Of the 3 CEOs, I think only Mulally has the “right stuff” to turn his company around. Ford suffers still from Jack Nasser’s attempt to transform Ford into a General Electric, Welch style. This was followed by very weak management by Bill Ford. Mulally’s efforts at Beoing after 9-11 speak well for his ability to make unpopular decisions. Ford is doing OK abroad and has many good designs for small cars that can be produced in North America. Shutting down the Expediton plant, and converting it to make Fiestas, the new small designed in Europe, is a good decison.
Mulally said he is not personaly seeking a bailout, but is supporting GM and Chrysler, since their demise will bankrupt a lot of suppliers, and that would be bad for Ford.
“In another thread we proposed that GM make further structural cuts by getting rid of Pontiac, Saturn, Hummer, the GMC brand and close one half of its dealerships.”
Weeee did, or Youuu did?
I find your self-aggrandizement offensive. Maybe we should start by closing all the Canadian GM facilities and franchises. What would you think about that?
“You’re confusing filing for Chapter 11 and closing the doors…BIG DIFFERENCE. The WORSE case scenario is GM or Chryco will be bought out by one of it’s competitors. Ford looks like it’ll be able to ride it out. We’ll see.”
No, the worst thing that could happen is if they went out of business and all their employees lost their jobs.
“GM/Ford and Chryco COMBINED only have about 200k employees…NOT 2 million.”
Oh, and don’t forget the parts suppliers. That’s where the 2,000,000 comes from. But that’s before we add in the unrelated service industries, like department stores, gas stations, home builders and re-modelers, grocery stores…
“Why does everyone think that the ONLY path is for them to close their doors. They’ll file chapter 11 and restructure…and hopefully either get bought out of finally learn about how to run a company and emerge from bankruptcy with a stronger company.”
Who’s going to loan them the money? The credit market is in shambles. Companies with good credit ratings can’t even get loans now.
“UM…WRONG…The GM corporate jet is owned by GM…but used EXCLUSIVELY by the CEO. He lives in Seattle WA and uses it to commute back to Seattle on the weekends. It’s one of his perks.”
I believe the planes are leased. They are returning several. I read about it in the paper today.
“I say…call their bluff. Give the Bail Out but directly payable to the UAW workers in the form of health insurance and retirement benefits until the new contract is valid.”
Do you mean that the auto companies will not be liable for the pensions or health care benefits of their retirees and employees for 2 years? How is that calling anyone’s bluff? It’s a dream come true for the auto industry executives.
YO!!! WAKE UP!!!
The ENTIRE auto industry got caught with its pants down during the last price spike.
The “Big 6” including Toyota, Nissan and Honda, ALL produce gas guzzling fat tired monsters for US to buy. And WE buy them.Toyota even took point to limit CAFE MPG standards so they could look the Prius hero while outselling GM with the Tundra.
My 'hood in East Oakland CA is pepperred with forclosures that USED to be occupied with equity-levereged SUV’s in the driveways. Those same folks have those same SUVs and are now renting!
Where Detroit has failed is not in the US, they just sold us what we wanted, but abroad. GM’s best seller abroad is th Buick in China! Big, tacky, gold trimmed LeSabers and LaCrosses. They have left the efficient car market to the competition.
DON’T THINK WE CAN DRIVE OUR WAY OUT OF THIS. The GenX and GenY dopes think they know the answer because they believe that Borrow Borrow Borrow is the only way to prosper. Those of us who believe in thrift and saving WON’T see a huge change in quality of life!! We might even make a dime or two pouring some sweat equity into the enevitible opportunity this presents. All while the GenX and GenY’s catch some ZZs!
Truly-
an aging F.A.R.T.
(Father Against Radical Teen)
The big three oil execs. talk conspicuously like the tabacco execs. trying to keep us hooked on oil (like tobacco) as long as there are trillions of $$$$ left in the ground. Keep leading us around because they know what’s best for us.
Just history repeating itself…we’ll bite and give them more $$$$ so they can slowly steal our wealth and take our health.
Why doesn’t the Govt. just give the money to the public for new car purchase and let us determine who will survive. Give them one year to ready their products when are car rebate checks come in…
“Why doesn’t the Govt. just give the money to the public for new car purchase and let us determine who will survive. Give them one year to ready their products when are car rebate checks come in…”
What?! If Uncle Sugar gives me money for a car, I buy a Toyota, and GM goes out of business, the expenses for their closure don’t change. We still have to pay for unemployment and retirement benefits. Tell me how your suggestion makes any sense at all.
I totally agree to not wanting the big three go under but I do think that they need restructuring. Why not sell the company to the union, have them run it, and get rid of the executives, who by the way earn about $6,000,000 a year each. If Marie Antoinette could have her head chopped off, why not the execs?
By public, I mean state and municipalities which but American brand cars…
By the way, Toyota has just as many unsold cars sitting around, they just don’t have the overhead. Buy only cars assembled in the US regardless or brand. You help the American worker. Delco makes parts for all cars…GM survives
Here’s what I would say, “You want a bail out and put tax payers at risk, fine. You will buy stock in your company equal to 95% of your net worth which you can’t sell for six months after you leave or until the loan is paid in full, then we’ll be more the happy to loan you some money. After all if you don’t believe you’ll turn your company around why should we?”
If they really believe what they say they would jump at this chance. After all the stock is at a very low price right now and if they really do turn the company around they would make BILLIONS, and if it doesn’t then they get stuck just like the taxpayers.
I believe Lee Iacocca did exactly that; he worked for $1/year until Chrysler became profitable and the loans were paid off, but he got quite a bit of “useless” Chrysler stock, which became worth about $14 million later. No one begrudged him this nice capital gain.
“Why not sell the company to the union, have them run it…”
They have been a big part of running GM, Ford, and Chrysler for a long time. Why would things change if they had even more power than they do now? Remember that their sole constituency is the workers, not the public or the stockholders. Why do you think they would change their motives if they were in charge? And if you are only interested in worker welfare, don’t you think they have a great contract already?
Agreewith jt; this rarely succeeds. I believe British Leyland was sold to an investment firm and their unions, after even BMW could not make a go of it, and they were not very successful either. The Chinese have now bought up the remaining assets which includes a nice manufacturing plant.
International Paper was going to close a mill in the 70s. The plant manager and employees bought out the company, and ran it successfully for over 25 years. This is a rare example of such a situation working, but required substantial reduction in wages and benefits. Since the mill was in an isolated location, the employees agreed, since selling their homes and moving were not good options.
A classmate of mine worked for Monsanto’s foam rubber division. When they decided to close the operation, he and 2 partners bought the assets, with a government loan. He renegotiated the labor contracts and was successful in selling the Big Three on foamed-in-place seats for their cars. I had 2 Chevies with his seats in them.
The government loans were soon paid off, my friend bougth out his partners, and the business expanded to other countries. His net worth was $600 milion at the latest count. Again a rare instance of this type of buyout succeeding.
The big three are hemmoraging money. For a long time time they’ve said that’s due to legacy costs and unreasonably beneficial contracts (which they agreed to, incidentally).
Given that, and that I’ve come never to underestimate the sliminess of a person when it comes to money, why don’t they just pull a Lorenzo?
AKA Frank Lorenzo, the guy who had a brief string of success LBO’ing his way into distressed airline co’s, declaring bankruptcy, voiding contracts, and “flipping” them. If Wall St really bieleves legacy costs et al are the cause of woe here, then such action would seem to bump up stock prices long enough to abandon ship.
(Lorenzo’s downfall was that he’d become smitten with running an airline, and used his newfound wealth to do so, only to find out he wasn’t any good at it…maybe that’s also the current problem?)
GM doesn’t own AC-Delco anymore. In fact, GM was funneling money into AC-Delco to keep them out of bankruptcy about a year ago because they were such a large supplier to GM. But not in any way owned by GM now.
I’m glad to hear success stories. But they are significantly different than the deal suggested above. ellenthesignlady wants all executives, including the astute ones you mentioned here, dumped so that the union can run the show on their own.