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Why Bankruptcy Is the Best Option for GM

Chapter 11 would better preserve the valuable parts of the company than an ad hoc bailout



<a href="http://online.wsj.com/article/SB122688631448632421.html">http://online.wsj.com/article/SB122688631448632421.html</a>
 
Starting to flog a dead horse but....



"The simplest solution is to allow GM and the others to file for bankruptcy. If the companies file under Chapter 11, they would be able to continue producing cars, and the workforce would remain employed while the firms reorganized. The firms would also be able to get short-term credit under bankruptcy protection."



<a href="http://www.washingtonpost.com/wp-dyn/content/article/2008/11/17/AR2008111702917.html?sub=AR">http://www.washingtonpost.com/wp-dyn/content/article/2008/11/17/AR2008111702917.html?sub=AR</a>
 
[quote author="morekaos" date=1227064878]Starting to flog a dead horse but....



"The simplest solution is to allow GM and the others to file for bankruptcy. If the companies file under Chapter 11, they would be able to continue producing cars, and the workforce would remain employed while the firms reorganized. The firms would also be able to get short-term credit under bankruptcy protection."



<a href="http://www.washingtonpost.com/wp-dyn/content/article/2008/11/17/AR2008111702917.html?sub=AR">http://www.washingtonpost.com/wp-dyn/content/article/2008/11/17/AR2008111702917.html?sub=AR</a></blockquote>
Another great article, I love the following quote because it's very true...



"Restructuring in bankruptcy and resetting wages are measures that have saved airlines as well as manufacturers. The claim that bankruptcy would mean the loss of millions of jobs is nonsense intended to scare the public and force legislators and the Bush administration to throw money at the auto industry's problems.



Only by reducing wages and benefits will the firms be able to survive and provide good jobs."
 
yes, so long as they start by reducing the executive's salaries so that they are 100X the line workers, rather than the current 1000X for Wagoner.
 
There is a point about how customers would handle issues like "Warranty" with a Chapter 11

Automaker. It does work for airlines. But with Autos it is a longer term horizon.

What about availability of spare parts for the life of the purchase ?

Dealers commiting to inventories. Lets not forget sales are already off 45% in October.



Part of the problem with GM is our old friend GMAC/Ditech. They are still selling kool-aid

and advertising to this day.



Personally. I say let them rot. They had all the time in the world to modernize.

They killed the EV1 project. They spent nothing on battery technology. All the while

sales continued to shrink. Giving them boatloads of cash will not help sales.

GM is finished. Game over. If you live in Michigan. Time to move.
 
[quote author="morekaos" date=1226618311]Power to them. Toyota yanked 1800 high paying jobs out of Torrance two years ago and move them to Tennessee. Most went, and even though I am a CA native I can understand why. Doing business in this state is comprabale to hari-kari. Costs here are ludicrous. Until this state and others pull their collective heads out these southern states are going to cherry pick our job markets for years to come.</blockquote>


That was Nissan, and they paid big time because none of their key employees would move...they quit
 
[quote author="PeterUK" date=1227110631][quote author="morekaos" date=1226618311]Power to them. Toyota yanked 1800 high paying jobs out of Torrance two years ago and move them to Tennessee. Most went, and even though I am a CA native I can understand why. Doing business in this state is comprabale to hari-kari. Costs here are ludicrous. Until this state and others pull their collective heads out these southern states are going to cherry pick our job markets for years to come.</blockquote>


That was Nissan, and they paid big time because none of their key employees would move...they quit</blockquote>


Again, Our loss their gain.
 
[quote author="usctrojanman29" date=1227065546]Only by reducing wages and benefits will the firms be able to survive and provide good jobs.</blockquote>


If that's not doublespeak right there I don't know what is.
 
[quote author="no_vaseline" date=1227144028][quote author="usctrojanman29" date=1227065546]Only by reducing wages and benefits will the firms be able to survive and provide good jobs.</blockquote>


If that's not doublespeak right there I don't know what is.</blockquote>


A good job could still be considered a good job at $48.00/hour (Toyota) instead of $73.00/hour (GM).
 
Mitt would have made a good President.



Op-Ed Contributor

<span style="font-size: 13px;"><strong>Let Detroit Go Bankrupt </strong></span>



By MITT ROMNEY

Published: November 18, 2008



<a href="http://www.nytimes.com/2008/11/19/opinion/19romney.html?hp">http://www.nytimes.com/2008/11/19/opinion/19romney.html?hp</a>
 
I guess all 3 of the Auto CEO`s flew in on Company Jets.

Kind of like pulling up to the Salvation Army Rescue Mission in a Ferrari.

Buddy can you spare 25 Billion?
 
On a side note.



I would like to buy a dodge challenger SRT8. Every dealer wants 5-15K over list price. It appears that dodge aren't making any money at all and this is their bread and butter. Anyone recommendations for a dealer?
 
It's a sales technique called "standing room only". They've been selling Corvettes like this for years. Hell, they were selling condos in Irvine like this recently. Here's what I'd do.........



Find a Chrysler dealer who is part of a big corporate chain.



Go to the nearest "Any other brand" sister store for the corporate chain. Ask for the Fleet Manager. Tell him you want to buy an SRT-8, but the last guy you tried to buy it from had bad breath. Ask if he knows anyone who could help.......see what happens.



If that doesn't work, post back. I got other ideas (find an independent auto broker, there's at least three I know of here in Orange).



It isn't widely known, but the Chevy dealer can sell a new Toyota if they want. Dealer trades happen all the time.
 
Bottom line: This is the politicians bailing out their constituency and campaign contributors, the UAW. It is not a bailout of the automakers. The automakers would be better off after a Chapter 11.
 
[quote author="Stuff It" date=1227174085]On a side note.



I would like to buy a dodge challenger SRT8. Every dealer wants 5-15K over list price. It appears that dodge aren't making any money at all and this is their bread and butter. Anyone recommendations for a dealer?</blockquote>


If you leave them your name and number and tell them your terms eventually you will get a call and none of those games. They are trying to build value at the expense of the consumer. If you can wait them out you will get your price.
 
Showing us how it is done...Unfortunately



<a href="http://online.wsj.com/article/SB122809320261867867.html">America's Other Auto Industry </a>
 
it is coming...



<a href="http://www.realclearpolitics.com/articles/2008/12/auto_bailout_wont_prevent_bank.html">Auto Bailout Won't Prevent Bankruptcy</a>
 
<strong>A pathetic attempt at grovelling...</strong>



<em>Ford and GM said they would sell their corporate jets to save money. The executives were criticized for flying to Washington for the last round of hearings on separate private jets.



Ford CEO Alan Mulally was driving to Washington from Michigan in a Ford Escape hybrid. GM's Wagoner planned to drive in a Chevy Malibu hybrid. Like his counterparts, Chrysler's Bob Nardelli will drive a hybrid, the company said.



But that move is ironic. The only two hybrids Chrysler makes, the 2009 Dodge Durango and 2009 Chrysler Aspen, were to be produced at a Delaware plant that has been marked for closing at year's end. As a result, the hybrid models, originally slated for delivery this fall, will never make it to dealer lots.

</em>
 
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