This is not about the design topic, but I want to see what you think about this.

You may have heard about this news. A famous economics uinversity professor said "GM and Ford is at the verge of bankrupcy".


1. Do you really think it is possible?

2. If it happens, how catastrophic will things be? Can you tell me in detail?

3. Why GM and Ford doing so bad that this speculation came up?

4. Is there anything else you would like to share?


Thanks.

1. Is it possible: Yes, possible but probably not real likely.

2. Why: Look at the burn rate of cash versus cash on hand.

3. Is it catastrophic: More perception than reality. Bankruptcy would actually be an excellent way to set wages and benefits at a level that makes economic sense versus UAW negotiations. In GM's case they would get out from underneath obligations for the Delphi restructure. In bankruptcy one can start over on most existing contracts; cancel for better pricing, switch to others with better prices and terms.

4. Other comments: The politicians will be manuevering all over the place to prevent any of this occuring. They don't like economic reality when it hurts their ability to pander to voting blocks.

Jeff

Totally agree with Jeff,

If things get much worse, I could see either of the big two going chapter 11 just to get out of financial obligations or have them lowered to more attainable rates.

Chapter 7 or 13 belly up? No way. Only if the invention of the human teleporter comes out tomorrow.