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Ford, which has about $29 billion in cash, has the least liquidity risk and should be able to manage for about two years, but may have to sell Volvo. (http://www.msnbc.msn.com/id/25514775/)

http://www.cleanmpg.com/photos/data/500/gm_ford_chrysler_copy.jpgAP - July 3, 2008

If someone writes "Why Detroit Slept" - it will be an interesting read - they had to know gas guzzlers were unsustainable -- Ed.

Poll is multiple-choice.

New York - Bleak picture for Detroit’s automakers Thursday, suggesting General Motors Corp. might need to raise $10 billion, Ford Motor Co. could be forced to sell Volvo and Chrysler LLC may have few if any options by late next year.

JPMorgan auto and credit analysts wrote in a client note that the automakers, shouldered with the triple burden of declining sales, soaring fuel prices and stiff competition from overseas, are facing liquidity issues — but they have options.

General Motors may burn through $18 billion in cash by the end of 2009, and management will likely not tolerate less than $15 billion on the books, they said… http://www.msnbc.msn.com/id/25514775/

My three selections:
"GM avoids bankrupcy" - based on their larger selection of small efficient cars available in other markets. By 2015, they can bring over more Opel/Vauxhall models, and leverage their Daewoo engineering and manufacturing to bring the Beat/Trax/Groove to market.
"Ford declares bankrupcy" - Ford is smaller than GM, so even if they have more cash in hand now, they don't have the same sales volume to replenish that cash. Locally, in the US, Ford dealers are still trying to sell trucks, and that 20 year old sales philosophy will sink them if it doesn't change. Every Ford dealer I pass has nothing but trucks out front. If I didn't know better, I'd think they had no cars for sale.
"Chrysler is liquidated" - Without some sort of merger or liquidation, I don't see how their current product line can carry them though to profitability. They can't get the sales numbers high enough to finance an overhaul of their products. Also, other than the PT Cruiser (an all-Chrysler design), all their current passenger cars are restyled Japanese or German sedans.

I voted that both GM and Ford will still be around in 2015 but Chrysler will be liquidated. At least that seemed to be how the article was leaning. My thinking is that GM and Ford both still have valuable overseas businesses that if necessary could be sold to raise cash to keep going. Ford already started doing this when they sold Jaguar. Chrysler, on the other hand, doesn't have much presence outside N. America.

Chrysler and their, "Ooh, it's a hemi," mentality has exhibited the most myopic management of the three. I don't see how Chrysler can survive.

Overseas business will keep GM and Ford afloat long enough for them to get some fuel efficient cars on their lots here in North America.

Harry

I voted Chrysler is a goner. Cannot imagine how they will survive...

This may be a good time for all three to implement lean manufacturing methods like the Toyota system or the HON Co. system, if they haven't already. It may also be a good time for them to get concessions from the unions. Whatever they do, they will need to move decisively and effectively. And one thing that I haven't seen mentioned is that if Americans are driving less miles to conserve fuel, then cars will last much longer causing annual sales volumes to decline over some period of years.

A novel approach for Detroit would be for all three to declare BK and then bargain as a single unit with both the unions and the Feds. Of course, there would be some public outcry and a lot of finger pointing but is would be far better than closing shop. They, all three of them, simply have to tune up their manufacturing processes, top to bottom. The real problem is that the market is shifting far faster than Detroit can follow. Big companies-- I know because I worked in several big companies-- have a terrible time changing direction with any speed.

No matter what people think of Detroit, it wouldn't be to anyone's benefit or to this nation's benefit, for any of them to go close shop.

Faithful and True.

Their order of long term sustainability right now is:
1) GM
2) Ford
3) Chrysler

GM actually has some R&D going, and a decent small, efficient car selection. If they ever get the volt out, and if they can just ramp up production of smaller cars and lower production of mammoths (kill Hummer), they might do OK.

Ford is in a mediocre to bad spot. They do have a few suitable options for drivers looking for efficiency, but they have also long depended on their high truck and fleet vehicle sales. Their lineup is still truck, SUV, and fleet heavy. This is not as good as GM's lineup in the long term.

Chrysler is in a horrible position. Notice how of the Big Three, they spend the least amount of time touting the efficiency of their vehicles. That's because the vast majority of their vehicles are FSPs. The desperate 2.99 gas guarantee was implemented because of this, but it hasn't been very successful. They have a hybrid coming, but it's on their huge SUV with a 5.7L V8 HEMI, so it's FE is still horrid. They went with being a muscle car company, so they're pretty screwed. They'll file for BK in the near future, and they may not be around all that long.

Maybe oil companies will bail them out with some loans?

I voted Chrysler is a goner. Cannot imagine how they will survive...

I agree. I see Chrysler shrinking down to a "niche" manufacturer as opposed to a mainstream automaker. Contractors will always need heavy-duty trucks no matter how expensive gasoline becomes. But most folk will likely buy right-sized vehicles as gasoline continues to spiral upward.

Ford's prospects are slightly better but not a whole lot better. They've had a good hybrid propulsion system and have basically done nothing with it.

I think GM has the best chance of long-term solvency. They're making a variety of hybrids and have started scaling back on guzzlers.

both GM and Ford make nice profits overseas - the trick will be how to dump the North American divisions on the taxpayer (pensions, healthcare) or some dumb sovrieign wealth fund while keeping the overseas groups.

The foreigners aren't biting - since Bear Stearns