http://www.tnr.com/politi cs/story.html?id=a4893b49 -36df-4784-9859-2dfa3a321 1bfThe first thing we HAVE to do is stop the bleeding ASAP, THEN implement recovery plans before the industry is dead - not a simple solution. Letting it die immediately means ALL interrelated wage earners have nothing to SPEND to support our economy - a complete disaster with no taxes coming in OR a freeze on spending.
.... so you are saying that bankruptcy is still an option? The problem with bankruptcy, is that while it will sort some problems out, it will not solve the biggest problem, that is that they are simply not profitable. Bankruptcy plus a good plan to get them back on their feet, like the one I laid out below have to BOTH be part of the plan.
When a big company that gets into trouble is more valuable living than dead, there used to be a well-established legal process for reorganizing it - called chapter 11 of the bankruptcy code. Under it, creditors took some losses, shareholders even bigger ones, some managers' heads rolled. Companies cleaned up their books and got a fresh start. And taxpayers didn't pay a penny.So why, exactly, is the Treasury substituting government bailouts for chapter 11? Even if you assume Wall Street's major banks and insurance giant AIG are so important to the national and global economy that they can't be allowed to fail, that doesn't mean they have to be bailed out. They could be reorganized under bankruptcy protection. True, their creditors, shareholders, and executives would take bigger hits than they're taking now that taxpayers are bailing them out. But they're the ones who took the risk. We didn't.The Treasury seems to have lost sight of its real client. Its client is not the creditors, shareholders, or executives of any of these firms. Its sole client is the American people.It would be different if Main Street was getting something out of all this. But credit still isn't flowing to small businesses or distressed homeowners, and unemployment is skyrocketing.There's more at stake for Main Street when it comes to General Motors and other automakers now teetering on the edge of bankruptcy, because two and a half million households depend directly or indirectly on them for their paychecks. But the best way to protect all these people is not to pay off the automakers' creditors, shareholders, and executives, with no strings attached. Recall that when the government bailed out Chrysler in the early 1980s, a third of its employees lost their jobs.In exchange for government aid, the Big Three's creditors, shareholders, and executives should be required to accept losses as large as they'd endure under chapter 11, and the UAW should agree to some across-the-board wage and benefit cuts. The resulting savings, combined with the bailout, should be enough to allow the Big Three to shift production to more fuel efficient cars while keeping almost all its current workforce employed. Ideally, major parts suppliers would adhere to the same conditions.Remember: The underlying goal is to help Americans through this crisis and come out of it with a stronger economy.And what a tragedy it would be if the government spends so much on these bailouts there isn't enough money left for the next administration to help average people get affordable health insurance, send their kids to good schools, and find good jobs -- including jobs rebuilding the nation's crumbling infrastructure and finding alternative sources of energy.It's not the big guys who need rescuing. It's the small. Right now, the government has its priorities upside down.-http://robertreich.blogspot.com/2008/11/real-difference-between-bankruptcy-and.html
As much as I realize that the problems that the Big 3 are facing is their own fault, I still root for them to survive. Out of all of them Ford has the best chance of getting out of this. Ford has some quality cars, and they're becoming more global so we'll be getting some good European Fords here soon enough. GM is too large, needs to sell HUMMER as soon as possible, and stop their bad strategy of having the same car in all their brands. It canabalizes sales. Chrysler is in pretty bad shape too, and apparently looking for a merging partner right now.
Bail out Absolutely Not. Rescue package and recovery plan? Yes. Building vehicles with far higher fuel economy is pretty much mandatory if we are going to avoid another fuel crisis. But to do that, would need a massive injection of funds, and a massive retooling, as well as a restructuring of all taxes relating to cars and transport.
http://www.tnr.com/politi cs/story.html?id=a4893b49 -36df-4784-9859-2dfa3a321 1bfThe first thing we HAVE to do is stop the bleeding ASAP, THEN implement recovery plans before the industry is dead - not a simple solution. Letting it die immediately means ALL interrelated wage earners have nothing to SPEND to support our economy - a complete disaster with no taxes coming in OR a freeze on spending.
Have General Motors not tried that with Mercedes? What happened there? And who is seriously going to buy HUMMER?
.... so you are saying that bankruptcy is still an option? The problem with bankruptcy, is that while it will sort some problems out, it will not solve the biggest problem, that is that they are simply not profitable. Bankruptcy plus a good plan to get them back on their feet, like the one I laid out below have to BOTH be part of the plan.
When a big company that gets into trouble is more valuable living than dead, there used to be a well-established legal process for reorganizing it - called chapter 11 of the bankruptcy code. Under it, creditors took some losses, shareholders even bigger ones, some managers' heads rolled. Companies cleaned up their books and got a fresh start. And taxpayers didn't pay a penny.So why, exactly, is the Treasury substituting government bailouts for chapter 11? Even if you assume Wall Street's major banks and insurance giant AIG are so important to the national and global economy that they can't be allowed to fail, that doesn't mean they have to be bailed out. They could be reorganized under bankruptcy protection. True, their creditors, shareholders, and executives would take bigger hits than they're taking now that taxpayers are bailing them out. But they're the ones who took the risk. We didn't.The Treasury seems to have lost sight of its real client. Its client is not the creditors, shareholders, or executives of any of these firms. Its sole client is the American people.It would be different if Main Street was getting something out of all this. But credit still isn't flowing to small businesses or distressed homeowners, and unemployment is skyrocketing.There's more at stake for Main Street when it comes to General Motors and other automakers now teetering on the edge of bankruptcy, because two and a half million households depend directly or indirectly on them for their paychecks. But the best way to protect all these people is not to pay off the automakers' creditors, shareholders, and executives, with no strings attached. Recall that when the government bailed out Chrysler in the early 1980s, a third of its employees lost their jobs.In exchange for government aid, the Big Three's creditors, shareholders, and executives should be required to accept losses as large as they'd endure under chapter 11, and the UAW should agree to some across-the-board wage and benefit cuts. The resulting savings, combined with the bailout, should be enough to allow the Big Three to shift production to more fuel efficient cars while keeping almost all its current workforce employed. Ideally, major parts suppliers would adhere to the same conditions.Remember: The underlying goal is to help Americans through this crisis and come out of it with a stronger economy.And what a tragedy it would be if the government spends so much on these bailouts there isn't enough money left for the next administration to help average people get affordable health insurance, send their kids to good schools, and find good jobs -- including jobs rebuilding the nation's crumbling infrastructure and finding alternative sources of energy.It's not the big guys who need rescuing. It's the small. Right now, the government has its priorities upside down.-http://robertreich.blogspot.com/2008/11/real-difference-between-bankruptcy-and.html
As much as I realize that the problems that the Big 3 are facing is their own fault, I still root for them to survive. Out of all of them Ford has the best chance of getting out of this. Ford has some quality cars, and they're becoming more global so we'll be getting some good European Fords here soon enough. GM is too large, needs to sell HUMMER as soon as possible, and stop their bad strategy of having the same car in all their brands. It canabalizes sales. Chrysler is in pretty bad shape too, and apparently looking for a merging partner right now.
Why, thank you.
http://meganmcardle.theat lantic.com/archives/2008/ 11/labors_love_lost.php
Bail out Absolutely Not. Rescue package and recovery plan? Yes. Building vehicles with far higher fuel economy is pretty much mandatory if we are going to avoid another fuel crisis. But to do that, would need a massive injection of funds, and a massive retooling, as well as a restructuring of all taxes relating to cars and transport.
There seems to be no ideal solution. (And I'd like to see sources on the poll intro, if you wouldn't mind.)