Let GM go Bankrupt

@Finn dAbuzz,

Quote:

Bankruptcy doesn't allow the bankrupt to shaft their creditors. If you think this is the case then I assume you are in favor of eliminating all bankruptcy laws.

Obviously youve had no experience with bankruptcy in industry. Ive been a sub to several mining companies thatve gone Ch 11 and theyve had, by referee, been allowed to "shaft" creditors to the tune of 10c on the dollar.(AND THEN, youd have to stand in line while the available money is doled out).

Your pompous stements are a demo of the Lucy factor
"If you cant be right, be wrong at the top of your lungs"

3 Replies

@farmerman,

Well- creditors do shaft themselves by extending credit to companies which are not sound. They are too eager to take orders. If they don't know they are taking a chance then they are hardly fit and proper companies.

Bankruptcy laws are necessary for capitalism.

1 Reply

The GM Execs keep saying they don't want to do Chapter-11 because nobody will buy cars from a bankrupt company. But people already aren't buying their cars (in enough quantity). It doesn't seem like bailing them out would change that.

So they take the bailout money, pay their debts, then go out of business again sometime down the road. Or they take the bailout money, spread it around and use part of it to restructure and retool to make cars people will buy. But if that were the case, the least they could do would be to come to the table with a plan for how to fix the core problems. But it doesn't seem like they did that.

1 Reply

@rosborne979,

Quote:

The GM Execs keep saying they don't want to do Chapter-11 because nobody will buy cars from a bankrupt company. But people already aren't buying their cars (in enough quantity). It doesn't seem like bailing them out would change that.

that has never made sense to me.....I am just as likely to lower the value of a warrant from a company that says that at current course they will need to go bankrupt in a few months as I am to do so if the company is already bankrupt. Either way I have little reason to trust that the warranty will be honored.

In any case GM could solve the problem by setting up a trust now, that can't be touched by the court in Bankruptcy, which is to be accessed by the dealers for warranty work. After the filing the government could also guaranty the warranties. Either way there is a fix that does not require the remedy the automakers claim (they can't do bankruptcy), therefor the claim is clearly part of an effort to manipluate the outcome.

1 Reply

@hawkeye10,

I don't see the risk of backruptcy as being that people won't buy their cars, I see it as being a ripple effect down the line of creditors which would be like a cancer in the middle of an already shaky economy.

A bailout on the other hand doesn't buy you a solution, it only buys you time.

The best way for government to use its money is to induce "Market Pull" instead of "Industry Push".

For example, if government subsidized the cost of producing Wind Turbines, or BioAlgae Farms (to name just a few) and gave 50% of the production contracts to Ford/GM (with the other 50% going to other private firms to induce competition) with the stipulation that 80% of their productivity within 4 years should be turbines, then maybe creditors would lend Ford/GM money because they knew they would make the money back over time.

The award of the contracts after 4 years time could be given to the company (or companies) which produced the product with the most cost efficiency. This would force the Big 3 to be competitive, and if they weren't then there would already be a more competitive industry sitting beside them ready to take over and buffer the loss if they ultimately fail.

1 Reply

@rosborne979,

Quote:

For example, if government subsidized the cost of producing Wind Turbines, or BioAlgae Farms (to name just a few) and gave 50% of the production contracts to Ford/GM (with the other 50% going to other private firms to induce competition) with the stipulation that 80% of their productivity within 4 years should be turbines, then maybe creditors would lend Ford/GM money because they knew they would make the money back over time

Such is what THOMAS L. FRIEDMAN and Al Gore have been advocating. However, the extreme foolishness that is the American public sector creation of and support of the grain based ethanol industry does not inspire confidence. Before we did such a thing we would need to replace most of our representatives in Washington, would need to replace them with competent people.

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@hawkeye10,

But the vast bulk of competent people have a wake from their younger days of ladies waiting for them to run for office so that they can run to the press and spill the lurid details for $$$$$s. Maybe some accountants as well.

How do wind turbines and biofuel stack up with oil at $48? If they don't stack up at all how much money has been wasted on them.

What you are all doing is thrashing about tinkering with whatever idea jumps into your heads. With each tinker unrelated to any other factor and thus making complete sense. It's a psychological state involving thinking you understand the economic system when you haven't a clue.

Imagine a nursery where the kids elect the head teacher.

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@hawkeye10,

The little point that they are a car companies and are not set up to build wind turbines might enter into the subject would you think?

1 Reply

@BillRM,

Quote:

The little point that they are a car companies and are not set up to build wind turbines might enter into the subject would you think?

No, we pressed the auto companies into armament production during ww2, we can press them into wind turbine production now as a condition for their their being allowed to survive.

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Let the above discussion about wind turbines serve as an example of why Nationalization doesn't work. Paramount is keeping bureaucrats and other incompetence out of the general management of private business.

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@OCCOM BILL,

Quote:

Paramount is keeping bureaucrats and other incompetence out of the general management of private business.

Sorry, this just needed to be said twice.

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@OCCOM BILL,

Quote:

Let the above discussion about wind turbines serve as an example of why Nationalization doesn't work. Paramount is keeping bureaucrats and other incompetence out of the general management of private business.

right, because the private sector managers with the multi million dollar per year compensation packages have done such a bang-up job. You might have more luck with that argument if the private sector was not demanding that my kids and grandkids spend their entire life paying for private sector mistakes with their tax bill.

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@spendius,

Quote:

What you are all doing is thrashing about tinkering with whatever idea jumps into your heads. With each tinker unrelated to any other factor and thus making complete sense. It's a psychological state involving thinking you understand the economic system when you haven't a clue

I am not saying that we should make GM get into the alternative energy source business, I am saying that the American citizens are fully with-in their rights to do so if GM is to get special treatment that allows them to avoid the market determined death of the company.

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@hawkeye10,

The congress doesn't HAVE to pay them though hawkeye.

The government doesn't have any business in the general management of private business.

AND

Private business doesn't have any business asking for bailouts from the tax payers.

THEREFORE

No bailout. GM (and the other 2) either succeeds or fails.

2 Replies

@hawkeye10,

hawkeye10 wrote:

Quote:
Let the above discussion about wind turbines serve as an example of why Nationalization doesn't work. Paramount is keeping bureaucrats and other incompetence out of the general management of private business.

right, because the private sector managers with the multi million dollar per year compensation packages have done such a bang-up job. You might have more luck with that argument if the private sector was not demanding that my kids and grandkids spend their entire life paying for private sector mistakes with their tax bill.

That's really sloppy thinking. Bureaucratic incompetence has no relationship with current management’s competence level whatsoever. Next time you apply for a job and your prospective employer inquires about your qualifications; tell him you have none… then point out another moron and tell him you're not him. That should prove you’re qualified, right? Rolling Eyes

1 Reply

Did anyone hear anything about a new $75billion proposal from the House next week?

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@maporsche,

We are finally too smart to allow flawed markets to determine our fate, we can not and will not let poor economy management and decades of unjustified faith in the markets totally destroy our way of life. We have to subsidize segments of our economy right now, and at the cost of trillions. But God damn it, it is the citizens who are paying for this, we decide who lives and dies and under what conditions. If the citizens tell GM that they must make wind turbines if they want to live then GM damn well better say "thank you very much for this faith in us, we will do our very best to not let you down".

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@OCCOM BILL,

Quote:

That's really sloppy thinking. Bureaucratic incompetence has no relationship with current management’s competence level whatsoever. Next time you apply for a job and your prospective employer inquires about your qualifications; tell him you have none… then point out another moron and tell him you're not him. That should prove you’re qualified, right?

the answer would be " I can sure as **** do better than the guy you have right now"

1 Reply

@JPB,

No. What are they trying to do now?

1 Reply

@maporsche,

Quote:

The congress doesn't HAVE to pay them though hawkeye.

The government doesn't have any business in the general management of private business.

AND

Private business doesn't have any business asking for bailouts from the tax payers.

THEREFORE

No bailout. GM (and the other 2) either succeeds or fails.

so let a few 100,000 unemployed (perhaps a million or two ?) pound the pavement ?

i assume that bailing out the financial institutions is a different story - or should they also "swim or sink" ?
since most of the financial institutions also got themselves into the problems they are in , i don't see that they have any special rights , do they ?

if the argument is that we can't let the financial system go under because of the "financial turmoil" it would create . well , that's too bad but i don't think it would be "the end of the world" .
hbg

1 Reply

Let GM go Bankrupt

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