Look at the airline industry - many major carriers went bankrupt and kept flying while they renegotiated all their contracts, then "came out of bankruptcy" in full force with much lower costs.

So why is the big B bad for the auto industry? Because GM, Ford, etc, don't really build cars, they assemble them. A huge majority of their parts come from outside suppliers, independent companies who are heavily reliant on the business. Going bankrupt would allow GM to wipe out a big chunk of their debt, which is money they owe these other companies, which very likely had to borrow money to produce the parts they made. If that happens, you'll likely see massive layoffs and actual closings of OEM suppliers (which is a bigger industry than just assembling the cars), which hurts the economy, the auto industry, and political careers.

So even though from a purely theoretical economic point of view it may be best to let failing companies go bankrupt (I don't know myself, I'm just reading headlines like everyone else), the political reality makes it unthinkable and something to avoid at ALL costs.

But in any case, it's very likely cars, trucks, and military vehicles will continue to be produced. Worst case: GM fails and liquidates (not likely IMO), all its assets are sold (including plants that continue to produce cars) and the new owners start to make a profit on each car because they got the plant so cheaply and their costs are lower (remember, all debts are gone, and wages are probably lower as well - oh, and all those retirees with their massive health benefits? They are not the problem of the new owners).

Where will they get their parts? From whomever bought the assets of the bankrupt OEM suppliers. Or, from some other company in China. Maybe they all decide to ship the manufacturing equipment overseas and build over there. Then all those US jobs would be lost permanently. And politicians get voted out of office. And other bad stuff happens (like, we end up paying of the retirees health care).

Anyway, it's a huge, multi-faceted problem with no easy solutions but loads of ramifications. At this point, saying management screwed up is like saying the captain of the Titanic was going too fast. It doesn't matter - you still send rescue ships. But you also expect said management to go down with the ship, don't you?

Erwin 89 750iL Lowered (a little)

Mouse over for details >>> Engine/Driveline Wolf engine and throttle chips 19 lb, 4-hole (Design 3) fuel injectors Custom Intake based on 850csi parts Custom Cold Air Boxes Royal Purple 20W-50 3.64 LSD w/Royal Purple gear lube Royal Purple trans fluid Interior Phone removed, replaced with cut-to-length dash wood trim on hinge E38 Shifter Knob, Console Plate, and Boot M-Tech 2 M-technic Steering Wheel - air bag deleted E38 Self-Dimming Mirror Interior Light Fading Module (Shogun special) Audio BMW Business CD Player "CD43" Head Unit Refurbished factory amp w/equalizer Bass blockers (300hz/4ohm) on stock front kick panel speakers Rear deck speakers: Alpine SPS-13C2 5.25" 2 way 175 Watt with bass blockers Subwoofers: 2 JBL GTO804 8" 4-ohm subs Subwoofer install: custom sealed enclosure mounted behind ski bag opening Subwoofer amp: Alpine MRP-M450 400w MONO CD changer relocated to driver's door bottom pocket, actuated by bio- mechanical arm controlled by semi-intelligent nut behind the wheel Suspension H&R Lowering Springs (1/2 coil removed from fronts) Koni adjustable front shocks Stock rear shocks (self leveling) Racing Dynamics Stress Bar Stock front sway bar Dinan rear sway bar - 21mm M5 aluminum lower control arms Racing King rear subframe delrin inserts Front tires: 245-40-18 Goodyear Eagle F1 GS-D3 on 8.5" EuroTech rims Rear tires: 275-40-18 Michelin Pilot Sport PS1 on 9.5" EuroTech rims Exterior/Body 25% Side tint, 5% Rear tint BMW Mud flaps - rears trimmed to tire width Rear fender lips rolled Smoked side markers (after pic taken) Euro Smiley Headlights (after pic taken) Soft close trunk retrofit E66 trunk emblem "750 iL" (after pic taken) Zymol wax Way too many paint chips touched up Brakes Front Rotors: 850CSi, 324 X 30 mm, cross-drilled and slotted Rear Rotors: stock size, cross-drilled and slotted Pads: Hawk Performance Ceramic (may switch to HPS) Stainless steel lines Racing Blue brake fluid

• I realize I treat American automakers like some punching bag... - bcweir750 2008-11-12 20:51:29 (47 views)
  • I gave American automakers 2 chances, - 320ialpina 2008-11-22 21:56:54 (30 views)
  • Re: I realize I treat American automakers like some punching bag... - htrdbmr 2008-11-13 21:05:20 (42 views)
    • Bankruptcy does not always mean a halt to operations - erwin 2008-11-14 15:11:05 (47 views)
      • Actually, my comparison is not valid - erwin 2008-11-20 12:58:41 (32 views)
    • Depends on which military equipment you're referring to. (url) - bcweir750 2008-11-14 00:21:49 (39 views)
  • No Sympathy for US car makers from me... - Nick (Australia) 2008-11-13 19:33:30 (49 views)
    • Re: No Sympathy for US car makers from me... - bcweir750 2008-11-14 00:40:55 (51 views)
      • Socialism - kfister 2008-11-16 15:27:05 (36 views)
        • I never said the USA sucked. (nt) - bcweir750 2008-11-17 00:48:20 (29 views)
          • If conservatives really want to win back the American public... - bcweir750 2008-11-17 01:13:40 (28 views)
  • the world can also live without American cars (url) - shogun 2008-11-13 00:08:45 (46 views)
    • Interesting point, especially if you consider... - bcweir750 2008-11-13 01:20:48 (41 views)
      • Warren Buffett has an interesting proposal (url) - bcweir750 2008-11-21 13:52:09 (25 views)