Re: [Vo]:The case for Chapt. 11 bankruptcy for carmakers
In reply to Harry Veeder's message of Mon, 24 Nov 2008 23:00:13 -0500: Hi Harry, [snip] > > >The horse and buggy evolved into in the auto-mobile. >Perhaps the auto-mobile will morph into the OU-mobile: >something which generates electricity and provides a means >of transportation. > >harry [snip] It might, if I got half a chance to build the power source. Regards, Robin van Spaandonk <[EMAIL PROTECTED]>
Re: RE: [Vo]:The case for Chapt. 11 bankruptcy for carmakers
The horse and buggy evolved into in the auto-mobile. Perhaps the auto-mobile will morph into the OU-mobile: something which generates electricity and provides a means of transportation. harry > > > - Original Message - > From: "Hoyt A. Stearns Jr." <[EMAIL PROTECTED]> > Date: Monday, November 24, 2008 5:08 pm > Subject: RE: [Vo]:The case for Chapt. 11 bankruptcy for carmakers > > > They've seemingly ignored another portion of the equation: People > > will still > > want cars and maintain them, so any jobs lost will just migrate > to > > otherfirms providing the same services or manufacturing efforts. > > > > > > > > -Original Message- > > From: Jed Rothwell [mailto:[EMAIL PROTECTED] > > Sent: Monday, November 24, 2008 9:00 AM > > To: vortex-l@eskimo.com > > Subject: Re: [Vo]:The case for Chapt. 11 bankruptcy for carmakers > > > > > > Here is a comment about the effects of bankruptcy on automobile > > buyers, from the New York Times. Customer opinion surveys show that > > the problem is severe. It is worse than I thought. > > > > - Jed > > > > Source: > > > > http://www.nytimes.com/2008/11/24/opinion/24abraham.html > > > > > > ". . . Almost every carmaker that has ever gone bankrupt has > > disappeared for good. And there is no reason to believe the Big > Three> would not do the same. Chapter 11 filing would almost surely > lead to > > liquidation. > > > > Just as financial institutions depend on the confidence of those > with> whom they do business (as Bear Stearns and Lehman Brothers > > discovered), automakers depend on the confidence of car buyers. To > > purchase a car is to make a multiyear commitment: the buyer must > have> confidence that the manufacturer will survive to provide > parts and > > service under warranty. With a declaration of bankruptcy, that > > confidence evaporates. Eighty percent of consumers would not even > > consider buying a car or truck from a bankrupt manufacturer, one > > recent survey indicates. So once a bankruptcy proceeding got > started,> the company's revenue would plummet, leading it to > hemorrhage cash to > > cover its high fixed costs. > > > > That would thwart any attempt at reorganization, and the case would > > likely move inexorably toward liquidation under Chapter 7 of the > > federal bankruptcy code. Debtor-in-possession financing — which is > > what the bankrupt need in order to pay for the continued > operation of > > their business — would not be available in the vast amounts > required,> given the plunge in revenue. . . ." > > > > >
RE: [Vo]:The case for Chapt. 11 bankruptcy for carmakers
They've seemingly ignored another portion of the equation: People will still want cars and maintain them, so any jobs lost will just migrate to other firms providing the same services or manufacturing efforts. -Original Message- From: Jed Rothwell [mailto:[EMAIL PROTECTED] Sent: Monday, November 24, 2008 9:00 AM To: vortex-l@eskimo.com Subject: Re: [Vo]:The case for Chapt. 11 bankruptcy for carmakers Here is a comment about the effects of bankruptcy on automobile buyers, from the New York Times. Customer opinion surveys show that the problem is severe. It is worse than I thought. - Jed Source: http://www.nytimes.com/2008/11/24/opinion/24abraham.html ". . . Almost every carmaker that has ever gone bankrupt has disappeared for good. And there is no reason to believe the Big Three would not do the same. Chapter 11 filing would almost surely lead to liquidation. Just as financial institutions depend on the confidence of those with whom they do business (as Bear Stearns and Lehman Brothers discovered), automakers depend on the confidence of car buyers. To purchase a car is to make a multiyear commitment: the buyer must have confidence that the manufacturer will survive to provide parts and service under warranty. With a declaration of bankruptcy, that confidence evaporates. Eighty percent of consumers would not even consider buying a car or truck from a bankrupt manufacturer, one recent survey indicates. So once a bankruptcy proceeding got started, the company's revenue would plummet, leading it to hemorrhage cash to cover its high fixed costs. That would thwart any attempt at reorganization, and the case would likely move inexorably toward liquidation under Chapter 7 of the federal bankruptcy code. Debtor-in-possession financing — which is what the bankrupt need in order to pay for the continued operation of their business — would not be available in the vast amounts required, given the plunge in revenue. . . ."
Re: [Vo]:The case for Chapt. 11 bankruptcy for carmakers
On Mon, 24 Nov 2008 10:59:30 -0500 "Jed Rothwell" <[EMAIL PROTECTED]> wrote: > Here is a comment about the effects of bankruptcy on automobile > buyers, from the New York Times. Customer opinion surveys show that > the problem is severe. It is worse than I thought. > > - Jed > > Source: > > http://www.nytimes.com/2008/11/24/opinion/24abraham.html I suppose the congress knows that and will fork over the money; but first want to pressure the carmakers into an attitude adjustment. I can't believe they won't save the drowning carmakers after shelling out umpteen billions to a bunch of bankers, who probably could go bankrupt without provoking a catastrophe. It's sad, though, to see the once-vibrant auto industry turned into a bunch of beggars.
Re: [Vo]:The case for Chapt. 11 bankruptcy for carmakers
Excuse me . . . I think I have the formatting set wrong. Let me just upload that paragraph again and see if it comes out right. Please ignore. Here is a comment about the effects of bankruptcy on automobile buyers, from the New York Times. Customer opinion surveys show that the problem is severe. It is worse than I thought. - Jed
Re: [Vo]:The case for Chapt. 11 bankruptcy for carmakers
Here is a comment about the effects of bankruptcy on automobile buyers, from the New York Times. Customer opinion surveys show that the problem is severe. It is worse than I thought. - Jed Source: http://www.nytimes.com/2008/11/24/opinion/24abraham.html ". . . Almost every carmaker that has ever gone bankrupt has disappeared for good. And there is no reason to believe the Big Three would not do the same. Chapter 11 filing would almost surely lead to liquidation. Just as financial institutions depend on the confidence of those with whom they do business (as Bear Stearns and Lehman Brothers discovered), automakers depend on the confidence of car buyers. To purchase a car is to make a multiyear commitment: the buyer must have confidence that the manufacturer will survive to provide parts and service under warranty. With a declaration of bankruptcy, that confidence evaporates. Eighty percent of consumers would not even consider buying a car or truck from a bankrupt manufacturer, one recent survey indicates. So once a bankruptcy proceeding got started, the company's revenue would plummet, leading it to hemorrhage cash to cover its high fixed costs. That would thwart any attempt at reorganization, and the case would likely move inexorably toward liquidation under Chapter 7 of the federal bankruptcy code. Debtor-in-possession financing — which is what the bankrupt need in order to pay for the continued operation of their business — would not be available in the vast amounts required, given the plunge in revenue. . . ."
Re: [Vo]:The case for Chapt. 11 bankruptcy for carmakers
Howdy Jones, Still won't work. Regardless of assets and market position, longevity etc.. it will always get down to people in leadership. The ideal way to work out the US auto industry would be for it to transition to bankrupcy to acquisition by people that know how to run a manufacturing business. It would only take 5 bright young guys.. dump GM, Ford and Chrysler into a single enterprise. Won't happen, too much baggage and too few people with knowhow, plus congress would never allow the opportunity for politics to escape them. Richard One of several good articles http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/11/19/BUVG147QK6.DTL Bankruptcy is the only way to trim the gross layers of fat off the top - get rid of Putz and the fleets of corporate jets and other perks.
Re: [Vo]:The case for Chapt. 11 bankruptcy for carmakers
Here is a funny animated cartoon in the same newspaper about the auto industry: "Big Three Owner's Manual" http://www.sfgate.com/comics/fiore/ - Jed
Re: [Vo]:The case for Chapt. 11 bankruptcy for carmakers
This is a good article. It is well written and it covers most aspects of the situation that I have seen in other news articles. I think there is one valid reason not to File for Chapter 11, described here: ". . . consumers would stop buying their cars if they could not be sure the companies would be around to honor warranties or provide parts." Someone else wrote that Chapter 11 in the auto industry is like a roach motel; you go into it but you never come out, mainly for this reason. I think they should do it in spite of this problem. George Will and some other right-wing commentators have said that the first thing GM needs to do is stop development of the Volt, other hybrid technology, and small cars. They say hybrids are a passing fad and consumers don't want small cars. They say only kooky members of Congress want GM to make hybrids, and Congress should repeal CAFE standards to save the auto industry. It is amazing how different their perception of the situation is compared to mine. I say look at Toyota, the biggest, most successful car company. They have sold a million hybrids and they intend to make their entire line of cars hybrid in a few years. Will has a conflict of interests in this, which he readily admits. Whenever he writes about the auto industry he notes that his wife Mari Will "is a consultant for the Japan Automobile Manufacturers Association." I almost suspect that he & the Mrs. are trying to destroy what is left of the U.S. auto industry, on assignment from the Association. - Jed
[Vo]:The case for Chapt. 11 bankruptcy for carmakers
One of several good articles http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/11/19/BUVG147QK6.DTL Bankruptcy is the only way to trim the gross layers of fat off the top - get rid of Putz and the fleets of corporate jets and other perks.
