Without going bankrupt. I am not a financial guy but I see that Ford was in bad shape as last year as well as GM. Anybody think GM could have survived without the bankruptcy?
<How did Ford Make it?>
With Ford some will say: better management; good timing of borrowing money; Ford family preferred stock issues etc...
I believe, the real answer is "Ford Quality".
Slogans like "Built Ford Tough" that actually mean something.
Basically, Ford overkills every part they put into their vehicles, especially their trucks.
Ford was the first to see how Toyota and Honda were taking sales away from the domestics, and strived to up the quality to Japanese standards and you can argue maybe now better then their standards.
<<<"Couldn't the government just had guaranteed the financing instead of taking over the company?">>>
Then who would have forced any management change?
(Not to imply that there was enough!)
<<Couldn't the government just had guaranteed the financing instead of taking over the company?>>
You may remember that during that particular point in time, the government managed to tank the economy taking the credit markets with it.
No one could get a small business loan, or even a loan for a car from any lender. Who was there that would be willing to loan a really big amount to GM or anyone else? So for the government to guarantee the loan, there would have to be a lender. There was none, in fact the people who could have served as DIP lenders were all getting bailed out themselves.
I hate it that GM took the loan from the government, but cash flow would not let them continue and the company would have been liquidated. Some think that would have been the right approach, I respectfully don't.
They really didn't "make it" yet; I mean, they still have a "B" bond rating (BBB is investment grade and I'm told GM will have an IG-rating). Their book value used to be $25/share and now it's around 0. Their stock price was as high as $68/share and now it's $11-something (with no tangible equity F is basically a "stub"). So GM and Chrysler may get the last laugh.
At least they didn't look to the taxpayer like a teenager who blew her allowance at the mall and asks her parents for more money, which of course she will use to go back to the mall again and repeat the cycle.
Ford made it via SHEER LUCK when they mortgaged their butts off (including the blue oval as collateral). This all took place before the market tanked and loans like that were available.
Wow, that's how you see it. Some luck yes, nobody could predict what the market and economy did of course, but they did so some planning, and that had a lot to do with it. None of which GM did.
'Anybody think GM could have survived without the bankruptcy? '
Would have taken lots of balls and brains at the corporate level, none of which they had. So no. BK was the easiest way.