Quote:
Originally Posted by UCF w00t
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.
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."
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A strike wouldn't last very long and there are other workers looking for jobs that would easily fill those that are on strike.. Have you looked at the unemployment numbers lately? Like I said, Chapter 11 would be costly at first, however look at what number we are at already..30 bill in less than 6 months. It will reach 100 bill in a year and half and more if the government keeps giving out handouts and printing money when the need arises gaining more control each time of the industry. Don't you see what is happening. Your intentions are good in supporting the bailout and all current GM employees or most will support it because it means keeping their jobs and salary. However in the long run it is only hurting all of American taxpayers. Chapter 11 may have been harder initially but in the end it would have been the right step to take in making the American car companies competitive again..