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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Aggie who wrote (114598)	12/5/2008 4:55:00 AM
From: energyplay	Read Replies (2) \| Respond to of 206347

Hi Aggie - The auto guys and Congress are at the same time weird, disgusting, and frightening. I am not happy about giving money to these guys, with the possible exception of Ford, which made a profit this spring. Unfortunately what they are saying is probably true, and these are pretty much the only people we have to run this. (The Ford guy came from Boeing about a year ago) It's the same "Too big to be allowed to fail" game. The Foreign companies are getting help from their governments. If we look back about seven years ago, Nissan had to be bailed out by Renault, and it took a lot of hard work by Carlos Goshn to fix Nissan. Some of the Korean firms had a forced merger. The only companies that have done well over time are Porsche, BMW, Honda and Toyota. Everybody else has had government help multiple times. Also, a lot of their plants in the South are non-union. Many of the AWFFN have 80% of their supply chain with non- US factories, and the parts from the US often have multiple sources. There are some key US suppliers, 4 wheel drive transmission parts from the US are sold all over the world. So some of the overseas automakers would be hit by any major US problems. >>>"I just don't buy all the MoTown shuffle about Parts Suppliers and the Industry Backbone falling like dominoes and Our American Way Of Life collapsing. " <<< I feel this maybe closer to true than we would like. If this was 2005 or 1998 or 1996, a BK of one of the Big 3 would not take down large parts of the supplier base. There are supplier problems that hit production lines all the time, the whole industry is very lean (no safety stock), AND interconnected. Sort of like the banking industry with high leverage and many interrelated deals. The supplier base is much weaker today. Take out a couple of suppliers, and several production lines will shut down in days. If those production line shut downs last more than a week or so, other suppliers will go, shutting down more production lines, including overseas production by both US and foreign companies. Their shutdown will hit the rest of the world wide supplier base, and so on... Multiple bankruptcies would not only take out the US supplier base, but much of the European and Asia suppliers as well, and then hit their car companies. That would make it tough to sell the foreigners any Boeing airplanes or iPods or wheat. >>Looking on the bright side, at least these guys don't pay themselves like Wall Street does. ;-)