Posted on 11/19/2008 7:21:14 PM PST by mathwhizz
"I'm very much attracted to the prepackaged bankruptcy idea," said Sen. Christopher Dodd, D-Conn., who held auto bailout hearings Tuesday as chairman of the Senate banking committee. He was referring to a method of seeking Chapter 11 protection whereby a company would negotiate plans with creditors before filing for bankruptcy, thus speeding up the process.
"I believe their best option would be some type of Chapter 11 bankruptcy, where they can renegotiate — get rid of the management," the banking committee's ranking Republican, Richard Shelby of Alabama, said Wednesday on CBS' "Early Show.
(Excerpt) Read more at google.com ...
But it is what has to happen for GM, Ford, and Chrysler to survive. They have to go bankrupt and throw the UAW under the bus. Unless they break the back of the unions suffocating them and develop a cost structure competitive to toyota and honda, they will cease to exist unless nationalized by Obama and the communists as some sort of welfare job program.
Note, no mention of union concessions.
Who is going to “get rid of management” in a chapter 11. It is management that goes into chapter 11, it is management that negotiates it, and oversees it. Dick Fuld is still CEO of Lehman.
Oh, yeah, Lehaman. That worked out great. Let’s do another, only 10 times as big! Now is great timing because we are already in horrible financial shape. Let’s kick the economy all the way into the gutter and stomp on it until its unconscious!
That’s creative destruction baby! Yee-ha!
Huh??? GM to go bankrupt and then we bail them out??? How does that help drive down union costs, pension costs, supplier costs?
Stop it! This is silly!
Enough of this. They won’t survive; no way, no how. Pieces of the companies may be purchased just like the banking operations of WAMU were bought, but the companies themselves are done.
Would you buy a Chevy once GM has declared bankruptcy? Chevrolet and the other GM plates have been bleeding share for too long. A buyer may come in to purchase the production capacity, but that is about it.
GM, Ford, and Chrysler are dead. It is time to bury the carcasses.
Please just let them die so new, more responsible companies can come in and grow. This is no different than the airlines. They should have died too.
Bad. Companies. Must. Die.
I saw Romney on tonight saying the companies need to declare bankruptcy and reorganize. Then I saw a clip of our friend “Barney” saying we need to bail them all out...
it was on B O’Reilly, then Bill let Barney have it big time.
One thing Bill O. is good at is giving it to Barney Frank.
I fear rats bearing gifts. The rat idea of a managed bankruptcy is a UAW bailout with rats gaining control of the US auto industry. Say hello to the new rat CEOs, Barney and Chris, guided by their UAW masters.
You’ll hear the MSM pronouncing how the gov’t loans saved Chrysler under Iococca. For those who remember, the gov’t held warrants at $9+ for lots of Chrysler stock. When Iococca went to pay off the debt early, part of the deal was that the gov’t give back the warrants. I recall Chuck U Schumer not being so warm toward that deal, because the gov’t could have made tons of money by exercising warrants when Chrysler stock was above $20/share. The warrants would have ruined the run up. But the gov’t gave in.
The situation is still the same - car companies basically blackmailing the gov’t by threatening to put millions on unemployment conpensation, which even with a bailout now, that scenario is still in the future - ie. money down the drain. Iococca did the same with England when he ran Ford there, way back when. His ‘executive ability’ was way overrated.
...and Barney’s good at TAKING it...hehehe...!!!
Alla youa factory are berong to us! We buy wif Warmalt dorrar!
Next, we get youa house!
“Huh??? GM to go bankrupt and then we bail them out??? How does that help drive down union costs, pension costs, supplier costs?”
This could prove the best way to go.
A bailout withOUT bankruptcy would be business as usual for the companies AND the unions, continuing right down the road to ruin.
Bankruptcy by itself might result in credit problems for the automakers, because even after restructuring, they might not be able to raise sufficient cash (through wary financial institutions) with which to continue in business.
However, if, after bankruptcy, the government would be willing to indemnify lenders to the automakers, they could then restructure (with renogiated union contracts) AND be able to find the necessary cash from banks who wouldn’t fear of losing their loan money....
I detest Dodd (from my own state), but perhaps he’s actually right on this....
- John
I am less worried about the unemployment insurance than I am about the costs that might fall on the PBGC (pension benefit guarantee corp, a federal entity that doesn’t need deep pockets because it just reaches into ours)
Do you have any estimate of the liabilities that the pension plans of GM and Ford have? It is hard to imagine that the liabilities are higher than the $25 billion that the companies are seeking. I am against any bailout, but especially one that is way more than the companies can ever hope to pay back in order to fund a pension plan and hourly wages for a work force that is among the least efficient in America.
No worry, that will be rolled into Social Security like our 401k's :-)
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