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DeLorean disproves domsayers in debate over auto bankruptcies

Started by cordblomquist · 7 months ago

In the debate about bailing out the Big 3 automakers, it is said that we just can’t allow a bankruptcy. Despite the fact that Chapter 11 bankruptcies have taken place for retailers such as Circuit City and many airlines such as U.S. Airways, autos are said to be different because of ... Continue reading »

4 comments

  • Nancyf

    7 months ago

    Thanks for explaining this. I kinda wondered why they threw car parts into the protest or request. But I didn't think really deep about it. I didn't think the car dealers actually made the parts.
    reply
  • factory hand

    7 months ago

    Wow! Have you ever been involved in manufacturing? Producing "parts" requires equipment and tooling, sometimes millions of dollars of tooling, for even the smallest and least complicated part. Most part makers are just holding on by their fingernails right now and most of them make parts for many customers. If they were to lose the volume of a GM or a Ford they would go out of business immediately and their other customers, who are likely the foreign transplants everyone loves, would face a shutdown of their operations. Sure speciality manufacturers can make a few repo parts (as long as it does not involve capital intensive processes like casting and forging) for low volume vehicles like Delorean which are not anyone's daily driver vehicles. Have you ever heard the expression, "your tools are on the dock" which exactly describes this situation.

    GM has been in a Chapter 11 bankruptcy for almost three years with Delphi with no end in sight (if you do not understand that Delphi is GM--well it's another story).
    Give GM, Ford, and Chrysler the loans that they need to keep going with the thanks of the American taxpayer as a final installment for all they did in World War II if that makes you feel better. These great companies should be held in the highest esteem for the pioneering work thay have done with employer based health care, defined benefit pensions, and 401k plans (see GM Stock Savings Purchase Plan). Thank you American Auto Industry!
    reply
  • Gern

    6 months ago

    Wow! The people producing parts who are hanging on by their fingernails would fail. Then they'd have to... *gasp!* ... do something else! Calamity! You're right. No enterprising business would fill the parts market niche and make a profit on it.

    Thank them for what they did in World War II? Can I thank them for paying their "laid off" workers up to 95% of their salary? Can I thank them for giving their employees a sense of entitlement? Can I thank them for ignoring the ramifications of the last energy crisis in the 70s by designing vehicles that get the same gas mileage as those of 30 years ago? Good riddance, then. Adapt and improve, or die off. If they are unwilling to do the former, then I welcome the latter.
    reply
  • cuttingofmynose

    6 months ago

    The problem is not that the big three will have trouble continuing to produce parts (although they will), but rather that consumers will stop buying vehicles produced by companies in bankruptcy. Would *you* buy a new car from a bankrupt automaker? I highly doubt it.

    When I buy something from Circuit City or U.S. Airways I get way I pay for: a ticket or a consumer electronics device. Doesn't matter if they're in chapter 11 or not. When I buy a car I'm actually buying a long term relationship with the manufacturer. That's not a bet most reasonable consumers would make.

    Whether or not warranties could be restructured, consumer perceptions would sound the death knell of bankrupt automakers.

    But frankly that's probably what they deserve.
    reply

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