Kiss the American auto industry goodbye
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Thread: Kiss the American auto industry goodbye

  1. #1
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    Default Kiss the American auto industry goodbye

    In a 2008 NY Times OpEd titled "Let Detroit Go Bankrupt", the writer stated that the auto industry's "demise will be virtually guaranteed" if there is a bailout. And "the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses.

    http://www.nytimes.com/2008/11/19/opinion/19romney.html

    Four years later, it's great to see the author was very wrong: market shares are increasing, the Volt is a model of technological innovation, is definitely a superior product, and jobs are being added.

    Of course he is now claiming credit for the favorable outcome! http://www.businessweek.com/news/201...liability.html

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    The problem for Willard is that you can't be a leader unless you have balls, in some ways the bigger the better, and he has none (figuratively speaking, I understand he has a lot of kids). First when he's running for President the government needs to bail out Detroit. Then after the election he says "Let Detroit Go Bankrupt" and comes up with the fantasy that private equity will put up the money. Now after government intervention has proved a great success he wants to claim it was his idea. As in other cases, all his confusing shucking and jiving only reminds people that he manages to combine all the attributes they disliked about Al Gore and John Kerry.

    Zero leadership skills. Definitely not presidential.

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    He had Bain capital bottom-feeding on his mind. How could a bailout helping a company be good - why not swoop in and feast on the weakened carcass and profit from it. Maybe he was investing in Toyota, Nissan and other foreign companies at the time?

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    DonC "comes up with the fantasy that private equity will put up the money" Why in the world would you post such a thing? That is a shockingly un-capitalistic, socialistic statement! In a free market (stop rolling eyes) buyers would have lined up to be able to buy the assets of GM or Chrysler post bankruptcy. What they didn't want is the company along with it legacy baggage (unions, health care and pension liabilities..) this is what a non-governmental reorganization would have provided. GM did not have access to credit from the private market - that is true - but only to keep them OUT of bankruptcy. Post bankruptcy would have been a completely different story. The govt didn't bail out GM they bailed out the unions and they did so at the expense of creditors who according to our bankruptcy laws should have been first in line. The GM and Chrysler bankruptcy made a sham out of our bankruptcy laws.

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    Quote Originally Posted by ronr64 View Post
    The govt didn't bail out GM they bailed out the unions and they did so at the expense of creditors who according to our bankruptcy laws should have been first in line. The GM and Chrysler bankruptcy made a sham out of our bankruptcy laws.
    Simply put, and there is no other way of putting it, your facts are wrong. Let's look at the actual facts. First fact: Chrysler did try to sell assets in order to stave off bankruptcy. The result was that no one was remotely interested in paying ANYTHING for the assets. If you doubt that, take a look at how much Tesla paid Toyota for Nummi.

    Second fact: Creditors for GM got paid 100% on the dollar. Creditors at Chrysler, including Goldman Sachs, didn't but they AGREED to take less. Why? Because they (correctly) figured that a liquidation would give them less, far less, than they got from the restructuring. No one held a gun to their heads. They made a decision based on their self interest as they saw it. That's the way it works.

    Third fact: Your ideas about who gets paid in a bankruptcy are naive. There are many creditors in a bankruptcy proceeding. Consumers are creditors. Unions are creditors. Suppliers paid within years are potential recovery targets. Your notion that people line up to be paid in order to some legal rule is a fantasy. A bankruptcy is a giant negotiation and you get what you can negotiate for based on your leverage. It's all about the golden rule -- he who has the gold makes the rules -- and in this case the ONLY financing available was from the government -- so the government got to make the rules. Nothing unusual about this at all.

    Personally I find it amazing that people who have no idea how bankruptcy works and have never participated in one come up with completely bold and completely wrong pronouncements about how bankruptcy should play out. I don't know why but my guess is that they've listened too often to some equally uninformed talking head spout the same nonsense.

    Personally I suspect every last bankruptcy lawyer on the planet was in awe of how well the Obama Administration executed on the bankruptcy plan. It was a brilliant plan brilliantly executed. One a scale of one to ten it was a twenty. Completely amazing. Rather than just admit this, and give credit where credit is due, what the right wingers do is come up with the narrative that it "subverted the bankruptcy laws" or something. Which is the problem Romney has. He basically can't decide whether to take credit for the plan (this is what I told them to do) or to criticize it as a bailout (I told them to do this also but now I've changed to a "severe conservative"), and, as a consequence, his position is confusing and and contradictory and he comes off looking weak and rudderless, which may be accurate but that's not helpful to him at this point.

  8. #7
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    Resurgent General Motors posts record profit for 2011

    http://www.latimes.com/business/mone...,1837452.story

    Sure, GM could still blow it (any company can - witness Kodak), but this is good news all around.
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    Spot on Don. Most people don't understand anything other than how they think it should be. Some fantasy from a high school civics class, perhaps? I forgot, they don't even teach very basic finance in high school...just how to be a wage-slave.

    I followed the entire SCO vs world+dog fiasco over on groklaw and talk about a perverted/subverted bankruptcy that didn't even follow statutes - wow. In this case, SCO figured that they owned all the IP for Linux (and by extension, all other opsys) and sued absolutely everyone but Microsoft, since that's where their funding was coming from (under the table, but exposed by those pesky kids and paralegals over on grok). It didn't end well...but it did effectively bankrupt Novell due to the "irregular" SCO bankruptcy process which hasn't ended yet - years after the actual law demands going to chapter 7 or whatever and ending it all. Of course, Microsoft won in the end and wound up owning all Novell's patents and copyrights through a proxy, which is what they were after all along. The guys with the biggest lawyers always win in our system.

    You'd have to admit that the main beneficiaries of the bailout were indeed the unions, who for awhile actually owned the controlling interest in the stock (outside the government). They ditched that double quick of course, since as management, they couldn't play the "it's all their fault" game anymore. Even though they gave up quite a lot, they did better than any of the other players did out of it. Except maybe me - I shorted 50k of GM stock *after* they announced they were going to bankruptcy, and it bought me a 2010 Camaro which I traded in on the Volt...Thanks UAW for the nice car! I doubt anyone else was holding GM long at that point.
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    Good old Mitt. Flippin' and a floppin'! I have heard of situational ethics before, but now I'm using what is a new term to me, "Situational truth", LOL.
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  12. #10
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    Regardless of the finer points of bankruptcy law, Mitt's position reflected that of many in the Fox echo chamber: the bailout would doom GM and Chrysler, that it was wasted money since the companies would be sure to sink afterwards because they would be "run" by the government and the government can't do anything right.

    Better to put them out of their misery, and let the Bain's of the world swoop in and pick over the carcass while wishing good luck to all those put out of a job, while ignoring the aftershocks that would affect suppliers, main street.

    Yet, here we are with GM and Chrysler posting record sales and regaining market share. Kind of puts the lie to Mitt's entire Op Ed. No wonder there is such a concerted effort to MAKE GM fail! Congressional hearings, constant distortions bordering on slander, etc.

    I'm not suggesting that government is always the answer, but I disagree with those who maintain it's never the answer.

    The problem Mitt has is he seems to be a centrist, moderate in a party that demands an extremist (ha, a severist?) who is "anti-". Try as he might, he does not wear that suit well. He was for the bailout before he was against it.
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