Posted on 11/22/2008 5:58:05 AM PST by Leisler
The moment of truth in the nation's automotive bailout debate might have come this week. As the CEOs of GM, Ford and Chrysler begged Congress for federal aid, a Detroit radio talk-show host asked whether Michigan, as well as the car companies, should get assistance. The state is being hit by an economic hurricane, he said, just as New Orleans was hit by a natural hurricane. Huh? Will the victimology myth never end? Hurricane Katrina was an act of God. The car crisis is an act of man. For the difference, consult the Bible. Any version will do. Yesterday, congressional leaders gave the car companies until Dec. 2 to come up with viable business plans and renew their request for aid. Meanwhile, it's worth examining the myths that are shaping this debate. One is GM's assertion that "bankruptcy is not an option." In truth, GM already has conceded that it's bankrupt -- by publicly stating it's nearly out of cash and needs emergency assistance. The company hasn't made a formal bankruptcy filing, which is no small matter. But it has declared bankruptcy everywhere else. Chrysler, at this week's Senate committee hearing, did the same. A second myth is that management changes in Detroit would be pointless. GM CEO Rick Wagoner said he wouldn't resign to secure federal aid for his company. This was like Louis XIV saying, "L'État c'est moi."
(Excerpt) Read more at online.wsj.com ...
Why wasn’t the banks made to put forth a ‘viable plan’?
That link doesn’t work. What’s wrong with the milk industry? I know milk has gone up outrageously (I assume due to high cost of corn from bidding with ethanol manufacturers) and cheese too.
Oh, it’s satire.
Hook him / her up! ;)
There's only one Iowahawk.
Why should they! Check out this link:http://info.detnews.com:80/video/index.cfm?id=1189
Chapter 9 is for government entities which go bankrupt. If a city, county, or state went bankrupt they would file under this chapter.
Why not just do an INVOLUNTARY chapter 11 on the big three?
I can partially agree, but buying something you use once, like an airline flight or a hambuger is different than a capital investment like a vehicle. The consumer has to live with the product for 5 years typically, and we all know that after sale service is just as important as the product itself- what good is a 30k car if it doesn’t run and you can’t get it repaired ?
You know, if I were a direct stockholder, the comments by the CEOs indicate that they unwilling and/or unable to take the steps necessary to fix the systemic issues that are driving their companies into the ground. And the sheer arrogance/blindness of not stepping aside to allow someone in who might be willing to make the tough decisions leaves me exasperated. I would pull my stock.
I’d ask ONE question of the Big 3 CEOs. If all it took was money, then why isn’t any other car company in the world or any well funded equity fund willing to buy you?????
No car maker is going to buy GM, Ford or Chrysler becasue they’re huge money pits now. Also, no investment firm in their right mind woudl buy any of the big 3 now. Cerberus Capital Management got a super sweet deal from Daimler Benz and that’s gone south too.
Go bankrupt, re-organize and tell the unions to beat it. If they don’t want to work the assembly lines at a reasonable wage, there’s a lot of people out of work willing to take their place. The cost of training will be much cheaper than continuing to pay super high wages.
I am willing to wager there’s plenty of DIP financing waiting after the big 3 go bankrupt and renegotiate these ridiculous contracts.
Wow. The answer would fill a book. Several books, actually, and have.
Don't you remember being taught about the GM sit-ins at GM plants as the UAW got it's start? How nasty GM would send in strike breakers with baseball bats to take back the factories and staff them with other out of work men willing to work for lower wages?
The 1930's was when the UAW began it's existance, and it's stranglehold on the auto companies.
The milk industry has been getting bailed out for years. Too much production!
I love this argument. Do people think that because the big 3 go under that you will no longer be able to get parts for your car or get it repaired? Come on, there are thousands of repair shops and after market parts manufacturers. If the US auto makers go under those independent service garages and parts makers will boom and it could be one of the hot new areas where growth will explode.
They are toxic management, labor farms.
The machines, factories are inert. There are what they are. Kind of like guns. It isn't the gun it is the person, or people holding it.
The other manufactures have their own hands full and no one wants to take on a big pity fest, that in the main, are fat, slow, expensive losers, that will only burn up your money and talent.
By the way, I think the bailout is in the bag. Done. They'll get it. Rinoplicans( rye-nop-le-clins) will fold.
Made some of the best lookin cars ever made 30-39
When GM was poorly run, they would talk market share. Well guess what, that doesn't fly anymore. So, they can not shelp that B.S. Now they talk quality. Yep, only they don't make money.
It's like any loser bureaucracy, punk kid, junkie, boozer. Always excuses, for get about me lieing in the past. Tomorrow I'll be different...just...just...give me the money now.
Kind of like the Democrat and Republican party in a way. Forget about me lieing in the past, I'm different now. I/we have learned our lessons.
The govt. could guarantee the warranty for cars sold during Chapter 11 and for some time thereafter. Costs nothing unless Chapter 11 turns into Chapter 7.
Lets face the truth. The cost of doing business in America has become the downfall of many good companies. The smart ones have moved operations offshore, much to the detriment of workers who have lost those once good paying jobs.
Cutting corporate taxes and payroll taxes would be a great start at profitability. Also workers comp and insurance costs have become almost insurmountable, but still mandatory to keep any business going.
Unfortunately for our economy, 100- $10 an hour workers will spread less money through the economy than 5- $20 an hour workers. Yet our economy has shifted to a service economy and most of the so called job creation is selling convenience and Chicom junk. We can ill afford to lose even a thousand good paying jobs. Yet some are saying if one auto mfr goes bankrupt a million jobs could be lost. I have no idea how true those predictions could be. I think some support companies could shift production to other products. Some just flat out won’t survive. A business plan has to be ever changing to meet the times, and change with the future. There has been a lack of future planning for all sides, private and government. How can any business look beyond the next election cycle to plan for ever changing taxes, investment in retooling, and keeping up with employee health demands and benefits.
Looks like either way things happen, we get shot in one foot or the other. I still think cutting taxes and regulations on corporations would help considerably. People whine about corporate greed. But I think the government greed has surpassed the corporations. And government incompetence has caused the problem, thanks to liberal Democrats.
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