GM exec: bankruptcy not an option for industry

**Terri** · #1 12-03-2008, 08:15 AM

By JULIE HIRSCHFELD DAVIS
Associated Press
December 3, 2008

WASHINGTON (AP) -- General Motors Corp. President Fritz Henderson said Wednesday that bankruptcy isn't a viable option for struggling U.S. automakers seeking $34 billion in federal aid, maintaining that a retooling plan they're giving to Congress this week is sufficient to save the industry.

Henderson said that General Motors is ready to undertake a host of steps needed to resize, but said that "to win, you've got to win with product and technology. ... And we do not want to give consumers a reason not to buy our cars and trucks."

General Motors is ready to undertake a host of steps needed to resize, Henderson asserted in an interview on NBC's "Today" show. But he also said "to win, you've got to win with product and technology. ... And we do not want to give consumers a reason not to buy our cars and trucks."

More

autoxr1 · #2 12-04-2008, 11:56 AM

This is absolutely right! A recent study showed that 80% of consumers would NOT consider buying a car from an automaker in bankruptcy. When you invest $20-40,000 in a new vehicle, you want assurance that the company will be around to back the warranty for as many years as it lasts, and that parts will be available for the life of the vehicle.

This is quite different than flying on an airline that's in Chapter 11, where you hope that a $300 ticket will be good just a few weeks into the future. There are too many other car options for consumers to take a chance on a bankrupt car company. If one of the Detroit 3 enters Chapter 11, that will be the end of that company!

This is why I was SO DISAPPOINTED to see GOPUSA actually encouraging Republicans to contact the President and their Congressmen to lobby AGAINST the auto company bridge loans. Evidently it is fine to throw $10's or even $100's of billions at banks with no accountability or expectation of repayment, but it's unacceptable to save an entire industry affecting millions of jobs by simply LOANING the companies money TO BE REPAID WITH INTEREST, as Chrysler did in the 1980's.

Hypocrisy reigns!

**Terri** · #3 12-04-2008, 12:14 PM

Before you start blaming us you should find out the facts. GOPUSA has been consistent. We are against taxpayer funded bailouts.

GOPUSA lobbied against the bank bailouts too.

Government bailing out business is not a conservative principle. Government needs to stop over regulating business and it needs to stop being Uncle Sugar when business fails.

So what do you call being against bailing out the banks and for bailing out the auto companies? Isn't that a bit hypocritical?

mrsmal · #4 12-04-2008, 12:16 PM

This is BS. Bankruptcy should be the only way to go. GM is giving up Pontiac and Saturn but keeping the partnership they have with Toyota? Bankruptcy is the only way to get the union contracts null and void and start from scratch. NO BAILOUT MONEY FOR YOU! You didn't know how to run your respective companies in the first place, now it will be just throwing good money after bad.

Dingbat36 · #5 12-04-2008, 12:22 PM

Bailing out these industries is just kicking the problem down the road.

MamaCat · #6 12-04-2008, 01:09 PM

Of course a GM exec says that backruptcy is not an option. I think most people facing a bankruptcy would muchly prefer a bailout. Only makes sense.

BUT I think the 60% who in polls are against bailing them out are 100% right. Let's take the medicine now, as distastful as it is. If they really want to stay afloat, they'll find a way to make a bankruptcy work for them. If not, oh well.

autoxr1 · #7 12-04-2008, 06:00 PM

It's amazing how many are ignoring the fact that the auto companies have been restructuring for the last eight years, and have already closed many unprofitable plants, shed 40-50% of their workforce, begun retooling truck and SUV plants to build small cars, and caught Honda and Toyota in quality and fuel efficiency. These plans were starting to pay off, particularly at Ford which made money in the first quarter. It was the banking collapse and credit crisis that stopped things cold!

If this were just a Big Three issue, then the other automakers selling in the U.S. should be just fine. But guess what? Ford sales were down 32% in November, but Toyota, Nissan, Hyundai, Mitsubishi, and Suzuki sales were down even more! People that are ready to buy a new car can no longer get financing. This is also a global issue, as W. Europe auto sales fell 25% in November.

If this were just about Ford, GM, and Chrysler, one could argue to let them fail. But the U.S. automobile business affects one in ten jobs in this country. A collapse of the Detroit automakers would be a cataclysmic event. It would send this nation from recession into a full-on depression. And to pretend otherwise is to ignore the real issue.

MamaCat · #8 12-04-2008, 07:09 PM

Maybe it will take a full blown depression to wise people up. I'll take my chances.

Let them try bankruptcy.

oldjules · #9 12-04-2008, 09:34 PM

Quote:

Henderson said that General Motors is ready to undertake a host of steps needed to resize, but said that "to win, you've got to win with product and technology. ... And we do not want to give consumers a reason not to buy our cars and trucks."

To lack the ability to manage a going industry and needing to get bailed out by the Gov does not make me want to buy a car from them. I will take my chances with a company that can stay financially sound on its own.

The Big three let the Gov. and the unions push them around and now they have to pay the price. To give them money now is letting them set the hook for larger loans in the future.

The managers and employees killed the goose that laid the golden egg and "Atlas Shrugged".