Organizing for America | Robert Bell's Blog: Let GM go Bankrupt

Let GM go Bankrupt - then bail it out!

By Robert from Jekyll Island, GA - Nov 16th, 2008 at 1:30 pm EST

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Barack -

I used to work for GM. I went to their little college, General Motors Institute. I watched as both managment and the unions frittered away a 60% market share by selling cheaper and cheaper cars and mortgaging the future of the company.

PLEASE do not bail out GM - at least just yet. Let GM go bankrupt first. Then provide bailout money as Debtor-In-Possession.

If you give them the money NOW, it will all go to fat-cat salaries for management (and bonuses no doubt) and to continue paying the $70 an hour wage of the UAW workers. It will also prop up extinct brands such as Pontiac and Buick and prevent GM froim paring down its dealer network.

Bankruptcy will force new management, new union rules and rates, and also slim down the company by eliminating unprofitable brnads and dealers.

At that point, GM can survive. If you give them the money NOW as Pelosi wants to do (pander, pander) all that will happen is you will delay the inevitable for a few months, maybe a year.

Let Generous Mothers go chapter 11 and reorganize. THEN bail it out, if they need the dough.

Just my 2 cents. The employes of GM (that is not a typo, they spell employe differently there) both salary and management drove the company into the ground. They should not be rewarded for this task.

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Chapter 11 reorganization | Report to Admin

By Lucius Nov 16th 2008 at 1:38 pm EST (Updated Nov 16th 2008 at 1:38 pm EST)

The only way to compel the Big Three to retool, reorganize, and face a future with scarcer oil supplies is to finally declare that they are bankrupt.

The Big Three have been exploiting the American consumer and living hand in glove with Big Oil since Day One. As one wag said, given their cozy relationship, Big Oil should bail-out the Big Three. Plus, they're the only ones with the resources.

I notice that Toyota and other Japanese/American auto manufacturers are not crying to the government for help.

Re: Chapter 11 reorganization | Report to Admin

By S from Huntsville, AL Nov 16th 2008 at 2:26 pm EST (Updated Nov 16th 2008 at 2:26 pm EST)

President-Elect Obama DON'T BAIL OUT THE AUTOMOTIVE MAKERS!
If they are bailed out, it will not encourage me to buy one of their cars. They will be in the same position after the bailout that they were in before it, the only difference will be that they will have the taxpayers' money. Believe me, we are not fooled. When they start building better cars, like toyota, honda, and nissans, they might not be in this mess.
When will our dependency on oil end?
Of course their problems are complex, there is no one solution, but giving them taxpayers money is not one of them.
Who will have their handout next, while the American people struggle to pay expenses to make it from day to day.

Re: Chapter 11 reorganization | Report to Admin

By Robert from Jekyll Island, GA Nov 16th 2008 at 4:17 pm EST (Updated Nov 16th 2008 at 4:17 pm EST)

Thanks for your comments. You make good points.

One misconception about the auto industry bailout is that if we don't "rescue" it, it will "go down" and take many other industries with it.

Not true.

Declaring bankruptcy and starting over will not even mean the assembly lines shut down or anyone misses a day of work. It is a seamless process.

What it does mean is that creditors, shareholders, pensioners, workers, and salary bosses will all take a long-overdue hit. They have milked the car companies dry for years, taking the path of least resistance - building empty steel boxes called "SUVs" and "Pickups" which had high profit margins, while conceding the more profitable and competative market segments to the Japanese and Europe.

We we "bail out" GM and others, they will go back to their old ways (particularly now that gas is $1.87 here in Georgia) and sell more SUVs and Pickups and nothing will change.

We cannot reward bad behavior.

In addition, giving GM $20 million without changing the fundamental management and labor structure will just be tossing $20 million down the drain. GM will go under (or request bailout after bailout) and take our money with it.

Why not just nationalize the company like they did in France? (Just kidding, that's an even worse idea!).

This idea of "ALL OR NOTHING" being pur forth by Pelosi and the governor of Michigan (whatshername) is a FALSE CHOICE. Companies CAN go bankrupt and still survive.

Rather than BAILOUT GM now, let it go bankrupt and then if they have trouble getting debtor-in-possession financing, THEN step in (with a loan or a stock purchase).

But propping up incompetent management and corrupt unions is a BAD IDEA. I've seen union members SABATOGE the assembly lines out of shear boredom. And many managers are more interested in building their own empires than in the overall success of the company.

DO NOT REWARD THESE PEOPLE FOR THEIR BAD ACTIONS!

DO NOT USE MY TAXPAYER MONEY TO DO SO!

If you do, WHERE IS MY BAILOUT? You'll have to bail all of us out then - it would only be fair. And that would BANKRUPT the country - chapter 7, not 11, too.

Bail out the poor not the rich | Report to Admin

By CJ from Temecula, CA Nov 21st 2008 at 5:07 pm EST (Updated Nov 21st 2008 at 5:07 pm EST)

About the bail out of GM. Why don't government give money to all the tax payers toward their new cars payments? This will also solved economy issue but putting money back in circulations. Tax payers get a new cars, car salesmen get to make their commissions, car dealer make their sales, and factory car workers will still have their jobs making cars to sales to people. Instead of just bail out company by giving money to the company so the CEO can leach off and all the workers will still going to get layoff. Everyone still end up poor and jobless accepts for the people that runs the company who will used the bail out to benefit themselves.

This also goes with all the other bail out. Really what is the point of bail out if people are still going to loose their jobs and economy still in the slump. With billion of dollars that government giving away to support the riches. Why don't government give to the people that actually needed. I understand that we received tax refund, but seriously, WHAT'S THE HELL IS $600 DOLLARS GOING TO DO FOR US? Government willing to give billion of dollars away to the millionaires and billionaires, but only give us $600. Instead of using tax money to bail them out, why don't they divide those money and give it to middle class people that are trying to make ends meet. We all will put those money back in circulation and people will still have jobs. The only people that are benefit out of all the bail out are people like CEO and other that are already making million and billon of dollars anyway. Why help them? Why don't Government help us? Government is just giving more money so these guys can just get even richer and poor will just stay poor or get even poorer.

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