What if Ford and GM go bankrupt? What will happen to the economy?

It is time to do what is right, not what is profitable.

 

Which is what they should have done decades ago.

The economy will continue to deteriorate as it has been, no big deal everything considering.

 

GM, Ford fall sharply as outlook dims

A new report says U.S. auto sales will hit recession levels this year, threatening their survival.

By Alex Taylor III, senior editor
Last Updated: October 9, 2008: 11:40 AM ET

NEW YORK (Fortune) -- How bad is it going to get for automakers? Worse, much worse.

Investors made a shocking vote of no confidence in the future of U.S. automakers Thursday. GM (GM, Fortune 500) stock was down more than 14% to $5.92 a share, while Ford (F, Fortune 500) fell 7.5% to $2.46. That gave GM a market capitalization of $4.3 billion - chump change for this industrial behemoth - while Ford stood only slightly better at $6.6 billion.

The stock selloff effectively puts these companies on death watch and it is easy to see why. A new report by Global Insight, the economic forecasting and consulting firm based outside Boston, shows U.S. auto sales hitting recession levels this year - and then sinking lower in 2009.

"We won't get back to where we were in 2006 until 2013," said George Magliano, director of forecasting for North America. Global Insight is forecasting sales of 13.8 million units this year and only 13.4 million in 2009, compared with 16.1 million last year.

http://money.cnn.com/2008/10/09/new...th_watch.fortune/index.htm?source=yahoo_quote

 

Date DJIA Quotation

September 1929 381 "There is no cause to worry. The high tide of prosperity will continue." – Andrew W. Mellon, Secretary of the Treasury.
October 14, 1929 351 "Secretary Lamont and officials of the Commerce Department today denied rumors that a severe depression in business and industrial activity was impending, which had been based on a mistaken interpretation of a review of industrial and credit conditions issued earlier in the day by the Federal Reserve Board." – New York Times
December 5, 1929 251 "The Government's business is in sound condition." – Andrew W. Mellon, Secretary of the Treasury
December 28, 1929 238 "Maintenance of a general high level of business in the United States during December was reviewed today by Robert P. Lamont, Secretary of Commerce, as an indication that American industry had reached a point where a break in New York stock prices does not necessarily mean a national depression." – Associated Press dispatch.
January 13, 1930 250 "Reports to the Department of Commerce indicate that business is in a satisfactory condition, Secretary Lamont said today." – News item.
January 21, 1930 250 "Definite signs that business and industry have turned the corner from the temporary period of emergency that followed deflation of the speculative market were seen today by President Hoover. The President said the reports to the Cabinet showed the tide of employment had changed in the right direction." – News dispatch from Washington.
January 24, 1930 256 "Trade recovery now complete President told. Business survey conference reports industry has progressed by own power. No Stimulants Needed! Progress in all lines by the early spring forecast." – New York Herald Tribune.
March 8, 1930 275 "President Hoover predicted today that the worst effect of the crash upon unemployment will have been passed during the next sixty days." – Washington Dispatch.
May 1, 1930 275 "While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty of the future of a people of the resources, intelligence and character of the people of the United States – that is, prosperity." – President Hoover
June 29, 1930 219 "The worst is over without a doubt." – James J. Davis, Secretary of Labor.
August 29, 1930 238 "American labor may now look to the future with confidence." – James J. Davis, Secretary of Labor.
September 12, 1930 241 "We have hit bottom and are on the upswing." – James J. Davis, Secretary of Labor.
October 16, 1930 197 "Looking to the future I see in the further acceleration of science continuous jobs for our workers. Science will cure unemployment." – Charles M. Schwab.
October 20, 1930 193 "President Hoover today designated Robert W. Lamont, Secretary of Commerce, as chairman of the President's special committee on unemployment." – Washington dispatch.
October 21, 1930 186 "President Hoover has summoned Colonel Arthur Woods to help place 2,500,000 persons back to work this winter." – Washington Dispatch
November 1930 183 "I see no reason why 1931 should not be an extremely good year." – Alfred P. Sloan, Jr., General Motors Co.
January 20, 1931 166 "The country is not in good condition." – Calvin Coolidge.
June 9, 1931 133 "The depression has ended." – Dr. Julius Klein, Assistant Secretary of Commerce.
August 12, 1931 138 "Henry Ford has shut down his Detroit automobile factories almost completely. At least 75,000 men have been thrown out of work." – The Nation.

 

The US is self imploding.

Thank you Bush for a wonderful 8 years.

Bin Obama surely will fix things. You can
bet on it.

 

I've lived in metro Detroit my entire life, grandparents and father worked for GM. So they've put food on our table for generations.
From a purely objective point of view they have not been able to produce a car that can keep up with the Asians in regard to quality for decades. All GM and Ford are good at is producing trucks. It's a giant cluster fck of a company that needs restructuring.

However, many people that don't live in metro Detroit or even the mid-west perhaps don't understand the scale of a bankruptcy. I think the figure is for every 1 GM or Ford job lost = 5 surround jobs are lost.

So if they do go bankrupt Michigan will have double digit unemployment rates.

I guess pick your poison. It's going to get really bad here but i think it will get very bad everywhere. No growth, banks refuse to lend, decreasing jobs. I can't see any upside here.

We are in for some very tough times and who knows what is going to happen.

 

Gm and Ford could go to zero and the US economy would bee fine. American made is a joke anyway.

 

Criminals in DC will take over GM's pension liablity.

John

 

Wrong. Nice try though