Why would F follow GM into ch 11 voluntarily? Makes no sense!
This does not make any sense to me? Comments?
I believe Chapter 11 will create more problems ... It is sales that is the problem. Unlike for Airlines, it was the fuel cost, etc. If GM sales drop even more, cost cutting by Chapter 11 will not offset already low sales. It will eventually have to go to Chapter 7.
F needs to stay par ... GM, C chapter 11 will make UAW make greater concession and if F can last to 2010, there will more savings with health care, etc, etc allready in play.
ga_connection: I agree 100%. BK for GM will quickly lead to liquidation, not reorganization. GM needs to explain how foreign car companies do most of the R&D outside the US. If GM goes, so does almost all automotive R&D in the US.
I am currently contracting at an American auto parts manufacture that was just purchased by a German company. The parts are currently manufactured in Mexico (and they screw up so badly that it turned out to be MORE expensive) but all of the R&D is done in Wisconsin.
We are pretty sure the German's are going to close the Wisconsin R&D facility but continue making the parts in Mexico.
Wait till they find out how unproductive the Mexican facility is. But it won't matter because it will be too late.
In the long run, the manufacturing and R&D will all be moved to Germany, the new capital of the automotive industry.
And we'll all be selling life insurance to each other.
I don't think that F would follow GM into ch 11. F has a much better cash position. If GM were to go into chapter 11, the UAW contract would be voided and renegotiated. I think F would demand the same type of cost structure with the UAW.
I don't understand why the UAW isn't negotiating with GM right now to come up with a plan to help avoid bankruptcy. I think they are playing chicken, hoping that that congress will bail out the Detroit 3 and not require any concessions from labor. Certainly the Democrats are on their side, but when unemployed people hear about the job bank, you can bet that their Democrat representatives are going to get some nasty letters.
The UAW is negotiating. I think the UAW is getting the message that they can't demand super high wages/benefits like they did in the good all days. Things have changed. The Mexican and Chinese autoworkers are a lot cheaper!
I think Obama and the Democrats are doing the right job by keeping the pressure on GM/Chrysler. Wagoner needs to go. Or GM should at least have a non-executive chairman.
I am glad someone is thinking reasonably. I can not believe some are saying F needs to follow GM into Chapt 11 voluntarily ... so they can be stay competitive with them. This is like following someone off the bridge. Most of time, these boards do more harm then good for retail investors.