Tuesday, February 17, 2009

Detroit Has Its Hat Out Again

No.

Troubled US carmaker Chrysler has asked for another $5bn (£3.5bn) from the US government, saying it plans to axe 3,000 jobs and cut three car models.

The moves form part of its restructuring plan submitted to the Treasury Department on Tuesday.

Meanwhile General Motors has said it would try to borrow up to $16.6bn more from the government, on top of the $13.4bn it has already received.

Its plan includes cutting 47,000 jobs and closing five more US factories.

GM says that it could be in profit within two years and fully repay its loans by 2017.

The best thing for these companies is for them to go into bankruptcy so that they can get out from underneath their unsustainable business model.

(6) Comments
Posted by Owen at 2144 hrs
Economy + Politics + Politics - General

  1. I concur.  The government needs to stop throwing good money after bad to keep these anachronisms going.  Bankruptcy would allow them to shed their legacy costs, layoff employees without bribing them to leave, close dealerships, eliminate brands, and basically give them the best chance for sustained profits in the future.  Giving these fools even more money, especially when they can’t even get some simple concessions out of their union when the company’s very existance is on the line, is a mistake.

    Posted by .(JavaScript must be enabled to view this email address) on February 17, 2009 at 2208 hrs


  2. Question. Who is going to loan them the money in bankruptcy?

    Posted by .(JavaScript must be enabled to view this email address) on February 17, 2009 at 2339 hrs


  3. Loaning money to companies in bankruptcy is both common and easier.  Once you are in bankruptcy, there’s a pretty clear understanding as to the order of obligations.

    Posted by Owen on February 17, 2009 at 2345 hrs


  4. Let them suffer the consequences of their bad decisions. If they go out of business - some other car company will buy them up at a discounted price and continue on.

    Posted by .(JavaScript must be enabled to view this email address) on February 18, 2009 at 0809 hrs


  5. I do notice that ford is not asking for enything at all at this point. I wonder why?

    Posted by .(JavaScript must be enabled to view this email address) on February 18, 2009 at 0923 hrs


  6. Interestingly, on NPR tonight they reported that this came as a complete suprise to industry insiders and lawmakers alike. I seem to remember the talk radio spectrum saying this was a bad idea because they would be back around march 1st for round 2.

    Posted by fishaddict on February 19, 2009 at 0040 hrs


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