GM President states that bankruptcy not an option for industry

[bdeutsch]

While I do not wish this to happen to any company, why should this not be an option for any of the Big 3?

Somehow I suspect if my industry hit the skids, nobody in the government would be particularly keen on keeping it as a viable business.

[Dan40]

I'm amazed how a downturn in the economy, an event long overdue that has taken place on an irregular basis throughout history, has caused our elected officials and appointed officials to go instantly insane. Somehow Paulson, et al forgot or decided to ignore sophomore lessons, and throw out the rule book of CONTRACTS! Resulting in the giveaway of hundreds and soon to be THOUSANDS OF BILLIONS of Dollars. [Which we do not have and NEVER will have]

WHY?

"To protect these companies from bankruptcy!" Said Paulson.

Stupid me,,,,,,I thought bankruptcy WAS protection.

Dan

[clayfoushee]

What he is saying is he does not believe GM (or any of the other 2) could successfully reorganize under Chapter 11 and would be forced into Chapter 7 (liquidation). In this financial climate, what investment banking firm would step up with funding, as is the case in a typical Chapter 11 reorganization?

Morever, sales would likely dry up because not many would want to buy a vehicle from a firm in bankruptcy (who would honor a 5-year warranty on a Ford, a Chrysler, or a GM product if the company ceased operations?).

Chapter 11 has worked in the past for a number of industries, but not on this scale, not in this trainwreck of a financial environnment, and it's never been tried in the auto industry. People might purchase a plane ticket on a Chapter 11 airline, but I suspect this industry is vastly different.

[Ron61]

Clay,

I was watching one of the Ford officials a couple of days ago trying to explain how they got into the mess they are in and he said exactly what you said. Bankruptcy would be the worst thing they could do as no one would want to buy a car from any company that was going through that for fear they may not survive. A plane ticked could be quite a bit different as many of the airlines used to honor each others tickets back when I was flying, but I don't know about that now.

Ron

[Jamo]

Naw Clay, you're full of sh!t.

It's all to gain the support from the UAW and their fellow travelers for the bailout since BK is the route to breaking the brain-stem sucking union contracts.

BK would indeed work. Ford would likely avoid it, Chrysler deserves it and GM might be cut up into more reasonably-sized operations. Even 7 might be beneficial by allowing competitors and other n'er-do-wells an opportunity to come in and buy some chunks.

As I and others have said previously, we don't need no stinkin British Leyland on these shores.

This "sky is falling" BS is getting old. A few years ago, the BKs and mergers in the airline industry raised fears of not having an American flag carrier. Nobody seemed to give a good golly damn about the steel workers when LTV and the others started falling away.

There are many rules and theories which apply to capitalism, but the most basic one is this: sh!t happens.

[Smokingcobra2]

Today i heard a layed off worker from on e of the big 3 automakers on Orielly. HE HAS been and will continue getting 80% of his pay for 5 years and this is the second time for him. SCREW them all! I don't want a ball out for this kind of mess. Ten years of not working and he gets 80%!!!! of 98.00 and hour plus medical. THERE NUTS!!! Let them go under. We can buy other cars where the union wont screw it all up.
joeg

[bdeutsch]

I would submit that, based on what I read regarding what brands they will try and save, Pontiac, Saturn, GMC and Saab are already dead if people are concerned about long term viability (earlier reference to Chapter 11 declaration).

Regardless, one way or the other, the U.S. Auto Industry is in for some very big changes in 2009.

[Jamo]

SmokinCobra

Yup...I pointed that out in an earlier thread. The current contracts have job protections up the kazoo...it costs them too much to lay them off, which is why these three can't get down to fighting weight when they need to. The UAW isn't going to give that kind of crap up...BK IS the only route.

[clayfoushee]

Originally Posted by Jamo

Naw Clay, you're full of sh!t.

It's all to gain the support from the UAW and their fellow travelers for the bailout since BK is the route to breaking the brain-stem sucking union contracts.

BK would indeed work. Ford would likely avoid it, Chrysler deserves it and GM might be cut up into more reasonably-sized operations. Even 7 might be beneficial by allowing competitors and other n'er-do-wells an opportunity to come in and buy some chunks.

As I and others have said previously, we don't need no stinkin British Leyland on these shores.

This "sky is falling" BS is getting old. A few years ago, the BKs and mergers in the airline industry raised fears of not having an American flag carrier. Nobody seemed to give a good golly damn about the steel workers when LTV and the others started falling away.

There are many rules and theories which apply to capitalism, but the most basic one is this: sh!t happens.

Like I said above, "what he is saying is. . . ." (not what I'm saying)

I have serious doubts that an 11 BK would work at GM, but I've been around long enough to know anything is possible, and no one can accurately predict the consequences of anything--not even you. The real question is how many other companies would fall in the aftermath, and are we willing to take the pain. It's a bit like "playing chicken."

[Jamo]

Hi buddy!

I know...jus missed playing war with BB guns with ya.

You're right...who the heck knows what it will mean to an already bad economy. But I am damn sure (I've assplained it to my own personal satisfaction) that unless/until the current union contracts are broken and rewritten in a more reasonable fashion, no amount of bailouts will keep their heads above water.

[clayfoushee]

Ah yes, those sparring matches were quite fun!

[Ron61]

If, and I am saying If, the big 3 did take BK and get rid of the union contracts which I believe are the root cause of many businesses failing, could they not reorganize and leave the union out completely. If that could be done and get rid of the unions, then it might work. But remember, any time they are shut down it is going to affect many other companies also, and at this time with the economy like it is, can the country afford it. I am not in favor of bailing them out by just handing them money to cover their union contracts. But I do want to see them survive. Wasn't it Boeing that their machinists just went on strike a short time ago and I thought than what a time to just close down and let hem stand in an unemployment line. But no big company that wants to survive can realistically do that. However the workers are also to blame as the union can't call a strike, or at least couldn't when I was working without a vote of the membership and if the membership votes to not strike then they should not be able to. As stated above, Sh*t happens, but in most of these cases with a little intelligence and thought I think much of it could have been avoided.

This just came upon my news module and it would seem the union may be willing to back off some if you can believe anything they report. The union is more concerned about losing dues than the companies, but anything could be a help.

http://news.yahoo.com/s/ap/20081204/...KaJKnVXU.s0NUE

Ron

[Dan40]

Originally Posted by Ron61

If, and I am saying If, the big 3 did take BK and get rid of the union contracts which I believe are the root cause of many businesses failing, could they not reorganize and leave the union out completely. If that could be done and get rid of the unions, then it might work. But remember, any time they are shut down it is going to affect many other companies also, and at this time with the economy like it is, can the country afford it. I am not in favor of bailing them out by just handing them money to cover their union contracts. But I do want to see them survive. Wasn't it Boeing that their machinists just went on strike a short time ago and I thought than what a time to just close down and let hem stand in an unemployment line. But no big company that wants to survive can realistically do that. However the workers are also to blame as the union can't call a strike, or at least couldn't when I was working without a vote of the membership and if the membership votes to not strike then they should not be able to. As stated above, Sh*t happens, but in most of these cases with a little intelligence and thought I think much of it could have been avoided.

This just came upon my news module and it would seem the union may be willing to back off some if you can believe anything they report. The union is more concerned about losing dues than the companies, but anything could be a help.

http://news.yahoo.com/s/ap/20081204/...KaJKnVXU.s0NUE

Ron

Can the country afford a bankruptcy by the "Big 3?" No one on the planet knows the answer to that question. But everyone with a brain knows that we cannot afford, do not have, and never will have:

The $700,000,000,000.00 already promised to the financial industry. Or the $85,000,000,000.00 already given to AIG.[and they want more]. Big 3 asked $25,000,000,000.00 but their total didn't add up-REJECTED! So they return, $34,000,000,000.00 is the new number needed in less than 2 weeks time! But $125,000,000,000.00 is not enough to save the Big 3, experts say.
And $2,000,000,000,000.00 is the number some "experts" say the bailouts will EXCEED!

How long does a number have to be before the insanity becomes obvious?
The real bankruptcy proceeding will soon be, The United States of America vs. itself. The trial will last less than a second..

We can cut down every tree, bush, and shrub on the globe, but the "Law of the Jungle," will remain. The fittest survive, the others MUST succumb.

Dan

[Scott S]

Originally Posted by Dan40

We can cut down every tree, bush, and shrub on the globe,

Dan

I am in where do you want me to start?

I buy a new pickup or two every year, always Fords.

If a bailout happens my next purchases will be Tundras, why should I pay twice for the same truck?

Scott S

Oregon Logger

[427 S/O]

Quote Scott: why should I pay twice for the same truck!.

I was thinking the same thing during the B-3 grilling. If 09 is as projected, they won't pay back anything and may very well be no more, a business....imo.