Chrysler says it will not be able to come out of a bankruptcy. Their suppliers would also end up closing their doors, many of whom also supply some things to Ford and GM (like steel, glass, polymers, paints, etc.
Delphi, is a GM parts supplier that GM spun it off on it's own in 1999. They filed for bankruptcy in 2005 and have said that if GM files for bankruptcy they will not survive.
There is a chance it would whittle down to the Big 2 if Chrysler goes under, but from all the analysis, the parts suppliers going under will be the end of the American Auto Industry altogether.
This blog talks about the major differences in spending between Toyota/Nissan/Honda and GM and why the burden of health care is one of the big issues for GM.
http://chinamatters.blogspot.com/200...al-health.html
In the United States, GM paid $4.6 billion in 2006 in health care costs for 350,000 retirees. A lot of those retirees were employees who were downsized in a series of restructurings.
In an effort to whittle away at this number, GM changed its policies so white collar retirees have lost their lifetime GM health insurance and will be pushed into Medicare upon reaching 65, saving GM $1.5 billion. Health care for union retirees will be pushed into a UAW-administered trust—a Voluntary Employee Benefits Association or VEBA—into which GM will pour $33 billion.
Even with these changes, GM has a hefty, multi-billion dollar yearly bill in retiree health care costs it has to work through.
If GM doesn’t go bankrupt first.
The story’s different for Toyota in its home base in Japan.
In Japan, Toyota pays health care for its retirees for two years after they leave the company. That’s less than 3,000 workers per year. The health care costs are so small they don’t show up on Toyota’s balance sheet.
Then the Japanese National Health Insurance—the government-operated facility that covers the retiree and non-worker end of Japan’s universal insurance system--picks up the tab.
Japan is an expensive place to have a factory. When bonuses are factored in, Toyota and GM workers both make yearly incomes in the $60,000 range.
Even with massive exports of Japan-built cars, the Japanese operations account for about 1/3 of global profits while posting 50% of worldwide sales.
In the first quarter of FY 2006, Toyota’s home operations brought in about US$1 billion of its total profits of $3.23 billion.
That’s roughly what GM was paying per quarter on retirees’ health care.
ETA: I spent my morning at a Saturn dealership and on Wednesday or Thursday, I will be the proud owner of a ruby red 1009 Saturn Vue! I have done all that I can to help
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