costs of separated employees. That does not include benefit costs for current employees but COBRA for employees subject to termination and retiree medical. In every other industrialized nation these costs are picked up by the federal government, in America they remain a significant hindrance to our competitiveness on the world stage. The benefit obligations stem from various collective bargaining agreements entered into over the past 50+ years so even if the UAW wanted to renegotiate or eliminate the benefit costs it’s doubtful that they can (see the latest 8-K filed by the Ford Mo Co)

Any one of these would mean problems for Ford, but all three combine to put FoMoCo on the ropes with only one viable alternative, chapter 11.

Under Chapter 11 FoMoCo (at the order of a federal judge) would be granted the ability to hold off creditors until new sources of revenue could be freed up. It could Freeze pension plan contributions and renegotiate UAW contracts.

A government bailout / loan would be effective in the short term to solve liquidity issues, but it would not address the larger issue that the current UAW contracts combined with the rising cost of healthcare and extended life expectancies will continue to hamper Fords efforts to compete on the world stage.

Ford was in trouble before the oil prices rose. In the late 1990s, very early 2000s, Ford spiked the residuals on their leases sky high. For instance, a 2000 Ford Focus cost $17,500. They leased out 33% of it, thinking that the car would be worth 2/3 of that value in 3 years and 36,000 miles later. In 2003, a 2000 Focus was worth $7500. Who covered the gap? Ford did. In the early 2000s, around 2002-2003, Ford stopped made their leases very unattractive, so most people bought, so Ford offered 0% loans on cars and sold them at invoice or below holdback (the money a dealership gets paid to sell a car). Ford isn't in trouble now because of the oil prices and the credit crunch, Ford is in trouble for their business dealings.

Very rarely could you sell a car for anything above invoice because everybody was on the internet and found your invoice, shopped 5 different dealerships and told you if you don't sell them a car at invoice with 0% financing, they're going to another dealership that did.
 
last rumor i heard on the american auto industry is that although they may only directly employ 3 million people, but 13 million people in american auto industry related jobs would be at risk of losing their jobs if the auto industry is not bailed out....some person on c-span's washington journal this am or yesterday am?

of course, not all of them would lose their jobs but it sure sounded like they would, when this person there was talking about it!
 
I don't agree. Chapter 11 would require layoffs and the big concern with the automobile industry is 2 million jobs go with it, including businesses reliant on the auto industry to survive.

Unless any plan deals with job protection, it would fail in terms of our economy's needs right now, in my opinion.

jillian, layoffs are comming even with a bailout package, and just because a company files for Chapter 11, does not mean all 2 million people would lose their jobs. Case in point. Delta, United, and all the other Airlines that have operated at one time or the other under Bankruptcy.

Does Chapter 11 mean Delta is going out of business?
No. Under Chapter 11, we will continue to conduct normal business operations. That includes continuing to serve our customers and pay our employees. Indeed, our financial and operational position is strong, including an unrestricted cash position of $2.8 billion of unrestricted cash equivalents and short-term investments as of September 30, 2006.

Delta Air Lines - Chapter 11 FAQs
 
2003 was a little late in the game. Ford is the one American auto company taking a more progressive approach. The big three waited far too long to step up their game though. I disagree that Ford's product is great. Good at best.

I'm sorry, but if you take the Ford Focus and compare it to every single other car in its league, the Focus offers more room, better safety, more features and options.

If you compare the Explorer to all other mid-size SUV's, the Explorer will beat them all, except in overall looks. I'll admit, the Explorer is a little boxy. But it has the smoothest ride because it offers 4-wheel independent suspension, offers the most interior room, offers a 6 or an 8, both of which have great pick-me-up speed... and the Expedition was the first large suv to offer fold into the floor 3rd row seats. Now, I don't know too much about those Korean cars, Kia and Hyndai, but Ford's products beat out Toyata, Nissan, and all GM models. Ford has a bad reputation for putting out crappy cars in the 1990s, but GM is still putting them out.
 
The point is, it’s not that Ford’s products are bad, or not selling, or whatever. It doesn’t matter if you like the Expedition or Fusion or Mustang. FoMoCo was hit by a downturn in sales before it could retool from light trucks to cars and then was hit with a sharp decline in the value of its assets and a higher cost of capital.

The only way to solve Ford’s financial issues is let them throw off FMC and renegotiate UAW agreements. An infusion of cash will only get them so far and be much more costly to the American public. Bankruptcy does not mean Ford is going out of business.
 
Downturn Hits North Carolina

The global economic crisis has struck indiscriminately at North Carolina's most resilient industries, bringing layoffs to companies in building supplies, semiconductors, pharmaceuticals, textiles, direct mailings and computers. In the past few weeks alone, the roiling economy has taken out several thousand jobs in the state as businesses reduce production and close facilities.

Statewide joblessness of 7 percent (NOTE: Higher than the national average) is at a six-year high and climbing. There were 54,000 fewer people employed in September than a year ago at the same time. For each worker who loses a paycheck, less cash gets pumped back into the system.

The worst of the storm could take about six months to pass, but the effects may be felt well into 2010, experts say. Economists predict the downturn could leave more than 8 percent of the state's workers without jobs, a level not seen in a quarter century.

---

Thousands are laid off even in relatively hardy industries; joblessness could top 8 percent.

newsobserver.com | Economic downturn hits N.C.

Which States Have the Best Economies

According to research by The Kaufmann Foundation, Massachusetts, New Jersey and Maryland have the best economic climate. That's because they are successfully adapting to a global economy by attracting innovative and entrepreneurial companies. For that reason, these states are most likely to create and retain high-value and well-paying jobs. The states that are improving the most are Wisconsin, Vermont, North Dakota and Rhode Island.

The states at the bottom of the list are West Virginia, Mississippi, South Dakota, Arkansas and Alabama. Their economies are more reliant on manufacturing than information technology. The states that are declining most rapidly are Missouri, Maine, Oregon, Arizona, New Mexico, Oklahoma and Hawaii. (Source: Kauffman Foundation, 2007 State New Economy Index)

Which States Have the Best Economies?

NONE of the states listed as best economies are right to work states.

Alabama, Arkansas, and Mississippi, all listed at the bottom, are all right to work states.



Hmm.. Somehow the numbers aren't matching. This data is from the Labor Statistics Bureau.

State unemployment, September 2008 «click column headings to re-sort table»
Rank 6 State Rate
51 MICHIGAN 7.7
49 ALASKA 6.1
49 MISSISSIPPI 6.1
48 OHIO 5.9
46 DISTRICT OF COLUMBIA 5.8
46 SOUTH CAROLINA 5.8
45 ARKANSAS 5.7
42 CALIFORNIA 5.6
42 KENTUCKY 5.6
42 MISSOURI 5.6
41 OREGON 5.5
40 ILLINOIS 5.3
38 NEVADA 5.2
38 WISCONSIN 5.2
37 WEST VIRGINIA 5.0
36 RHODE ISLAND 4.9
33 MAINE 4.8
33 NORTH CAROLINA 4.8
33 WASHINGTON 4.8
30 CONNECTICUT 4.7
30 GEORGIA 4.7
30 MINNESOTA 4.7
27 INDIANA 4.6
27 NEW YORK 4.6
27 TENNESSEE 4.6
26 PENNSYLVANIA 4.5
25 OKLAHOMA 4.4
23 MASSACHUSETTS 4.3
23 VERMONT 4.3
22 FLORIDA 4.2
20 NEW JERSEY 4.1
20 TEXAS 4.1
19 MARYLAND 4.0
18 IOWA 3.9
17 KANSAS 3.8
16 COLORADO 3.7
15 ARIZONA 3.5
13 DELAWARE 3.4
13 NORTH DAKOTA 3.4
12 LOUISIANA 3.3
10 NEBRASKA 3.2
10 NEW HAMPSHIRE 3.2
6 ALABAMA 3.1
6 MONTANA 3.1
6 NEW MEXICO 3.1
6 VIRGINIA 3.1
4 SOUTH DAKOTA 2.9
4 WYOMING 2.9
3 UTAH 2.8
2 HAWAII 2.7
1 IDAHO 2.5
Source: Bureau of Labor Statistics
 
Hmmm... Alaska has the second highest unemployment rate in the country and this wasn't brought up during the VP debate?
 
I don't agree. Chapter 11 would require layoffs and the big concern with the automobile industry is 2 million jobs go with it, including businesses reliant on the auto industry to survive.

Unless any plan deals with job protection, it would fail in terms of our economy's needs right now, in my opinion.

Hi Jillian. I think if the government is going to loan the Big 3 our tax dollars, it should be on our terms. If they don't like our terms, they can go get a traditional loan on their own.

First, FIRE THE BOARD OF DIRECTORS and CEO's that ruined these companies with million dollar bonus' during hard times and big expensive trips.

And no more laying off blue collar workers. No more sending jobs overseas. No more corporate jets for the CEO who works in Michigan to fly home to Florida. No more waste.

Notice how the Republicans said the Unions were to blame? Well they've shipped all the plants down south or to mexico/china, and they've cut thousands of jobs, and still these companies are failing?

Is it the employees fault that American's don't want to buy crappy American cars?

I say it's the fault of the greedy corporations. This is also what you get when politicians and corporations get too chummy with each other. Tax breaks to send jobs overseas? And let corporations like Toyota in without worrying how that will affect the big 3? Not forcing countries like China and Japan to have fair trade deals with us because the owners of these companies benefit from the imbalance.

Sorry I just rambled. My brother is a VP. He says you can't replace these 55 year old CEO's with guys who are 45 years old and who've never run a company before. I say bullshit. Just like they said Obama can't do it because he isn't experienced enough. I bet he's smart enough not to double the debt or lie us into a war for profit that bankrupts the country.

These CEO's and BOD's are all in cohoots together. You're on the BOD of my company and I'm on the board of your company. You want a $5 billion dollar bonus, so do I. This shit has got to stop. And they said it was the hourly union workers killing the companies. HA!! I knew it was the CEO's.

I'd like to do the math. Take all the CEO's, Presidents, VP's, HR Directors, CIO's, and every other upper management person, add up their salaries vs the employees and I bet the big dogs cost the company more. Don't forget to add up the shit that doesn't count as income. The trips, the expense accounts, etc.
 
No bonus' for CEO's until all the old timers with pensions are dead. Fine if you want to renegotiate with new employees, if that's what has to happen, but all retirees should get what they were promised. If it is bankrupting the company, maybe pay the CEO $500k a year instead of $10 million.

I'm sure you can find someone who will do it for $500k. Maybe an Asian or Indian from overseas? They might even do it better. LOL
 
Last edited:
I have been pondering on this issue for a couple of days now and i think we should let them go in to chapter 11, restructuring.... i worked for a subsidiary of a Corporation that went in to chapter 11 bankruptcy, about 15 years ago, but i would imagine things are pretty much the same as they were back then....

We were one of the corporation's profitable companies, so we experienced no layoffs, while some of their other nonprofitable companies fell by the wayside, were sold off at what or even below what they were worth, to get the dead weight off...so yes, people lost their jobs, but through the restructuring, HEALTHY payoff packages were arranged so that all employees being laid off got severence compensation for their years of service...the stock fell to nothing but those of us that hung on to it the few years of the restructuring and waited to sell after they had come out of it, MADE a bundle!

I guess what i am saying is that Chapter 11 is NOT in any way a death sentence for Gm or chrysler or the auto industry in general....it is a GOOD procedure, that has the judge that oversees the corporation there to help guide the corp in to the sound decisions that will make these companies bigger and better in the long run.

the only inconvenience we had was that the court controlled our ''open to buy''....we had to get a court secured number for all the purchases we made so that the companies we were buying from to run our business had a guarantee of being paid.

Business was actually better for our subsidiary because the people we purchased from now were not hesitant to sell to us because we had FINALLY filed for chapter 11....meaning, selling to us with a rumored bankruptcy was very risky for them because they may have only been paid 50 cents on the dollar for those goods after the bankruptcy....

NOTE though, that AFTER the Chapter 11 filing, these were the same vendors that were standing IN LINE to sell to us again, because AFTER the filing, if we bought something from them, they were guaranteed by the COURT to get their money in full for what they sold us....and this is what the court number i mentioned earlier was that we put on our orders, a court guarantee of payment.

a bailout would NOT guarantee there would be NO LAYOFFS, as i once thought...these institutions that have gotten our tax monies through the bailout are laying off like crazy...

A chapter 11 restructuring is the proper procedure and protection these companies failing need, imho!

care
 
I have been pondering on this issue for a couple of days now and i think we should let them go in to chapter 11, restructuring.... i worked for a subsidiary of a Corporation that went in to chapter 11 bankruptcy, about 15 years ago, but i would imagine things are pretty much the same as they were back then....

We were one of the corporation's profitable companies, so we experienced no layoffs, while some of their other nonprofitable companies fell by the wayside, were sold off at what or even below what they were worth, to get the dead weight off...so yes, people lost their jobs, but through the restructuring, HEALTHY payoff packages were arranged so that all employees being laid off got severence compensation for their years of service...the stock fell to nothing but those of us that hung on to it the few years of the restructuring and waited to sell after they had come out of it, MADE a bundle!

I guess what i am saying is that Chapter 11 is NOT in any way a death sentence for Gm or chrysler or the auto industry in general....it is a GOOD procedure, that has the judge that oversees the corporation there to help guide the corp in to the sound decisions that will make these companies bigger and better in the long run.

the only inconvenience we had was that the court controlled our ''open to buy''....we had to get a court secured number for all the purchases we made so that the companies we were buying from to run our business had a guarantee of being paid.

Business was actually better for our subsidiary because the people we purchased from now were not hesitant to sell to us because we had FINALLY filed for chapter 11....meaning, selling to us with a rumored bankruptcy was very risky for them because they may have only been paid 50 cents on the dollar for those goods after the bankruptcy....

NOTE though, that AFTER the Chapter 11 filing, these were the same vendors that were standing IN LINE to sell to us again, because AFTER the filing, if we bought something from them, they were guaranteed by the COURT to get their money in full for what they sold us....and this is what the court number i mentioned earlier was that we put on our orders, a court guarantee of payment.

a bailout would NOT guarantee there would be NO LAYOFFS, as i once thought...these institutions that have gotten our tax monies through the bailout are laying off like crazy...

A chapter 11 restructuring is the proper procedure and protection these companies failing need, imho!

care


Who's going to buy their cars?
 

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