Honda, Toyota could fail if Big 3 fail

Can we really afford to let the Big 3 automakers fail?

Yes.

Did you drink the kool aid?

Remember what we were told what would happen if the bank bailout wasn't passed? TPTB are fear mongering.

GM needs to reorganize and this is the only way to do it. If they don't make it through bankruptcy, oh well.

Look, sales of new cars is going to crush the Japanese car manuf. with or without Detroit failing.

There is a seismic paradigm shift happening and trying to delay or control it is futile.

reply to post by stander


i do agree with you that there will be severe consequences and hardships if the big three fail, i understand my posts may downplay that scenario

but in all honestly i dont feel that it would be the end of things

in my eyes i truly believe that in a capitalistic society there will be SOMEONE out there within the united states who will be able to start up new companies to take the place of the big automakers, there will always be someone who wants to make money, and there will be a demand for transportation, someone will supply that demand, it may start off overseas, but it wont last

ford wasnt the mega-corporation it is today when they were first starting

and that same thing applies now to all the new technologies

instead of going from horse and carriage to fords production line

we're going from our gas powered production line cars to whatever will be the next technology


with what we have available to us we can go many different ways, from air powered cars to hydrogen cars, solar powered, i can do this list all day, but to save us all the time i just honestly dont see this being a very large long term problem

Originally posted by truthquest
reply to post by stander

 

A big-3 bankruptcy would not at all stop production of US-made cars. Sure some plants would shut down but have no doubt that the profitable ones will remain in business.

That all depends on the reasons that caused the trouble for GM and what the bankruptcy judge would prescibe. The company is divided into divisions, and I don't think that the situation in the plant that manufactures heavy GM trucks is particular to the problem.

If it turns out that the unions played a major part in the trouble and the union leaders won't budge and refuse to make concessions, then that's the end of GM. But that's unlikely scenario. The bankruptcy proceedings allow a company to buy some time, identify the problem, and remedy the problem without being bothered by its creditors. The company usually hires a bunch of experts who communicate with the bankruptcy judge.

But if Chapter 11 is a way to fix problems, there is no need for any bailout, right? In reality, things are more complex when a whole industry faces a severe problem. The Feds let Lehman Brothers to file for bankruptcy, but invented TARP to keep the whole financial system going.

Obviously, the Big 3 plants are not going out of business effective a certain date, but my scenario described the situation where the problem couldn't be fixed and the US auto industry would slowly die off. These events happened before.

The bankruptcy proceeding have two different goals: Either it aims toward restructuring or it allows the company to go orderly out of business -- that means the creditors get eventually paid, but the shareholders get nothing.

As it turned out, the trade deficit figures that would show up in case the US auto industry follows the dinosaurs are not reliable and can't be enumerated easily due to the conflicting data. The figure relies on the yearly sales of passenger vehicles in the USA. Here is one info regarding that:
answers.yahoo.com...

16.5 million cars is the figure I used. But this figure may combine the purchase of new and used cars. To separate new from used, I looked around came across a number of new/used cars sold in 2006 that was way down from 16.5 million.

en.wikipedia.org...

In the year 2006, 7,667,066 passengers cars were sold in the United States[6] according to the U.S. Department of Transportation. This figure “Includes domestic and imported vehicles." (Department of Transportation)

In order to separate the yearly sales of new and used cars, I visited here:
mva.state.md.us...

This site offers the lowest number in the new & used cars category and puts it at 1,096,250 vehicles sold in 2006.


Someone said once that the Internet is a "retarded cyber-creten." There is surely some truth to it even without reading the external quotes in most OPs on this site . . .

Has anyone noticed that the economic indicators over the past decade has gone down as the number of Internet users increased? I guess the Big 3 calculated their earnings by consulting Wiki Answers or other "reliable" Internet sources. I wonder what the execs of Lehman Brothers were clicking on.

The American consumer market is very big. Actually it's the fat cow that the world absolutely must feed lest the world desires to be eaten itself.

60% of Japanese cars were sold in the U.S. last year. No, it's not going to kill the industry. But basically we're headed toward a global recession, so you can expect output to drop anyway... so it doesn't really matter.

My final opinion: this is just pure fear mongering by the liberal media. They want you, the general public, to feel guilty about not supporting the auto bailout. They're trying to make you feel guilty by telling you there are far wider implications for not supporting it.

At the end, relative to the U.S., Japan will still be doing better, even if it loses 60% of its sales. Why will the Japanese auto makers be absolutely fine, considering the economic conditions we are in? Well, because, the U.S. automakers will lose 60% of its sales and more at the exact same rate as the Japanese. So there's a proportional drop in output. Nothing changes. The Japanese will still be doing good, because demand for cars is STILL THE SAME, and that is never going to change, as long as we have cities and roads and places to go.

God damn, whatever message this article was trying to send, it really is quite a weak statement.

[edit on 18-12-2008 by cognoscente]