Let GM go Bankrupt

Forums: Politics, Economy, Economic Crisis, Gm, Auto Industry
Email this Topic • Print this Page

General Motors is in such dire financial straights that it needs to line up a federal aid packaged before president-elect Barack Obama takes office in January, the automaker's chief executive said Monday.

"This is an issue that needs to be addressed urgently," Wagoner told Automotive News, adding that now is the time to "overshoot, not undershoot" the level of assistance.

GM is willing to offer the government preferred stock, speed the introduction of fuel-efficient vehicles and set limits on executive compensation in exchange for financial aid, Wagoner said.

But Wagoner did not think it would be "a very smart move" for him to resign.

"It's not clear to me what purpose would be served" Wagoner said. "I think our job is to make sure we have the best management team to run GM."

On Friday the biggest US automaker warned it would run out of cash in the first half of next year and appealed to the US government for help to save it from collapse.

http://www.breitbart.com/article.php?id=081111001615.g5irg0ui&show_article=1

Another case of a poorly managed company now seeking a handout. Let them go bankrupt, get re-organized, bring in new management, renegotiate with the unions and build better cars!

AIG's handout is now double. Who is next? Starbucks?

I can not agree with Obama on this one.

Topic Stats
Top Replies
Link to this Topic

Type: Discussion • Score: 34 • Views: 73,052 • Replies: 1,168

@Woiyo9,

I definitely think they should seek Chapter 11. Of course, that means dumping their retirement benefits burden on the government, but from a corporate point of view that makes sense. NPR did a report this morning saying that they want to avoid chapter 11 because they think consumer confidence in their company will crash.

2 Replies

@engineer,

because they THINK confidence in them will crash? A little late to worry about that wouldn't you say? Laughing

0 Replies

@Woiyo9,

I'm not sure what to do about these big companies going out of business either.

I don't believe that the government, as a general principle, should be involved in bailing out companies simply for the purpose of keeping them alive. That would undermine the value of capitalism by reducing the incentive for companies to be efficient and productive.

On the other hand, I do believe that the government is responsible for maintaining a viable structural base for the economy, and when the failure of large institutions threaten the stability of that base the government should react.

It's a tough balance to achieve. I'm not sure what the proper response should be.

0 Replies

@engineer,

engineer wrote:

I definitely think they should seek Chapter 11. Of course, that means dumping their retirement benefits burden on the government, but from a corporate point of view that makes sense. NPR did a report this morning saying that they want to avoid chapter 11 because they think consumer confidence in their company will crash.

I agree. Protect the retirement and savings investments of the workers.... and then let the company die if it must. Maybe they should have thought about this 30 years ago and started retooling their plants to make gas efficient vehicles.

No one bailed out the dinosaurs when their time was up.

3 Replies

@Bi-Polar Bear,

The biggest concern for me is what is purported to be an additional 2.5 million unemployed workers if the big three tank. GM is only 1/3 of the big three but the reason to bail out the 'industry' is jobs. Not just the jobs of those who work directly for the automakers but the jobs of the support suppliers as well.

I don't know the answer either but it's a big flippin' mess.

2 Replies

@JPB,

those people will lose their jobs in any case it sounds like. It sucks but throwing good money after bad will only worsen the situation.

You don't shut the barn door when the horse has already escaped. I realize that sounds simplistic but there are times when the simplistic answer is the obvious one.

If the government is going to subsidize these guys then they should attach the strings that they IMMEDIATELY stop production on SUVS and bring gas efficient and hybrid vehicles on line within 1 year and not hear any bullshit about how they can't do it because they can if they're forced to stop cock blocking it.

They should also dole out the money on a monthly basis to cover bare bones operating necessities only and not just give them a check. Obviously they don't know how to handle their money. Put 'em on an allowance.

0 Replies

@Woiyo9,

OK, I'll bite. How is this Obama's fault?

Bush's administration put the current bailout package in place, GM is trying to get the aid before Obama takes office, yet Obama is the villain because....?

2 Replies

@DrewDad,

because woiyo hates him and is bitter about his election. That was a rhetorical question wasn't it?

1 Reply

@Bi-Polar Bear,

More along the lines of, "I wonder what kind of bullshit he can pull out of thin air to sustain his desperately partisan identity."

0 Replies

@DrewDad,

GM's financial mess is not Obama's fault and I can not understand what makes you think that was implied?

Obama is suggesting the bailout. That does not make him a villain.

You need to grow up.

1 Reply

@Woiyo9,

Where, exactly, did it say this is Obama's idea?

0 Replies

@JPB,

Chapt 11 might save jobs. Chapt 11 will force the removal of management. Chapt 11 will force them to re-organize and consolidate.

They may even become efficient.

A bailout only protects the failed management team who will blame the workers.

2 Replies

@Woiyo9,

Quote:

Chapt 11 might save jobs. Chapt 11 will force the removal of management. Chapt 11 will force them to re-organize and consolidate.

They may even become efficient.

A bailout only protects the failed management team who will blame the workers.

It worries me when you start to sound reasonable.

1 Reply

It is why I am for one union, one company. The emergence of the industry wide union killed of the smaller companies resulting in an oligarchy. When the big auto companies go so does the industry viz. the steel industry.

0 Replies

@Woiyo9,

I'm not sure why you think bankruptcy will remove management. Courts often approve retention bonuses for management in a company that declares bankruptcy.

1 Reply

@rosborne979,

rosborne979 wrote:

It worries me when you start to sound reasonable.

It's actually amazing that post election, a lot of us are starting to sound reasonable again (with a couple of glaring exceptions).

0 Replies

@parados,

So you would support a govt bailout? On what conditions?

1 Reply

Yes.

There is only one reason Democrats are arguing against such a result:

UNIONS

The most reliable, best buys for the money cars in America are manufactured in the South by foreign companies.

Why?

The South is not in the thrall of unions.

3 Replies

@Woiyo9,

It's possible that I might be for bailout, given serious conditions, but I'm edging against it, more for bankruptcy. On the other hand, I'm no economic guru. I'll have to read more on the subject.

1 Reply

Let GM go Bankrupt

Related Topics

Quick Links

My Account

able2know