Quote:
Originally Posted by The_Blur
Let's throw out the political rhetoric. We all believe in a free market, but are you willing to accept that foreign workers and companies will take over if we don't act? Are you really so idealistic to believe in a capitalistic market that works against you? Other countries are injecting lots and lots of money into their markets. The US is holding out on GM because we're too stubborn to help the millions of Americans that will lose their jobs because a corporate mammoth is collapsing.
You want to make sure they use that money wisely. They will. They don't want to lose their jobs. Do you want to lose your job? Think about it. They're just like us. They want to put that money into their basic operations that they simply can't fund right now. If they can get through 2009, then they will have significant cost reduction in 2010. They need just a little bit of help through the next year.
We need to stop being stubborn and start supporting our country. Everyone else is supporting theirs.
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This is to both this and Dragoneye. I believe that at the end of the day, financing will have to be made available to GM.
The Government did something drastically different with Chrysler than what is proposed with GM. They gave Chrysler
loan guarantees totalling 1.1B-which is different from a loan. The US basically became Chryslers cosignator. They then turned Chrysler into a basically a forced pseudo-chapter 11 bankruptcy reorganization with an actual law (Chrysler Corporation Loan Guarantee Act of 1979).
Through the pseudo-CH 11, Chrysler was able to discharge 400 million in debt outright (so private business made Chrysler a nice fat donation). Then they converted several hundred million dollars worth of debt into special issue stock with no dividends the had no options to call due or redeem the stock for several years. Then they used the loan guarantees to get further funding from private business. Then they fired nearly half their employees (20,000+ out of 40,000+). Then they cut all their product lines to just a few which they could sell profitably. I'd be willing to support a more Chrysler-esque plan.
"They want to put that money into their basic operations that they simply can't fund right now." <===this right here is the basic problem. They can't fund these components of their business because there are flaws in their basic cost structure. We can give them $25Billion dollars and it won't correct the flaws. Therefore, eventually, they'll need another $25Billion.
So again, "So if you want me to both buy a GM AND make them a donation at tax time, I want to make sure they're going to use that money wisely and not just band-aid a sinking ship."