Saturday, February 14, 2009

GM (General Motors) Bankruptcy? Not Shocked.


I don't know about the American Automotive Industry. This once vibrant industry just did not, in my mind, keep up with the changing times. The changing times for more fuel efficient cars, this industry opted to stay in bed with big oil and kept producing these huge 30K on up gas guzzlers. Their inability for forward thinking, keeping a pulse on what the public demands and the economy has jettisoned their own industry. I guess I should feel sorry for them, but honesty I just don't.

I remember back in the 70s when the pinch was in for purchasing gasoline for your car. My parents used to drive from gas station to gas station with us little people in tow, sometimes sitting for hours just to get gas. That was a tall tale sign back then, that America needed to break from depending on overseas oil. Did we get that old memo? No.

So, for the past few years we have had to deal with gas prices going up and down. The gas prices are low now, but the trick is ask anyone if they believe that the prices will stay down and the answer is no. Which means many are staying away from purchasing any new cars, but the used car industry is picking up, even demand for used car parts is perking up. This means that Americans are keeping what they got or getting it used.

The automotive industry has made big money on big cars, SUV, etc. These big cars had big price tags on them, to my chagrin some of these vehicles would rate a 20% down payment for a home. I guess that is why I never was into what car I was driving. My only prerequisite was heat, a/c, the car runs, look ok. I am not into stylin' and profilin', I can't afford that. In fact, I know some folks with those big Navigators, Escalades, Yukons that have told the payment centers to come and get their cars. These folks have been hit with job losses, work reduced, strapped mortgage payments and just trying to keep up with daily family life. They have learned a hard way, through repossession that there is nothing wrong with a solid running beater, it will do.

So as GM is continuing to lay off workers, last number 10,000 jobs with our foreign competitors feeling the pinch too, as Nissan cuts 20,000 jobs and Toyota around the corner, we the public are in a position to demand what we want from these companies. The first thought is an affordable automobile that is fuel efficient.

As an American we need to start making, producing things in this country again. The erosion of trade agreements is at an all time low, not to mention China. I have to bring China up because recently my husband had to get a new water pump; he drives a compatible beater, 95 Mercury Mystique. All the bells and whistles still work on this car, but as all older cars you do take a hit from time to time for parts. We have found a very good, fair mechanic who is honest. Well, we had to take this car back three times due to the water pump not working correctly. The mechanic was honest with us, most of the parts for cars now come from China and these parts are less reliable than parts that were made in this country. So, what happens is that the mechanic takes a hit on replacing this failed water pump, which eats into his time for other customers. We must do something about making, creating jobs in this country again.

I am not blinded by how trade works, but I am angered that we have an open door policy with China to ship whatever the hell they wish in this country with little inspection and oversight, due to the U.S. owing trillions to China, mainly to pay for the Iraq and Afghanistan Wars. President Obama has a heavy load on his plate to fix this.

As for GM going under or bankruptcy, I do not feel anything right now. We as a country are in such a quagmire of debt that everyone is running to the POTUS for a bailout. The question is this, "Can we continue to do this?" The public perception is negative to Wall Street and the Automotive Industry to some extent. The hard question is do we continue to give these industries money or let them fail? The Obama Administration has already stated that some banks are just going to fail, I think eventually this will happen to some in the Automotive Industry. Taxpayers in the end cannot continue to save private sector industries that have allowed themselves to be run in the ground by inefficient upper management. And if anyone thinks that the public won't have an outcry about more money being dished out to these companies, think again. The outcry will be loud and clear.

General Motors Corp, nearing a Tuesday deadline to present a viability plan to the U.S. government, is considering as one option a Chapter 11 bankruptcy filing that would create a new company, the Wall Street Journal said in its Saturday edition.

"One plan includes a Chapter 11 filing that would assemble all of GM's viable assets, including some U.S. brands and international operations, into a new company," the newspaper said. "The undesirable assets would be liquidated or sold under protection of a bankruptcy court. Contracts with bondholders, unions, dealers and suppliers would also be reworked."

Citing "people familiar with the matter," the story said that GM could also ask for additional government funds to stave off a bankruptcy filing.

And the UAL walked from GM concession talks


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