This would save at least $30 billion in tarp funds from being given to them. Because if they dont go into bankruptcy, they would take $30 billion , Burn through it by giving it to useless management and $40 hour floor sweepers, and simply file for bankruptcy 6 months from now. If airlines can operate under bankruptcy protection, why cant automakers?
Market and a screaming majority in America want GM to go into bankruptcy. GM and Chrysler NEED to die so something better can rise up. The good talent there won’t just disappear. However, the government just won’t let it happen. First GM is so well connected in Washington and second I’m sure any administration would rescue them because who wants to be marked with causing hundreds of thousands of jobs lost? (Nevermind that these job losses are neccesary and would probably come back in the future in some other form and the new hires would collectively produce something of actual VALUE). Its so frustrating.
I think they are now going to let the prepackaged bankruptcy actually happen now, even GM seems to think its not such a bad idea. The companies wont disappear, but they will be back in a new form thats for sure, with those pesky unions back under control with any luck.
the loss of jobs creates too much uncertainty surrounding consumer spending, thats why the market doesn’t REALLY want it. if they’re kept alive, the downtrend is orderly, if not we’ll spike down because the threat of a deflationary spiral skyrockets. think what would’ve happened if AIG went bankrupt and didn’t pay out on its 100s of billions of CDSs… everyone would be bankrupt.
I cant believe unions still exist in for-profit companies
IH8FSA Wrote: ------------------------------------------------------- > I cant believe unions still exist in for-profit > companies Well there about to get much much stronger. All you have to do is listen to the president as he JUST stated himself on his stimulus er Recovery Act… it went something like this (cant remember word for word). Many say this (stimulus) won’t do much, but wait until they see the TEACHERS still teaching our kids, the FIREMAN still putting out fires, the POLICE still protecting our citizens… Take a closer look… all of these are… UNIONS. WEEEEEEE.
How about the Teachers striking twice a year while the students make the parents look for babysitters. In ontario, the largest university ( york) was on a 12 week strike by teaching assistant staff who have a union. Kids now had to miss march break and take classes in summer just to make up for it. Its a joke
The industry needs consolidation. Domestic manufacturers are just not efficient, and rewarding companies for making bad products and running inefficient operations goes against free market capitalism. the big three need to survive for jobs sake in this economy, but once this mess is all cleared up, some of these companies need to be left to die.
GM so needs to be in bankruptcy. However, the culture in Michigan will resist, as they believe GM is too big to fail and their (the employees-all of them) are entitled to unsustainable high wages and benefits. 400k+ retires in a defined benefit pension and health care paid mostly by GM for life…please. I worked there (as a contractor), one of my co-workers put his entire 401k in GM stock, which we know the value of that, now he refuses to retire on the 36k a year defined benefit pension(free money) claiming…he can’t live on that. This guy never paid tuition either. This is very typical at GM. This dude makes around 100k now. Employees at GM think their in the NFL and you have to buy them out of their contracts etc. It is an unwritten rule that GM employees don’t fire other GM employees…so nobody can fire you. Some of the jobs there are a joke. Essentially some positions are data management, job scheduling, manpower, etc., and these guys make 125k a year plus a free car AND free gas and insurance. I talk to these people regulary and they act as if they can’t lose their job, that GM HAS to find them another position. Some bounce group to group -do nothing and are useless…yet their getting 100k salary, 401k (most of the time with matching), defined benefit pension, and most of their health care paid for in retirement. My neighbor was moving boxes building to building for 75k plus a year. He retired at 54 with a two year salary buyout, full pension starting at a certain age with “bridge” payments untill then. The unions act as if the “jobs bank” elimination was a sacrifice…please… Saturn as a unit has never made money in 20 years…please… Way too many models also (they compete with themselves). Not to mention way to many dealers and most don’t sell all GM brands so you have to go to multiple dealers to shop GM cars…wow thats smart… Wagoner and the board are gonna milk it to the last drop, then walk away. Maybe if I had a MBA from Harvaard like Wagon-er, I could figure this superior strategy out… Not sure what the Bondholders are gonna get in the end, I think they have to divy with the pensioners. If you can pass a few math classes with a C-, you should be able to figure out where this company is going.