#OT# more on GM "rescue"

It's actually the 2010 model Camero, although I don't know when it's scheduled to be on the market. Pre-production work is scheduled to start in a few weeks.

This is one of those deals whereby the OEM (GM) actually owns the tooling and sometimes the machines. But those contracts and the financing can be so convoluted that most of us could never figure out how the deals would be settled in court. It looks like everybody is trying to squeeze everybody else, although it's likely that GM's financial troubles are the proximate cause of the whole mess. Either they bled Cadence dry, or something about Cadence's own financing collapsed when GM got into deep trouble, because Cadence had a couple of new plants planned as late as early summer.

-- Ed Huntress

"Holding hostage" code for "We haven't been paying our bills and they won't let us have our parts or tooling until we do."

Now doubt, not sure about Delaware but Bankruptcy Judge may be able to void the agreement. If they give GM the parts and tooling without paying up to date Cadence gets to go to the back of the GM pay me line. That line valued at about a penny on the dollar as an unsecured debtor.

Tom

"Ed Huntress" wrote in news:4959bf7d$0$14306$ snipped-for-privacy@cv.net:

Yea, you have to buy the GM (or other big 3) tooling at your own expense a year or more in advance, then put together a huge paper trail/red tape/b*s* book and other documentation. Then you have to pay for proving out the tooling/systems/machines/etc. Then maybe a few months to a year after production starts, they send in some "specalists" to audit your documentation and use any technicality or anything else they can to try to get out of paying for anything they possibly can. Then you wait another 45-90 days to get actually paid. So you wind up giving them a loan for about 2 years by the time it's all said and done, and basically you pay them interest (because of what they disallow) for loaning them the money. And by the time you are finally paid (if you are), they are back at the table asking for a 5-10% price reduction on the parts. Great way to treat your suppliers. You'll see more suppliers in this situation in the coming months I'm afraid.....

FWIW

I have handled bankruptcy and receivership files for tier 1 and tier 2 auto suppliers since the mid 1970's and with only two exceptions they were GM suppliers. In my personal experience GM is one of the most egregious companies I have come across. They pay very slowly, they sometimes don't pay at all (over perceived issues)and if you improve your own in-house process and end up with a cost savings on a GM part they take 1/2 of the savings as a deduction from the purchase price going fwd. (They don't negotiate...they just take it). However, if you are a hard nosed SOB and handle them appropriately, you can make good money.....for a period of time anyway.

IMHO (just my personal thoughts)

The economy would suffer a very major shock if GM were to file, but I think that is the only way the North American Auto sector can revive itself. You can't teach an old dog new tricks and the powers at the big three just don't get it yet. For heaven's sake...look at the model that GM is going to court with Cadence over...a modern day muscle car????

America has the strength and resiliency to survive the turmoil in the short term but could have a problem supporting the arrogance and incompetence in the long term.

By the way, when Cadence filed, they were owed $28,477,179 by GM and $27,049,424 by Chrysler, and Cadence held GM owned tooling at three of it's plants. Maybe the trustee just wants GM to pay their bill???? Cadence was hopelessly insolvent, a two year old start-up from assets acquired from another insolvent "Venture" and run by a group with an apparent track record of failures. Can't really blame this one on GM that receivable is less than 30 days sales.

Keith