I mean, look at how many times airlines go BK, but they are still there. Look at how many casinos go BK, but they are still there in business. Not really a big deal if the big 3 go BK except to maybe the employees. Yeah it sucks if your retirement income disappears, but hey... we are now paying because you couldnt pay for your inflated house you bought in 2006...now we gotta pay because you couldnt save your own money with your fat inflated salary for the last 30 years? I'm sorry, but if you worked for a company for 20-30 years at higher than average wages, and the only way you could survive into retirement is with 90% of your wages still coming in, YOU messed up. We shouldnt have to pay for that. Now I am all for unions and high wages. I'm not so much for paying employees 90% wages when a factory is dark. Now I am all for helping the poor and less fortunate. I'm not for helping the upper-middle class who are just being plain greedy. If you need some food, I will give it to you. If you need some clothes, i will give it to you. If you need 1000 bucks because your retired ass needs to make his boat payment this month...F*** you, asshole! Let them go Bankrupt. Ford & GM will still be there afterwards, just run buy a bunch of different people with no debt and new employees(probably the same employees actually) who will probably get to keep their same salaries, but gotta manage their own money now.
The one major difference is when buy a car it's a long term relationship, tied to warranty. When you fly a BK airline its short term. I don't know that I would buy from a car company that is BK due to warranty hassles plus their quality my decline further. Airlines have some standards cars I believe. I would consider the loan, not bailout. But I have strict conditions. Major restructure of UAW contracts and management. They are both at fault IMO. Most folks mistakenly attempt to point to one cause when it's typically a combo of factors, as is the case with the Big 3.
Jobs, jobs, jobs. You think things are bad now? Let the domestic auto industry go down and we'll be in the worst main street economic crisis since 1930, my friend.
But its NOT going down. Creditors will take over assets or sell them at pennies on the dollar. Someone will buy those assets if they are sold and they are in business making cars without any debt. GM could be sold into several different new car manufacturers. The industry is not going away my friend. Only shareholders and creditors would get hurt. GM will still make cars even if they have to do it with different management and under a different name.
People seem to think if they go BK someone will step in, or they will just restructure. Not in this environment they wont. There is something terribly strange going on. I have heard supposed experts say let them fail in one breath and in the next breath say, buy gold we are in deep trouble. Almost as if they want the depression to be as great as the last. We can not be weak. We can not afford to have a loser mentality. There is one way out, spend...stimulate. Losing a million jobs is not the right way out. I don't think I have ever truly agreed with Crammer until tonight. I even think he is dead wrong bashin Beranke. He said it the way it is. Paraphrasing.. "Now is not the time to pick apart Detroit. Now isn't the time to punish them for past practices. If we want to avoid a Depression we must save them. We can go after them later" Those are not his exact words, but close enough, and I think he is dead on. I normally do not watch his show, but after today, I have been watching everything. I am short this market, but that doesn't mean I want a Depression. Forget this 71 per hour rhetoric. They make 30, the rest is health care, which they will lose in the next few years anyway, if that makes you feel better. We could have let Aig fail because they are more broken than anyone. Let all the wall street firms go. Their model is dead too. We recognized their systemic risk. Do not think the millions involved here pose none. Do not think Chapter 11 will go so smooth. Or the Japanese or Germans will fill the gap anytime soon. This is not the time to turtle up. Do not fall for this loser mentality. Do not feel guilty about fighting back.
Bankruptcy does not mean every employee loses there job. Also, Citi is laying off 50K, nobody cares about them because they aren't union. Way to many people overstating the 'devastation' and 'carnage' if they file for bankruptcy.
It was reported that GM was burning $5 billion a MONTH. Bankruptcy WOULD be better. They need it to: Slash the number of dealers Have time to realign their offerings and invest. Volt? Which normal American is going to pay $34K for a plugin car that will need > $5K battery replacement in a few years? Get out of unused real estate and other obligations Preserve their remaining cash Throw out the union contracts, and pay them the same as workers at American operations of Honda, Toyota, and other foreign car companies. Get rid of retiree health care Get rid of the "job bank" where union workers are paid near full salary to do nothing[ Etc. Etc..size]
The bankers can't be nationalized, they are chinese. So if the chinese don't find the big 3 too appealing, then they must go broke. China has ample supply of workers who need a job and won't ask for much. The question is more, what strategy to fix the unemployment that will come out of this? Is there enough service jobs for them until they retire? This would mean increased police salary to pay for the higher violence & corruption that so many angry man in the free would do. The solution will be international, or will look like a catch-22. There is a switch to natural gaz consumption, russia is a major player. There is scarce nuclear, push for consumption where there is not enough land or coast to build mass alternative energy supply. Many minerals are due for shortage in 15 years. Recycling worldwide and how? ..
I never said don't crush the unions; I simply said save the Big Three. it's nothing less than a matter of national security that we save and then help our manufacturing base to become world class. All the nations of the world are gunning for our aircraft industry next. We all need to unite, north, south, west and east, to force the discipline it will take to ensure the next generation of Americans have the infrastructure to produce wealth. The only way to do this is to produce 'things.' The U.K. thought it could lose its domestic manufacturing base (ownership) and all would be well as they shifted to a service sector economy...I believe time will tell the world that their gamble will not pay off, and they will burn badly.