[iranfromthezoo]

Forgive me for being dumb but there is something about the big three bailout I just don't understand. Let's just say that the bailout does not happen and one of the big three go bankrupt or goes under. What would happen to the people who bought a Ford car and financed through Ford? Would their car be repossessed? Would they not have to pay for the car anymore? Or will everything stay the same, even though you are paying a company that no longer exist?

[turtle777]

Originally Posted by iranfromthezoo 

Forgive me for being dumb but there is something about the big three bailout I just don't understand. Let's just say that the bailout does not happen and one of the big three go bankrupt or goes under. What would happen to the people who bought a Ford car and financed through Ford? Would their car be repossessed? Would they not have to pay for the car anymore? Or will everything stay the same, even though you are paying a company that no longer exist?

You still owe the money, either to Ford or to whoever did the financing for Ford.
I'm pretty sure financing is done through a separate unit, or even a third party bank.

At any rate, you're not off the hook.

-t

[iranfromthezoo]

Yeah I was just making sure my car was not going to be taken away from me...you know?

[finboy]

Originally Posted by iranfromthezoo 

Forgive me for being dumb but there is something about the big three bailout I just don't understand. Let's just say that the bailout does not happen and one of the big three go bankrupt or goes under. What would happen to the people who bought a Ford car and financed through Ford? Would their car be repossessed? Would they not have to pay for the car anymore? Or will everything stay the same, even though you are paying a company that no longer exist?

Nothing would happen, other than a bunch of legal proceedings. There would be no impact, essentially. Aftermarket parts would still exist, mechanics could still work on it, warranties from Ford would still be protected legal agreements under Chapter 11.

All of the stuff coming from the UAW and car co. managers now is FUD. They just don't want to loose THEIR jobs, and the UAW doesn't want to have to give back on paying $76/hr. or so for dumbass work.

Once again, the ignorance of the American people is being exploited to transfer wealth (or in this case, to keep from having to reform an industry). It's amazing that it's happened twice in the same month! Otherwise, just business as usual.

[Art Vandelay]

Except if the polls are accurate that say people won't consider buying cars from a bankrupt company. If that's true and one or more go bankrupt, then sales will collapse completely and then you're talking Chapter 7.

If a company was to go away, you'd still have your car. However, its value will plummet instantly. Also, it will eventually become difficult to service it. Just look at what happened to Daewoo owners when GM bought Daewoo and closed all US operations.

[KSE7696]

If Ford files bankrupt it's not exactly going to close its doors. Bankruptcy today is nothing like bankruptcy of old (The Great Depression). If they file they will more than likely just reorganize, regroup and get all their ducks in a row and then make another go at it with a revamped company... and probably an improved one. Just because they may file bankrupt doesn't mean they are going under. The chance of either of the three actually closing their doors is incredibly slim to none. A lot of companies usually come out of bankruptcy with a more solid foundation and a little wiser. Bankruptcy doesn't always mean a company is closing its doors.

Personally, the auto industry does need to revamp. Now is actually a good time to load up on stock of the big three. I've been buying while I have the chance and going to let it set for 10 or 15 years and see how it turns out during that time.

[Maflynn]

It is quite conceivable that Ford or one of the big three can fail outright. Right now they're spending more then they're taking in. Nobody can do that indefinitely and at some point they will have to pay their bills but won't have any cash to do so.

They can enter into Bankruptcy before that occurs or just as it occurs. There's two types of bankruptcy, chapter 11, reorganization and chapter 7 liquidation. The thing that the big three fear is that if they file for chapter 11 people will stop buying their vehicles and because of the tight financial market be unable to get financing to survive. A critical piece to reorganizing is getting an infusion of cash to survive. If they can't they'll close up shop. Simple as that.

Well not as simple, they'll still have some plants open to produce replacement parts for 10 years but a huge swath of jobs will disappear.

[Railroader]

Originally Posted by finboy 

the UAW doesn't want to have to give back on paying $76/hr. or so for dumbass work.

Talk about FUD.

[turtle777]

Originally Posted by finboy 

Nothing would happen, other than a bunch of legal proceedings. There would be no impact, essentially. Aftermarket parts would still exist, mechanics could still work on it, warranties from Ford would still be protected legal agreements under Chapter 11.

You're a bit too optimistic, IMO.

What if the ripple effect sends Tier 1 and Tier 2 suppliers into bankruptcy ?
What if they (Tier 1, Tier 2 suppliers) can't make it to Chpt. 11, but only Chpt 7 (liquidation) ?

If the supply chain dries up, after market and spare parts might get hard to come by.
As integrated as the automotive industry is, the domino effect could be huge.

-t

[Laminar]

I'm keeping a close eye on the new Fusion Sport.



Ford's doing some really good things right now, hopefully it's not too little too late.

[Art Vandelay]

Also keep in mind those suppliers don't just supply one company. Most suppliers sell to the other domestic, Asian, and European companies.

Let's say Chrysler goes into Chapter 11. Their proceedings causes a strong negative impact on Johnson Controls and causes them to fold. Now several other companies like Ford, GM, Honda, Toyota, BMW, Mercedes no longer have a supplier of some interior parts. They have to stop production on several car lines. See where this is going?

An interesting note is a new development being reported on today... a prepackaged bankruptcy. In this scenario under my understanding, the details of a chapter 11 reorg are arranged before bankruptcy is actually filed. Then the company can file for chapter 11 and almost immediately have everything lined up already and quickly exit chapter 11.

[Art Vandelay]

Originally Posted by Laminar 

Ford's doing some really good things right now, hopefully it's not too little too late.

I actually agree on this. Out of the big 3, they are in the strongest position. They are investing heavily in future product for the 2010 model year, hence why they're burning through so much cash, which they have the most of out of the big 3. They are taking a page from Apple's playbook - during downtimes invest heavily in the future. The risk though with them is if they will be around long enough for it to become reality.

GM on the other hand is suspending almost all their new product development except for the Volt and Cruze. Chrysler doesn't seem to have anything new in the pipeline.

[iranfromthezoo]

Originally Posted by Laminar 

I'm keeping a close eye on the new Fusion Sport.

Ford's doing some really good things right now, hopefully it's not too little too late.

Yeah I currently own a Fusion and absolutely love it. It's an (late) 07 with 26,000 miles on it. Bought it brand new off the lot. I love it and was hoping to be able to trade in for the 2010 but I most likely won't. ;( But the fusion is a very nice car.

[iranfromthezoo]

Originally Posted by Art Vandelay 

GM on the other hand is suspending almost all their new product development except for the Volt and Cruze. Chrysler doesn't seem to have anything new in the pipeline.

Yeah, GM and Chrysler focused a lot on the big trucks and now no one is buying them it's crazy. The new F150 is nice also, but Ford seemed to understand things were heading the way it is now with the Fusion, Focus, and Taurus.

[cjrivera]

I agree with Art... out of the Big 3, I think Ford has the best chance of surviving. Some of their new products coming down the pipe seem to be very promising.

[Art Vandelay]

I'm surprised the new Fusion Hybrid isn't getting much press. It gets 39mpg city which is 5 more than the Camry Hybrid. Also, it can go up to about 50mph on electric only. They're saying you could almost drive entirely in a city on electric only.

[cjrivera]

You know there'd be a lot more press if the same car came from Honda or Toyota.

[finboy]

Originally Posted by turtle777 

You're a bit too optimistic, IMO.

What if the ripple effect sends Tier 1 and Tier 2 suppliers into bankruptcy ?
What if they (Tier 1, Tier 2 suppliers) can't make it to Chpt. 11, but only Chpt 7 (liquidation) ?

If the supply chain dries up, after market and spare parts might get hard to come by.
As integrated as the automotive industry is, the domino effect could be huge.

-t

Or, it could be nothing. IF we bail out GM/Ford/whoever, how will that sell more cars for them? Are we going to buy the cars? If not, THE SUPPLIERS WILL LAY OFF ANYWAY.

Maybe they go Ch. 7 -- if they are a viable business (long-term) someone will buy and operate them. If not, those assets will be used to actually compete to make money. By someone. Probably without labor contracts.

We're not talking some academic argument here -- this happens all the time. In normal economic times, firms turnover b/c management (or labor) can't cut the mustard. So, now, when there is no liquidity in the market, or people are worried about the economy, etc. we shouldn't expect things to be different. If GM is worth operating as a company, someone will operate it. The current explanations I'm hearing are majority FUD, again.

Giving them money without changing the business (and labor) model is stupid. I understand both sides, and the "bailout" side is stupid. The "transfusion" model works better, but only if all of the UAW contracts are voided and we get some actual freaking managers in there.

Unless we actually buy cars from them, lots and lots and lots of cars from them, nothing will happen to "save" anyone. Even then, we're just propping up a dinosaur.

[finboy]

Originally Posted by Railroader 

Talk about FUD.

FUD? Look up the "rubber room" and "featherbedding" along with UAW. Big Auto's cost structure is too high. They cannot ever be successful without undergoing some drastic changes to the way it's been done. Sure, they're smaller than they were 20 years ago, so what? They're still caught up in making things nobody wants to buy.

"Let's do some R&D and get GREEN" you say. Where does that money come from? Most of it from retained earnings, not from the market. Can't have retained earnings without profitability.

"They can get GOVT. money to invest in GREEN TECHNOLOGIES" you say. Ok, just like they did in the 70s, and 80s, and 90s. Where are the flying eco-cars? Where is the solar truck? Not happening. Congress and the unions and mgmt. played ALL OF US for suckers on that one. And killed the railroad industry at the same time, and commuter alternatives. THANKS.

Don't sell me sh*t with wheels and tell me "we're getting better." I want a strong domestic car industry too.

All of this, all of it, is payback for getting out the vote. Just as was predicted but on a MUCH LARGER SCALE THAN EVER BEFORE, and much quicker. Hence, the market reaction. When oil prices turn around we're really going to be in trouble. And it's coming.

So, yeah, it's all FUD on the "no bailout" side. We'll see.

[Doofy]

Originally Posted by Laminar 

But look at the thing. It's hideous.

If you guys really want to save the auto industry, you'll employ me to vet every design. And give me power to say "hey, designer, that's hideous - you're fired, go back to designing Nikes". Sorted.

[turtle777]

Originally Posted by finboy 

Or, it could be nothing. IF we bail out GM/Ford/whoever, how will that sell more cars for them? Are we going to buy the cars? If not, THE SUPPLIERS WILL LAY OFF ANYWAY.

I'm not sure why you assumed from my post that I'm PRO bailout.

I work for a big European automotive Tier 1 supplier, but I'm still against bailing Detroit out.
Will it hurt ? Hell yes, it already does. We're laying people off, cutting merit increases, make people take mandatory vacation, stop projects etc...

I personally don't believe that a bailout will really fix the issues.

-t

[imitchellg5]

I don't think Ford would go under completely. They are growing quite quickly in Europe.

[macintologist]

Originally Posted by iranfromthezoo 

Yeah I currently own a Fusion and absolutely love it. It's an (late) 07 with 26,000 miles on it. Bought it brand new off the lot. I love it and was hoping to be able to trade in for the 2010 but I most likely won't. ;( But the fusion is a very nice car.

I hate the loud clicking noise the turn indicator makes. It's much quieter in a Japanese car.

Don't buy American cars, they are crud.

[turtle777]

Originally Posted by imitchellg5 

I don't think Ford would go under completely. They are growing quite quickly in Europe.

So is GM's Opel, and they are in serious trouble, because GM is bleeding them dry.
Successful international business will NOT guarantee their survival.

-t

[Andy8]

Perhaps they will be bought by an Indian or Chinese company

[imitchellg5]

Originally Posted by macintologist 

I hate the loud clicking noise the turn indicator makes. It's much quieter in a Japanese car.

Don't buy American cars, they are crud.

Oh boo hoo. And then you have BMWs which make no sound.

[Wiskedjak]

Originally Posted by Andy8 

Perhaps they will be bought by an Indian or Chinese company

Exactly. If Ford were to go under, it doesn't mean that Ford will disappear.

They will restructure and improve, or ...
They will get bought for a bargain by a company looking to make a quick entrance into the auto market, or ...
They will get bought for a bargain by an existing automaker looking to expand their manufacturing cheaply.

[olePigeon]

Originally Posted by Art Vandelay 

I'm surprised the new Fusion Hybrid isn't getting much press. It gets 39mpg city which is 5 more than the Camry Hybrid. Also, it can go up to about 50mph on electric only. They're saying you could almost drive entirely in a city on electric only.

Ford sells 60+ MPG diesels in Europe, but we get 39 MPG hybrids in the States that get closer to 10 MPG if you push them. It isn't news because it sucks.

[Laminar]

Originally Posted by Doofy 

But look at the thing. It's hideous.

Proof that the British have no taste.

Originally Posted by macintologist 

I hate the loud clicking noise the turn indicator makes. It's much quieter in a Japanese car.

Don't buy American cars, they are crud.

Crud that is of equal quality and gets better gas milage.

[turtle777]

Originally Posted by olePigeon 

Ford sells 60+ MPG diesels in Europe

Links, please. Thanks.

-t

[Big Mac]

As long as quality Mustangs and Corvettes are still around going into the future, I'll be pretty satisfied with whatever else happens to Ford and GM. I'm pretty strongly anti-bailout though. I think chapter 11 bankruptcy is the only thing that can get the unions in line. As for people being afraid to buy a car because they've heard the word bankruptcy, just have the government buy a ten minute chunk of prime TV time to explain what it means and why it will result in a stronger, more competitive domestic auto industry. To those who think American cars right now are crud, though, you're pretty much wrong. The foreign maker quality gap has been all but closed, with Ford leading the way.

[Art Vandelay]

Originally Posted by turtle777 

Links, please. Thanks.

-t

http://blogs.cars.com/kickingtires/2...-ford-fie.html

It's not the norm for all of their diesels but they do have them.

[olePigeon]

Originally Posted by turtle777 

Links, please. Thanks.

-t

http://www.businessweek.com/magazine...pStories_ssi_5

But then again not everyone likes the tiny cars. (now I'm cross posting.) Several companies make full size sedans and sports cars that get around 50 MPG, and they don't skimp on the horse power or torque.

[Doofy]

Again, kiddies, MPG is irrelevant. If you all switch to 50 MPG cars from 25 MPG cars all that'll happen is fuel price will double.

[Art Vandelay]

Originally Posted by Doofy 

Again, kiddies, MPG is irrelevant. If you all switch to 50 MPG cars from 25 MPG cars all that'll happen is fuel price will double.

It would still be better on the environment.

[Art Vandelay]

I think it's a cool looking car. It will be on sale here in about a year, if they're still around. This and the 3rd gen European Focus are coming over in 1-2 years plus 4 other European models.

[turtle777]

Originally Posted by Doofy 

Again, kiddies, MPG is irrelevant. If you all switch to 50 MPG cars from 25 MPG cars all that'll happen is fuel price will double.

How that ?

Theoretically, total fuel consumption will go down by 50% , so total demand will go down by 50%.
Everything else being equal, why would the price automatically double ?

-t

[olePigeon]

Originally Posted by turtle777 

Everything else being equal, why would the price automatically double ?

-t

Because they can.

[imitchellg5]

Originally Posted by turtle777 

How that ?

Theoretically, total fuel consumption will go down by 50% , so total demand will go down by 50%.
Everything else being equal, why would the price automatically double ?

-t

Gas was double this summer what it is now for absolutely not reason.

[sek929]

We drove 11 billion less miles in the past few months.

The price has plummeted around here (about 1.89 or so for regular)

Maybe demand is a bigger driver of gas prices than everyone thought.

[Laminar]

Originally Posted by sek929 

We drove 11 billion less miles in the past few months.

The price has plummeted around here (about 1.89 or so for regular)

Maybe demand is a bigger driver of gas prices than everyone thought.

I saw it for $1.60 in Des Moines yesterday. I paid $1.98 for premium today.

[sek929]

Putting premium in a Ford 4-door just seems so wrong.

OT I think the Big Three brought this upon themselves. I don't wish anyone to lose their jobs, maybe just everyone in management can get fired and replaced with people who know how to run a friggin' car company.

[turtle777]

Originally Posted by imitchellg5 

Gas was double this summer what it is now for absolutely not reason.

Wrong. It was up in anticipation and fear of much higher demand than supply.
Exactly the opposite of a lower demand and higher supply as described in the assumption above.

-t

[Doofy]

Originally Posted by turtle777 

How that ?

Theoretically, total fuel consumption will go down by 50% , so total demand will go down by 50%.
Everything else being equal, why would the price automatically double ?

You're using half the gas, so the oil companies get half the revenue if they maintain the current pump price (not to mention the government getting half the tax income off their duty). Since their shareholders won't settle for half the dividends, their staff won't settle for half the wages and their pipelines won't cost half the maintenance fees, the price must double to bring the revenue back to the original figure.

Think of it this way: A greengrocer is selling 10 apples a week to 10 people at $1 per apple. That's $100, so he's taken on a mortgage of $50 a week, a car loan of $20 per week and the rest he uses to live off.
If those 10 customers suddenly decide to buy only 5 apples each per week, he has to either (1) lose his house or (2) double the price of the apples.
Now, one may think that the law of competition applies and his customers will go to the guy down the street with apples still at $1, but if all the greengrocers are hit with the same problem at the same time (as in the case of a whole country eating less apples) then they'll all simultaneously double the cost of their apples. So it is with the oil industry.

[imitchellg5]

Originally Posted by turtle777 

Wrong. It was up in anticipation and fear of much higher demand than supply.
Exactly the opposite of a lower demand and higher supply as described in the assumption above.

-t

Anticipation driven by a few asshole speculators. I like how a few people can ruin everyone's party.

[imitchellg5]

Originally Posted by Laminar 

I saw it for $1.60 in Des Moines yesterday. I paid $1.98 for premium today.

$1.55 here for regular, $1.75 for premium. I've been driving nearly 300 miles a week, compared to 700 all of last summer.

[Laminar]

Originally Posted by sek929 

Putting premium in a Ford 4-door just seems so wrong.

So does going 150mph, but it happens.

[Andrew Stephens]

We had a similar experience here in the UK when Rover went bang a few years back. The value of new Rovers went through the floor, with cars being offered at 50-75% off and still not selling. Eventually they all got bought be people with really no money who couldn't afford a new car any other way.

Warranty claims ended up being handled by a third party warranty company but pretty soon parts became an issue. The second hand value of all Rovers promptly collapsed since you could buy a new one cheaper.

I saw an 18 month old Rover 75 (BMW 5 series clone) in the shop that looks after my old Peugeot. It needed a new front wing and bumper (fender) due to accident damage. Since it was an insurance job the parts needed to be new. Probably around £800 of work on the car. The parts were unavailable so the car was scrapped.

Now Rovers are really bargain basement cars, even quite new ones are dirt dirt cheap second hand. You hardly see any of them on the road at all around here now.

.

[The Godfather]

Originally Posted by Andy8 

Perhaps they will be bought by an Indian or Chinese company

What's the name of that Hollywood movie where the unionized car factory gets bought by a Japanese company?

[Art Vandelay]

Gung Ho