91z4me

What if GM does declare Chapter 11?

How would the public react to a Chapter 11 filing by GM?  

88 members have voted

  1. 1. How would the public react to a Chapter 11 filing by GM?

    • Positively
      8
    • Negatively
      56
    • Indifferent
      24


15 posts in this topic

91z4me    0

Simple question: What would happen if Delphi strikes and sends GM into Chapter 11?

Things I think can happen:

1. Immediate renegotiation of UAW contract.

2. Immediate renegotiation of plant contracts.

3. Immediate renegotiation of Delphi and other supplier contracts.

4. Ford declaring chapter 11 also, maybe Chrysler.

5. Court letting some assets be sold off (remainder of GMAC, Hughes).

6. Freeze in product development.

Things I don't think will happen but possibly could:

1. Renegotiation of dealership contracts (hoping for this one).

2. Voiding of warrenties.

Also how would the stock react? How would GM be better able (or less able) to fight Toyota and other competitors? How would the media (auto and non-auto alike) react to this? What would happen to the retired employees and families of former employees? Would GM's job bank close? How would this affect Holden, GM Europe and other overseas divisions?

Looking for whatever answers I can get.

The poll portion of this thread is:

How would the public react?

***This thread is also going up on GMI and CZ28 no need to reply to multiple threads if you don't want to, I just want a wider response.

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I can not even pretend to understand waht would happen exactly and why and if it might help.... but I know history repeats itself someties and this mihgt not be the worst thing. I voted "Positively", based on gut instinct and Chrysler's past.

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ellives    0

I agree. In some sense it's not clear why GM is even relevent any more. There are SO many car companies out there that the void would immediately be made up by others. The losers in all this would be the employees/retirees and current owners like me.

I don't see a clear parallel to the Chrysler backrupcy. Iacocca pulled them back from the abyss. I think that's one of the things GM needs - a pitchman. Every car dealer advertising on TV here has one. Ford has Bill Ford out there front and center. Car buyers relate to a face giving them confidence there's a real person behind the product. GM needs this to convince the buying public it has a soul.

Public perception of GM bankruptcy = fatal wound.

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Camino LS6    866

I had to think this one over for a while before responding. First, I don't believe that GM will ever declare chapter 11. If they did, the initial public reaction would be a near fatal blow as the press would jump all over it. Eventually, it would be seen as a good thing by investor types but GM would be forever marginalized and we would lose so many promising programs that this new ,"healthier" GM would not be recognizable.

Second, a prolonged strike by the UAW and subsequent GM bankruptcy would be a suicide move for the UAW. They need to give-in now or be rendered irrellevent permanently. I can't see them being quite that stupid.

Third, the impact of a GM bankruptcy would have far-reaching and disasterous effects on the rest of the domestic auto industry and the national economy as a whole. The current administration would realize this too late to be effective in heading-off the damage. They would then proceed to interfere, making matters worse.

My conclusion: The UAW needs to realize that the days of the gravy train are long gone and that the best they can hope for is to slow the erosion of their influence and power. They will have to give concessions not only to Delphi, but also to GM,Ford and Chrysler over the coming years in order for the industry as a whole to survive and become competitive once more. Negotiating the rate of implementation of these concessions is where they need to concentrate their efforts now. That and making inroads into organizing the Asian shops in this country - Toyota has the fattest wallet around and they would be target one if I were running the UAW. The unions have to stop :deadhorse:

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CARBIZ    1

On a side bar here: when Texaco when bankrupt one of its conditions when it emerged was to sell off its Canadian subsidiary. Texaco is now forever gone from Canada.

Just a thought.............................

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Newbiewar    1

I agree. In some sense it's not clear why GM is even relevent any more. There are SO many car companies out there that the void would immediately be made up by others. The losers in all this would be the employees/retirees and current owners like me.

I don't see a clear parallel to the Chrysler backrupcy. Iacocca pulled them back from the abyss. I think that's one of the things GM needs - a pitchman. Every car dealer advertising on TV here has one. Ford has Bill Ford out there front and center. Car buyers relate to a face giving them confidence there's a real person behind the product. GM needs this to convince the buying public it has a soul.

lol we could put bob in the comercials... :scratchchin: maybe LaNave?

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As hard as this would be to imagine, I could see GM being forced to sell "soft assets" like brand names along with entire factories should it be forced into bankruptcy. Who's got lots of US dollars??? The Chinese. Who keeps talking about breaking into the US market??? The Chinese. I could easily see a judge allowing a Chinese buyer (SAIC most likely) to pick up the Saturn, Pontiac and/or Buick brand names along with franchise agreements and selected tooling from any number of plants. The tooling would get shipped back to China and the cars made there. GM might continue to build LaCrosses and Ions for the Chinese while they design their own stuff.

This could happen. Remember IBM sold off its PC division to Lenovo of China? In fact, just the other day the Chinese passed the Japanese for the first time as largest holders of US paper:

http://www.nytimes.com/2006/03/29/business...ess/29yuan.html

Seriously, would you rather buy something called a "Geely" or a "Pontiac?"

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ehaase    18

This morning I watched Maria Bartiromo interview Bill Clinton on her Wall Street Journal program. Clinton supports the federal government bailing out GM in exchange for GM producing more fuel efficient cars. Clinton stated that Barak Obama and Hillary Clinton have proposed such a program. He pointed out that GM can not compete with other automakers when its health care costs are so much higher. He also pointed out that, in recent years, workers losing their jobs suffer, on average, a 40 percent drop in income in their new jobs.

This proposal is interesting, but it would mean substantially fewer of the V8 powered vehicles most of us here desire in exchange for hybrids and more 4 cylinder cars.

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turbo200    6

This morning I watched Maria Bartiromo interview Bill Clinton on her Wall Street Journal program.  Clinton supports the federal government bailing out GM in exchange for GM producing more fuel efficient cars.  Clinton stated that Barak Obama and Hillary Clinton have proposed such a program.  He pointed out that GM can not compete with other automakers when its health care costs are so much higher.  He also pointed out that, in recent years, workers losing their jobs suffer, on average, a 40 percent drop in income in their new jobs. 

This proposal is interesting, but it would mean substantially fewer of the V8 powered vehicles most of us here desire in exchange for hybrids and more 4 cylinder cars.

the general public would largely be comfortable with those cars. only the wealthy, enthusiasts, and those who truly need the power could pony up for higher-powered cars. Why is it people always complain about Clinton and yet he always does his research and knows the real issues?

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turbo200    6

the topic of this thread is a difficult question to answer. I think public opinion might be negative and indifferent unless the media really portrays the UAW as the roadblock to improvements. The media would have to hammer home the issues like healthcare costs and overhead; which they haven't always been doing a good job of.

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This morning I watched Maria Bartiromo interview Bill Clinton on her Wall Street Journal program. Clinton supports the federal government bailing out GM in exchange for GM producing more fuel efficient cars. Clinton stated that Barak Obama and Hillary Clinton have proposed such a program.

It's clear that our political leaders are CLUELESS when they propose these types of "solutions" that put the onus on the manufacturer while ignoring how our free market system works. People have in the past, do so now, and will always vote with their pocketbooks. GM making fuel efficient vehicles in lieu of Tahoes won't make anyone want to buy them.

Further, the proposal (if serious) is simply flawed if the end-result is to keep GM moving while decreasing our reliance on foreign oil. Even if everyone in America drove a Prius, our reliance on foreign oil wouldn't change a bit because of the worldwide effects of Hubbert's Peak. And because of Jevon's Paradox (which states "as technological improvements increase the efficiency with which a resource is used, total consumption of that resource may increase, rather than decrease" -ref Wikipedia) our resource consuption of crude would likely increase faster than if we were all emptying our personal wallets driving thirsty Escalades. The only thing that's within the power of our leaders (regarding our addiction to oil) that respects the laws of supply and demand is the ability to increase gasoline taxes. Our leaders are weak, but they know consumer consumption is the only thing keeping our economy afloat.

Because our know-nothing Congress insists on playing these stupid games we can expect to be unprepared for a number of crises coming our way (GM's problems being one of the smaller ones believe it or not). At that point, we'll all be introduced to an executive dictatorship for the first time, and we'll all demand it (a discussion for another message board).

Welcome aboard.

Edited by buyacargetacheck

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FUTURE_OF_GM    26

the general public would largely be comfortable with those cars. only the wealthy, enthusiasts, and those who truly need the power could pony up for higher-powered cars. Why is it people always complain about Clinton and yet he always does his research and knows the real issues?

I agree... Clinton was an excellent president in many ways, and (Here's a little secret) I'd probably vote for Hillary if she ran!

Anyway... The public would view a GM bankruptcy in a VERY NEGATIVE way... Remember, they don't KNOW all the facts like we do and probably don't care enough to research them.

Not to count according to CNW (I think) 75% of americans said they WOULD NOT buy from a bankrupt automaker.

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Chicagoland    2

Some facts to clear up about old Mopar 'bail out' and Lee I.

1. Chrysler enver declered bankruptcy, only was nearly to that point

2. The US Gov't did not 'hand out' $$$ to Chrysler, they merely 'co-signed' for loan gaurantees, that were paid back in full earlier than planned.

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