As you were typing that question, our future President, in all his wisdom(sarcasim) and being in the back pocket of the unions(not scarcasim), is trying to get Pres. Bush to give the automakers more money. I say more money cuz they just received 25 billion from the American taxpayer last month or maybe in Sept. Like the banks, the automakers are TO BIG TO FAIL!!!
Sorry for the political rant, but the answer is yes. There will be a GM and more vettes to come.
Basically, the author makes the point that the future for the US automakers is bleak, and that it is in the best interests of the US to let one fail. He does make a very good point that the carmakers owe about $60 Billion in pension liabilities, and that going through a bankruptcy is the only way to get this wiped out and avoid saddling the US taxpayer with the liability through the Pension Guaranty Fund.
He makes the prediction that Chrysler will be the first to fail, but that GM will be there in about 6 months.
On the political rant, The American economy is fueled by sales, not tax credits and bailouts. If they want to boost the economy, forget the Wallstreet welfare program and give the 900 kagillion dollars to us so we can pay the mortgages and buy stuff. JMHO
My opinion is that if the government bails out these companies it will be with serious strings attached. Besides salary caps for management it will guarantee higher cafe' standards and place new regulations on them beyond what we can imagine. The government will use our money without our consent to place these reg's on private companies. I think the Corvette will fall into a new "gas guzzler" class as will most large SUV's and performance cars. I also think new penalizing taxes will be imposed on these type of vehicles to discourage sales which could greatly effect the outcome and future production of many vehicles. Who we vote into our Halls of Congress has tremendous consequences. Stay Tuned!!
......going through a bankruptcy is the only way to get this wiped out and avoid saddling the US taxpayer with the liability through the Pension Guaranty Fund.
If dumping the Corvette line would save UAW workers pensions, I say quit building them right now.
On the political rant, The American economy is fueled by sales, not tax credits and bailouts. If they want to boost the economy, forget the Wallstreet welfare program and give the 900 kagillion dollars to us so we can pay the mortgages and buy stuff. JMHO
Don't underestimate the degree to which the financial system enables sales, and how access to cheap consumer credit (provided by Wall Street) is the only thing that buoyed sales in the last downturn. To paraphrase Seinfeld's theory on sex, "it's like air; when you have it you don't notice, but you realize you can't live without it when you don't." If you let banking fail, you take away credit, you take away sales, and the cost to the economy will be measured with a lot more zeroes on the end than any bailout package. (which is at heart a loan anyway). Take away being ablle to spend the artificial wealth of asset bubbles and you're left with this fine mess, which is why we just saw the worst decline in sales in at least 15 years posted yesterday. So even with some dorky fiscal stimulus package (that would ultimately be made up for with more taxes anyway), we just plain can't spend our way out.
As for GM, unfortunately this problem started decades ago with the bad quality of the 70s and 80s which caused a perception problem, and union concessions adding $2,000 to $3,000 per car costs, taking away competitiveness either through cheapening cars (interiors?) or reducing profit that could have gone to investment (hybrids). I give a lot of credit to Wagoner and Lutz for trying to change all this, but it left them where they've paid the costs and given up liquidity but haven't realized all the long-term benefits yet. They just had bad timing to have a meltdown hit, and I sure hope they're around long enough to see the ship turn. It would be horrible to see them go - loss of jobs, the American manufacturing base, etc, so I'm not opposed to giving them a bridge loan to the other side.
And about the only thing more depressing than the economic fallout of a GM collapse would be spending ZO6 money on a sports car and receiving a Cayman that can't even break the 300-hp mark
My opinion is that if the government bails out these companies it will be with serious strings attached. Besides salary caps for management it will guarantee higher cafe' standards and place new regulations on them beyond what we can imagine. The government will use our money without our consent to place these reg's on private companies. I think the Corvette will fall into a new "gas guzzler" class as will most large SUV's and performance cars. I also think new penalizing taxes will be imposed on these type of vehicles to discourage sales which could greatly effect the outcome and future production of many vehicles. Who we vote into our Halls of Congress has tremendous consequences. Stay Tuned!!
plus on top of it all the UAW have them in their back pockets. I've read most Republicans are averse to almost any legitimate help at all though (meaning extension of TARP or additional loans), so it's almost like picking your poison.
Why does the government need to give those companies to continue their manufacturing? It's their responsibility and there are other option where the government can put the money. And it's GM's choice whether they will continue their plan with the vette. Cars are one of the basic needs of people right now, that's why even people would have negative reactions about it, there would be lots who would buy it.
Muddbug1 is correct on this one. But, please don't blame our soon-to-be new president. Nobody wants to end up in a river with concrete as your best friend. I've heard that the average auto worker makes around $80 per hour. Is that true? I love my '05 vette even though it has been in the shop for repairs 9 times versus 0 for my wife's Lexus. Labor Unions control this country, and they will until WWIII or something else drastic. Yes, there will be a GM and there will be a C7 Corvette.
Soon enough everyone, the check GM and any other car manufacture will say...
FAIL
or
VOID
And then the GM or whatever manager will be like. And then everyone that works there. And me.. I told ya so!
If seeing a huge, rippling structural shock in the economy, massive increases in unemployment, and a mortgage crisis devolving into a downward spiral that sucks what's left out of American financial and manufacturing leadership can bring you such senses of joy and vindication, then all I can say it's that it's too bad there's not an emoticon for "that's f-d up".
Other car companies will fill the voids and pick up the slack. They'll fill the demand and hire more workers to meet it. But a large proportion of those cars will come from abroad, the additional workers in other countries won't be the same ones displaced here, the profits will flow to somewhere else, the trade deficit will widen, the dollar will fall, and even though all those cars will become a lot more expensive, there'll be a lot less disposable income to buy them.
America needs to be competitive. That should be the main objective of the decision on Capitol Hill, and determining the best course to make that happen should guide the vote. My feeling is that the automakers are extremely competitive internationally (not least in the BRICs) and have made huge strides towards regaining domestic competitiveness. They themselves got that, albeit a little late, but then got wrangled up in the fallout of the financial mess. American competitiveness will be best served by giving bridge loans to what I firmly feel is a brighter future, and is inarguably brighter than the grim alternative.
What, exactly, would the auto companies do with a $25B bailout? What is their plan to get thru this? If it's just more money to pay retirees benefits for a few more months, then they can kiss off. Let them go in BK and restructure. Both Management and Union need to a healthy dose of reality. And if they fail, we'll still have cars to buy. Not like we'll all be walking. Our Gov't can just slap a $10,000 tax on all foreign built cars and it will force the foreign manufs to build here. New plants, new hires. Of course, Detroit will become a ghost town, but other areas will grow. One thing I keep hearing that drives me nuts is that the Govt wants to force US auto manufs to make more efficient vehicles. THEY ALREADY DO! We consumers just chose not to buy them when gas was cheap. Now that gas is cheap, no one feels comfortable taking on a new loan.
BUILD MORE CARS AND THEN Be in a bind again.....It was a Fail the first time, And it'll be a Fail every time after......I guess they could use that 25B so they can keep making the all Mighty Tahoe Z71.....Followed by El C-Vette..
I read where dealers have an estimated 200 days worth of inventory already. Normal would b 30 to 45 days.
My point being is we can bail out GM and all the others, but if someone does not start buying new cars again soon, it will be throwing away money. We can debate how it got to this all we want, but bottom line is it is all supply and demand. With todays financial situation I don't blame anyone for not buying a new car right now.
So what happens the tax payer bails out GM only to have them make more cars no-one wants to buy?????? thats just delaying the inevitable. I hate it but that's what I think. I also resent that the same govenment that taxed me to death as a small business owner is willing to bail out BIG business. THATS BS
I work at GM as an electrician so I make about 4 dollars more than the production workers do and my pay is 32.73 plus 1.08 cost of living totalling 33.81. Thats less than half the 80 dollar figure. Production is more like 28 per hour. The way they figure the 80 dollars per hour is factoring in blue cross, free GM legal services(limited for anything major I pay thousands out of pocket), free college tuition (as long as I get at least a C average), dental and all the paid holidays. I doubt that adds up to 80 per hour. An outside electrician gets 3 dollars more than I do in Michigan and when they come to work in our plants their companies get more than 80 per hour for their workers.
I work at GM as an electrician so I make about 4 dollars more than the production workers do and my pay is 32.73 plus 1.08 cost of living totalling 33.81. Thats less than half the 80 dollar figure. Production is more like 28 per hour. The way they figure the 80 dollars per hour is factoring in blue cross, free GM legal services(limited for anything major I pay thousands out of pocket), free college tuition (as long as I get at least a C average), dental and all the paid holidays. I doubt that adds up to 80 per hour. An outside electrician gets 3 dollars more than I do in Michigan and when they come to work in our plants their companies get more than 80 per hour for their workers.
Wow, I used to be an aircraft mechanic for NorthWest airlines. I was a sparky myself. The base pay was 21.30 top out after 7 years. 1.36 for lead pay, .75 inspector pay. A lot of people thought we made a lot more too. Its kind of shocking to see that someone working on a production line is making over 20 an hour. I think the writing is on the wall for GM paying employees that much. NWA went bankrupt paying aircraft mechanics max 25 an hour. How can someone survive paying that kind of payroll? Just make sure you have a 2nd option for work when your job goes away.
Wow, I used to be an aircraft mechanic for NorthWest airlines. I was a sparky myself. The base pay was 21.30 top out after 7 years. 1.36 for lead pay, .75 inspector pay. A lot of people thought we made a lot more too. Its kind of shocking to see that someone working on a production line is making over 20 an hour. I think the writing is on the wall for GM paying employees that much. NWA went bankrupt paying aircraft mechanics max 25 an hour. How can someone survive paying that kind of payroll? Just make sure you have a 2nd option for work when your job goes away.
Don't forget about all the retired union workers that get some kind of pay for sitting home. And every time they have production layoffs, how many of those workers who are at home still collect a full paycheck.
And when the outside electricians come in and charge GM $80/hr., why is that? It's NOT because those workers get $80/hr. It's because the employers have to figure in all the insurance they have to carry, the taxes they have to pay and the expenses they incur getting to and from the location, the health benefits, the tools they carry and a margin for any non production down time on the job. Not to mention a bit of profit.
I don't think anyone can say for sure whether GM will continue to make corvettes in the future. The situation is still unfolding and the eventual outcome is highly uncertain.
I don't know that Corvette will survive without GM. While corvette may show profitability under GM, it may not be profitable as a stand alone unit. There are economies of scale and other beneficial aspects that the Corvette division enjoys as part of GM that would go away if Corvette was a stand-alone operation.
Corvette Store
The Future of Corvette
plus on top of it all the UAW have them in their back pockets. I've read most Republicans are averse to almost any legitimate help at all though (meaning extension of TARP or additional loans), so it's almost like picking your poison.
And then everyone that works there. 
And me.. 
I told ya so! 
