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Originally posted by KrazyHorse
Because they know GM won't hang on, but will be able to blame Bush this way (Machiavellian)
Because they know GM won't hang on, but will be able to blame Bush this way (Machiavellian)
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The bailouts are actually very unpopular with the general population.I drank beer. I like beer. I still like beer. ... Do you like beer Senator?
- Justice Brett Kavanaugh -
Wow. I'm truly surprised by this.Originally posted by DanS
The problem with blaming Bush is that a Detroit bailout is likely to be very unpopular. I haven't seen recent polls, but vaguely recall a 70% against figure.
12-17-10 Mohamed Bouazizi NEVER FORGET
Stadtluft Macht Frei
Killing it is the new killing it
Ultima Ratio RegumComment
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Who knows how political winds will blow in the current circumstances, however.I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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It's just a drop in the bucket anyway considering all the bailing out that will be done before this is all over.I drank beer. I like beer. I still like beer. ... Do you like beer Senator?
- Justice Brett KavanaughComment
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there are a whole lot of costs in all this, but in principle -200-300k extra unemployed in a short period of time would hurt a lot, and than you would have to retrain them/wait for Japanese or Europeans to build new factories to pick up the slack etc to do something better... hard to calculate for all involved... killing of Rover and just one massive plant was comparatively easy, especially as it happened during a growth period here in UK so it was absorbed pretty well...Originally posted by KrazyHorse
bailout in principle can be good
If you can show that the transition costs of bankruptcy will be higher than the cost of a bailout and company will return to profitability, then yes (apart from moral hazard)
My feeling is the GM will never return to profitability in anything approaching its current form. Better to just let it die.
the main reason for incompetent car industry in US is the legal status of those car companies and the way they signed themselves to death long time ago when negotiating with the unions... (we can ignore management
,as typically US companies are not so poor... so I'd say that this is not the prime reason)
They need to free their hand there via some political means, to get competitive again, and I am sure they can be. There is a lot of potential value in the organization... cost does not have to be prohibitive either - take them over, rebuild, and sell them off at a later date... sure the existing employees will have to take new contracts on the table and shareholders are all but wiped out already (so take them out of their misery), but overall there is a lot to gain by restructuring, as other than the billions of debt sunk already (to be repaid by future products), there is a whole lot to gain for all the stakeholders (local communities, parts manufactures , dealers and the rest of the "ecosystem", government who will have to foot the bill for the retirees and who knows what else, even consumers with having more choice) in making the companies sound again.
Current form would have to change though - no bailout, but restructuring is needed here. No federal money until the "form" is changed. Again others did similar stuff already (commie French
), and it worked... no reason why it cannot work for the US, except for the "cultural" reason... ie stubborn unions and no restructuring, restructuring in politically assigned incompetent hands, or just pure kill (what you guys are after) as the better option is impossible to agree.
This might be what the politicians are waiting for too... they basically have the gun against unions heads... unions can play russian roulette if they want, so don't do a thing until they break, and than step in with a good plan (good plan... this is the tricky part, but definitely not impossible)...Socrates: "Good is That at which all things aim, If one knows what the good is, one will always do what is good." Brian: "Romanes eunt domus"
GW 2013: "and juistin bieber is gay with me and we have 10 kids we live in u.s.a in the white house with obama"Comment
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OFITG: You could do that through bankruptcy.
Many people have a misconception about what bankruptcy means for US companies. It offers a company a chance to restructure while being protected against the claims of those to whom it has obligations.
It doesn't necessarily mean that the company will stop doing business. Few of the big airliners who have been through bankruptcy have ceased doing business, for example. This is true even though those airliners have good competition from Southwest Airlines.
The bottom line is that bankruptcy facilitates restructuring. That's what the system does, day in and day out. It is reasonably good at it. So it makes sense to entrust GM to the bankruptcy process.Last edited by DanS; November 12, 2008, 14:12.I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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OK... but would it not bring in all sorts of triggers that would generate the collapse of various financial instruments and other contracts with third parties etc... just through legal requirements... until the company administrators take control... in other words for someone who bleeds 3bn per quarter any slowing down is assured death...Socrates: "Good is That at which all things aim, If one knows what the good is, one will always do what is good." Brian: "Romanes eunt domus"
GW 2013: "and juistin bieber is gay with me and we have 10 kids we live in u.s.a in the white house with obama"Comment
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GM is bleeding $7 billion per quarter. You must have missed the update.
The company could "prepackage" its bankruptcy -- i.e., plan the restructuring before actually filing for bankruptcy. The objections that you have mentioned so far don't hold water.I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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OK... if bankruptcy is required for restructuring than
but at least in my understanding typically it would make the bad situation even worse due to extra bureaucracy involved and further deterioration in companies operational execution... but if you cannot start a re-org without direct involvement of the courts than all the best
edit: and 7bn per quarter - missed it... but the figure is 'impressive'...Socrates: "Good is That at which all things aim, If one knows what the good is, one will always do what is good." Brian: "Romanes eunt domus"
GW 2013: "and juistin bieber is gay with me and we have 10 kids we live in u.s.a in the white house with obama"Comment
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No, GM could do a restructuring at this time with neither government help nor bankruptcy protection. The UAW could sit down this afternoon and sign an agreement to make GM competitive, if it so wished.I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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my assumption is that UAW will do the lemming trick - jump off the cliff... it is dead one way or another... but with government putting in the billions on the table saying here they are if... (and wait until) ...
so if they are at all sane - accept restructuring on government terms - get the loans to keep the operations running, and start off with the restructuring plan. (that is government restructuring for me)...
But if they don't accept - than under bankruptcy protection, and breakdown. If your law is so flexible that operations can get on as "usual" if you are under bankruptcy protection - great, but who will give bankrupt company the cash in case it runs out as it will... with the current amount of 'bleed' without gov intervention any administrator can only shut down and sell off... ie kill to stop the rot. At least this is how I see it.Socrates: "Good is That at which all things aim, If one knows what the good is, one will always do what is good." Brian: "Romanes eunt domus"
GW 2013: "and juistin bieber is gay with me and we have 10 kids we live in u.s.a in the white house with obama"Comment
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forgot to add what will happen though:
UAW/GM: We are to big to die
Gov: Yes you are, how much?
UAW/GM: umm 50bn loan for xyz
Gov: OK, let's pass this
until the next meeting... UAW survives, GM continues as is, Gov wastes taxpayer money...Socrates: "Good is That at which all things aim, If one knows what the good is, one will always do what is good." Brian: "Romanes eunt domus"
GW 2013: "and juistin bieber is gay with me and we have 10 kids we live in u.s.a in the white house with obama"Comment
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The sad thing is that the UAW views the employer/employee relationship as adversarial rather than as a partnership. It seems obvious that the fortunes of the UAW are tied closely with the fortunes of the companies/investors/management.
The UAW is from a bygone era.I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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it might be obvious for an outsider, but for a "marriage" partner of half a century or more... reality distortion field
(and not in a good sense like around Steve Jobs)
Socrates: "Good is That at which all things aim, If one knows what the good is, one will always do what is good." Brian: "Romanes eunt domus"
GW 2013: "and juistin bieber is gay with me and we have 10 kids we live in u.s.a in the white house with obama"Comment
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