GM & Chrysler Merger Back on the Table
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Joined: Mar 2001
Posts: 1,938
Senator Corker was the one person making sense in those hearings yesterday - he has it exactly right (for a change).
These companies need to make “Chapter 11” style concessions as a prerequisite to getting any taxpayer assistance; nothing short of that sort of reorganization is going to save Detroit.
Corker’s recommendation is spot-on…it would allow Detroit to do a “Chapter 11” type of reorganization without the stigma and negative consequences of actually filing a Chapter 11 bankruptcy…it would put them on financial par with their foreign competition and allow them to become financially stable; even with a depressed TVM.
Of course, the Detroit Three CEOs are never going to say it publicly but privately, I'll bet every one of them would like to do a Chapter 11 reorganization and get rid of the UAW (or at least relegate them to the level of impact/importance they should have on Detroit Three's business).
It’s an opportunity for Detroit to erase 50 years of bad decisions and still retain a Detroit auto industry.
These companies need to make “Chapter 11” style concessions as a prerequisite to getting any taxpayer assistance; nothing short of that sort of reorganization is going to save Detroit.
Corker’s recommendation is spot-on…it would allow Detroit to do a “Chapter 11” type of reorganization without the stigma and negative consequences of actually filing a Chapter 11 bankruptcy…it would put them on financial par with their foreign competition and allow them to become financially stable; even with a depressed TVM.
Of course, the Detroit Three CEOs are never going to say it publicly but privately, I'll bet every one of them would like to do a Chapter 11 reorganization and get rid of the UAW (or at least relegate them to the level of impact/importance they should have on Detroit Three's business).
It’s an opportunity for Detroit to erase 50 years of bad decisions and still retain a Detroit auto industry.
Last edited by Robert_Nashville; Dec 5, 2008 at 12:29 PM.
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Joined: Apr 2000
Posts: 2,224
From: CNY
Corker NEVER made that recommendation. It was from a Senator earlier in the hearings.
All Corker did was attack the UAW and attack Chrysler.
And the UAW was receptive to that recommendation as long as ALL parties were brought to the table and EVERYBODY shared in the sacrifices.
And that's a good point. Where's management in all this? Where's the dealers? Where's the suppliers? Where's the creditors? Why weren't any of these people at these hearings?
They had one guy from the CT dealer's assoc. Where was the head of NADA? And one guy from one supplier. I'm sure they have a supplier assoc. Where was the head of that group?
It is clearly lopsided.
All Corker did was attack the UAW and attack Chrysler.
And the UAW was receptive to that recommendation as long as ALL parties were brought to the table and EVERYBODY shared in the sacrifices.
And that's a good point. Where's management in all this? Where's the dealers? Where's the suppliers? Where's the creditors? Why weren't any of these people at these hearings?
They had one guy from the CT dealer's assoc. Where was the head of NADA? And one guy from one supplier. I'm sure they have a supplier assoc. Where was the head of that group?
It is clearly lopsided.
Banned
Joined: Mar 2001
Posts: 1,938
Corker NEVER made that recommendation. It was from a Senator earlier in the hearings.
All Corker did was attack the UAW and attack Chrysler.
And the UAW was receptive to that recommendation as long as ALL parties were brought to the table and EVERYBODY shared in the sacrifices.
And that's a good point. Where's management in all this? Where's the dealers? Where's the suppliers? Where's the creditors? Why weren't any of these people at these hearings?
They had one guy from the CT dealer's assoc. Where was the head of NADA? And one guy from one supplier. I'm sure they have a supplier assoc. Where was the head of that group?
It is clearly lopsided.
All Corker did was attack the UAW and attack Chrysler.
And the UAW was receptive to that recommendation as long as ALL parties were brought to the table and EVERYBODY shared in the sacrifices.
And that's a good point. Where's management in all this? Where's the dealers? Where's the suppliers? Where's the creditors? Why weren't any of these people at these hearings?
They had one guy from the CT dealer's assoc. Where was the head of NADA? And one guy from one supplier. I'm sure they have a supplier assoc. Where was the head of that group?
It is clearly lopsided.
Maybe we aren't talking about the same Senate heraings yesterday in which Corker said...
“At today's hearing I suggested a number of very specific and rigorous measures that should be in place before we even discuss making a loan to any of these companies.
• “One, give existing bondholders 30 cents on the dollar to help reduce their overall debt load.
• “Two, bring wages immediately in-line with companies like Nissan and Volkswagen.
• “Three, GM owes $23 billion to the United Auto Worker’s VEBA (voluntary employees’ beneficiary association) account. The union must agree to take half of that payment in GM stock.
• “Four, the union must agree to do away with payments to workers who are still receiving almost full compensation up to four years after their jobs have ended.
“These are the same types of conditions a bankruptcy judge might require to ensure that these companies become viable and sustainable into the future, and if they will agree to these terms then we have something to talk about. The process I have suggested would allow them to avoid the problems and stigma that accompany a formal bankruptcy, while forcing them to do the things they need to do to be successful companies.”
• “One, give existing bondholders 30 cents on the dollar to help reduce their overall debt load.
• “Two, bring wages immediately in-line with companies like Nissan and Volkswagen.
• “Three, GM owes $23 billion to the United Auto Worker’s VEBA (voluntary employees’ beneficiary association) account. The union must agree to take half of that payment in GM stock.
• “Four, the union must agree to do away with payments to workers who are still receiving almost full compensation up to four years after their jobs have ended.
“These are the same types of conditions a bankruptcy judge might require to ensure that these companies become viable and sustainable into the future, and if they will agree to these terms then we have something to talk about. The process I have suggested would allow them to avoid the problems and stigma that accompany a formal bankruptcy, while forcing them to do the things they need to do to be successful companies.”
I'm not saying dealers and supplier and the reast aren't important to the entire "car buying" process but they have little to do with Detroit's problems and little they could do to help.
Dealers and suppliers are already dropping like flies...I'm not sure what sacrifices you think they need to make that would make things better???
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Joined: Jun 2000
Posts: 805
From: MI
That statement is packaged in a nice little way to make it sound good at first until you think about it for a minute.
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Joined: Mar 2005
Posts: 213
I was unable to watch the hearings because I was at work and can get in trouble for excessive personal internet use, but I found this article gave a good summary of the hearings - http://www.christonium.com/automotiv...12284939913205
I found this blog several months ago and enjoy the author's insight.
I found this blog several months ago and enjoy the author's insight.
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Joined: Jul 2001
Posts: 3,132
From: Santa Clara, CA
There is too much capacity in the US right now, and frankly there are far too many makes and models in market segments. Merging Chrysler with another manufacturer wouldn't fix this unless a big axe is taken to the company. In the case of a merger with GM, it probably makes sense to:
1) Retain the minivan and RWD large-car business
2) Replace Hummer with Jeep
3) Eliminate nearly every other Chrysler product line
1) Retain the minivan and RWD large-car business
2) Replace Hummer with Jeep
3) Eliminate nearly every other Chrysler product line
Every other Chrysler automotive platform is a problem that Chrysler needs to fix. The Ram could be sold to Nissan, so that they'd still have the replacement Titan.
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