GM: Holding a knife to the Volt's throat

GM going bust would also have very bad consequences in the Credit Default Swap market. But a more immediate victim has just been identified:

GM ends 9-year endorsement deal with Tiger Woods - BusinessWeek

 

I agree with some of your points, but you are also missing some things. Yes, long term, other suppliers would fill the need in the market but you are forgetting lead time. Toyota can't just ramp up and make 100% more vehicles. It will take time to build the tooling and facilities need. For example it takes ~ 6 months from kicking off an injection tool to having it on the line ready to be run.

You are also forgetting about the supply chain. The automotive supplier business is interconnected. Take Alabama for example. We have a Mercedes, Honda, and Hyundai in the state and Kia and Toyota right outside of the border. We also have hundreds of part suppliers that built in Alabama to supply these companies. However, they don't just supply the company down the road, they also supply GM, Ford, and Chrysler. The Birmingham News did an article on these just this past Sunday. For model year 2008, Alabama parts suppliers did $656 million with GM, $765 million with Chrysler, and $1 billion with Ford. That is $2.42 Billion in business with the Big 3. What happens if that business goes away? That would put many of those suppliers on the brink as well.

Now I don't see the same scenario as Malorn. I see GM going into chapter 11, restructuring, and coming out stronger and much lighter on the other side. They will still continue to buy parts from suppliers and sell cars. Yes, they will sell less cars but they will still sell cars and people will still buy them. The american public is used to bankruptcy and will forget about it in a short time. They will go past the GM dealership, see they still have cars and buy them. I didn't stop flying United just because they were bankrupt.

I see Chrysler going into Chapter 11 then 7. They will get split up and sold.

Ford is the question. I can see them surviving without bankruptcy. They have a plan and future product to survive. However, if GM goes into bankruptcy Ford will have to in order to compete. They will need a federal judge to do the restructuring that can't be done in the bargaining room.

 

Maybe a sign that GM is going to kill of the Buick brand. After all Tiger Woods was the spokesman for Buick.

 

I agree although I really see GM and Chrysler merging under Chapter 11. They are both producing too many, same market models. Consolidate into the best and reduce the inventory.

I think Ford is agile enough they can avoid Chapter 11. Perhaps I should say, I like to think Ford is agile enough. But the other two dinosaurs need a major shake-up.

The funny thing is "GM: Holding a knife to the Volt's throat" reminds me of:

I have no doubt that GM is ready to cut the throat of the Volt. Let's look at their history:

• BAS hybrid - the proper name is Belt Assisted Showing The Appearance Resembles Doing (BASTARD) a hybrid. An ordinary vehicle with a computerized engine start and stop.
• Two-Mode Hybrid - priced at $50,000+ to make sure they don't sell in numbers greater than 1,000 per month. Obviously not worth doing.
• Seven years of anti-Prius, nonsense and supporting sock-puppets like CNW Marketing and the "Ann-Arbor Center for Automotive Research"
• As recently as six months ago, "Global warming is a fraud."

As far as I'm concerned, the board, Wagner and Lutz all need to deploy their parachutes and get out of the way.

Bob Wilson

 

i agree that of the big 3, Ford seems to be the only one on the same page as Toyota. at least they have put some hybirds on the market including the best small SUV in the FEH...(where are you Toyota?? you got your butt kicked in this market!!)

now that they are putting out cars in the hybrid lines... but GM??? still nothing and the Volt imho is nothing... there was doubts they could do what they said 3 years ago, and after MAJOR adjustments to the specs, i still have doubts...

 

I imagine your right, Nissan make crap cars just like GM do.

 

No matter how much bailout money is thrown down the black hole of the Big 3 there is no guarantee that they will not eventually fail. As was said before: bad business model. They've made consistently bad decisions while their management has bled the company dry through obscene salaries and un-earned bonuses. (You can't earn a bonus when your company is going bankrupt, not honestly.)

There is no guarantee that the U.S. still won't lose all of those jobs. Nothing has stopped GM, Ford or Chrysler from closing U.S. plants and shipping jobs overseas. There is nothing to stop them now.

Let them fail. It's like an alcoholic hitting bottom. They still don't believe they've done anything wrong. They just think they can continue their failure but just improve efficiency. What you end up with is a more efficient failure.

 

i agree Godiva, at this point they need to fail, go to chapter 11, reorganize. hopefully that will give them enough incentive to start doing the right thing.

Ford is the only company that has produced viable products for today's market. gm still seems to stand by their original conviction that no one really wants a hybrid...

it is simply incomprehensible to me

 

My problem is much more personal. I had a Jeep until 7 years ago. When I went into market for a non-SUV, I test drove everything from the Big-3 that I thought I might be remotely interested in. Hated all of 'em.

Really, why should I spend my hard earned money to buy something I don't want? Oh, wait...I shouldn't. Why should my hard earned money be taxed to support a company who makes a product I don't want? Oh wait...

Make a better product. People will buy it. People want to buy it, but they're just not getting a reason to. I love my Jetta. I like the Prius. It's good for what we need, and wife loves it. I can't envision saying that about a Big-3 car right now.

Put something in the show-room that people can't help but buy. That'll go a long way.

Finally, one of these days, you'd think the UAW would make a few concessions (without being forced to via bankrupcy) to allow the companies to breathe a little and maybe to save their members some jobs. Have they? Not much. They should be screaming for a plan from the execs too, and they should be giving some money back to help their current job. Are they? Doesn't seem like it.

Why should I give up money from my pocket when those affected most refuse to do so? Come on.

 

Funny I read this in Businessweek yesterday when in the dentist waiting room, seems like a good idea. I'm against bailing them out regardless of the consequence for jobs are in the country, giving them money is only going to keep them doing what they are doing, which is barely keeping their nose above the water. They'll end up asking for more money as well in a year or two anyways.

 

If they're not interested in the future, that's fine. Someone else can do the work and reap the reward.