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...The auto bailouts occurred months before Obama even took office. I even remember discussing them with some of the people in this thread. In fact, I know it was attached to the TARP legislation, which definately passed under Bush. Obama's contribution was putting the taxpayer on the hook by promising to assume the debts and obligations of Chrysler and GM should they go under.
Of course, Obama voted for TARP so I suppose he could weasel in some credit that way.. But then again, bailouts are a reward for epic failure (a typical Democratic theme) and should remain politically toxic.
Both Chrysler and GM could have restructured under normal bankruptcy laws and still be in the same situation today...sans our money bailing their sorry inept arses out.
Naw, that wouldn't have allowed Obama to payback the unions for their support. Now that the unions have gotten their payback this IPO will send more to Goldman Sachs.
naw, that wouldn't have allowed obama to payback the unions for their support. Now that the unions have gotten their payback this ipo will send more to goldman sachs.
Both Chrysler and GM could have restructured under normal bankruptcy laws and still be in the same situation today...sans our money bailing their sorry inept arses out.
very true.
Quote:
Originally Posted by ovcatto
Well that's, shall we say, factually incorrect. GM and Chrysler were facing Chapter 7 bankruptcy not Chapter 11.
In Nov of 2008 GM had $12 million in cash on hand with a need of $11 million per month just to keep the doors open.
GM would have no choice but to shut down, said Maryann Keller, an independent auto analyst and consultant based in Greenwich, Connecticut. A GM failure that stops production would cost 2.5 million jobs in the U.S. in the first year, according to the Ann Arbor, Michigan-based Center for Automotive Research.
“In this world, you don’t go Chapter 11 reorganization,†Keller said in an interview. “You go Chapter 7 liquidation.â€
Only with the influx of liquidity from the government was GM and Chrysler able to seek reorganization under Chapter 11.
actually during the bankruptcy proceedings, gm and chrysler both would have had a chance to restructure, set the old debts aside for the time being, and reduce the amount of cash they were burning through each month. instead the government poked their noses in with a prepackaged bankruptcy that basically screwed the bond holders, illegally by the way, and the stockholders out of their investments, and gave the government and the unions ownership of the companies. at the worst, if both companies did end up having to liquidate, the assets would have been sold off, at bargain basement prices, the bond holders and stock holders would have gotten at least something out of the deal, and the parts of both companies would have been recycled. also remember it wasnt the entire company of GM that filed for bankruptcy, it was only GM of north america.
Quote:
Originally Posted by florida.bob
Ford had better management. They saw what was coming and took steps to survive it. But had Obama not stepped in for GM and Chrysler, even Ford would probably have been forced to liquidate, they likely would have had no suppliers.
actually as far as the suppliers go, what likely would have happened is that all the companies that built and sold cars here in the US would likely have formed a holding corporation that would have merged with the parts suppliers during a chapter 11 bankruptcy, and that would have kept the suppliers open until the auto industry would turn around, at which time the suppliers would then be able to buy back their companies and become independent again if they so chose to.
Quote:
Originally Posted by Winter_Sucks
Tt was after bankruptcy that the government gave them money to continue to operate.
actually it was before, and as part of the bankruptcy that gm and chrysler got money from the government, especially since they were being taken over by the government.
Wall Street banks led by JPMorgan Chase & Co. and Morgan Stanley stand to make a combined $120 million on General Motors Co.’s initial public offering. If it weren’t for Goldman Sachs Group Inc., they could have made four times as much.
In a pitch to the U.S. Treasury in May, Goldman Sachs offered to accept a fee of 0.75 percent, according to people with direct knowledge of the matter. That’s a fraction of the 3 percent banks typically charge on the largest IPOs and well below the 2 percent offered by Bank of America Corp. and other banks that presented to Treasury, said the people, speaking anonymously because the matter is private.
The government came in, threw money at it, Hugo Chavez wanna be Obama put his guys in charge, stole equity from bondholders and turned it over to the unions, then pulled out for an IPO offering which stands again to make the big banks big buck. Meanwhile the American taxpayer gets for his investment....nada.
What would make anyone, including the OP, think that GM and Chrysler are set for perpetual success? It baffles the mind that one would conclude that the bailout is a "success" as if these two companies couldn't fall on hard times again. Did I fail to notice some sort of statute of limitations saying that "success" was contingent on an IPO and that's it?
Here today, gone tomorrow. That's how it works in America. Unless Marxism is the new American standard.
Ford had better management. They saw what was coming and took steps to survive it. But had Obama not stepped in for GM and Chrysler, even Ford would probably have been forced to liquidate, they likely would have had no suppliers.
I call BS. I might as well say that an earthquake would've swallowed Ford HQ if GM wasn't saved. Prove me wrong.
I call BS. I might as well say that an earthquake would've swallowed Ford HQ if GM wasn't saved. Prove me wrong.
Proving something didn't happen, is difficult and a convenient ploy by those who, for some reason, refuse to not look at the reality. The conventional wisdom at the time, was that fear. One such person, the Chairman of Ford, if you can put any credence into his opinion. Quoting Bill Ford, Jr, "One thing that's encouraging is that it looks like the government is going to provide a lot of money to GM, which will be passed through to the supply base". It seem he had fears of an uncontrolled GM and Chrysler bankruptcy.
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