A useless warranty and a lack of parts if you ever need to have the car repaired. If you don't think the company will actually survive bankruptcy, you really shouldn't buy a car from them. This is adding an element of feedback to the big three's problems right now. No one wants to buy cars from a company that appears to be failing.
If it's a popular car model then there are bound to be other companies picking up the slack in terms of spare parts, and if a car company is going out of business the money saved by getting a great deal would probably counteract the loss of warranty. Moot point though, since I wouldn't buy a new car anyway, too much depreciation the instant you drive it off the lot.
I'm no car salesman, but my uncle has been in the business for 20+ years. How many of those 7000 dealers move 1,000+ cars per month. According to him, less than 200. He works for the biggest GM dealer in the Birmingham Metro Area (1.5 million people) and on a great month, they move 400. Last month, they moved 80.
Considering aftermarket companies are still making 6-volt ignition coils (which haven't been used on cars since the 1940's). The aftermarket will pick up the slack, and do it with relatively little increase to inventory. Car companies reuse parts for literally generations. One starter part number will fit a dozen GM motors spanning 40 years (#3150S). Adding a second part number to inventory will cover another dozen motors for the same 40 years (#3150). You can do even more with Ford. One part number will cover a family of V6, small-block V8's, and big-block V8's produced since the early 1960's. The only change you may have to make is removing two bolts, reclocking the face, and putting the two bolts back into place. For instance, Marso's '08 Mustang 4.6L V8? Every part in the motor, transmission, and drive train is identical to models that have been in service for nearly 15 years. The computer may be programmed differently, but it's the same basic parts in my '03 Crown Vic Interceptor and the '97 Crown Vic I had before that.
I don't believe it's coming. I'm already on the fringe, so my immediate situation will likely remain relatively stable. That said, my boat is barely afloat in this gale, and a hurricane is coming... And it's coming for you. Everything east of the Rockies is going to be hit hard, mark my words.
Ford and General Motors have been in a restructuring program since 2001, which has left them strapped for cash. Couple this with a credit crunch and a very dead car market, brings us here. The problem is, everyone acts like it's the 1980s and refuses to hear otherwise. I don't know how the three of them didn't just stand up and scream at Dodd until they were blue in the face; I know I couldn't have taken it.
There is no good solution to the car industry situation now. The markets mean financing is unavailable in Chapter 11, a bailout is like putting a band-aid on a gunshot wound and might help for six months to a year but then we are back where we started. Either way a lot of people lose their jobs.
You're right there is no good solution. So instead of dragging this out they should turn the ship around and drive it right off that waterfall and let the the whole damn thing crash. The longer they wait the worse it will get when they finally fall over the fall.
Holy shit. Is it really possible that we'll see them go down? Certainly looks like it - there is a report in today's Spiegel magazine (bad, bad Babelfish translation) about their presentation at the LA Autoshow. I mean, wow - they can't even afford proper lighting, personnel or brochures these days Btw, for all who are happy about the bailout failing: a breakdown of GM alone would cause an estimated 2,5 million unemployed. Hooray, let's make lemonade
I don't want the auto industry to get a bailout. 25 billion dollars wouldn't even slow down GM, let alone the three of them. Either way we go, it's millions of jobs. J.
I fully expect Lehmans mk II. GM will fall first, causing a massive ripple across the markets leading to some panicky new bailout to save Ford and Chrysler. Obama's going to wish he could delay starting his presidency for 6 months...
I'm not really upset they flew on a company jet. First their company regulations from what I've seen in the news says they have to fly on the company jet for security reasons. It was like that before 9/11 and after 9/11 of course it got even tighter. Then of course if they flew in on commercial jets most of you would still be slamming them except this time you'd all be crying how they are trying to fake being "poor" just to get the bailout money.
Apparently GM's going to try to force the issue by reclassifying the major portion of itself as a bank:
Fox Business had on some old geezer Ford executive who had nothing better to argue than a rant about how the auto industry won WWII and so they deserve our respect (I guess respect = bailout dollars/national debt). Despite the sales statistics, he insisted that American cars are the finest in the industry. You're a nice lady [news interviewer], but you're not too bright. We don't give 100% salaries to people who get laid off, we only give them a mere 80% for doing nothing. If these are the types of idiots, 40 years behind the times, running the Big 3, they deserve more than to just fail, they deserve to be shot. But no, they roll up to Capitol Hill in their private jets and beg for money which they clearly have no plan or idea to use effectively.
But we need to bail them out so the union workers won't be out of a job. Remember if it wasn't for unions, we would be working 29 hours a day, 10 days a week.
Uh, Cerebus owns the other 51%, and nobody knows what they want with it; they've discouraged and outright fought auto loans. I really don't think they're so generous as to loan General Motors or its customers any money.
Well, cost factors into it also. If you have to charge more for the vehicle because of high labor costs, less people buy the product. If you don't charge more but make less per unit than the competition does due to the labor costs, you fall behind on the bottom line. Both of these apply in various ways to the Big 3.
It has an effect, but the fact that the cars were unappealing and poorly designed for years is by far the largest portion of the problem. Current models are actually fairly comparable, but the brand perceptions are still damaged.
Just to build on my previous point about the brand names being damaged, I feel strongly that it may be VERY difficult for the big three to really have much improvement in market share in the short term. I am of the opinion that a simple change of brand name (or at least the branding on the vehicles) could be a big help for the big 3. Just a historical example: GTE was a huge telephone company with a HORRIBLE reputation due to problems with their merger. They were essentially a joke in the eyes of the public. To combat this problem, GTE spent huge sums of money on building its network and its customer service, to a point where one could pretty much factually state that it was far and away the best network/service in the country. However, everybody still was full of derision for GTE. GTE decided to hire some consulting firms and do a lot of research. The research indicated that it takes about one generation to reverse the perception of a brand name in a positive direction. So, GTE decided to rename itself Verizon and therefore became very successful. I feel that a lot of people still have a lot of disdain for even the name "GM" or "Ford". It doesn't sit well with them. I know they have this rich history of being around since the very birth of automobiles, but they've got to know when to move on. At the very least, stop selling a "Ford Taurus" and continue a similar line under some other name, even if the parent company is still called Ford.
It's one thing for a phone company to change it's name, but I don't think that would work with auto's which are such visible and status items. Ford tried that by calling the Taurus the Five Hundred. It did not work, so they renamed it the Taurus or as we used to call it the Snaurus.
It was still a "Ford" though. The issue isn't so much with the model names as with the reputation of the overarcing brand. A good brand brings an immediate, specific meaning to mind (the name doesn't have to make sense, it is just associated with something). Ford, GM, Chevy, etc, all sell such diverse types of vehicles in so many prices ranges, of such varying quality that they don't even stand for anything.
The American auto industry should be expected to bail themselves out of this. They are the ones who were stupid enough to enter into these contracts with the UAW guaranteeing them lifetime medical benefits, as well as paying people to not work. In my opinion their cars for the most part are complete crap. They have horrible bodylines, tend to be far less dependable than their Japanese counterparts and you can't drive them into the ground with simply doing routine and regular maintenance. About the only thing the Americans still have going for them are their trucks.
But if you change the name from Ford to anything else, it will still be looked at as a Ford by the consumer buying public.
I think it still makes a big difference. It worked with Saturn for a long time. Saturn is a GM company but for a pretty long time they did very well in the same space as japanese automakers. Saturn has been diluted to more "general" types of cars as well, which I think is stupid. Keep each brand to a specific market segment if you ask me,
