Quote:
Originally Posted by jfelbab
You all seem to assume that they will go down for the count if not bailed out. More likely they would file for Chapter 11 protection and continue operating. This would give them the ability to renegotiate all their supplier and employee contracts as well as restructure their debt. This most likely would result in a reduced size but they would continue in a restructured and quite possibly a more economical manner. This doesn't mean that they would not be in business at all. It means smaller, leaner and hopefully on a competitive basis with the imports. I'm against this bailout.
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If they (OEM's) renegotiate our contracts (Suppliers) many suppliers will pass on the unprofitable business (especially at the reduced volumes)
If any of the big three fold, MANY companies in their supply base will fold as well.. Here's the kicker, those suppliers also supply to other OEM's (foriegn OEM's included) so this will not only hurt the OEM that folds but all others they supply to..
OE's and Suppliers are VERY lean right now. As David eluded to the OE's used to be fat Currently, janitorial positions and other "non production" jobs are no longer done by Union employee's but contracted out. The low hanging friut and fat has been trimmed.. Very few plant closures (if any) are even possible at this point.. The acceptable amount of lay-off's and closures have already been done or soon to be done
You used to be able to walk around an OE assembly plant and see people screwing off NOT ANYMORE, OEM assy plants are like ghost towns compared to what they used to be like.. QUite honestly everyone is doing "more with less" and if you are not on the line you are not there with the union.
As for if the OEM's declare Chapt 11 meaning they are not out of business, this is true BUT how many people will buy a sizeable depreciating investment, which for most is the 2nd largest expense they undertake from a company that is in Chapt 11.. NOT MANY... This is not like an airline declaring chapter 11 when you are just buying a ticket.. This is more like buying the airplane!
When the fed's previously bailed out Chrysler they did so very smart and asked for things such as a 3 year business plan, concessions, stock etc and in the end MADE a SIZEABLE amount of money in return (I think $500M).
Union labor contracts have been renegotiated and will really start benefiting the OE's here within a couple years so, many of the legacy costs associated with poor OEM contracts with the union will be a thing of the past (for the most part, excluding job banks but thats another story)
I do not agree with the greed of the leaders of these organizations and I think accountability should be held to at that level BUT to let the industry crumble will have effects that I think MANY have no idea.. Bite off your nose to spite your face