How Bankruptcy Would Wreck GM and Chrysler

GM...PULL THE PLUG, Reset, PLUG BACK IN

Without the THREE U.S. automakers combining into one there is no rationality to bailing out GM. GM’s cash burn is triple the street estimate and has lost all control over its sales, its product development and its future. The executives and the unions have the company hostage to government capital infusion. Bankruptcy is a viable answer that can push off creditors and force unions and management to make concessions that are impossible unless a loaded gun is at their head. There is too much capacity, too many models, too many plants, too many employees producing products that are more easily produced by others. The VW bug was the first indication that the Big Three did not have a clue to the needs and long-term preferences of the U.S. consumer. And today we have a glut of SUV’s that will ultimately have to be sold at a first-ever half-price sale. GM has already built them, they have already paid for them and no one wants them. You need cash, blow them out the door ½ price or less and they are out of inventory and cash hits the balance sheet.

But to infuse GM with cash to keep it afloat without bankruptcy is no answer because next in line will be Ford and Chrysler. These three should be forced to combine and re-form to use their talents and capacity to building something we all need and that is energy independence.

There is one industry that has a payback that cannot be overlooked as a place to re-train and invest and that is in renewable energy. Train those people, insist that the manufacturing capacity of GM be converted to energy and produce, once and for all, a source of energy that once in place CAN NEVER GO UP IN PRICE. In World War II Ford built a massive number of B-24’s in their new Willow Run plant in Ypsilanti. That change in production and product proved that it can be done and Ford did a spectacular job producing that airplane to the considerable consternation to the Nazi war machine. Fast forward to 2008 and our enemy is our own waste and inefficiency; energy independence is crucial to our national safety and we can actually budget part of our national defense budget to this end.

I am not against giving money to GM...but I am against giving them money to build products that have no measurable or important upside to our economy long-term. I am against giving money to GM with Ford looking like that doggie in the window. Force them into solar, wind, wave and nuclear. Support them in their endeavor to re-tool and you got my money. Absent that, you will not get me to suggest giving them, their workers or their bloated retirees belly-aching about their co-pay when millions have no health care a single dime.

The side benefits are obvious: our defense structure is enhanced because we no longer have to depend on a cartel of Bedouins in the Middle-East to determine for us how much oil we are going to use and our environment actually can become healthy in L.A. vs. choking

Axxel Knutson of NJ 9:47AM November 13, 2008

This really isn't fair to Toyota and Honda, they are building cars in North America that people actually want to buy. You can make a good argument for the "mistake" that was made rescuing Chrylser in 1981, are we about to repeat the same mistake? This would be a gross tax payer subsidy to shareholders. Pandering to Michigan Voters. Maybe the world would be better off without one of the "big 3."

Michael Simon of NJ 2:50PM September 25, 2008

The Big 3 should watch this documenary. Let them reap what they have sown with SUV-era. I just feel sorry for all the hard workers who have to deal with corporater greek back firing.

EV 1 of IL 1:32PM September 25, 2008

so, I wonder, where exactly are you getting your cash flow information about Chrysler? hmmm, you don't work for Chrysler or Cerberus? And seeing that we are a PRIVATELY held company... I don't really see how it is ANYONE's business what our CF position is or whether we are close to Ch.11 or not! So, I suggest before you go reporting that Chrysler is on the verge of bankruptcy, you sight your sources in your articles... or better yet, stick to the "real facts", b/c no one really cares about needless speculation. Oh, I forgot, you're with the newspaper, you don't have to sight your sources or tell the whole truth in a story, because that is what it really is... a story.

and yes, my posted email address is a "real" address

J . E. of VA 9:35AM September 03, 2008