What would bankruptcy mean?
SYRACUSE -- Amidst all the turmoil in the auto industry, there are questions about what bankruptcy would mean for those who lease a car. The Big 3 stand at a crossroads, entering unchartered territory with the federal government now dictating terms to two of the country's iconic corporations, GM and Chrysler. "They must produce plans that would give the American people confidence in their long-term prospects for success," President Barack Obama said Monday.
From Washington to Detroit to cites and towns here in Central New York, there's concern, among those who own and those who lease a car. "Well, I think people are unwilling to buy," said Janet Bodner of Kiplinger's. "I mean there really is more saving going on now than there has been at least over probably the last ten years. The flip side and the irony of course is that there are bargains galore out there," she said.
Along Auto Row in Syracuse, car dealers are keeping a close eye on all of this. But if the Big 3 go belly-up, what then? And what does it mean for people locked into a lease? "I don't think they have anything to worry about," said Todd Caputo, owner of Sun Auto Warehouse and Sun Chevrolet. He's keeping a watchful eye on what's happening. "I think that if there ends up being any kind of bankruptcy at all, I think the government is going to end up backing the warranty on the cars," Caputo said.
So, if any of the Big 3 go bankrupt, what happens to those who lease? "So, what will happen is if there's a warranty issue on the car, you'd come to the dealer that you always would go to, they'll fix it and then the dealer's going to have to worry about getting the money from the government," Caputo said.
On the brink of financial ruin, the government is warning GM and Chrysler to go back to the drawing board and come up with a viable plane for the future or forget future bailouts.
