If GM and/or Chrysler go under... What about replacement parts and dealerships

Marc

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Leader
#1
If GM and/or Chrysler go under, how do you think it will affect the availability of replacement parts and such? What will happen to existing dealerships?

Your opinions?
 
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T

Ted Schmitt

#2
I don´t think they will go under... GM is the biggest corporation in the world (last I checked).... if they go under, then the world crisis will get REALLY BAD !!
 

Marc

Fully vaccinated are you?
Leader
#3
Probably not, but in today's world I won't bet either way. This is just a hypothetical 'what if' question, mostly aimed at GMs US operations.
 

SteelMaiden

Super Moderator
Trusted Information Resource
#4
Overheard at a GM dealership when I went with DS to buy a car in December:

"We'll just become a used car dealership, that is where we make our money anyway, the markup is much higher on used vehicles."

Not really directly in answer to the original post, but interesting nonetheless.
 
C

Craig H.

#5
If GM and/or Chrysler go under, how do you think it will affect the availability of replacement parts and such? What will happen to existing dealerships?

Your opinions?
I don't know exactly why this is, but there are a lot of companies that produce reproduction GM parts, so I don't think it will be much of an issue (that said, when I was in the body shop business in the early '80s, you had to be careful with sheetmetal). For Chrysler, though, non-pentastar Chrysler parts can be hard to come by. I never really understood the reasons for this.
 
M

MIREGMGR

#6
The majority of GM parts and sub-assemblies are made by suppliers. In most cases, GM owns the tooling that they use, but the suppliers hold and maintain that tooling.

Of course, the tooling could be "clawed-back" by a bankruptcy court and then scrapped for its metal value. That would be legal but dumb, since the netted cash would be minimal. Or, a bankruptcy court could say to a given vendor, you're a member of the Unsecured Creditor Class, so you have to pay $X right now in lieu of a percentage of any future revenue you might generate with the tooling, to be divided among other members of the Unsecured Creditors pool. My guess is that this approach would be unlikely, because few of the suppliers could afford it and therefore no one would get any benefit.

Thus probably the tooling would remain with the present suppliers of the parts, who would be able to build parts to GM-purchase-order specs under their own name, or the name of some new GM-service-parts distributor.

Another possibility is that, even in the instance of a Chapter 7 or 11 bankruptcy, the court would immediately split-off GM Service Parts Operation into a separate business, provide it with sufficient funding, direct that it remain in business under the control of a court referee, and give that referee powers to take over existing vendor relationships (but not their payables), take over pieces of existing POs, and otherwise conduct business so as to maintain parts and service-training availability.
 

bobdoering

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#7
Another possibility is that, even in the instance of a Chapter 7 or 11 bankruptcy, the court would immediately split-off GM Service Parts Operation into a separate business, provide it with sufficient funding, direct that it remain in business under the control of a court referee, and give that referee powers to take over existing vendor relationships (but not their payables), take over pieces of existing POs, and otherwise conduct business so as to maintain parts and service-training availability.
Good thoughts! :agree1: With the notion that the Feds are going to assure GM and Chrysler warranties, either they will strong arm the suppliers to make spare parts (if they took a supplier bailout, that won't be much of a problem - see Mr. Wagoner) or not pay attention to the court as they pull the molds and dies, and find themselves asking for a dry well and wring their hands a lot. I could see either happening. Don't forget - there is always China. They will make anything.

After watching the Wagoner, I think more suppliers will just ponder bankruptcy themselves, further complicating the scenario.

Hey, do you thing we will be sending PPAPs to the Feds?
 

Coury Ferguson

Moderator here to help
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#10
My opinion would be that the parts would now become spares from the actual suppliers that made them. The dealerships, well they may have to find another type of vehicle to sell. Maybe the Automakers that survive.
 
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