VentureBeat

Assume for a moment, like almost every other corporation, the "Big" 3 were not to receive bailouts from the fed.

1) GM: Would need to declare bankruptcy, a lot of its outrageous obligations to UAW would go away. They would be FORCED to become profitable. The incompetents that run the show now would hopefully be removed, and replaced with capable talent (if they are able to lure any into auto) who would realize that when they have only 8 months of cash left at the current burn rate, action needs to be immediate, instead of wait until they are out of money and see what happens next. They obviously wouldn't disappear overnight, that is what bankruptcy is for. Mismanagement has driven the company bankrupt; now all that is left is for them to declare it.

2) Chrysler: This is a privately held company with a cash rich parent. Cerberus can bailout its own portfolio, instead of asking me and you for money, all while not giving us any ownership in exchange. If Chrysler did not get its bailout, it too would declare bankruptcy, after-which, Cerberus can inject it with cash and make it a profitable company. Since they are risking their own money, and not the feds, they’ll be more inclined to get on their feet faster.

3) Ford: They can make it through this; they’re just along for the ride. Management here would be incompetent if they didn’t join their competitors in asking for a government gift.

Clue Guy -

They aren't going to accept a pre-packaged BK. The public needs to "feel" relieved. (Just like when Bush made everyone feel relieved when he protected us against the terrorists)

Its going to be tough for them to become profitable when the buying public won't want to buy buy cars from GM dealers knowing the manufacturer is BK. The average person won't realize that its just a reorganization - they will think GM has gone out of business.

I totally agree w/your second comment; Cerberus should manage their investment better. If they don't want to, then they should find a buyer. Good luck trying to find a buyer for that portfolio piece.

Lastly, Ford will definitely make it through this; they will come out of this like smelling better than a new leather interior.

I bet Ford secretly wants GM to file BK - it'll probably send more people to their dealerships...

emiltsch -

The thing is if any one of these companies go down the others will too.

GM makes Ford's motors, Delphi makes steering and brakes for all three. Ford doesn't want GM Bankrupt, it needs GM.

If GM were to declare bankruptcy, it would cause a huge problem for all companies, companies that make work gloves would have problems because the workers in the plants wouldn't need gloves, car dealerships would close, steel foundries would lose business, plastic molding companies would lose business, etc.

If one of these companies goes down the government is going to have to support far more than just the Big 3, they are going to have to support the entire state of Michigan as well as many other businesses.

In my opinion 15 b is a tiny amount to pay to keep a state viable and more than just 3 million people employed. Though there does need to be a lot more restrictions on the money than that was given to the banks and there needs to be some major restructuring.

No to Bailouts let’s just have more financial recovery.
If they lend money on automakers, the question is, who has the money to buy one? With this kind of economy.