Originally Posted by Phil Hoskins
I think the assumptions being made about what would happen in bankruptcy are wrong. First, foreign automakers are having their own cash problems and are unlikely to go after taking over the big 3 unless in the process the "legacy" problems are resolved.

I made no assumption Phil. I didn't say that a foreign company would buy any of the "big 3". What I states is that once those "big 3" fail, 45% of cars sold in American will no longer be produced. When that happens, there will be a higher demand for cars and foreign companies like Toyota would buy the now offline factories previosly owned by Ford, GM and Chrysler and retool them to build their own cars.

I strongly believe that Ford can survive this downturn with a few minor tweaks. Out of the 3 they reacted the fastest to the change in car demand.

Chrysler is already on life support and if it doesn't get the deal done with GM it will be out of business soon anyway... GM has to be allowed to fail.

And let's not forget that the US car market is over saturated. Per Wikipedia, in 2006 there were 250,851,833 registered passenger vehicles in the United States and that figure is likely higher today.

The US consumer can no longer keep buying cars at the same rate it has in the past. Production in the US has to be cut between 30-40% anyway to find a good balance between supply and demand.

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