Bloggy Business Today

When a company files for bankruptcy, would there be anything to go after? General Motors, a company that almost found itself filing for bankruptcy itself were it not for the timely auto bailout that the U.S. government had released, has reportedly filed a lawsuit against one of its suppliers, Cadence.

Cadence, which makes door trim, instrument panels and air bag covers, filed for bankruptcy protection in August, but this month abandoned plans to sell itself and is now liquidating, according to court papers.

Now filing legal action is one thing but would it matter if the company has practically closed shop? What would you get from them if they have shut down operations already?

The Chevrolet Camaro car is their product line that is being threatened and without the parts on this line, a likely disruption is expected to ensue. If this were the case it seems like it is negating the initial aid that General Motors got and a big blow is likely to occur from their forecast and business outlook.

“Even one day’s disruption in supply of certain Component Parts could cause a shutdown of GM assembly operations, disrupting not only GM’s business, but the operations of countless suppliers, dealers, customers, and other stakeholders,” GM said in the complaint.

GM said that such a shut down could cost millions of dollars per plant per day and it would need to have a successor supplier in place by January 12 for the launch of the new Chevrolet Camaro.

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[tags]new_chevrolet_camaro, chevrolet_camaro, bankruptcy_protection, filing_for_bankruptcy, instrument_panels, assembly_operations, business_outlook, bailout, air_bag, component_parts, cadence, camaro, general_motors, stakeholders, gm, chevrolet[/tags]

In what was deemed as the last saving grace to save Detroit’s auto industry, the auto bailout is history as talks for dramatic salary increases to be in line with Japan’s auto industry had the United Auto Makers refuse the deal. So with that part of the auto bailout play layout unaccounted for, the Senate rejected the bailout plan, failing to acquire the 60 required votes to approve the financial aid to Chrysler and General Motors.

So with this development, the future of these two giant car manufacturers of Detroit are looking grimmer. They have declared that they could be weeks from closing shop, leaving Ford which did not request for financial assistance at this time but may soon follow their footsteps if business does not pick up.

In the end, the doom of the U.S. auto industry may be pointed towards the greedy and selfish desires of their labor and manpower resources, something that will surely be monumental. But they are not entirely to blame. They have to work to survive and the drastic cuts in wages seem to be too much for them as the cost of living for these people needs to be satisfied.

But don’t close the door just yet. We saw the same scenario before when the financial bailout was being made. Expect a new round of auto bailout talks since the U.S. is surely not going to allow their auto industry to just drop dead.

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[tags]financial_bailout, last_saving_grace, bailout_plan, manpower_resources, u_s_auto, auto_makers, drastic_cuts, auto_industry, united_auto, car_manufacturers, financial_assistance, general_motors, financial_aid, chrysler, salary[/tags]

It was announced that the U.S. government is in its final stages of perhaps providing a $15 billion proposal to save Detroit’s car industry and avoid the collapse of these three automakers. General Motors and Chrysler are the ones in dire need of financial assistance to avoid bankruptcy while Ford just has not yet pushed the panic button and just wants some assistance just in case business does not pick up.

As far as the financial assistance that is being given, it shall be taken out of the taxpayers’ money. But hold on. Isn’t that fund the same as what the laid off employees were being deducted off when they were connected with some of these companies? The big three have cut off thousands of workers and while that did not draw much attention it looks ironic that they will be the ones who technically rescue these automakers and allow the millionaires survive for another day.

Prioritizing the economy’s state and the businesses that evolve around it is understandable. But what has the government have in store for the laid off workers who are now facing problems as far as surviving in the financial part of their lives?

The scenario does indeed look weird. A lot of people are in need of help. But as of now, it seems that the millionaires are getting the aid over the not so fortunate ones. Are we sure the owners of these large auto companies are really in need of help or just don’t want to infuse money to their companies so that they can invest it somewhere else.

These are some things you should ponder on folks. Business is still a dirty game and the wealthy know how to play it wisely.

The bailout is designed to allow GM and Chrysler to avert threatened bankruptcy through March with short-term loans. Ford Motor Co is not requesting immediate help but would like a line of credit in case its finances worsen.

Lawmakers fear if automakers collapse, it would deepen the U.S. recession. But many say market forces, not a government saddled with a record deficit, should determine their fate.

There also is reluctance to provide another federal rescue in the wake of the voter backlash against Congress for its passage of a $700 billion bailout for Wall Street in October.

At the same time, many argue that if Congress provided relief for millionaires in the U.S. financial industry, it should also help blue-collar autoworkers facing unemployment.

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[tags]short_term_loans, ford_motor_co, auto_companies, ford_motor, car_industry, automakers, bailout, millionaires, financial_assistance, recession, general_motors, lawmakers, chrysler, taxpayers, bankruptcy[/tags]

The “Big Three” have laid out their needs and have declared that if they don’t get any financial help soon, they may just be closing shop. Is the U.S. government listening? Unless they have earplugs on, the closure of the big three: General Motors, Ford and Chevrolet, could be the worst economic development the U.S. has ever faced and from all indications, they would do well to heed their call.

The Detroit automakers on Tuesday urged Congress to authorize $34 billion in loans and credit lines, far more than the $25 billion they failed to secure in November when lawmakers demanded the companies offer plans showing they could be made “viable.”

The development came on the same day that GM, Chrysler and Ford Motor Co posted a drop in combined U.S. sales of nearly 40 percent for November and warned that the world’s largest vehicle market showed signs of tumbling further in 2009.

The government has been put in a fix following the worst economic crisis ever to hit the country since decades ago. The pressure is mounting and though some sources say that help is on the way, hopefully it will not be too late to bail out the big three from impending closure or worst, bankruptcy.

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[tags]detroit_automakers, impending_closure, ford_motor, economic_crisis, financial_help, general_motors, economic_development, chrysler, chevrolet, bankruptcy, ford, congress, loans[/tags]

Unlike the big three (General Motors, Chevrolet and Ford), Citigroup was given a financial bailout assistance worth $20 billion as the government lent a helping hand to save the stricken bank from billions of dollars that could have totally been catastrophic. Stocks reacted as well as Dow Jones industrial shot up 300 percent.

And so the proper selection of which companies to help out continues but there is still a lot of work to do as far as strengthening the financial system of the United States is concerned. There are more companies outside the big three automobile manufacturers out there drowning and if the lifesavers are not sent out to pick the proper companies that really need help, chances are this financial bailout strategy is entirely useless and futile.

Stocks may be up today but who knows what tomorrow would bring. We have seen this trend before. Stocks rise after any enticing development comes up. Would this trend continue or follow suit the previous spikes in the endangered trading and finance system of the United States of America.

“With these transactions, the U.S. government is taking the actions necessary to strengthen the financial system and protect U.S. taxpayers and the U.S. economy,” the three agencies said in a joint statement. “We will continue to use all of our resources to preserve the strength of our banking institutions, and promote the process of repair and recovery and to manage risks.”

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[tags]financial_bailout, dow_jones_industrial, automobile_manufacturers, banking_institutions, finance_system, dow_jones, lifesavers, citigroup, general_motors, billions_of_dollars, taxpayers, chevrolet, united_states_of_america, stocks, ford[/tags]