General Motors Corp. and Chrysler LLC told the federal government they need at least $21.6 billion more combined in bailout loans to put them on the road to recovery, and outlined possible scenarios if either auto maker should have to file for bankruptcy protection.
Both GM and Chrysler, in the recovery plans submitted Tuesday to the U.S. Treasury, argue that bankruptcy would be more costly and drawn out than government-funded restructurings.
GM said it might need as much as $100 billion in financing from the government if it were to go through the traditional bankruptcy process. Rick Wagoner, GM’s chairman and chief executive, said the bankruptcy scenarios are “risky” and “costly” and would only be pursued as a last resort.
Chrysler’s plan said the company would likely have to file for Chapter 11 protection if it doesn’t get additional loans from the government and concessions from unions, creditors and dealers. It said it would need $24 billion in financing if the company were to file for bankruptcy. But company officials said in a conference call that they believe a Chapter 11 filing is “not necessary” for Chrysler’s survival.
Jim, agree about the dealer model, it’s a relic from a bygone era. Recall this from earlier in the week here on this blog:
http://tinyurl.com/djbv2x
31
Well, gee. Since I mentioned it to you in another comment thread I figured you’d have “guessed” it. But, it’s tough being the CEO of your mothers larder…
“MORE RAGU MOM!”
“OK Snookums!”
“I’M THE CEO! IF THE BOARD WOULD LET ME, I’D FIRE YOU!”
#27 – The UAW fights to line their own pockets. They try to get unskilled and semi-skilled labor paid like high-skilled which makes their product to expensive and also devalues high-skill jobs, completely fucking the whole economy. Not to mention paying by length of service rather than ability and output which just screws things up worse by removing incentive.
The battle between unions and corporations is a pendulum swing. I Detroit it swung too far to the union side about 30-40 years ago, hence their problems.
Pretty cheap compared to bailing out the banks and their Chief Ponzi Officers.
43,
Richard Wagoner made 14.5 million dollars in 2007. 1.5 million was his base salary. And what did his vision provide GM? Losses? Or is that the fault of the line worker?
And, judging by your answer, you would not want the salary and benefits of a UAW worker. I guess you work for free, or at best minimum wage to make sure your company stays “competitive?”
#35 we need to start buying American made stuff again.
No we don’t, we need to make quality products Americans want to buy.
“The carmakers MUST drop the local dealer model entirely. ”
Absurd.
The dealer model is about providing customer service.
A major purchase — and an automobile is always one — you want to deal with real live human beings.
Not just before the sale, but after the sale. And for the next sale.
Cars have a life cycle … purchase, service, resale.
This is buiness. The US auto makers have lost the knowlegde of how to run a sucessful buiness and have dug their own graves. They shouldn’t our money.
#47
What customer service do you mean? Selling me a car? Car salesmen piss me off. They don’t work for me, they work for themselves and the damn dealer to screw me out of as much money as they can.
The US television manufacturers had a dealer model until the Japanese built a TV that didn’t need constant service. The computer industry tried the dealer model until computers became commodities. Cars are pretty much commodity items given computerized engine management systems and advances in technology that make services like tune-ups, chassis lube, and transmission service unheard of anymore.
I don’t buy my tires from the dealer. I don’t buy alignment services from the dealer. I don’t buy my gasoline from the dealer. If my car wasn’t under factory warranty, I wouldn’t even have it serviced at the dealer.
Dealer’s have 4 profit centers. New car sales, financing, service, and used car sales. Financing, service and used cars are where the money is at, and in all three there are alternatives to the dealer. So please explain why the dealer system is relevant.
Back to the topic at hand. How is loaning money to the US car manufacturers going to help when the object of the exercise to sell cars to people, which they are unable to do?
# 49 George said, “Back to the topic at hand. How is loaning money to the US car manufacturers going to help when the object of the exercise to sell cars to people, which they are unable to do?”
It won’t. 30 days in and Obamanomics is a bust.