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Thread: Ford and Chrysler to work summer shut-down

  1. #11
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    Re: Ford and Chrysler to work summer shut-down

    Quote Originally Posted by Somerville View Post
    Yes, that is correct. However ... if GM and Chrysler had been shut down thru bankruptcy as advocated by some folks, then all of the smaller businesses that supply the bits and pieces to the car builders would also have been affected, causing many of them to close their doors and that would have affected not only Ford but also the other car manufacturers in North America.
    Actually, GM was never really near total bankruptcy. Only their North American operations were in real trouble and even then they could of restructured, and would of already done so, if they had gotten concessions from the Unions. They had already closed and consolidated several plants, unfortunately, due to Union Contracts and sometimes state laws, closing the plants proved to be costely and left them holding a lot of debt. If they would of filed bankruptcy, it would only have been to shed a lot of Union debt. But, if the government is going to hand you free money, why not take it. Unfortunately for them, they didn't read the fine print and the bailout they got was not the bailout they wanted or what Chrysler got back in the 1980s.

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    Advisor Nick2253's Avatar
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    Re: Ford and Chrysler to work summer shut-down

    Quote Originally Posted by DVSentinel View Post
    Actually, GM was never really near total bankruptcy. Only their North American operations were in real trouble and even then they could of restructured, and would of already done so, if they had gotten concessions from the Unions. They had already closed and consolidated several plants, unfortunately, due to Union Contracts and sometimes state laws, closing the plants proved to be costely and left them holding a lot of debt. If they would of filed bankruptcy, it would only have been to shed a lot of Union debt. But, if the government is going to hand you free money, why not take it. Unfortunately for them, they didn't read the fine print and the bailout they got was not the bailout they wanted or what Chrysler got back in the 1980s.
    That's mostly true. However, one of the big problems that GM and Chrysler faced was that they could not find sufficient restructuring capital given the bad economy. And the government's bailout was in response to this problem. However, GM and Chrysler could have gone ahead and restructured with what was available, but it would have probably meant significant decreases in US capacity, which is what the government wanted to avoid.

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