GM Bankrupt Again (Saturbray)

www.brayincandy.com ^ | 8/18/12 | bray

[bray]

“I have testimony weightier than that of John. For the very WORK that the Father has given me to finish and which I am doing, testifies that the Father has sent me. John 5:36

My source inside the White House is warning that the collapse of GM is imminent it is just a matter of if they can hold out until after the election. The bankruptcy of Obama Motors with the entire reason for the Premier’s re-election resting on its success has the entire DNC on triple high alert. Never mind they have no economic clue outside the usual liberal extortion, they are seeing some reports worse than they were during the final months of the Bush years and applying lipstick with a spatula. They are claiming it is the shining star of the Obama recovery while internal reports are showing it bleeding like a Christian at an Islamic conversion celebration.

What could possibly go right when you combine the Gummit with the Auto Workers Union to run the largest corporation in the world? You have central planners making economic decisions by party affiliation while the unions are attempting to replace the cash out of their pension funds they have just raided to get Obama and his fellow cons elected. Now you have non-existent sales due to the anger the consumer has at being robbed to fund another Ponzi scheme while being insulted again and again by this corrupt syndicate.

Who didn’t see this coming from the beginning when the unions have been destroying these companies for decades with their suffocating wage and benefit programs while producing an inferior product. Now you can’t give the cars away as they are nothing more than a commie lib vision of the car he would love to drive but nobody else wants. They are dreaming of little clown cars that tip over when you put a sack of groceries in them while sipping gas like it was a vintage wine. If they would allow the oil companies to drill without the EPA strangulations we would have cheap gas to drive bigger cars which bring the most profit margin and happiest customer. This can’t happen under a communist dictatorship because they don’t want happy people who can think and act for themselves let alone make profits, they are all about controlling your life and you working for the state.

There is no way Gummotors can succeed. This was a formula for failure from the beginning and now we have to watch a once great company collapse under its own bloated fat. We have an ownership which has no profit motive running a company whose only reason for existence is employing people and funding the union pension plans. It has a labor cost that is the highest on the planet with benefits that far exceed the value of the product they produce which only can lead to one destination, bankruptcy. The sooner this happens, the better for this Obamanomic disaster for the company, its workers and the few investors it has left. The only ones it is not good for is the taxpayers and Obama but we knew that when it happened so may as well bite the bullet now rather than later.

This is the reason communism and nationalization does’t work in building cars or any other enterprise including Healthcare, Medicare and Social Insecurity. The gummit has no profit motive which is the simplest way to motivate people and maintain costs. When you take that out of the equation you have to replace it with bribes and graft which leads to corruption and waste making inferior products and subsidies which is what we are seeing today. For the short sighted Pol they have a Works Project they can point to that is creating jobs even though it is creating more waste and abuse. This is why it doesn’t work for Chevy and why it doesn’t work for Medicare, you have to have people motivated by self governing profit to make the company efficient and healthy.

The best thing that can happen for all of these programs is for them to collapse under their own weight. Just like GM there will be short term suffering and long term gain. People will be forced to make the necessary sacrifices that will have to be made until a new and market based program can be developed. In GM’s case there needs to be a complete bankruptcy and either a buyout from another company such as Ford or Toyota, or it goes the way of American Motors. Ideally a new investor buys it that is union free. The unions have been sucking these companies dry for so many decades they are no longer viable due to those lavish benefits.

Now there are going to be some tough decisions to be made and first and foremost is the ending of the communist union bosses. When we eliminate the unions from the cost of building a car they will eliminate thousands of dollars of expense making their cars more competitive in the world market and making these cars more affordable to the average American. The worker will have the same amount in his paycheck however he can save for a 401K like most Americans and manage his retirement himself. It will make the production floor more competitive and efficient leading to more pay and more profit. You have to reengage the worker into the company rather than the union us against them mentality.

The sooner GM goes bankrupt the sooner we can see real changes in our auto industry and in our economy. We are simply propping up a failed company with subsidies both above and below the table to help the Commie Organizer continue his destruction of our economy. If GM were to file for real bankruptcy cancelling all of the union contracts then people would be interested in investing in that company and a new and vibrant future would be worth pursuing for some auto investors.

Until that day the risks are too big and the rewards are too small. The taxpayer is going to take a hit but we knew that when the economic maroon made the loan just as when they forced loans on Fannie Mae, that were simply bribe money and never coming back. So in the long run the best thing we can do for the taxpayers is get rid of the union and replace them with capitalists who will reorganize this company to return it to the greatness it once enjoyed, unfortunately there is only one path for that to happen and they are on that path so close the doors and begin rebuilding General Motors and America.

Pray for America

[joelt]

I’ll wager Hyundai could make a pretty good pick-up truck.

[FredZarguna]

This article is ridiculous. GM still has serious problems, and their European Division is an albatross, but they aren't going to go belly up anytime soon. In a decade their US operations will be either vestigial or nonexistent. But bankruptcy within months? No.

I would take issue with the claim that this is an issuer friendly environment. Comparatively, I can't agree with that assessment.

[FredZarguna]

I think you are overlooking the fact that GMAC received a LOT of TARP money; GMAC went to that well at least three times that we're aware of. We will never actually know how much GMAC received -- it is a very cleverly hidden part of GM's bailout. We do know that their terms were more favorable than just about anybody else's. So I doubt they have short term debt they can't cover; although they might, if they've been hiding the extent of their exposure, which, clearly through the end of 2009 is exactly what they were doing.

Even so, I think this is baloney.

[think4yrsf]

Did a quick Google search and found this recent article in Forbes:

http://www.forbes.com/sites/louiswoodhill/2012/08/15/general-motors-is-headed-for-bankruptcy-again/

[Attention Surplus Disorder]

I read that article. (from your link)

That article makes a subjective opinion about the market penetration and market dominance (or lack thereof) of GM, which we all at some level think of as a powerhouse brand name. I believe the article is fairly well argued; but I also think it is important to distinguish between “bankrupt” as a subjective writer might term a “sales downturn resulting from poor engineering or styling choices” versus “bankrupt” as an accounting/legal status.

I don’t really know the answer here, I am just pointing out that my prior posts on this thread related to the accounting/legal meaning of BK. I’m not sure GM could even go BK (acctg/legal) at this point; the government would lose so much money bailing it out (again) that IMO the US Gov is absolutely committed, 0bama or not, to keeping the company going. It very well may be that the Govt loses less money keeping GM in biz, even if they operate at a massive loss, rather than paying unemployment for the workers (and the workers in support industries, eg; steel, plastics, rubber)

I really don’t know. Perhaps the whole thing is just waiting for the next genius to come along to figure out how they and their pals can strip a few more billions out of the carcass. Then we’ll be informed of the “new plan for GM”.

[Slyfox]

I don’t know anything about GM’s financial situation, but I do know that when the gov took over, they hired in new recruits at $15.00 an hour with no benefits.

[bert]

The only solution is to sell off foreign divisions and shut down the money devouring American operations.

The American divisions could be offered for sale piecemeal but if there are no buyers to assume the debt they must be shuttered.

[ROCKLOBSTER]

I get irritated when people use words like gummit or goobermint

I agree.

Everybody knows it's "gubmint".

[bray]

Thanks guys, glad you liked it. For those who are English majors, my condolences for being born w/o a sense of humor.

Pray for America

[nc28205]

>>> , I’d point out that “GM” also includes GMAC, their financing arm.

No, GMAC is separate from GM. It is now known as Ally Financial. GM has a captive finance arm known as GM Financial. In 2Q12, auto sales accounted for about 37B in sales and GM Financial was just 487MM. Even so, auto finance companies have been performing fairly well lately because used car values have been high, which limits loss severity even if the loan goes bad.