Quote:
Originally Posted by mgescuro
Yes. You're absolutely right.
But how much more of this bailout nonsense must the country endure?
Realistically, Detroit needs to go to Chapter 11 and really, truly organize themselves for the future.
They cannot go on with the tremendous fixed costs and liabilities they have endured for decades.
GM is still built like a company with a 35% market share for crying out loud.
What will a bailout do? It will just buy them some time.
Chapter 11 is really the only cure for Detroit, despite its negative consequences. And that's the scary part about it all. Do we push the automakers into bankruptcy now, so they can reorganize themselves fully, in order to come out of this downturn stronger than ever? Or do we simply buy them enough time and keep them on life support??
Perhaps GM going into Chapter 11 won't be such a bad thing, if the government gave them AIG-like bailout money!!!???? $85 billion in loans, while in bankruptcy court, ensures GM's survival, while the reorganize the divisions properly. A judge will also then be able to make sure that the product strategies and business plans are in place.
But how do they mitigate the negative impact of a chapter 11??
Your guess is as good as mine.
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This is a 'damned if you do', 'damned if you don't' conundrum.
If the Feds give GM/F/C $50 Billion in loans then the Treasury better be damnwell certain that none of the three take the money and then go BK the next day. Legally it/we would just be another creditor in line with the rest of the creditors hoping for a nickel on a dollar return. Where would that $50 Billion have disappeared to? Who's pockets?
OTOH if the three do go BK first with the expectation that there will be a $25 - $50 Billion bonanza waiting for them when they come out of BK court in 2-4 yrs ( see Delphi ) then the creditors will refuse to negotiate a settlement.