Originally posted by johnmflores It sounds like you don't believe that any company is too big to fail? True?
No company is too big to fail.
---------- Post added 07-27-10 at 12:16 PM ----------
Originally posted by Nesster Detroit management is an exhibit in the dictionary next to 'dinosaur'. The auto industry was the backbone of the US economy for years... and Detroit grew fat and lazy thinking this.
GM didn't really learn the lessons of NUMMI, for example, their jv with Toyota. The plant started out as GM's worst, but with Toyota it turned around big time. Did GM manage to implement similar systems in their other plants, in the 80s? nope. In the 90's, surely? Nope. This is what's known as not watching your own main business. The UAW did have a role too, but in the end, it is management willpower that counts. Willpower is the main energy spend when you're in management, it's what you get paid for. GM managment failed.
Another thing, GMAC, the financing arm... guess what they got into just before the bubble burst? Do you remember Ditech? guess who bought them?
The freeze up of overnight cash in the system was what brought Lehman and Bear down, and the freeze up is what prompted TARP. The car companies and their suppliers are/were a big user of overnight/short term financing. They, like many other companies, pumped up their borrowing hoping to ride out an ordinary recession... only this one's not ordinary. This one's led by the lack of liquidity, a banking recession...
Ford is fortunate its finances permitted going it alone.
Actually they did do pretty well with Saturn in the beginning.
And unions are very responsible for what's happened. At least as responsible as the management.