Auto Industry Bankruptcy Play

Auto Industry Bankruptcy Play
I was happy to read that President Bush gave tons of money to the Auto Industry today. I think everyone knows these companies are going to file Chapter 11 Bankruptcy, and this is a good way to delay the inevitable and prepare the public.

As a global traveler, I am truly embarrassed by the US auto industry; they are just not a player on the world market. I seldom see USA cars or trucks, unless I am in the USA.

Panajachel, Guatemala
Thursday, December 18, 2008
Travel Journal --- --- Travel Bag Survey

There is an emotional variable to the auto industry, the country needs to prepare itself mentally for Bankruptcy, and this will keep Mom and Pop investors from getting panicky. Moreover, by March all the smart money can distance themselves from the auto industry, sit around, and wait… if the companies look stable they can jump back in.

Just think, I could manufacture cars in Guatemala and pay workers 5-10 dollars per day, and the employees would be happy.

Auto Industry Bankruptcy Play


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The US auto industry will not go bankrupt. They were declaring record profits as recently as 5 years ago. They made a big mistake by betting the farm on large trucks and SUV's right before energy prices spiked. But fundamentally they produce a quality product. Its more a question of proper design. They need wage cuts (for workers and management), pension and bondholder renegotiations, and a new focus on smaller high-efficiency vehicles. They were almost shuddered during the great depression, but survived that and came roaring back. They will do it again.

During the great depression the USA was very insulated, now they compete wih the world. The USA auto industry only survives because the American people buy the cars. They have a choice now, I cannot even see why anybody would buy a car now when the warranty work can be a problem. They auto industry has made too many mistakes...

NOTE: I said Chapter 11 Bankruptcy, this is not chapter 7, 11 is when you reorganize, not liquidate.

They need to break the Unions in he USA in half, not destroy them, but in half.

I agree with your assessment.
Bush clearly stated bankruptcy "wasn't an option at this time." I think it is inevitable, due to the union.

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