GM Spirals the Drain (Part 2)

[Impaler[WrG]]

Their is more auto-producing capacity then is currently supportable, all the manufactures have slashed prices. If a large portion of that capacity is removed then the remaining producers are no longer under as much pressure to keep their prices down. But of-course the further reduction in demand for cars will play a big role in all this.

[One_more_turn]

I doubt any private companies would dare to take over the 3 in their current form.

[Dinner]

It's very clear that the GOP is engaging in unfair union busting for one reason and one reason only. Politics. Unions support Democrats because Republicans give them no choice. Republicans only care about the rich. Republicans are trying to attack one of the only organizations which help the common man live better because they think if they destroy the unions then they undermine the Democratic funding base.

Republicans are not just willing to permanently cripple America for temporary political gain but they're giddy about it. That's how little they care about our country and how much they love power. It's disgusting.



The GOP isn't even remotely interested in reforming the car companies and instead only care about union busting. The union has made concrete concessions to help the automakers (the jobs bank being the most prominent) and yet the GOP refuses to have all sides (bondholders, management, and labor) make concessions to reform the industry. This is just about union busting and nothing else because if it was about reform then they'd be looking at all parties instead of just making labor responsible for everything. The GOP's internal memos have even said as much.

[Naked Gents Rut]

Republicans only care about the rich.

The Democrats are the ones who want to bail out the private-jet flying corporate fat cats that run the Big Three.

[Dinner]

The private jets are gone but you are right that management needs to make more concessions for this to work. It can't just be labor alone. An end to the corporate dividend is needed so that the money can be used to rebuild the emergency fund which hedge funds raided and drained. Management pay needs to be strictly capped to show the pain is being shared by everyone and bondholders need to take a haircut. 50%+ of the debt needs to just disappear. Bondholders must agree because otherwise they get nothing.

Then the company can emerge with its debt load slashed, it's labor & management costs reduced, and more cash on hand. After that the government just needs to solve the credit crisis and the company needs to build good cars.

[Naked Gents Rut]

Then the company can emerge with its debt load slashed, it's labor & management costs reduced, and more cash on hand.

All this is best achieved via Chapter 11.

[Dinner]

Nope. Chapter 11 means either liquidation (after they it fails) or if it secedes then a slow death via starvation of capital a la British Leyland. This can do the good stuff of bankruptcy without risking the bad stuff. It's simply the best option. It worked with Renault and Volvo and it can work here.

[Naked Gents Rut]

Any company that can't survive Chapter 11 doesn't deserve to live. It certainly doesn't deserve $125 billion of taxpayer money. No sense in throwing money down a rat hole.

[Dinner]

Stop lying. No one has seriously mentioned that $125 billion number. That's just a number made up by anti-union, anti-car makers partisans. They completely pulled it out of their asses.

[Naked Gents Rut]

The industry may need $75 billion to $125 billion to avoid bankruptcy and the companies may well return asking for more money later if they get the $34 billion they want now, said Mark Zandi, chief economist of Moody’s Economy.com.

http://www.welt.de/english-news/article2831163/GM-Chrysler-merger-talks-could-restart-again.html

[Asher]

Originally posted by Oerdin
It's very clear that the GOP is engaging in unfair union busting

The UAW had this "job bank" and other ridiculous "perks" for how many years, and busting the union is unfair?

[DinoDoc]

Re Asher: I actually agree with you. It seems like it is very fair union busting.

Re Oerdin: Air America still exists?

[KrazyHorse]

Originally posted by Naked Gents Rut


You should support the destruction of GM and Chrysler then, as Honda's American factories and factory workers are much more efficient than Detroit's. Letting the Japs take over the remains of the Detroit automakers will be better for American national security.

Also, isn't it better to expropriate foreigners than it is to expropriate your own citizens?

[Dinner]

Originally posted by Naked Gents Rut


http://www.welt.de/english-news/arti...art-again.html

What a load of crap. First of all Ford isn't asking for a bailout so including it into "the industry numbers" and then claiming it's numbers into a bailout is blatantly wrong. Next GM and Chrysler's debts will be written down because the bondholders have no other choice so claiming the entire sum will need to be repaid is complete hackish crap. Lastly, even the last two payments into the pension and retiree healthcare trusts will be in stock now instead of cash so once again they're just making **** up.

That's just hack drivel designed to invent a completely unrealistic giant number to shock people. What a load of horse pucky.

[Asher]

What a load of horse pucky.

Self-awareness