So what does the Y block world think about the current state of the Finincal melt down especially in relation to FoMoCo? Bear in mind the following facts:
1) The republican Bush administration promoted and got a $0.7 Trillion bailout to the financial companies that have screwed up the motrgage and credit markets so badly that businesses are closing up right and left all around the world. But they (the Bushies) are now baulking at a plan worth currently $15 billion or about 2% of what they are planning to give the Financial companies and they can't even begin to administer that business!!
2) Even though all American producers especially FoMoCo and GM are building high quality cars that are said to be competitive with the best Asian and European brands a large portion of the American market will not consider them in any buying decision.
3) The big 3 Co's support an older work force and a huge retirement legacy that the foreign manufacturers on shore or overseas do not support. If the big 3 go under eventually the gov will end up picking up at least some of these retirement costs.
4) The foreign manufacturers are located in southern states who lured them to locate there by giving great forgivness on real estate and employment taxes, Free training for the work force (ie paid for by the state), low wage base and fairly lax regulation of safety and immigration. So these states are subsidising the foreign makers and are largely represented by the republican senators who make the most noise about letting the big 3 fail.
5) FoMoCo recognized a couple years ago that things weren't going all that well and started downsizing and building up cash reserves to weather the storm. They also started preparing to bring smaller cars from Europe and Asia with world wide "platforms". So now they are in the best shape to move into the new markets
6) GM has been far less forceful about downsizing their operations
7) Chrysler is now owned by a completely private big financial company Cereibus(sp?) who bought it from Daimler at fire sale prices. Another name for this is speculation.
So here is one possible scenario: GM gets a bailout with the CarCzar to be sure they use the funds wisely and don't use the gov $ to get a competitive advantage over FoMoCo. Cereibus gets to liquidate Chrysler and take their lumps. That means the the Gov probably gets stuck with the Chrysler employee retirement costs in the long run.
Doug T
The Highlands, Louisville, Ky.
