Car manufacturers - which will fall?
- Thread starter merlin
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Soldato
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I can't see Ford going down.
Soldato
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I pray that it is Citroen.
Soldato
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I haven't seen a Citroen in ages There's quite a few situations which will arise but this is from what I have learnt from what I am currently working on and what has been said, analysed, reported. This is my knowledge, in particular Ford (as, obviously, I know more about our situation than others)
Ford have enough liquid cash and an available credit line, the most by far out of the big 3, Ford can survive all the way through 2009 with the cash they have, they have had a plan since 2006 to restructure our vehicles towards low emissions and smaller cars and our 'One Ford' strategy relies on global shared technologies and sharing platforms and resources. Hence the next CD car (Mondeo size), will be designed in the US, and Europe's Focus and Fiesta will make it over there.
So you can see it's really going to be the US and Europe working STRONGLY together, which has HUGE cost savings. Ford have a good peice of leverage in that Europe's incredibly frugal engines and vehicles (compared to US) have shown proven success and reliability and can be taken straight over the US, and has proven that the way we do things in Europe can make a profit. (Ford of Europe profit forecast of $1.1bn by YE (December 31st))
These 2 facts, Ford have enough cash through till YE 2009, and Ford Europe make a profit, are huge factors in asking for money from Congress, Ford only need a bridge loan for 10 years, IN CASE something really dramatic happens like one of the other big 3 going under, of course they will be bailed out, but their suppliers will suffer and will affect Ford tremendously. You have maybe read that Ford's rating with suppliers in being able to pay has gone to zero in Europe, meaning many suppliers wont wait for payment once parts are sold, and this has caused a bump in our cashflow.
GM - I couldn't really believe the state they are in, but reading it everywhere really brought it home, I'm a BIG fan of GM vehicles (not all, I love cadillacs, corvettes etc). However, I believe these guys, unless they get their bailout money FAST (i.e. <30 days), they will have to go through chapter 11. They dont have enough cash to last till the year end and desperately need the money. The only side of GM which accounted for greener cars was Opel, they tried to sell them over there as Saturn but that didnt work, at the time they still focused on what they were doing for the last 5 years, which, doesnt work as we can see now.
It's very worrying since Opel are desperate for cash from the German government (will possibly get it), and the US side is teetering. If these guys go it will be like a black hole, suppliers are such a big part and everything is so intertwined it's unbelievable.
Chrysler LLC - its hard to tell how these guys are doing as they do not disclose accounts, however their sales were hit the hardest, and one can only guess what they're going through. Bob Nardelli has kinda in my opinion wants to jump ship as he said he would rather quit and see Chrysler survive than him take it down. There has been lots of talks for a merger, and Congress are really pushing it at the moment with GM. Millions (even Billions) are saved if GM and Chrysler merged, so many plants would not be needed, and this unfortunately means HUGE job losses, and I'm sure the UAW don't want that.
One point which made me slap my head was when Alan Mulally (CEO Ford) was asked if he would reduce his salary to $1, and he said, "I'm ok where I am". This made me laugh, however in fairness since he's joined the company Ford have risen and got better. But he should still sacrifice the pay, no doubt he'd get stock anyway.
SO - Wait a few days and see what happens out of congress. I see GM buying Chrysler LLC (through share swap or something). I'm confident Ford will be fine.
Sorry for the long post, I wanted to get a bit more detail in.
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lol, its not that bad I can tell you, all that has happened is a freeze in discretionary spending, (i.e. like outside training etc, approval levels have risen, a VP or CEO has to authorise a Hiring of staff at the moment!)
Don't all the French makers have dodgy government backing?
That and French people buy them.
I can't see that any major manufacturer will go bust as such.
In an extreme situation, they'll be sold to another manufacturer, at a reduced price, or in parts, or the intellectual property and use of trade marks will be sold or the business will be rationalised, consolidated or merged with another or a non-car manufacturer will buy them, but none of the large car manufacturers will go bust. The more likely scenario is reduced profitability, reduced output, losses for a couple of years and lay offs for the weaker corporations.
That's an interesting one. Personally, I still think we're a long way from seeing the US government bailing out the likes of GM in the same way that the UK Government bailed out the banks. There's a much stronger argument to immediately bail out the financial system to maintain economic stability than there is to save one out of three major US car manufacturers - none of them are terminal at the moment.
I think what you might see are financial concessions (or in the extreme, subsidies) in the future for the US automotive industry if the situation significantly deteriorates and again, in the extreme, import tarriffs (which would carry with it WTO implications). But at the end of the day, the three major US companies operate almost like a cartel and arguably overstate their current financial plight (particularly GM).
Witness this hyperbole from politicians with vested interests:
http://www.house.gov/apps/list/press/mi12_levin/PR111008.shtml
There's already been a lot of coverage on the GM issue:
http://www.time.com/time/business/article/0,8599,1858702-1,00.html
http://www.businessweek.com/lifesty...s_top+news+index+-+temp_dialogue+with+readers
http://www.nytimes.com/2008/11/13/business/economy/13bankruptcy.html?_r=2&ref=business&oref=slogin
http://www.telegraph.co.uk/finance/...d-be-a-step-too-far-by-the-US-government.html
In an extreme situation, they'll be sold to another manufacturer, at a reduced price, or in parts, or the intellectual property and use of trade marks will be sold or the business will be rationalised, consolidated or merged with another or a non-car manufacturer will buy them, but none of the large car manufacturers will go bust. The more likely scenario is reduced profitability, reduced output, losses for a couple of years and lay offs for the weaker corporations.
[TW]Fox;13029559 said:
That's an interesting one. Personally, I still think we're a long way from seeing the US government bailing out the likes of GM in the same way that the UK Government bailed out the banks. There's a much stronger argument to immediately bail out the financial system to maintain economic stability than there is to save one out of three major US car manufacturers - none of them are terminal at the moment.
I think what you might see are financial concessions (or in the extreme, subsidies) in the future for the US automotive industry if the situation significantly deteriorates and again, in the extreme, import tarriffs (which would carry with it WTO implications). But at the end of the day, the three major US companies operate almost like a cartel and arguably overstate their current financial plight (particularly GM).
Witness this hyperbole from politicians with vested interests:
http://www.house.gov/apps/list/press/mi12_levin/PR111008.shtml
There's already been a lot of coverage on the GM issue:
http://www.time.com/time/business/article/0,8599,1858702-1,00.html
http://www.businessweek.com/lifesty...s_top+news+index+-+temp_dialogue+with+readers
http://www.nytimes.com/2008/11/13/business/economy/13bankruptcy.html?_r=2&ref=business&oref=slogin
http://www.telegraph.co.uk/finance/...d-be-a-step-too-far-by-the-US-government.html
HAHAHAHAHA Bob Nardelli of Chrysler apparantly said that because their cars are built so well and are of such high quality people arent coming back to buy new ones which is the cause of their problem!!!!!!!!!!!111
edit - AND this was to the Senate Banking Committee!! Does he think they're morons? OH what I would do for a live feed!
edit - AND this was to the Senate Banking Committee!! Does he think they're morons? OH what I would do for a live feed!
2 million profit this year. First time they've turned a profit since Formula 1.
They're used to recessions now. Almost all their production workers are temps... so they can expand and contract the workforce very easily. Not like these big players where it costs millions just to make people redundant etc...
I think there is a high chance of GM and Chrysler either getting the initial amount they require to survive until March (think it's $4bn and $7bn respectively....I can't recall) by which time the Banking Committee would have had time to conjure up a more intricate plan. Or they will be, as I think will happen, be pushed into a merger. I've omitted Ford from this opinion as whether or not they are given bailout money, this is not a decision they need before the end of the year and can wait.
A big argument from a lot of senators is how 'white collar' banking industry gets huge bailouts while the 'blue collar' gets hung up to dry. I'm not really bothered on that part, however the consequences from any 3 of these companies going under is huge on a job loss and economy front. If GM go down it will bring down their operations across the world.
There are no better automotive unions than in the US, arguably a huge cost for the manufacturers and have HUGE leverage over the companies, hence the huge cost.
Again, in Germany redundancies are very costly due to regulations and laws.
The UK, well we just cut loads of jobs recently, Aston, and JLR also did the same, at a cost nowhere near as in the US. UK regulation is very weak on unions and legislation on redundancies, and we hire a lot of agency staff (they are the first to be cut). I think agency work especially in engineering seems to be a UK thing.
Especially when all their best output is actually euopean designed bar the mustang
Its all going transatlantic now though! Fiesta (EU), Focus (EU) going to the US, Mondeo size car (US) coming over here. In the future after the next wave of models who knows will probably be 50/50.
Also of note, the chap who brought us the Focus ST, Focus RS (both), Fiesta ST, hell any ST or sports inclined EU Ford since 2002, Jost Capito is now promoted to head up global performance vehicles and motorsport and will be based in the US. I wonder how that will affect things.
Ah, you have to admire audacity like that
Chrysler should be given billions of US Government dollars simply on that basis!