After avoiding the obvious, that the world was changing and their strategy needed to change just as fast, the Big Detroit Automakers failed to answer the call.
Last week, the executives from these companies went infront of congress.
Do they deserve a bailout?
Interestingly, Honda opened a new Plant in the mid-west...
Hmmm.
What do you think?
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12/10/08
Government Tries something
Recent news shows that the government/democrats are proposing the following;
> GM and Chrysler have approval for a bailout ($$$$$)
> Conditions would include a presidential appointee aka "Car Czar", who would have authority to review progress/financial state and allocate funds or force the company into bankruptcy
From the surface it looks good, but I can't help but wonder, why the companies can't do what they normally would do (like what Ford plans to do, i.e., sell some assets and stay afloat).
Question of the day for you all is.....what are all the consequences of bankruptcy for GM and Chrysler? Obviously, it depends on the type they file.
For those of you that may not know the most popular ones...
Read more >>>> link
Chapter 11 - Reorganization
Chapter 7 - Close Doors - Liquidate
The people are hurting already, sales are down(main problem), banks aren't lending or are finally checking who they are lending to, and holding back unless it's a sure deal. Continuing life-line without a re-org/new strategy, would only prolong the inevitable.
At the same time, there are many start ups looking to break into the manufacturing of new hybrid/other energy efficient cars. Check out the following article that talks about it in detail.
Is Silicon Valley the new Detroit for electric cars?
Elon Musk's Tesla Motors,Project Better Place, founded by former SAP executive Shai Agassi
San Dimas-based AC Propulsion, which makes an all-electric Scion eBox for $70,000
OK, so GM does have some hybrids too..... best one appears to be Chevy Cobolt.
Please advise on what you think the outcome would be of bankruptcy Chapter 11 for GM and/or Chrysler.....I've got my list started - will add it tomorrow.
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Prez Obama visits Electric Company in Southern California to learn about New Electric Vehicle, 120Miles / gallon.
http://www.sce.com/Feature/Obama-EV-Tech-Center.htm
2 comments:
My concern is that too many corporations are now coming to the government with hat in hand asking to be helped out. What happened to capitalism? Make a quality product and sell it at a price that your consumers will pay. Build market share and stay ahead of the competition. Expect the market to come to you and you may end up out of the market.
The Toyota Prius was not developed overnight, hybrids have been on the horizon long enough for Detroit to put serious investment into them. Instead, Detroit milked the SUV craze as long as they could. I don't work in the auto industry, so my perspective on it is the simple uneducated outsider. But I've been working hard, bought a house that I could afford, saving my money.
It frustrating to see individuals and companies that accepted more risk than they could handle get taken care of. Nobody deserves to get pulled under, but you have to think about your decisions carefully.
It looks like detroit auto makers will go down eventually even after the bailout. Auto magazines report that GM had 50+ billion loss in 2004 - 2007, which was supposed to be booming economy. Union problems are too big for the companies to let generate profit.
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