Deep Shit Begins
Car makers for the long jump
I wasn't in favour of this bailout as it delays the inevitable. If you ever want to see a trickle down effect in an economy both in the US and worldwide, just sit back and watch this one......HUGE.
GM employs 252,000 people worldwide but economists fear the collapse would have a ripple effect through the US economy as parts suppliers and car dealerships went to the wall, causing huge dislocation throughout America.
The impact on parts suppliers, who employ twice as many people, is likely to be profound. GM and Chrysler owe their suppliers about $US10 billion for parts that have been delivered. GM has held off paying them for weeks, and Chrysler is paying in small increments.
I wasn't in favour of this bailout as it delays the inevitable. If you ever want to see a trickle down effect in an economy both in the US and worldwide, just sit back and watch this one......HUGE.
GM employs 252,000 people worldwide but economists fear the collapse would have a ripple effect through the US economy as parts suppliers and car dealerships went to the wall, causing huge dislocation throughout America.
The impact on parts suppliers, who employ twice as many people, is likely to be profound. GM and Chrysler owe their suppliers about $US10 billion for parts that have been delivered. GM has held off paying them for weeks, and Chrysler is paying in small increments.
Many of their suppliers are verging on bankruptcy and cannot extend credit much longer.
Let the games begin.
posted by Cactus Kate at 5:04 AM
4 Comments:
People driving between the US and Canada via Detroit/Windsor will be able to get great deals on flax baskets woven by ex auto industry employees.
I agree that it delays the inevitable. Normally I would be against a bailout too. But the state of global confidence is so precarious that I think they need to be given some more time. That will mean we have the same problem in a year again, but in a year the world will be in a different space.
They need to be restructured sure, but not now,and not through chapter 11, the cost to the global economy would be too much, given the fragile situation we currently face.
I seem to recall hearing many years ago, in the 80's i think, that GM had 3 million employees. Obviously there's been some considerable organic retrenchment since then. Why don't they just completely shit-can their current methods and copy Toyota for godsake.
They'll feel better being able to blame the 'credit crisis' rather than Roger or being badly run and crippled by the Autoworkers.
Good luck to them.
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