My perspective on the Auto Bailout has been an interesting one. I am employed by an Auto Supplier which employs approximately 500 people and has locations all over the country and does business with many of the large manufacturers. True, this means that my perspective is not of all the Auto Bailout process, but it is one that not many have access too.
The first indications of trouble started early last year when contacts at the big three were slowly dropping off the grid. It got so bad late last spring that there was virtually only one name left in the contact list. Pretty strange when you are talking about a major American manufacturer that does business all over the world. Things for us were still humming along and we were making money, though business was down from the year before.
Last fall of course was when the shit really hit the fan as we all were witness too.
The funny thing is, the owners and Executives of my company are all Republicans. They were all in a quandry. They hated the idea of government interfering in business, but hey, it was their business and they still wanted to rake in the cash. This meant that of course, "it is all the Union's fault." Nothing was said about the bailout funds though. I think there were plenty of fingers crossed behind closed doors.
In public though there was lots of talk on how we needed to cut expenses in order to survive (we were making a profit). One by one, they went through the list and cut. First it was the little things, special coffee, extra add-ons for cell phone service, shipping costs. Then they let go all of the extra people that were temporary employees or in areas where the auto manufacturing plants were set to close, about 15% reduction overall. Then the bad news, we had to take a salary cut and a benefit cut. We hunkered down and waited.
A funny thing happened. Business picked up when prices fell in the market and we managed to keep most of our people busy while still making a profit.
Then January 20 came and the muttering in corners and the conference room got louder as they contemplated bankruptcy of the GM and Chrysler. We heard nothing.
Then, information came along that a program was put in place to provide a 'bailout' of suppliers to make sure they could weather the coming storm. People got busy and submitted our name for the list. The help came in the form of insurance for our receivables backed by the government at a reasonable cost. A bit of the tension was released, but still, we needed to see what was going to happen with the bankruptcy.
The first dark day was of course 4/30 but on 5/1 the phones still worked up in Detroit and people answered but all payment stopped. We waited three weeks and then were asked to prepare a listing of what was owed us from Chrysler. (this was a request directly from Chrysler, not the court as we had to file with them too) We sent it off with little hope that we would hear back quickly or that we would get even half what was owed. But still, we only waited 3 weeks for these instructions, pretty quick if you have ever dealt with bankruptcy.
Then, only a day or two later we were sent back a listing of all that we were owed with the proposed 'cure' amount. It was basically 100%. Unheard of! We then received the cash the beginning of the next week. Within 30 days of the initial filing we were back to business as usual. Quite a feat, except now we were waiting for GM to file.
While all of this was going on with Chrysler, GM was not due to pay us until after the expected bankruptcy filing. Instead of waiting until the usual once a month date, they paid us early in order to get it in before the filing. We were kind of surprised to say the least.
We waited. Was this going to go as smoothly as Chrysler? Since they had paid us early, we were in a much better position with what was owed. Then, like clockwork, three weeks later, we were contacted and asked to provide a listing of everything that was owed. We sent it off and within 1 day we were given our 'cure' amount. Again, 100% of what was owed. We were told that it would be sent to us on our regular payment date virtually 30 days after the initial filing.
Now for anyone that has an opinion on the car manufacturers of this country, I would bet they would think that their efficiency is not one of their strongest points. I would also bet that anyone that has dealt with bankruptcy court has quite an opinion on their lack of efficiency. I believe we were as shocked as anyone would be when this situation started if we told them how it would go.
Now the Republicans in my office are scratching their heads, not sure why everything went so smooth but very happy that it did. They don't see the forest for the trees.
I see the Obama Adminstration fingerprints all over this. They obviously had a plan, and we all know that when they have a plan, they know how to execute. The campaign was a fine example of their ability to execute.
Today there is a glimmer of life in Detroit with the news that they may come out of bankruptcy in 5 weeks. If the Obama Administration has a plan for that, expect it to be executed with efficiency.