Posted on 11/13/2008 5:11:30 AM PST by King of Florida
DETROIT — Momentum is building in Washington for a rescue package for the auto industry to head off a possible bankruptcy filing by General Motors, which is rapidly running low on cash.
But not everyone agrees that a Chapter 11 filing by G.M. would be the disaster that many fear. Some experts note that while bankruptcy would be painful, it may be preferable to a government bailout that may only delay, at considerable cost, the wrenching but necessary steps G.M. needs to take to become a stronger, leaner company.
Although G.M.’s labor contracts would be at risk of termination in a bankruptcy, setting up a potential confrontation with its unions, the company says its pension obligations are largely financed for its 479,000 retirees and their spouses.
Shareholders have already lost much of the equity that would disappear in a bankruptcy case. Shares of G.M. rose 16 cents Wednesday, to $3.08, but they have fallen 90.5 percent over the last 12 months, amid sharply lower auto sales and fears about G.M.’s future.
And as companies in industries like airlines, steel and retailing have shown, bankruptcy can offer a fresh start with a more competitive cost structure to preserve a future for the workers who remain.
(Excerpt) Read more at nytimes.com ...
They need to go under and drag the union down with it.
Without bankruptcy, some UAW union guy is booking an extra 2 week vacation to Hawaii, purchasing a new ski-doo, reconsidering that vacation home, getting braces for the kids and putting an extra $200 down on the Lions.
As I just said on another thread.
How about developing cars that last longer than the average financing contract?
That is what attracts most to the “foreign” cars. As an insurance agent, you see a LOT older cars being insured that are Honda, Nissan and Toyota than you do Ford or Chevy.
Just a non-scientific observation.
I vote for bankrupcy; or for THEM finding theier own way out of the mess that THEY made for themselves.
Why the hell should my tax dollars go to pay for the ill-advised full-salaried, early retirement plan of some unionized bozo whom GM used to pay way too much money to tighten bumper bolts on Chevy Malibus?
Maybe they’re going to have to break some of the promises they made to their spoiled work-force.
Too bad, so sad. But I never benefited from their largesse with their unskilled workers and I see no reason why I should have to bear the burden of their failures.
And that goes for Ford and Chrysler too. $73 per hour for unskilled bolt tighteners... Sheesh.
They have to go Chapter 11, or their problems will just continue.
LET THEM GO BANKRUPT AND THE MARKET WILL DECIDE WHAT TO BUY, AND WHEN TO BUY IT.
Question for GM: Why so opposed to anyone getting a look at your books...?
Bailouts mean we've decided to be a socialist country. We're not talking about a slippery slope anymore. We're going off the cliff.
I think the deal is greased on both sides of the aisle.
for the Dems it’s the UAW, Nancy, Harry & Barry
for the Reps it’s Cerberus, Snow, and Quayle.
It has to go bankrupt or the labor contracts cannot be renegotiated.
Note to GM: Bail out that kind of behavior? On a cold day in Hades.
"Going bankrupt" may be what the US automakers need, however if the companies go out of business, that would be a real economic disaster. A bankruptcy will allow GM to reorganize, and renegotiate their agreements. If this is allowed, the #1 place where the remaining money that GM has MUST be allocated to pay off commitments to pensions and health benefits of workers. Say what you will, but the company agreed to those terms with the workers, who negotiated and later worked in good faith. It's wrong to just "steal" from those workers. At the same time, as a tax payer, we had damned well better not get saddled with the costs of those promises by a corrupt board at GM.
On the other hand, there's nothing wrong with the company having to renegotiate the terms of existing workers.
However, if GM were to shut its doors, that would be an economic disaster. Remember, we're not just talking about the production plants. We're talking about dealerships as well. And suppliers of parts, and their suppliers, all the way down the chain to raw materials. The reverberations of the failure of GM would be a real economic disaster.
Mark
Nonsense. Pensions should be adjusted for the realities of the market place.
Yea, this is not a special interest payoff.
This bail out would be for the unions and the workers with benefits most of us can’t imagine. What happens in a couple of months when they again can’t afford the union graft or the wages? A bailout several times a year? They should go bankrupt. The government money hasn’t helped AIG!
Have those workers given thought to how many of their wages and benefits could have been covered by the money the unions used to elect Obama. Call him, he may still have some of the $605 billion left to help with workers bills!
Let them go bankrupt. Let unions enjoy their President.
I never thought about it in terms of longevity, but you’re right. We buy Toytotas and then drive them with nothing more than routine maintenance for 15 years. Our 4Runner is almost 12 years old, looks like a new car, runs like a new car, rides like a new “truck” (that’s the one thing I never liked about the 4-Runner, the ride is stiff, but partly because of the tow package we have on the car.)
We’ve had the same luck with Hondas, and wonderful service from the Honda dealership (better than service we’ve had with any other make of car.)
Before 1984 we bought American made cars, but in 1984 we bought our first Toyota...and since then we’ve never gone back to American made.
GM needs a new business model. A bailout won’t provide that.
I have a 1991 Toyota p.u. that’s rusting. We have a 2000 GMC with 190,000 miles on it that looks new, runs like new and has retained it’s value. Not only that, but we contributed to an American company. I’m proud to own a Chevy.
Which is why this is all about bailing out the union.
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