While rumors that GM's letting the UAW run it into the ground (accidentally on purpose) are pretty far-fetched, it's highly likely that GM knows it's flaming-out (cash-wise), heading for C11 in a death spiral. So what's stopping them from using C11 to protect their current cash reserves (which they need for reorganization) other than, say, hubris and self-delusion? Chrysler. When Chrysler files ("how our employees spent their summer vacation"), GM and Ford will get a short term boost. Sales will come from former MOPAR devotees, rural areas without a large transplant presence and people who consider Chrysler's bankruptcy a "wake-up call" to start buying American. If GM files before Chrysler, ChryCo gets the dead cat bounce. Oh, and why not let Chrysler introduce Americans to the possibility of buying a car from a bankrupt carmaker? Look for a full editorial on the slings and arrows of a GM bankruptcy by the end of the week.
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Hey I heard some dude on the radio today say that Hillary wants to win the primary but wants to lose the general election because she was ‘told’ to do so by the Bilderbergers/Illuminati/whatever secret group du-jour. And that has as about as much credibility as this rumor.
Well, given that polls have indicated that some 25% of prospective new-vehicle purchasers would NOT buy a car from a car company in bankruptcy, I would have to say that GM executives are probably on their knees praying that Chrysler pulls the trigger first.
Case in point: When GM actually forced Daewoo USA into bankruptcy by refusing to supply them with new cars (and even parts, until forced to do so by the courts/Federal laws) in 2002, sales at Daewoo stores evaporated faster than GM profits.
And that’s saying something.
I’ll get a wake up call to buy American when the American companies stop importing from Korea, Germany, etc., and stop building their own car in Mexico.
Ummm I see they are going to C11 quicker with that “strategy” not later…
People will “realize” they’re all in the brink… and will move away to the imports.
WTF are they thinking?
To me this just doesn’t make any sense.
Then why not buy any of the numerous models GM, Ford and Chrysler offer that are assembled in America Dynamic?
Chrylser has also went into bankruptcy and emerged from it before with it’s customer base in tact, though this time may be different.
Then why not buy any of the numerous models GM, Ford and Chrysler offer that are assembled in America Dynamic?
I have no problem with that. I’m just not sure why I’m supposed to get all patriotic and worry about the American car companies when they are tripping all over themselves to move production elsewhere. Let ’em go bankrupt. We’ll survive.
If any of the Detroit 3 file Chapter 11, they will file Chapter 7 a year later. Sales will drop to the point where they will never recover, forcing a permanent shut down (until a Chinese company buys their brand name and dealer network in the bankruptcy auction). A car company isn’t a freaking airline. When you buy an airline ticket, all you care about is the company lasting long enough for the plane to land. When you buy a car, you worry about your three year warranty at a minimum, not to mention parts availability after that or resale value. People won’t buy cars from a bankrupt automaker, period.
It doesn’t matter who dies first, they are all going to die.
We’ve seen this movie before, the only difference is that the characters were speaking with English accents and they had a Socialist government who propped them up for a few years before the body fell over and the bits were eaten by foreign companies. The US Gov’t won’t prop up these morons.
My children won’t have the opportunity to “buy American” when it comes to cars. Oh sure, they can buy a truck, because after all, that is all Detroit can build, body on frame trucks. In the end however, Detroit will realize that trucks are a niche market. Not enough to sustain an entire industry. The Unions will blame Management, the Management will blame the Unions. The reality is that each has deserved their fate.
Just ask any unemployed auto worker in Coventry, or Solihull, or Abingdon, they know how this story ends.
A turnaround is possible, even out of bankruptcy. That takes BALLS however, and nobody in Detroit has the testicular fortitude to pull that off. The Management are all pussies and the Unions are all suicidal morons.
Besides, we all know that Americans can’t even abide the sight of balls, much less handle somebody who can effectively USE them.
–chuck
http://chuck.goolsbee.org
Now, to be fair, if you’re going to call this a “wild ass rumor,” you should apply the same label to Paul Krugman’s musings.
I would not be surprised if Chrysler filed for bankruptcy protection. The new owners seem to have every option on the table in terms of returning to profitability and reaping a return on their investment. Seeing as Chrysler has nowhere near the liquidity that GM and Ford have, nor the overseas operations to keep them floating, if the cash burn isn’t stopped in the near future, there is little choice. Remember, Chrysler is “operationally bankrupt” already according to Nardelli. Chrysler’s number is already up, it is just a matter of time. GM or Ford going bankrupt though, not on your life. They will be able to turn the ship around before that happens, that is until the next great downturn and turnaround plan. I like to think they have finally learned a lesson though.
TriShield,
I can’t say for the others, but Chrysler has only handfule of plants in Mexico and Canada – the rest are in the US.
Here is a list:
Current Chrysler owned and operated assembly and component plants. (f) denotes a flex
manufacturing facility. Canadadian facilities denoted by 9c) and mexican by (m).
(f)Belvidere Assembly – Dodge Caliber, Jeep Compass and Patriot
(f)Brampton Assembly(c) – Chrysler 300, Dodge Magnum, Dodge Charger
Brampton Stamping(c) – Stampings for Chrysler 300, Dodge Magnum, Dodge Charger
Conner Avenue Assembly – Dodge Viper, V10 engines
Indiana Transmission I – 45RFE, 545REF, and in 2007, 68RFE
Indiana Transmission II – W5A580
(f)Jefferson North Assembly – Jeep Grand Cherokee and Commander
Kenosha Engine – 3.5 V6, 2.7 V6 (note: Exports to China and Austria)
Kokomo Casting – Aluminum parts; transmission and transaxle cases (note: World’s largest die cast facility)
Kokomo Transmission (I and II) – 62TE, 42RLE, 42RE, 40TE, 41TE, 40TES, 41TES, and soon to be replaced 48RE
Mack Avenue Engine (I and II) – 4.7 V8 – Mack Ave I, 3.7 V6 – Mack Ave II
Newark Assembly – Dodge Durango, Chrysler Aspen
(f converting) Saltillo Engine(m) – 2.4-liter turbo, 5.7 liter and 6.1 liter Hemi
Saltillo Truck Assembly and Stamping Plant(m) – Dodge Ram Quad Cab, Regular Cab, Mega Cab,Chassis Cab (note: many of these vehicles are exported to countries other than the US)
St. Louis North Assembly – Dodge Ram Standard, Quad Cab (1500 and 2500)
St. Louis South Assembly – Caravan, SWB Town & Country, Grand Caravan
(f)Sterling Heights Assembly – Dodge Avenger/Chrysler Sebring
Sterling Heights Stamping – Stampings and assemblies – Avenger, Sebring, Ram, Minivan, Grand Cherokee, Liberty, Pacifica (presume Commander)
(f)Toledo North Assembly – Jeep Liberty and Dodge Nitro
Toledo Supplier Park (Toledo South) – Body, paint, chassis of JK Wrangler
Toledo Machining – Steering columns, torque converters
Toluca Assembly(m) – PT Cruiser
Toluca Stamping(m) – Body panels for PT Cruiser
Trenton Engine – 3.3, 3.8, and 4.0 liter V6 engines
Twinsburg Stamping – Stampings, assemblies, and sub-assemblies for minivans, Pacifica, SUVs, trucks
Warren Truck Assembly – Dodge Ram 1500 Standard Cab and Quad Cab, Dodge Dakota and Mitsubishi Raider
Warren Stamping – Minivan, truck, Grand Cherokee stampings and assemblies
(f)Windsor Assembly(c) – Town & Country, Grand Caravan, and Pacifica (mix varies)
GEMA engines – 1.8, 2.0, 2.4 I4 engines
“Chrylser has also went into bankruptcy and emerged from it before with it’s customer base in tact, though this time may be different.”
Chrysler never went into bankruptcy. One of the arguments for the securing of loans from private banks (no taxpayer money) backed by the government agianst default, was that Chrysler could not survive a Chp 11 bankruptcy like other businesses due to the nature of it’s business.
chuckgoolsbee:
“Oh sure, they can buy a truck, because after all, that is all Detroit can build, body on frame trucks.”
If you really believe that, you need to get out more.
GM will not be declaring bankruptcy anytime soon. Their financials are troubling, but they’re not as bad as you imply, Justin.
Only 1 major US automobilecompany has survived bankruptcy, and that’s Studebaker, in 1933.
Otherwise, chapter 11 = end of company.
Frankly, I think GM, Ford and Chrysler are too busy focussing on their own problems to devise any kind of grand strategy that relies on other companies going bankrupt.
And the idea of the US government bailing out any of them is, today, preposterous. There was a time when one of the big 3 represented a sizeable chunk of the economy. Today they don’t.
Imagine the reception our governor, Jennifer Granholm, would get from President Obama with this pitch:
” Mr. President, despite the fact that I backed you opponent during all of the primaries, and Michigan went for McCain, I’d like you to take some of the tax money that Nissan, Toyota, Honda and BMW workers and dealers paid, and bail out the multi-millionaires who own and control the Ford Motor Company. After all, they used to be billionaires, and look at them now. It’s a real hardship not being able to own more than 3 homes.
“I realize that Ford workers make almost double what those guys in the BMW, Hionda and Toyota plants make. But don’t you think those worker’s taxes could be used to subsidize Ford workers? After all, these guys have boat payments, and summer homes to maintain.”
I think that would be a hard sell.
Bob
GM will not be declaring bankruptcy anytime soon.
Maybe so but they will go bankrupt nonetheless.
I think that we’re all too myopic in this “Let’s Kill GM!” scenario.
What’s dying isn’t the manufacturer, it’s the North American Market. Oh yeah, there are more than few jobs that are related to the indusrty, like steel, transportation, and manufacturing. GM is expanding and building abroad, just well and fine. They just announced $200 million to build a Brazil Engine plant. They’ve invested heavily in China and Eastern Europe. As has Ford and Chrysler ,and most every other manufacuter.
No Penelope, what you’re going to be mourning is the American Automobile market. And with it go your choices in vehicles that have an American flair. Include the dwindling market here and you’ve lost leverage for anything new and individual to YOUR way of living.
So sit on the side and point fingers and say, “I told you so!” And see your venerable cubic inch way of life disappear as it goes global…
…Hillary wants to win the primary but wants to lose the general election because she was ‘told’ to do so by the Bilderbergers/Illuminati/whatever secret group du-jour…
You simply don’t understand the grand scheme of things. ‘Tis the same group working to the same goal which has produced
-hot dog packs of 8 with hot dog roll packs of 12,
-bottled water for daily (non-sports/travel) consumption when it flows out of pipe in the ground,
-a Chrysler group that can go from K-cars/Diplomats one generation to the Ram/Intrepid/GrandCherokee the next to Pt Cruiser/300C the next and then back to Sebring/Caliber/Compass the next.
Also, fluoride does not prevent tooth decay; it DOES render teeth visible on satellite tracking lasers. The amino acids in breakfast bars are encoded with the deepest secrets of humanity. The ends of shoelaces are called aglets; their purpose is sinister.
And there was a single magic bullet. It was forged by Illuminati mystics to prevent us from ever learning, THE TRUTH!!!
chuckgoolsbee: I agree with you completely regarding Americans views and attitudes toward anyone with balls. America has been pussified…
I wonder if the UAW wouldn’t be more inclined to negotiate if Chrysler went bankrupt? The wake-up call wouldn’t be to the buyers; it’d be to the workers. I’d wager more than a handful have never seriously contemplated the notion that GM could go belly-up. Strikes and negotiation for long-term benefits are predicated on GM’s survival.
morbo,
LOL. Thank you for making this clear to me, I see the light now.
Windswords says: chuckgoolsbee:
“Oh sure, they can buy a truck, because after all, that is all Detroit can build, body on frame trucks.”
If you really believe that, you need to get out more.
I get out a LOT. All I see on the road that is American made are Trucks, SUVs and Rental Cars/Taxis. The rest of the road is populated by Japanese, Korean, and German rolling stock. Mind you one quarter of the Taxis are now Toyotas as well.
The only place I see a clear majority of American CARS is at the local “show & shine” and antique car shows.
–chuck
http://chuck.goolsbee.org
Chuck,
We must live in different parts of the country. Where I live I see plenty of Fusions, Milans, Malibus Auras, Lambda CUV’s, CTS’s, 300’s, Chargers, domestic minivans (no they are not body on frame trucks), Edges and Mk-whatevers – as well as Japanese cars and body on frame trucks. Al of these cars mentioned above have compared very favorably with foreign competion, even in TTAC and Consumer Reports. Anyway my comment was not that you don’t see enough domestic cars on the road where you live but that you think the domestics can only build body on frame trucks is all they can build.
Chances are that with the soon to be released Pontiac G8 and Ford Flex two more will be added to the list above.
*sigh* It seems that the “it’s gotta be imported to be good” mentality is almost as pervasive here as it is with those who know nothing about cars. Windswords is correct: his list deserves a test drive against the relevant foreign competition. I in no way suggest buying American just for that (I won’t) reason, but if the domestic product is rated well, it at least deserves a look. It seems part of Detroit’s problems are no longer just their doing. At some point you have to forgive past transgressions and realize that the world has moved on. Just like America did when they buy Japanese today. You don’t see “Remember Pearl Harbor” stickers slapped on Toyotas, do you?
I stuck with Detroit Inc for decades, literally.
Finally, in total exasperation with the dealers and with the cars, I bought “foreign brands”, despite living in Michigan.
Unfortunately for Detroit Inc, I won’t be going back, and neither will a LOT of other folks whose experiences mirrored mine (or, mine theirs).
The really ironic thing is that my wife’s 2007 Hyundai Sonata was manufactured in Alabama.
The competitor Ford product is manufactured in Mexico.
The competitive Toyota and Honda products are manufactured in the United States.
So, which is the “American car” anyway? A Canadian built “Chevrolet” Equinox with Chinese engine (built in a part-Suzuki owned factory), a Mexican built Ford (based on a Mazda), a South Korean built “Chevrolet” subcompact? Or my wife’s Hyundai Sonata, built – literally – with US Steel, in Alabama, including the engine?
So, which is the “American car” anyway? A Canadian built “Chevrolet” Equinox with Chinese engine (built in a part-Suzuki owned factory), a Mexican built Ford (based on a Mazda), a South Korean built “Chevrolet” subcompact? Or my wife’s Hyundai Sonata, built – literally – with US Steel, in Alabama, including the engine?
You can quit dinging Ford for their “hecho in Mexico” Fusions at any time, especially since that is the only vehicle in their lineup assembled outside of the U.S.
Interesting rumor indeed.
Ford Fusion, Mercury Milan, Chevrolet Malibu, Saturn Aura, Lambdas, Cadillac CTS, Chrylser LX cars, etc.
Being someone who used to work at a GM dealership and given the opportunity to drive numerous said vehicles (short of the Chrysler minivans, no desire to), along with their foreign competition, domestic makes are toast. There are some bright spots, the CTS is absolutely amazing and the Lambda’s are decent, but the gas-mileage that I was averaging was atrocious. I am absolutely enamored with the C6 Z06, and loved Chrysler design in the late 90’s.
Being a car guy, I consider myself level-headed about brands. But I’m not afraid to declare one brands superiority over another.
In my experience, anyone who cheerleads a Saturn Aura or Ford Edge hasn’t really driven a Honda Accord or Nissan Murano. The Malibu was a huge disappointment to me, nothing but an Aura in better clothes. Same song, different key. And let’s not get started about the Sebring/Avenger.
In my opinion, the brands to watch within the next 10 years are Suzuki and Hyundai. Amazing strides by these two.
I was raised in a GM-driving family. That tradition has since stopped with me.
If you haven’t done so already, please read Lee Iacocca’s book “Where have all the leaders gone?” It’s a great, thought-provoking read.
But, quasimondo, you didn’t answer the question.
Is the Fusion an AMERICAN car?
You’re also inaccurate – the Ford Crown Victoria (now fleet – read, police and state use only), the Mercury Marquis and the Lincoln Town Car are all manufactured in Ontario, Canada.
Are they AMERICAN cars?
Add to Ford’s hecho en Mexico list:
The Edge
and the soon to be: Ford Flex
The TRUTH is that the only vehicles that Ford manufactures in the USA is the Taurus, Mustang, F series Trucks and SUV’s.
With the slump in gas guzzler sales, I believe Ford manufacturers ~50% of its units outside of the USA this year, then imports them here.
Meanwhile, we have a bunch of self-described “patriots” running around yelling “buy American”. Little do they realize (or care to admit) that the Transplants are more American than the Big 2.4 these days. And profitable. And sustainable. Just sayin.
MgoBLUE, maybe Hyundai, Toyota, Nissan, Honda, Subaru and soon Kia should start waving the American flag about the fact that they manufacture some vehicles in the United States (or soon will be in the case of Kia).
Plus they actually need to increase their dealer footprint in the middle of the country. I guess that’ll happen “naturally” once the 2.801 are kaput.
The British public is no worse off (in fact, an very strong argument could be given that as taxpayers not supporting a dead auto industry, they are better off) without “British owned” mass production automotive manufacturers. I’m sure we Americans and Canadians will also do just fine.
Most countries of the world don’t have their own auto industries. However, it will be somewhat ironic to have India, China, Taiwan, South Korea, Germany, and France with home-grown mass production auto industries if America does not….
MgoBlue: If I recall correctly, the Edge is made in Canada. The Flex will be made in either Canada or the U.S., but not Mexico.
The upcoming Fiesta will be manufactured in Mexico. Even the head of the UAW admitted that Ford can’t make any money on the Fiesta if it manufactures it in the U.S. with UAW labor.