My prediction on the fate of the big 3 automakers

Providing that the bill never passes.

The 3 auto makers will at first hunker down and continue to fire workers and close parts of the companies assets.

The stocks will fall and then the magic will happen.

A company, in the USA will approach all 3 auto makers and make an offer to merge the 3 companies. The offer will consist of focusing on 2 types of vehicles and eliminating the rest. One type will be commercial vehicles and the other will be fuel efficient cars that compete directly with the hottest asian cars.

At first the big 3 will fight with each other, then the stocks will go up because the news leaked. The rise in stock will cause the share holder to pressure the big 3 into a merger.

The company will be renamed and the new line of cars will start rolling off the line very quickly. All dealers in the united states will embrace the change and the new company will become the fastest growing car company ever seen.

Americans will see the quality, price and patriotic nature of the move and invest in the companies through buying the new cars and trucks.

If the bill passes, the big 3 continue to not sell cars and they go out of business 2 years later but with out a merger , just a whimper. They also drag the value of the dollar down 2 to 8 points because the 15 billion was just the beginning.

reply to post by robwerden


nah, I think what will happen is GM will go belly up... even after recieving federal monies... or will be purchased by Ford for pennies on the dollar...

Chrysler I think will be purchased by a foreign entity...

Ford might possibly have to file bankrupcy for organizational reasons... and will re-emerge VERY quickly (by corporate standards).

I doubt congress would allow a merger of all three because of anti-trust laws.

Well, seeing as how the Senate just killed the bailout, things could go very bad very quickly. I read somewhere that someone from GM said that they could go under in a matter of weeks. (I think all of this is assuming that they don't use money from the 700 billion dollar bailout. They still might get federal money.)

And even if nothing happens, and they don't go under, they will still have to restructure and will suffer a serious blow. They're already talking about focusing on only a few different cars now. I believe SAAB, Hummer, and Volvo were just a few on the chopping block, regardless of whether or not they go belly-up.

[edit on 12-12-2008 by Totakeke]

They will only go belly up in the states all three seem to well around the globe.

thank you UAW

Actually, if they die here, doesn't that mean it's game over everywhere?

reply to post by Totakeke


I don't think GM will allow that to happen... Obama has already told them "help is on the way"...

they will do what it takes to maintain themselves until after Jan 20...

Maybe we'll see a temporary shutdown of all operations or something... but they won't take the plunge until after Obama gets into office...

reply to post by robwerden


Your optimism is spoiling the fresh doom we have going here at ATS. Please rewrite and include rioting in the streets, Don Henley getting lynched, and everything else you get to do when the apocalypse is upon us.

reply to post by nj2day


stock futures on the DOW already down almost 300 points due to the news from the senate...

the big three might not be an issue after this week... instead, everyone will be talking about where they were when they heard the news that the stock market collapsed...

Heh, it's kind of funny. If we need a depression every hundred years or so just to keep the economy going, we might need to rethink things a little.

reply to post by Totakeke


yah, it really doesn't seem like a very good system if you put it in those terms...

I think Ron paul is spot on as far as economics goes...

I am not a Paul supporter... but damn... while this guy would make a wierd president... he'd make an OUTSTANDING cabinet member...

Obama would be insane not to talk to Paul, or take him on as an advisor of some sorts...

reply to post by robwerden


The simple solution is to dump the UAW, hire new workers at about 1/3 the price and go back to making cars at lower cost, lowered price.

Has anyone thought of that I wonder?

Foreign automakers in the US can go non union and make a profit, why can't Detroit?

reply to post by plumranch


Unions are not the enemy...

The foreign automakers don't pay their workers a whole lot less than the US automakers...

Instead... the Foreign auto makers here in the U.S. have a pretty decent track record of treating their employees well...

its the bad employers that breed unions... So far, that hasn't been nessesary with foreign autoworkers.

the UAW is willing to negotiate... If Negotiations fail, I wouldn't blame the union as a whole... Instead, I'd blame the members of the union who feel they are "owed" something.

Without unions, even non-union workers would be making less money than they currently do.

Look at what the Unions have done in the Chicago shop that was shut down by Bank of America. now, they have forced the bank to pay them monies owed, which they had no intention of doing, and ensured at least a little of the "bailout" money went toward saving main street...

Originally posted by pluckynoonez
reply to post by robwerden

 

Your optimism is spoiling the fresh doom we have going here at ATS. Please rewrite and include rioting in the streets, Don Henley getting lynched, and everything else you get to do when the apocalypse is upon us.

Aww, but plucky, I like Don Henley. Do they really have to lynch him?

reply to post by robwerden


Of the three companies, Ford is in the best shape and will weather this crisis (although it will sell Volvo). Cerebus will probably sell Chrysler in parts (Chrysler, Dodge Trucks and Jeep), and GM will file bankruptcy re-organization.
That is my prediction, and I could be wrong.

Unions are not the enemy...

Ou contraire.. When companies like Caterpillar handle their UAW problems.. they start down the road of economic recovery and stop loosing money.

The foreign automakers don't pay their workers a whole lot less than the US automakers...

That sounds like a good reason NOT to unionize. Why rely on the union thug leaders when workers can make the same wages without them. Union dues are incredibly expensive. I've paid my share!

Instead... the Foreign auto makers here in the U.S. have a pretty decent track record of treating their employees well...

That's correct. Matter of fact, General motors and Toyota made the same number of cars last year. Toyota made 19 Billion and GM LOST about twice that. What was the big difference? Labor costs! Were GM workers a lot happier? Will they be a year from now?

Without unions, even non-union workers would be making less money than they currently do.

Looks like that the only workers with a job in the future will be non-union because the heavily union companies will be in chapter 11 or worse.

Go to the industrial district of any (formerly) industrial city in the eastern US and you will see block after block of 20 story high pigeon roosts. Former union businesses bankrupted, jobs gone elsewhere.

reply to post by robwerden


I have to think that it might happen more like this (but it's still an opinion):

Ford will not take bailout money, making it the average Joe's pick in the American Auto Industry.

GM Will go belly up and Chevy or Cadillac will be absorbed by Ford motor co.

Chrystler will be bought by a third world conglomeration.

Jeep will be bought by Fiat.

reply to post by plumranch


GM makes more cars and puts them down as a profit before they sell at a dealer. To balance the sheets, they turn out more cars. It looks good on paper, but the truth is the company does not see any money until the vehicle is sold. With more vehicles made, the automakers have to have incentives like 0% financing or rebates $5000 or more. Those deals cost the car maker more money, and they end up losing in the long run. The foreign car makers make the amount of cars they are going to sell, and reduce the amount if there is a slowdown. They count the money after the dealer has sold them, which is reflected in the long term.
In the past couple of years, the union workers have taken pay cuts, and the UAW has also taken over the health care fund. After GM and the others put money in the fund, they wrote that amount off. The billions they are losing now have nothing to do with health care costs, as it is a union fund now. The average pay is $28 an hour, and is much lower than the $35 an hour in the early 1980s. Adjust that number for inflation, and the union members have lost over half the pay they used to receive.
Many non union manufacturing plants pay $7 to $10 an hour (with no other benefits), which is not very much. Union jobs generally pay $15 an hour plus health and other benefits, and the workers tend to stay there for the benefits. Non union places are always hiring and training new people, which adds to the cost of running the place.
I do wonder how many of the anti union posters have worked at a manufacturing job? I have worked in non union plants, and would have loved to have a union official represent me when needed.
Also, why no questions on how much the AIG workers were making? They made a hell of a lot more money than a union autoworker. I guess the people who shower before they go to work are better than the ones who shower after work.