Actually you raise a good point:

If you buy a GM now and GM goes Chapter 11 there is a decent probability that you will get screwed and end up with no warranty. It will depend on the actions of the BK judge and debtor-in-possession.

On the other hand, if you get a post Chapter 11 GM with a warranty underwritten by a well capitalized independent company your warranty will be safe.

Click your heels together 3 times and say…”There’s no place like home, there’s no place like home”.

Regardless of that, there are independent third parties that the big three can use to underwrite their post bankruptcy warranties, reassuring post bankruptcy customers that their warranty will be safe.

Right now third party automotive warranties are a scam for sucker customers, but if a third party warranty was the manufacturer’s warranty then the size customer base would demand that it be a legitimate warranty.

The point is: Post Chapter 11 dealerships will be open and legitimate warranties will be available – if the products are good then customers will still buy. The GM funded survey is crap.

With bailouts and no Chapter 11 restructuring, on the other hand, the US auto industry will slowly crumble and disappear – American Leyland.

It smacks of intellectual dishonesty to build an editorial on a premise (no DIP financing = no survival = thus C11 is an impossible path) which intentionally leaves out one of the very real options simply because you don’t like the possibilities that option raises. If the feds get involved in a GM bailout, C11 and booting out the bosses has to be a fundamental part of the game plan. Democrats shouldn’t have any trouble doing this. Since when did a democrat ever get voted out of office for firing executives and forcing a massive company to restructure? In fact, why aren’t those accountability obsessed Republicans calling for Wagoner’s head? AIG, Fannie and Freddie all got new bosses and Citigroup is about to.

centi- means 1/100 (0.01), you must mean hecto- which means 100 (or were you being ironic?)

As for the analogy to Circuit City, there’s a distinction. CC was peddling service contracts issued by third parties. The D3 are the obligors on their original product warranties. Those extended service plans the dealers push so hard may be issued by D3 subsidiaries, but even then it seems they’d be caught up in a parent company’s bankruptcy.

So I’d like to hear from a bankruptcy attorney: what’s the law on warranty preservation, and if statutes don’t govern it, what do judges allow on behalf of warranty-holders?

I think you might be right as well. One big difference that is an impediment to that now though is the cat’s out of the bag. Everyone’s talking and looking at GM’s books and it is becoming apparent to most observers that Red Rick’s prognostication about GM running out of cash in 2009 is actually kind of optimistic by a whole calendar year. The speed of events at this point and the scrutiny GM is under might be too much for him to manipulate at this point. We can only hope.

Some experts note that while bankruptcy would be painful, it may be preferable to a government bailout that may only delay, at considerable cost, the wrenching but necessary steps G.M. needs to take to become a stronger, leaner company the shitcanning of Rick Wagoner and the entire miserable lot of GM upper management that turned the world’s once most-profitable company into a smoking crater.”

Fixed.

Also, I can get support for my Saturn and so can Saturn dealers, they just call Opel; which isn’t bankrupt and I think makes a slim piece of coin every year. Same goes for my Daweoo, I mean, Chevy Aveo. I can call Subaru or its pseudo-mothership Toyota and get “support” for my “Saab” these days as well. And if my truck breaks down, I just head down to Skeeter’s trailer-house (preferably while a big NASCAR race is on the TV) and pick through what’s on his front lawn for whatever parts I may need to effect my repairs.

I don’t what see what the problem here is with support. You don’t need GM North America to support GM products. We haven’t for a long time now, because GM North America gave up on that effort a long time before this C11 talk, and ironically that’s one of the reasons there’s all this C11 talk. I see a pattern here.

Oh, and great irony of ironies last night. I’m watching the Bail-Out-Now crew on MSNBC last night and they cut to commercial break. What is it? Toyota. Get the most reliable cars on the road, built in Texas and Ohio, at zero percent financing. Hmmm….

I’m sure you’re not alone. So where’s the survey on whether one would buy a car from a manufacturer so poorly run that it requires taxpayer handouts without end to survive?

Most of these two or three year old cars has another good three to five years.

They succeeded in drowning themselves. Used car values are silly low for decent vehicles. A used 3 series with the small motor is under 20K.

Every day I walk past my local Chrysler dealer (the GM side quietly left six months ago) and marvel at the non-moving inventory, save mixed used cars, which are probably carrying them at this point, and do move.

Where is the huge market for all these wonderfully demographically boutiqued vehicles ?

The people taking the survey probably assumed that bankruptcy means that GM would shut its doors and the warranties would be toast. Especially with the slanted questions that the biased survey likely had.

The truth is that a huge number of companies have survived and thrived with Chapter 11.

When people see GM dealers (at least Chevy and Cadillac) remain open after the Chapter 11 they will be greatly reassured.

With regard to warranties, the Bankruptcy court would likely allow GM and Ford to keep their warranty reserves to honor existing warranties, and future warranties could be done through independent third parties.

From Circuit City’s Chapter 11: “Circuit City Advantage Protection Plans(R) are product warranty and service plans sold by the company on behalf of unrelated third parties who are the primary obligors. As a result, these warranty and service plans are not subject to change as a result of the company’s Chapter 11 filing.”

As a matter of principle I will not buy a car from a big 3 manufacturer on the government teat, but, if the warranty can be assured, I just might buy the new Camaro from a Chapter 11 GM.

I’m guessing that if there’s anyway Obama can avoid letting 1,2 or all 3 of the Detroit3 go down on his watch, he will do whatever he can within his powers to try and ’save’ them. So if President-Elect Obama has Executive Order privileges, what if any of those privileges could he use to help get funds to the automakers? Anything? Anyone? Bueller?

If the anti-bailout groundswell reaches Congress next week, and if they do not agree with Pelosi, Reid et al, that fiacso is going to make for some interesting TV…

It’s nice to see this C11 idea gaining traction in the mainstream media, as it’s painfully clear that “saving” GM means it will either be dead or need another bailout in 5 years. The company needs to be cured of bad management, not just treated for its symptoms.

Giving 50 billion (Obama’s latest – wait for 75 billion from someone) to Detroit means that competition is suddenly out the window as a deciding factor in Capitalism. OK, we’ll just have to make a note of that, then. But it’s reshaping the playing field in a way that will have serious repercussions:

1. Detroit will get a quick fix, will burn through the stash and will change nothing.

2. The other brands will make it that much harder for US cars to get sold abroad, unless they receive similar benefits.

Capitalism seems to be a word that’s out of fashion these days.

C11 or C7, there’ll be a lot of cars to market. So who’d buy a car from a bankrupt manufacturer? Me and lots of other people–if the bargains are too good to pass up. How cheap would it be?

Assuming–
– Continued availability of parts (presumably, C11 would leave GM operating for a while at least, and anyway the number of GM cars on the road will ensure after-market suppliers step in);
– Third party warranty firms will write coverage if GM warranties are voided or aren’t trusted; then–
is it a fair guess that ordinary Impalas, G6’s, LaCrosse’s and such would be going for about 2/3 sticker price? Maybe less?