Great find RON430... rather than repost the whole article, 2 points:

1. Lee Iaacoca went before the country and asked for America's trust, and put his face everywhere (ie put his b-lls on the table, see if they get chopped). America rewarded the effort...

2. The "Big 3" and UAW whine in front of Congress pleading for cash with NO PLAN, no ads, NO VISIBILITY... oh yeah, just at the "airport"...

What does THAT say about Americans now running to buy cars in a bailout for the 3... yo Congress, give them $25 billion, who are they going to SELL THEIR PRODUCTS TO?????????

 

Thank you! That is exactly my point. I can see where every penny goes in my statements as well. Just because they are a publicly traded company doesn't mean that you know how and where they are spending their cash.

If you opened up GM's statements and found, say, line items for $250M for corporate travel and another for $500M for corporate perks wouldn't you suggest that they fix their own internal spending issues rather than hand them more money to flush down the toilet???

As well, if their labor expenses are as damaging as we all think they are, exhibiting their total labor cost might help the government to decide to assist them in getting out from under those binding contracts.

 

Oh definitely.

Every business failure is due to one of a few key factors:
(stolen from another website)
1. Lack of direction. Business owners often fail to establish clear goals and create plans to achieve those goals, especially before starting out, when they fail to develop a complete business plan before launching their company.

2. Impatience. This occurs when business owners try to accomplish too much too soon, or expect to get results far faster than is truly possible. A good rule to remember is that everything costs twice as much and takes three times as long as expected.

3. Greed. When entrepreneurs try to charge too much to make a lot of money in a short period of time, failure isn't far behind.

4. Taking action without thinking it through first. An entrepreneur acts impetuously and makes costly mistakes that eventually cause the business to fail.

5. Poor cost control. An entrepreneur spends too much, especially in the early stages, and spends all their startup capital money before achieving profitability.

6. Poor product quality. This makes it difficult to sell and difficult to get repeat business.

7. Insufficient working capital. An entrepreneur expects--and requires--immediate, positive cash flow that doesn't occur, leading to the failure of the business.

8. Bad or nonexistent budgeting. An entrepreneur fails to develop written budgets for operations that include all possible expenses.

9. Inadequate financial records. An entrepreneur fails to set up a bookkeeping or accounting system from the beginning.

10. Loss of momentum in the sales department. This leads to a decline in cash flow and the eventual collapse of the enterprise.

11. Failure to anticipate market trends. An entrepreneur doesn't recognize changes in demand, customer preferences or the economic situation.

12. Lack of managerial ability or experience. An entrepreneur doesn't know or understand the important skills it takes to run a business.

13. Indecisiveness. An entrepreneur is unable to make key decisions in the face of difficulties, or decisions are delayed or improperly made because of concern for the opinions or feelings of other people.

14. Bad human relations. Personal problems and conflict with staff, suppliers, creditors and customers can easily lead to business failure.

15. Diffusion of effort. An entrepreneur tries to do too many things, thus failing to set priorities and focus on high-value tasks.


I think GM could be cited for most if not all of these... A good managing body, given a little capital and a little time, could feasibly come in and clean their mess up... Restructure their business plan, cut expenditures, give employees the option of keeping their job at a reduced rate or finding others that will do the same work at a reduced rate... Hey, it's buckle down time - if you can't make more money than you are spending, something is wrong... I hate micro managing, but maybe it's time...

 

I don't know if that is the article/survey that the auto makers, unions, and many in Congress are quoting but it is the only one I could find without devoting my life to it. I don't think anyone with a brain doubts that filing bankruptcy is easy for the auto makers and their union. That is why they are fighting having to go into so agressively. The court filings will be public record and will likely be far more detailed than what is publicly released to stock holders. At least they will focus on what the key issues are relating to cash flow and require plans to be submitted and reviewed.

It should be fascinating to see the plans that the automakers produce by Dec. 3. GM needs a handout, quick. They will put the absolute minimum together they can to get it through but probably produce volumes of paper so no one will read it (standard operating procedure in DC). Ford may or may not be in a rush to produce much of anything if Mulally wasn't just pulling Congress' chain saying that they didn't expect to need any money during 09. Cerberus is a wild card IMO. Question is how much about Cerberus will Congress want to stick their nose into to give ChryCo their handout?

And just to make sure everyone knows how cohesive the gov is, Obama doesn't even feel like talking to Pelosi about anything. What a leader. On the exact day that the Speaker of the House came out and said bankruptcy isn't an option, the Obama leak machine participated in saying, as they have said before, that they are exploring bankruptcy. And you wonder why a lot of people don't want the gov involved.

Pelosi Says She Rejects Bankruptcy for Automakers

By Christopher Stern

Nov. 21 (Bloomberg) -- House Speaker Nancy Pelosi rejected bankruptcy as a solution for domestic automakers, saying it would be “digging a hole far too deep.”

President-elect Barack Obama’s transition team is exploring a swift, prepackaged bankruptcy for automakers as a possible solution to the industry’s financial crisis, according to a person familiar with the matter.

“Rather than going to that next step, let’s hope we can solve it before that,” Pelosi said at a briefing in Washington.

Bankruptcy by the automakers would have “a devastating impact on the workers, on the economy, on the manufacturing base and on the confidence of the country,” she said.

Pelosi and Senate Majority Leader Harry Reid yesterday blocked immediate action on loans for cash-strapped automakers and ordered them to make a case for the aid next month.

General Motors Corp., Ford Motor Co. and Chrysler LLC must submit viability plans Dec. 2 and Congress will meet the week of Dec. 8 to consider aiding them.

Pelosi said Congress must do something to help automakers.

“Doing nothing is not an option,” she said.

Obama’s team has contacted at least one bankruptcy law firm to discuss ways of aiding automakers who agree to an expedited bankruptcy process, a person who requested anonymity said.

Prepackaged Bankruptcy

In a prepackaged bankruptcy, an automaker would go into court with a business plan and financing in hand after reaching agreements with lenders, workers and suppliers on what each would give up. It’s a quicker process than regular bankruptcy, taking a year or less compared with up to five years for the ordinary Chapter 11 procedure.

The Bush administration today criticized Democrats failing to pass aid for automakers.

“It is appalling that Congress decided to leave town without addressing a problem that they themselves said needed to be addressed,” spokeswoman Dana Perino told reporters flying with President George W. Bush to a meeting of Pacific Rim nations in Lima.

Perino also attacked Democrats’ plans to weigh the viability of the auto companies survival.

“How in the world are 535 members of Congress going to determine the viability of a company?” Perino said. “It’s mind- boggling. They can’t even get together to pass a Mother’s Day resolution.”


http://www.bloomberg.com/apps/news?p...d=aJpJwhWgdS5A

The usual political republican-democrat nonsense aside, I am no longer very sure that all the auto makers have to do is wait for Obama. He doesn't seem to feel that he has to work with Congress. Wonderful.

 

I think the old Pasha Penske has sniffed a bit too much race fuel in his life to even think about what that article proposed. If I were to give him credit for anything, it is at least putting something out there. I guess it is because I don't have any great ideas for saving all of GFC. And that is a hard one to face up to, very few people seem to want to.

As for Congress, if they hand out 25 as a down payment on $50B, they will be the stewards of the auto company turnarounds. They don't have to propose the solution but I wouldn't feel particularly good about them even approving what the company's propose. And of course, this theatrical discussion in Congress wasn't even orchestrated to the point of telling GM, Ford, ChryCo, and the UAW to come in with a concrete plan this week. Just fly in for a chat and a couple of really expensive meals. Ridiculous

And you can see how DC works. Pelosi and Reid didn't make much of an issue of GM, Ford, and ChryCo having sound plans for a viable future that would require Congressional approval. They are much more interested in just having a plan. Hopefully it will be a nice big stack of papers when printed out and several CDs as well so they can stick it in a file folder and tell the voters they did their job getting a plan from the auto makers. I would much rather have a bankruptcy judge in charge. But the auto companies could still run that table. File bankruptcy, prepackaged or not, in say Michigan or Ohio, and I don't think you will have much problem getting anythng approved.

Hope that isn't killing you softly.

 

What was his voting record as Senator? How much experience does he have? Does anyone think this will change? And WHO is leader of the Dems? How much visability has Pelosi had in the last 3 weeks? WHO is going to make a stand, for once, on literally "passing the buck"? America voted for CHANGE...BAWHAHAHAHA, that felt good, it's Friday!!!!!

Not going into political rant, my point- can't click your heels three times and make the auto mess disappear....

 

I know we run the risk of having this combined into the debate forum and it would be better to really discuss the bailout here from the automotive and not political standpoint. The point I was trying to make is that we are in tough times. We put in place a monocracy in DC, that happens. The biggest challenges I have faced in business, and probably personal, throughout my life have fundamentally revolved around communication. I don't disagree with the point you make. It is just so easy for people to get their nose out of joint nowadays (look at road rage) that it really disappoints me that the Dems can't just pick up the phone and talk to each other. At least Reid, Pelosi, and Obama. Why do they think sending conflicting signals impresses anyone?

The auto companies are a mess. And I will give you better than even odds that DCs involvement makes it worse. But the least they could do with their monocracy is operate like a monocracy. Come on guys get together.

 

You're preaching my man... TESTIFY!!!

Couldn't have said it better!!!! BIG We get communication, there's a chance... whoops..... Washington, DC.... mmmmm....

 

Do you think that once Congress gets the proposals from the automakers they will be made public? My guess is no.

I may not have much of a life but I have turned into someone who is definitely not only going to watch what Congress and the Prez does in the five weeks before the election. I don't have a lot of extra time but I would really like to see a) what state these guys are in and b) what their plans are for viability. I really don't want to just count on the inevitable "leaks". If Obama gets his way and they go to bankruptcy, then the court records are far more open because creditors have a right to access. That first week of December is going to be interesting.

 

With the prospects of an auto bailout this week all but dead, Democratic leaders said Thursday that Congress would return in December to consider extending a $25 billion lifeline for troubled U.S. automakers if the companies devise a "viable" recovery plan.

"Democrats are determined to help auto workers and the auto industry," said Senate Majority Leader Harry Reid, D-Nev. "Unfortunately, the sad reality is that no one has come up with a plan that can pass the House and Senate and get signed by President Bush."

The news comes two days after acrimonious hearings on Capitol Hill in which the CEOs of General Motors (GM, Fortune 500), Ford (F, Fortune 500) and Chrysler said they needed an immediate $25 billion bridge loan to stay afloat through the end of the year.

The Bush administration, as well as many Republican and Democratic lawmakers, have pushed back. Opponents of an auto bailout argue that GM or any other automaker that can't sustain itself should use bankruptcy protection to to become competitive, rather than depend on federal assistance.

Lawmakers said that the auto companies have to prove that they would put bailout money to good use - so they wouldn't come back asking for more in the future.

"It is all about accountability and viability," said House Speaker Nancy Pelosi, D-Calif. "We [need to] see a plan where the auto industry is held accountable. Until they show us the plan, we cannot show them the money."

Executives at General Motors and Ford insist that bankruptcy is not an option. GM CEO Rich Wagner said he doesn't think consumers would buy from bankrupt automakers. Chrysler CEO Robert Nardelli said this week that his company also wants to avoid filing, arguing that buyers would demand cash on delivery and cause an even greater cash crunch. All three companies are burning through cash at a dangerous rate.

Many economists and auto industry analysts say a bankruptcy, even one that allowed one of the companies to reorganize its business and shed expensive labor contracts, could pose serious risk to the economy. Jobs would be lost and factories shut.

Still, it became clear this week that proponents of an immediate $25 billion loan to automakers did not have enough support in Congress, which last month committed $700 billion to prop up the financial sector, even with the automakers in dire financial shape

 

Guys, let's please stop spamming the thread with images - other members are complaining (removed most of them)

Thanks

 

very well put. I am a little less nuetral because I cant stand american cars, but I am impressed with your level of objectivity.

 

Guys I have a couple of questions.

First, how long is this proposed $25B going to last? Originally, I thought it was meant to get them through next year...then they are talking about it will get them to the spring...then, a couple of posts ago, it's suggesting it will get them through the end of this year?

If it's a short term loan (say even spring), how do they possibly think that they could make enough changes in a such a short period of time to have a lasting impact? My guess is that they will be back within 6 months looking for more cash if the wallet gets opened once.

Secondly, Ron, why are you convinced that all 3 are going to go down, or more specifically, why include Ford in this? Ford has already stated that they have enough cash to get them to 2010 and that they don't really need the bailout. I would assume that GM and the UAW dragged them there, or at the very least Ford decided that if the government was giving away free money then they at least wanted a piece of the pie. But it appears Ford already has a long term plan for recovery and has been making progress towards achieving it. Additionally, don't you think that if GM went down that Ford (and to a lesser extent Chrysler, if they survive) would be poised for a miracle comeback that would greatly accelerate their recovery?

I don't think any of them are particularly well run (actually I am completely flabbergasted as to how Waggoner and Nardelli have jobs), but Ford seems to be making the best efforts to turn their company around and hopefully they will succeed.

So if Ford can show that it is possible to restructure and take an American car company in a new direction without government intervention....why should GM/Chrysler get bailed out?

 

If GM went under, more than likely, the many, many vendors that supply parts and manufacturing for GM would go under as well. These would be the same vendors that supply parts and manufacturing to Ford and Chrysler. It would be throwing fuel on the fire of an already bad situation. Where would that leave FMC and ChryCo?

 

I don't disagree that losing GM would also spell the end of some vendors, but I do think the magnitude of the damage is debatable. Those companies that put all their eggs in one basket with GM, are just as blind if they haven't been able to foresee GM's demise and lack of vision. Unfortunately, you are right, they would go bankrupt as well.

There would definitely be an interuption in supply to FMC and ChryCo as the strong vendors figured out how to restructure their own companies and increase their supply to the remaining two. Good vendors have probably already been designing strategies to deal with the loss of GM in a worst case scenario.

If FMC continues to make the progress it seems they've been making, they would be able to ride out 2009 as their vendors make the necessary adjustment. With the changes they are making and an increased market share beyond 2009 without GM, their future would be much brighter than it is today.

Again, I don't disagree that if GM went under that it wouldn't have some ripple effects, just the severity