Which auto companies received bailout money

They learned the lesson the hard way of we need to improve of balance sheet," said Mark Wakefield, a managing director and global co-leader of the automotive and industrial practice at AlixPartners, which led GM's bankruptcy restructuring.

Much of the optimism is a result of the Great Recession. During that time, the Detroit automakers were forced to shed billions in capital expenditures and structural costs. From then on, executives such as GM CEO and Chairman Mary Barra made it their mission to fortify balance sheets in preparation for the next downturn, despite not knowing when or how it would occur.

Those efforts resulted in tens of billions of dollars in available cash, less leverage and more flexible union contracts for vehicle production, which helps save money when plants are idled, as they are now. Each of the automakers has said they have enough cash available to make it into at least the fourth-quarter without revenue if necessary.

It doesn't appear it will. Michigan's governor announced Thursday the state's auto manufacturers can resume operations this week. All three Detroit automakers plan to begin restarting North American vehicle production next Monday — albeit with strict safety rules to protect employees from an outbreak. Some supporting operations are expected to reopen this week. Depending on the length of the pandemic and impact on U. Executives for each of the Detroit automakers backed such a program ahead of a bipartisan group of lawmakers pushing U.

House leaders to include the American auto industry in the next round of stimulus spending. To be sure, Wall Street and industry analysts are closely watching the automakers' rising debt loads as well as the risk that consumers fall behind on payments as unemployment rates skyrocketed to Used car pricing and off-lease fleets could also face an influx of write-downs. GM was ahead of the curve in preparing for a downturn. GM's efforts are now paying off.

The company also withdrew guidance for its financial performance because of unpredictable circumstances. Still, the costs associated with renegotiating financial deals are not trivial, said professor Kara Bruce at the University of Toledo College of Law, who specializes in bankruptcy and commercial law.

We plan to emerge from this crisis as a stronger company. Meanwhile, Ford has declined to discuss financial details when asked during two of its recent meetings hosted by prominent banks. One of the nation's top bankruptcy lawyers, whose firm prohibited him from being named because it works with the auto industry, said Ford's "substantial losses are cause for concern. Still, candor isn't always an option, said John McElroy, longtime industry observer and host of "Autoline After Hours.

Suppliers would start to worry. Employees would be demoralized. It's a real tightrope to tell the truth without setting everybody's hair on fire. Now, just recently, we've seen Ford go back to the banks and ask them for another year before they have to pay that money back.

So, clearly Ford believes the situation is worse now than what it thought three months ago. More: Ford dividend cut a sign of more coronavirus troubles ahead. More: Bill Ford calms 26, workers, thanks them for stamina as disease ravages industry.

The article goes on to note that the Honda Odyssey is built in Lincoln, Ala. Meantime, the largest exporter of U. Here is another little understood notion: The preservation of GM and Chrysler has helped sustain Detroit and nearby parts of Canada as a highly significant center of innovation. As a source of patents and other innovations, that region now greatly exceeds many other parts of the country, even in areas of high tech, MacDuffie points out.

And while not long ago there was black humor about the last person in Detroit turning out the lights, a quiet but dramatic reversal has been underway. It has the headquarters of some kind from almost every big automaker and big supplier all over the world.

Some Silicon Valley operations are partnering with the Detroit manufacturers and others, and setting up high-tech ventures there as self-driving cars and electric cars advance. According to MacDuffie, yes.

The future for automakers is anything but a straight line. There are unprecedented new competitive challenges to the Big Three from upstarts like Tesla and high-tech companies dedicated to becoming self-driving car leaders.

There are also structural and lifestyle challenges. Car share programs and disruptors, like Uber and Lyft, are allowing more city dwellers and others to avoid car ownership altogether, or to have one-car households versus two cars.

Working at home, mass transit use, walking and biking seemed to be taking up most of the difference. According to a recent report by McKinsey, automakers will see more disruption in the next 10 years than in the last 50 years, driven by four factors: autonomous cars, connectivity, electrification and ridesharing.

Who would have predicted, for instance, that Ford would announce in April that it would stop making most of its car models to concentrate solely on SUVs, including so-called crossovers, and also pickup trucks. It is scrapping almost all of its sedans — the Fiesta, Focus, Fusion and Taurus. Only the Mustang will survive. That brings back the question of whether the bailout recipients are better prepared for the future now.

MacDuffie believes that some of the steps forward are impressive. With some 38, U. What's more, the program prevented GM and Chrysler from going out of business — an event most economists and automotive analysts said would have caused the entire industry to collapse and thrown the Midwest into a deep depression.

At the time, some critics argued GM and Chrysler should be allowed to fail and that government should not be interfering with the natural course of the market. Treasury Secretary Jack Lew said on Dec. The automotive industry recovered faster than most industries after the Great Recession.