You bet their business model is screwed up. What's worse, they all know it. So why the HECK don't they declare Chapter 11 and reorganize? That is literally the only course of action that will save the companies. I can see the union not wanting it. But management?? They'd rather let Congress nationalize their companies?? The only reason I can see the union and the managements colluding against their companies' best interests is because they don't dare let anyone get a look at the books.
Hey, I completely agree with you. They should go “pre-packaged Chapter 11” before they’re out of cash and have NO room to negotiate anything that comes down out of the court.
The reason why the management doesn’t want it: Let us assume for a moment that you or I were the special master appointed by a court to clean up any one of the Big Three. ie, we’re some management consultant/MBA/CPA with the power of the court behind us - and we can make unilateral decisions on behalf of the creditors as long as our decisions improve the ability of the creditors to recover their money.
Can you think of any scenario where you or I don’t slash management’s ranks, strip them of their comp packages, perhaps sack the entire exec staff and bring in a breakup specialist to break the company up into components for sale?
Neither can they.