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Dear Henry,Well, SIS, you're not alone - well, this is a confusing subject. Luckily, I've given this subject a little study and a lot of thought - it's a hazard of being a dork who loves cars, particularly American-made ones.OK, I’m confused about the potential auto bailout. I don’t know if they should be bailed out or if they should go bankrupt. Part of me is scared they’ll go bankrupt and jobs will be lost, but part of me thinks at least one should go bankrupt because maybe that will be the wake up call to the American auto industry and the UAW. I’m so confused.
What do you think?
Sleepless in Seattle
- GM needs to make bigger cuts than the other two. It needs to eliminate about 3,000 dealerships, (at least) 2 of its models (Pontiac, Buick or Saturn), and probably shift even more production overseas. Just as important, it needs help paying benefits, such as health care, for its retired employees. Also, what happened to that hydrogen technology that GM was promoting a couple years ago? Didn't Dubya give GM a huge subsidy to develop the technology?
- Chrysler should be shut down completely, in my humble opinion. Other than the Jeep brand, there isn't much left. Another firm - preferably healthy, like Toyota - should buy Chrysler's assets.
- Good news - Ford is ok. It's cars are improving in quality, overseas sales are strong, and the company doesn't need money now, unlike the other two. Its CEO has asked the Feds for a line of credit - not a loan - that the company could draw on only if the company needs it.
If GM were to file for bankruptcy, it would be a problem for customers (who may not be able to get a loan to buy a GM car), parts suppliers (who may not get paid by GM), employees (whose employment contracts may be void) and stockholders (whose stock would worth nothing). It would also be one of the largest bankruptcies in the history of American business.
Chrysler files for bankruptcy? Who cares. It's privately owned.
Published December 4, 2008 by Henry Schwaller |
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| Tags:
Congress
Corporate Power
Economy
Financial Industry
