Quote:
Originally Posted by Supermans
Well, I haven't read the 117 page report filed by GM asking for the bailout. However I for one was one of the people who felt GM should have filed for Chapter 11 before the first bailout and everyone was giving the same reasons back then as they are today for why GM should get bailed out. I do understand the struggle with the retirees and workers losing their jobs. What should have been done before is GM filing for Chapter 11 and the Government helping out the retirees who need their retirement to stay alive and in their homes and for the Government to help the workers losing their jobs to find new ones. This would have allowed GM to cut the ties with the union and legacy costs while they could have worked on a restructuring without Government control....
|
Their estimates for need for government aid in a chapter 11 scenario are up to $100bil. Basically the idea is that people won't buy cars from a company that's under bankruptcy protection. And I agree with that. Their sales will drop off a cliff until they're operating normally again. Normally a company that files bankruptcy would seek (and find) "debtor in posession" (often referred to as dip) financing but the way the credit market is and the massive sum of money that GM would need to make it through a bankruptcy simply make this impossible; only the government has the ability to fund that.
There's some ways of making ch. 11 work but it's all very ugly and would cost taxpayers much more than taking care of this without the courts.
So really the options at this point are denying all federal aid to GM and allowing them to go ch. 7 or giving them the pittance (in comparison to the banking handouts) they need to restructure without the courts' help.
And really, GM is already in bankruptcy. They're already making massive restructuring changes without the court's help. All chapter 11 is force their creditors, dealers, and the union to play ball. From the sounds of it, they're already making concessions so an official filing seems redundant at this point.
Oh and how do you think the UAW would react when their contracts are shredded in bankruptcy court? I'll give you one guess and a hint... it rhymes with "strike."