Bush considering 'orderly' auto bankruptcy - Page 5 - Mercedes-Benz Forum

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post #41 of 74 (permalink) Old 12-18-2008, 10:04 PM
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Remember, just 36 months ago all three were making solid profits, worldwide.
Fucking A.

Destruction.
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post #42 of 74 (permalink) Old 12-18-2008, 10:06 PM
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Your academic fly is showing.

Somehow, I don't think Ford would have problems renegotiating contracts at this juncture.
By what mechanism? And isn't that wholly speculative to begin with?

Seems to me that Ford would have to file at the same time, and I haven't seen that possibility mentioned anywhere, nor do I know that it would be to Ford's advantage, otherwise. I don't even know if it would be permitted.

We may assume that provisions will be made for some kind of equity amongst the Big 3, but so far isn't that just that--an assumption? I know this sounds argumentative, but we've seen so little sense of equity in all of the bailout proceedings. Hence the
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post #43 of 74 (permalink) Old 12-18-2008, 10:08 PM
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Sorry but you need to provide a refeence to validate your legacy cost of only 1.5% of total operating costs. Where did you get it?
Do a search on previous posts on this subject. The number is derived as follows.

Labor costs [including legacy costs]=10%
Legacy costs=26% of total UAW Labor costs
UAW provides 60% coverage of Big 3 factories [the other 40% being offshore]

So, IF ACTUAL Wages are EQUAL, and UAW costs are 60% of 10%, that is 6% of total Operating Costs.

Legacy costs are 26% of UAW wage costs. 26% of 6%=just about 1.5%.

All the links from GM, UAW, WSJ are wandering on one of the other threads along with the Toyota managers cost assessments.

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post #44 of 74 (permalink) Old 12-18-2008, 10:09 PM
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Fucking A.

Destruction.
Of the ECONOMY. Not just the auto industry.

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post #45 of 74 (permalink) Old 12-18-2008, 10:10 PM
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The OLD costs are reduced just allowing the new companies to start off with a clean sheet.
Of course, new suppliers need to be paid , but the overall cost structure is lower than preCh11.
what about the old suppliers?

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post #46 of 74 (permalink) Old 12-18-2008, 10:10 PM
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By what mechanism? And isn't that wholly speculative to begin with?

Seems to me that Ford would have to file at the same time, and I haven't seen that possibility mentioned anywhere, nor do I know that it would be to Ford's advantage, otherwise. I don't even know if it would be permitted.

We may assume that provisions will be made for some kind of equity amongst the Big 3, but so far isn't that just that--an assumption? I know this sounds argumentative, but we've seen so little sense of equity in all of the bailout proceedings. Hence the
Ford being healthier would be in a stronger negotiating position, would you think not ?
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post #47 of 74 (permalink) Old 12-18-2008, 10:12 PM
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Yeah, you missed the Republican leadership that wants to bust the Union and this is the best shot they have had in decades.

Nevermind that the facts/math don't add up or the standards are blatantly skewed, this obsession will continue.

I would have thought they grasped the pendulum lesson over the past two years but apparently not. A bunch of those UAW workers were very stalwart Republicans and an "in the pocket" constituency.
Last time I checked, most UAW unions were pretty darn blue. I'm sure that they would endorse any candidate that was pro-union, and that seems to be mostly the Dems recently.

Also, I think Bush is right on this one (Who would have thunk it). Also, remember the Dems are trying to push their environmental agenda through, stoping thoes big, bad automakers from making big SUVs.

If we loan the D 2.3 money, we will never see it again. That is not prudent, and Bush knows that. An orginized C11 is the best option. If you will refer to a document released by Moody's this week, they said that there were 3 options for moving forward. The most favored was a Pre-Packaged Bankruptcy with government assistance (70% likelihood). The UAW needs to be restrained and cut back severely, the concessions need to be moved up to now, no more job bank, and a new management staff is desperately needed at GM.

As car czar, names like Penske, Iacocca, Romeny, and Kenneth Feinberg (Associate of Bush).

As for me, I wouldn't say I'm entirely anti-union, but I don't particularly like them. Equal pay for unequal work just doesn't sound very good to me. I recognize their merits when business and management becomes too strong, but what happens when labor becomes too strong? Well, this.


As for Chrysler, it is a dead company walking right now. They really have no hope beyond a Bailout. If you read the auto blogs, you've seen their future product forecast, and its not looking good. (Vaporware, redesigned 300/Charger). Also, remember that Chrysler is held by private equity. When was the last time we bailed out private equity? Hmmm? And when was the last time the government had a successful bailout? (History of U.S. Gov’t Bailouts - ProPublica). Not many at all. Yep, you can say that Chrysler in the 1980's was successful, but guess where they are now, only 30 years or so later. Back with their tin cup begging for money.


Just my .02

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Last edited by Schm; 12-18-2008 at 10:24 PM.
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post #48 of 74 (permalink) Old 12-18-2008, 10:13 PM
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what about the old suppliers?
Old supplier contracts are torn up. Outstanding debt is converted to new paper.
If these suppliers want to continue doing business, they will have to renegotiate or stick with Ford and cut half of their capacity.
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post #49 of 74 (permalink) Old 12-18-2008, 10:15 PM
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Ford being healthier would be in a stronger negotiating position, would you think not ?
Not against the UAW, it works in exactly the opposite way.
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post #50 of 74 (permalink) Old 12-18-2008, 10:17 PM
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Originally Posted by mcbear View Post
Do a search on previous posts on this subject. The number is derived as follows.

Labor costs [including legacy costs]=10%
Legacy costs=26% of total UAW Labor costs
UAW provides 60% coverage of Big 3 factories [the other 40% being offshore]

So, IF ACTUAL Wages are EQUAL, and UAW costs are 60% of 10%, that is 6% of total Operating Costs.

Legacy costs are 26% of UAW wage costs. 26% of 6%=just about 1.5%.

All the links from GM, UAW, WSJ are wandering on one of the other threads along with the Toyota managers cost assessments.

FWIW, also linked previously, this is one of the more reasonable analyses I've seen comparing total labor costs, especially between the Big 3 and their principal competitors:

http://www.nytimes.com/2008/12/10/bu...leonhardt.html

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