Yup, I work for a supplier that supplies the tools used in assembly plants. The Big 3 have their share of self-made problems, both on the UAW side and Management side. Competition from the transplants AND imports is forcing them both to clean up their act and this is GOOD. However, the current crisis is NOT self-made. I.e. gas skyrocketing and then the credit crisis were a double whammy that caused sales to plummet to lows not seen in decades. Look at the root cause and it's greedy people in both cases: oil speculators (Wall St.) and greedy brokers (Wall Street) who fanned the flames of the sub-prime mortgage crisis. Notice the common culprit in both instances??? Yet, they got $700 billion with little fanfare and yet these obvious facts are swept under the rug. Why??? Because Congress is complicit in the credit crisis due to the CRA that forced banks to loan to people who normally wouldn't qualify (rightly so) for mortgages. It was a disaster waiting to happen.
Anyway, others on this thread have minimized the impact of a Ch 11 filing. They point to the steel industry years ago. Well, it is totally different for a company that supplies to other companies to file Ch 11 and a company that caters to consumers (i.e. the Big 3). When Delphi filed for Ch 11, their customer, GM, kept buying parts from them. If GM files, THEIR customers (buying public) will no longer buy cars from them. That will drive them to liquidation and the ripple effects will be felt everywhere. Will the country survive? Yeah, sure, but we're in a recession now. A Ch 11 filing will turn it into a depression that will probably last 5-10 yrs at least and there won't be enough bankruptcy judges in the country to handle all the cases that follow within days of a GM filing.
I know that the company I work for is dependent upon payments from the Big 3 to come in on a steady basis to make payroll, pay our suppliers, utilities, etc. If a Ch 11 filing occurs, it will delay our receivable payments that would have to be ok'ed by a judge. Our bank will probably cancel our credit line and the dominoes will fall.
It's a psychological issue now. The buying public is holding off buying new vehicles of ANY BRAND (including imports and transplants) because of the uncertainty surrounding the bridge loan (not a bailout, like the Wall Street plan). Sales are down ALMOST 50%, for goodness sakes and falling fast. People who ARE employed are afraid they will lose their job and it's not just auto-related. Brother (in Calif)works for a web-related company in the health care industry and is next to be laid off after a recent round of cuts. Friend's son-in-law got laid off recently from a company (Minnesota) that does on-line advertising for newspapers due to ad revenues being down. Newspapers are endangered due to drop in subscribers due to online news access and drop in ad revenues.
The impact will be felt all across the country, very quickly. How to survive? Well, wife and I both work, so we are probably upper middle class in terms of income. But we're living like either or both of us may lose our job any day. That means no discretionary spending, car-pooling, brown-bagging lunches, etc. We've all got to hunker down like our ancestors did during the Depression of the 30's.
Be curious to hear from posters who will NOT be affected by current economic crisis or whose income and companies they work for are growing. Anybody out there in THOSE circumstances?
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