Location: land of the Lilliputians, In the state of insanity
Posts: 24,185
Just a thougth about the auto industry
Like I said, this is just a thought. But lets say the Big 3 go under. Is it not feasible that the other industries, who had CEOs do the job right, buy up the assets? They would have to provide more vehicles, so they will need more plants. Would this not be the free market fix. Demand will still be there.
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kaafir mushrik
Unintended consequences and God have one thing in common: Liberals don’t believe in either of them.
They likely won't actually go out of business and shut down. They will go into reorganization. A bankruptcy trustee will be appointed to, essentially, run the company. The current management will be replaced, we hope. And the union contracts would be renegotiated. Guys that could be hurt would be small suppliers who don't get paid. And the UAW will take a hit. The UAW will no longer be running the auto industry in this country.
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Proud parents of our own "Daddy's Little Girls"
I heard Jesus He drank wine and I bet we'd get along just fine.
I have heard auto industry and nothing, nothing of any union concession. They ought to reorg the caboodle. Small guys can reorg as well. I'm sorry there just ois no way out of this easily.
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"There is nothing in the world like a persuasive speech to fuddle the mental apparatus and upset the convictions and debauch the emotions of an audience not practiced in the tricks and delusions of oratory." --American author and humorist Mark Twain (1835-1910)
Like I said, this is just a thought. But lets say the Big 3 go under. Is it not feasible that the other industries, who had CEOs do the job right, buy up the assets? They would have to provide more vehicles, so they will need more plants. Would this not be the free market fix. Demand will still be there.
It depends on whether the current reduced demand for new vehicles is a temporary aberration or is the market the automakers will be faced with for the indefinite future. In 2007 the U.S. market for new cars, light trucks, SUVs and minivans was about 16 million units. In recent months sales have been running at an annual rate of 10-11 million units per year. If demand returns to 16 million units or higher in the not too distant future than if the big 3 go bankrupt it might indeed be very profitable for investors with competent management to purchase those production assets at distressed prices and continue to build automobiles. However, entities with no experience in the automobile industry, even if they have deep pockets, might not be able to make a go of it. It first looked like Cerebrus was getting Chrysler for a very favorable price of $7.4 Billion just 10 years after Diamler-Benz payed $40 billion for it, but right now Chrysler probably has little or no market value. At current stock prices GM's market value is only $1.8 billion.
On the other hand, if 11 million units per year is the new level of demand, than there is currently excess production capacity of at least 5 million units per year in the industry and that is not sustainable. The bankrupt companies would likely be liquidated and a large amount of their production capacity would have to be scrapped to bring supply back into balance with demand. The bankruptcy and liquidation of all the big 3 would remove more than 5 million units of capacity from the industry but I think it is unlikely that established producers like Toyota, Nissan and Honda would be interested in assets of the bankrupt firms since the UAW workers would likely come with the facilities. It is more likely that Toyota and the others would build new production facilities and recruit a new labor force to replace the production capacity of the liquidated firms for which there is still demand.
***anese will not use exisiting machinery or personnel. They all start over from scratch! Good chance the UAW is going to tale a huge hiot here if if Cool Breeze doesn't give them a lift.
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"There is nothing in the world like a persuasive speech to fuddle the mental apparatus and upset the convictions and debauch the emotions of an audience not practiced in the tricks and delusions of oratory." --American author and humorist Mark Twain (1835-1910)
Very fewof thefat cat banking executives who brought you this world wide recession made any wage concessions.Banks were bailed out to the tune ofover 2 trillion dollars.Congress and the white house have decided thatbanking executivescankeep their golden parachutes. Sounds like the political pukes in DC are afraid to push the issue of golden parachutes for fear that some banking fat cats will spill the beans on the lack of government oversight into the banking industry.
The credit card companies have been bailed out and none of their executives took pay cuts. Now we want concessions from auto workers because they belong to unions. How absurd!!! [:'(]
And in the meantime, during this "reorganization" what is a recession with the potential to be very long and pronounced will become longer and even more pronounced. An industry, which represents one of the last bastions of American manufacturing will essentially completely shut down.
What emerges, will be very similar. A company with unions, trying to compete while providing health care benefits that foreign competitors do not even attempt to try to provide.
The market is now global, in case you guys haven't notice. The tariffs imposed on both sides have just a tad of disparity in respect to the benefits and compensation (which Americans like FM et al like to proudly and loudly "demand" as part of their "package.")
Or....or they will further outsource much of the manufacturing process. Who wins then, in our supposedly "free-market?" Everyone wishes to call for the free market to be left to its own devices...until it stands up and walks out on us and takes American jobs to greener pastures offshore.
You cannot have it both ways. You want to protect American jobs from going overseas, but when an American company can't compete, you want it to simply go broke and start over? Start over how???
The credit card companies have been bailed out and none of their executives took pay cuts. Now we want concessions from auto workers because they belong to unions. How absurd!!!
What? WHAT? Who gave you the right to display this type of critical thinking on this board?
No way, Jack. Just let the "free market" work. Just pay those American workers the same number of peanuts that the Chinese make. It will work itself out, right? After all its only about 1/5 of our economy that will be vaporized at the worst possible time since 9/11. No harm done.
Just a thougth about the auto industry
