Bush considering orderly auto bankruptcy

[winnar111]

Originally posted by: Thump553
I stick by my original assessment-GWB is weaseling out of taking any action, even if his inaction will make things far worse for the US and the next Administration. Shame on him.

Sounds like Clinton and the 2000 recession that he and the Democrats denied even existed.

 

[MovingTarget]

Originally posted by: winnar111
Sounds good. Kindly dump all the health care expenses they have.

Yeah, lets really stick it to them retirees who worked 30+ years for benefits they negotiated! That'll teach em to join a union! :roll:

 

[Fern]

Originally posted by: Thump553

Originally posted by: dullard
-snip-

A couple of problems with your solution. Loaning enough money to cover everything but the warranties would probably run hundreds of billions, maybe even into the trillion range. Think that will pass Congress when the Senate shot down a $25 billion temporary bailout package?

That seem too high, particularly given their current debt (if the post above is correct).

Your third point is also very problematic. The existing warranties are valid contracts between the previous customers and the car companies-any court action to recast those agreements would have to pass constitutional muster (not at all certain) and require new legislation. I don't see the GOP supporting legislation to walk willy nilly over contract rights, nor do I see GWB drafting and Congress adopting a rewrite of the bankruptcy code in a couple of days. The last time it was revised it was a decade long battle.

Warrenty contracts are just commercial/business contractsunder civil law. The Constitution is not relevent (and if it were, legislation by Congress could not address it as Congress itself does not have the power to alter the Constitution by itself).

Besides, I can't see anyone seriously advocating that warrenties be voided; consumers wouldn't stand for it. Warrenty costs only look to be about $5 billion per year, or about +$500 per auto anyway. That is not that much. Improved quality (surely an objective under any type rescue plan) would reduce those down towards the Asian automakers (the $200 range)

Somehow I dont see anyone trusting GWB enough to come up with a prepackaged Chapter 11 in a few days, nor do I see GWB taking any time out from his ego--polishing tour to do the heavy lifting to negotiate it. Remember also that still has to negotiate a Middle East peace agreement by the end of his term, among other things.

Someone mentioned that there has to be a repayment plan in a Chapter 11. That's true-but it doesn't have to be 100%, just more than the creditors would receive in a Chapter 7 liquidation. A 100% repayment Chapter 11 is the rare exception, in actuality.

I stick by my original assessment-GWB is weaseling out of taking any action, even if his inaction will make things far worse for the US and the next Administration. Shame on him.

I don't think the auto bail-out is the business of the Exec branch. It belongs in Congress IMO, but they don't want to deal with the political *hot potato*.

See bolded

Fern

 

[manowar821]

How about "a disorderly fuck 'em"?

 

[smack Down]

Originally posted by: Lemon law
I agree with Barney Frank, allowing bankruptcy would allow the big three to simply walk away from their debts, which in turn will cause the bankruptcy of countless suppliers while putting their pension obligations on the public tab. Maybe penny wise but dollar foolish, and not worth a bail out if that is the end result.

Yeah, that is the idea. The bondholders made a bad investment and they should be the ones to take the loss or bailout GM. Now we just need to fix the law that puts the pension plan liabilities on to the tax payers.

 

[Slew Foot]

Soft landing...hmmmmmmm where have I heard that one before.........

 

[woodie1]

Originally posted by: MovingTarget

Originally posted by: winnar111
Sounds good. Kindly dump all the health care expenses they have.

Yeah, lets really stick it to them retirees who worked 30+ years for benefits they negotiated! That'll teach em to join a union! :roll:

So Joe Taxpayer is responsible for their loss. Is Joe gonna replace the value my 401k has lost.

 

[Jhhnn]

Funny how things change when it's not Wall St fatcats taking the shaft, but rather middle class auto workers... and all the people who work for the dealerships, parts suppliers, etc and so forth...

Chapter 11 won't really work, because it'll kill any faith in the automakers ability to deliver on warranties and spare parts down the road... might as well make it chapter 7, spread the hurt to the execs who screwed it up, get it over with...

Honda, Toyota, and Nissan will announce wage and benefit cuts seeing as how their competition is gone... Whatcha gonna do about it? Rave on about the wonderful free market?

 

[Jiggz]

Originally posted by: Lemon law
I agree with Barney Frank, allowing bankruptcy would allow the big three to simply walk away from their debts, which in turn will cause the bankruptcy of countless suppliers while putting their pension obligations on the public tab. Maybe penny wise but dollar foolish, and not worth a bail out if that is the end result.

If you have faith in Barney Frank then you must also have the same faith in Pelosi and actually believes that the sky is falling! B Frank professes the same, the sky will fall if we do not bailout the Big 3; the same way he professed that everybody must be allowed to own a house! Well, the worst all time economic recession is now here and B. Frank still doesn't get it!

 

[woodie1]

Originally posted by: Jhhnn
Funny how things change when it's not Wall St fatcats taking the shaft, but rather middle class auto workers... and all the people who work for the dealerships, parts suppliers, etc and so forth...

Agreed, neither AIG nor any other business should have received taxpayer funds. Remember how the GOP resisted the original $700B bailout package and to this day many are opposed to what finally passed.

 

[bozack]

Originally posted by: TallBill

Originally posted by: dmcowen674
Not enough auto threads?

Jealous that you didn't post it first and put your troll spin on it?

LOL...too true.

I would be in favor of orderly bankruptcies. Really anything that compells them to restructure in a healthy way instead of simply propping up a failed business.

 

[boomerang]

Originally posted by: woodie1
Bush considering orderly auto bankruptcy - let's hope that's all he does.

Let 'em sink or swim on their own. Ford lined up financing to make it thru 2009 why can't GM?

Approximately a year and a half to two years ago, Ford hocked literally every asset they have. Everything they have has been mortgaged to the hilt. Yes, they've got cash, but they also have their asses hanging way, way out in the wind. It's put them in a far better position than the others cash wise, but it's far from an enviable position.

Whether Ford's Mulally was a genius, got lucky, or is a complete and utter fool remains to be seen. Regardless, hindsight is always 20/20.

 

[PokerGuy]

Originally posted by: Jhhnn
Funny how things change when it's not Wall St fatcats taking the shaft, but rather middle class auto workers...

The bank bailout was not done to save the fatcats, it was done because congress believed that the impact of their collapse on everyone else in the country would be a disaster.

Honda, Toyota, and Nissan will announce wage and benefit cuts seeing as how their competition is gone... Whatcha gonna do about it? Rave on about the wonderful free market?

Oh? Toyota, Nissan, Honda, BMW etc don't compete with each other? Interesting. If they cut the wage and benefit rates, that's how it should be, let the market determine what the right wage and benefit is for a particular job.

 

[Fingolfin269]

Originally posted by: Jhhnn
Honda, Toyota, and Nissan will announce wage and benefit cuts seeing as how their competition is gone... Whatcha gonna do about it? Rave on about the wonderful free market?

Ah yes, keep out the union by keeping wages competitive. The competition crumbles so you slash wages. The workers then unionize because you just cut their wages. I see what you did there.

 

[Squisher]

No Bankruptcy for now