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Originally Posted by fl_prn_str
I am sure you have heard of Lee Iacocca and the US Govent bailout of the Chrysler Corporation right....  |
Of course. I suggest that nowadays, instead of doing a full-on bailout (like S+L, or Chrysler) that there's been some 'backdoor bailout' by gov't quietly lending more and more coin to GM or Ford by buying corporate bonds. Problem is that it doesn't seem to be helping all that much any more, as profits still keep sinking and bond ratings keep dropping.
There was one source I was reading (if I can find it again, I'll cite it) that said GM only produced a 0.7% return on investment last year, with most of that money made from GMAC (their financing branch) offsetting loses in the auto side. The commentator quipped something to the effect of "... any local bank could do better with your money in a savings account." Not a great incentive for anyone to continue to pour money into their coffers while they continue to flounder around trying to find a design that'll sell.
Something dramatic will have to happen. I don't anticipate a total demolition (although it's not completely out of the realm of possibility!) but I can see a re-organization with a focus on building to their strengths. Ford makes a solid workhorse pickup... if they focused on building those trucks primarily and cut out the dead weight mid-line sedans and econoboxes, they could probably turn a respectable profit.
