montreal mike

with talk of a belly up scenario, is it safe?

could their potential demise be a self fulfilling phophecy?

or do we need another bail out?

your views, assuming you care?

montreal mike

in germany they have problems too

http://ca.news.yahoo.com/s/afp/08111...c_company_opel

http://news.bbc.co.uk/2/hi/business/7728986.stm

dbd33

I think the US government's bail out money would be better spent on the car makers than the banks, not that that's saying much. I think the car maker's primary problem is that they offered European style benefits such as healthcare and pensions and cannot afford them, perhaps the government's money could get them off those hooks.

bobcaygeonjon

I would by either of these. If they do go bankrupt ( and I reckon chyrsler will) your car will keep on running and there will be plenty of parts available.
Ford and GM will not go bankrupt but they will be very different companies in a couple of years, maybe split up with many assets sold and shareholders left with next to nothing. Aslso there current portfolio scaled back.
I dont know why Ford even attempt to make cars anymore why dont they just call themselves a commercial vehicle manufacturer and leave it to the japs and germans.

My thrupence worth.

dbd33

If the question relates to the vehicles, rather than the companies, then, oh yes, I'd love to trade that fragile Honda for a Ford.

Piff Poff

It amazed me at how many people continued to buy Rover after Rover went belly up - mind you I was amazed by how many people would buy Rover any way

I suppose the (Rover) deals were to good to pass up, the same would happen if any of those mentioned went bust. What I don't understand is why Ford are not bringing over the european models such as Fiesta and KA when the Yaris seems to be so popular here.

Atlantic Xpat

I can assure you that the Big 3's North American benefits packages are streets ahead of those offered in Europe. Or at least outside of Germany. Ford closed plants in UK and moved engineering jobs to Germany several years ago because it was impossible, financially, to reduce capacity in Germany by closing facilities there. Certainly they are paying the price now for buying industrial relations peace with generous benefits but more so because they build large, inefficient crappy cars that no-one wants to buy any more. I'm not particularly precient but came to this conclusion back in the late 90's during various trips to Detroit for Uncle Henry.

Would I buy a Ford , GM or Chrysler at the mo? No, but not through any concern of them going bust and not honouring the warranty. I would buy a Ford in 2009/10 when they bring the Euro Fiesta and Focus over. Assuming they don't **** up the suspension by Americanising it.

dbd33

I meant to compare the whole package one gets in Europe, including state benefits, with those enjoyed by car workers in the US. In the US the car makers have to pay to provide healthcare equivalent to that the European workers get.

Oakvillian

Agreed, the primary reason that the Detroit manufacturers are in the mess they're in is because they are effectively now held to ransom by the recipients of their pensions and benefits. Regardless of how many, and how desirable, the vehicles they produce, they simply cannot turn a profit due to the financial commitments they have elsewhere.

Having said that, the situation wouldn't have been so dire if they had been geared to make things that people actually want to buy. Sales of SUVs and trucks have been dropping through the floor for a while, yet it is only recently that the makers seem to have woken up to the fact.

That is, of course and as with all things, largely the government's fault for listening to the auto industry lobby about differential taxation. The whole escape clause about emissions controls (I don't have the details to hand, but it's to do with vehicles built on a separate chassis being classed as exempt and not counting towards fleet emissions and fuel efficiency targets, and being subject to lower purchase taxes, I think) has been a huge incentive for the manufacturers to continue to build large vehicles with inefficient powerpacks and drivetrains on cart-sprung chassis. Agricultural policies towards overproduction of corn, and the subsequent lobbying by corn processors to bring in the E85 ethanol content legislation haven't helped any, either.

In Canada, where neither of these legal loopholes are in effect, sales of small, efficient vehicles have long outstripped those in the US, in large part because it's cost-effective to buy them here.

Would I buy a Ford/GM/Chrysler product? Probably not, because they don't sell what I want here, although I'd be tempted to look at a Saturn Astra or, if the rumours prove founded, the European Fiesta. The Focus might have been an option but the Americanisation project managed to screw up what was otherwise a pretty good car.

Would I buy the company, if I had a few million spare spondulicks? No chance. If I were a vicious capitalist thug I'd wait in the wings for the inevitable bankruptcy then buy up the operations once they'd been divorced from the pensions and benefits liabilities, but I'm not enough of a bastard to have made enough money to have that option!

Novocastrian

So, to summarize, the reason the Big Three are in the shit is because they have been convinced to pay a decent living wage (and some benefits) to their workforce. Shame on them!

No, the reason (and you allude to it) is because they have been in denial about what sort of vehicle makes any sort of sense in the context of the public's admittedly limited perception of responsible environmental behaviour and an unholy alliance between Big Oil, the Repugs and themselves.

To return to the workers: you are perhaps right that a vicious capitalist thug is waiting in the wings to pick the bones of Detroit. I'm sorry that you aren't enough of a bastard to play the role. Yet.

Aviator

Absolutely not. An import every time, way better quality, service and residual value from many of the imports.

G77

I bought a Ford, not new admittedly, the quality of it isn't great, there seems to be some gremlins in the electrics - but then you get that in VW's.... Saves me getting lynched by the locals anyway, could get particularly messy around here for those driving imports if Chrysler or GM go down....

Aviator

The VW Jetta is put together in Mexico and are a pile of junk.

MarkG

No, it's because they pay vastly too much money to unskilled or low-skilled workers and continue to pay them even after they've stopped working; a bailout would merely be a giant welfare handout to the UAW, which is why Obama and friends will probably give it to them.

From what I've read, those 'some benefits' add about $3,000 more than other manufacturers like Toyota to the cost of every single GM car; it's no surprise then that they want to sell $40,000 SUVs with big profit margins and not $10,000 econo-boxes.

Seriously, GM and the UAW have been in a suicide pact for a couple of decades now; and it's finally coming to fruition. I'm not sure whether Ford and Chrysler are quite so determined to kill themselves.

Oh, and our Buick costs about $1,000 a year in maintenance, so it's not much of a surprise that we're looking at buying our next car from Japan instead.

Auld Yin

I really think all these posts are somewhat moot. Even with a bailout the Detroit Three, as they are now called, are finished. Their share values are virtually worthless and what, pray tell, are creditors going to do with the fixed assets which are useless to anyone outside the auto manufacturing industry. I can remember the day when one could walk into a bank with GM/FORD/CHRYSLER shares and walk out with a loan of 95c on the dollar. The share certificates are now good only as toilet paper. The rumour on the street is that GM is about to declare bankruptcy and/or go into Chapter 13 and it's highly probable the other two are close behind.