Enough with putting off the inevitable, it’s time to get it over with. GM and Ford need to file for bankruptcy.
WHAT!? I can hear the anger rising in Michigan, with fears that the collapse of these giants will devastate the already troubled state. Of course, that all depends on your perspective.
The simple fact is this: The auto industry needs to change and bankruptcies will force that change. Yes, unemployment will rise, suppliers will go out of business and dealerships will dissolve.
Forgive me for lacking compassion, but I don’t care. I believe the official term is collateral damage. Over time things will get better and the people who lost their jobs will find new ones (or discover that they never really liked their jobs anyway).
If Ford or GM filed for bankruptcy they would probably ask for, and receive, the ability to sever both union contracts and dealer franchise agreements. That could lead to a restructuring of mammoth proportions, ultimately putting the US automakers in a much better position to compete on a worldwide level with the likes of Toyota.
We have to face the reality of these times. The credit crunch has stalled car sales, made it virtually impossible for GM and Ford to borrow money and plunged their stock prices. In fact, Ford stock closed yesterday at $2.18. Yeah, buying a latte will now set you back more than buying a piece of Ford. Take that in your espresso shot and chug it.
Here’s another dose of reality: The maker of Hot Wheels is worth more than GM. Would you ever have guessed that a maker of toy cars could be worth more than the largest car company in the world?
If that’s not reason to give it up and start over, I don’t know what is.
What do you think? Is it time Ford and GM reached Chapter 11?