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Let Detroit Go Bankrupt

nytimes.com

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Re: Let Detroit Go Bankrupt

#11

Post by crabapple »

one must ask why a waitress at denny's who makes minimum wage and has no healthcare must bail out union workers at gm who make 8x the wages, do less work, have ZERO DEDUCTABLE healthcare (do you? i doubt it), and full pensions.

or why should a succesful worker at honda in ohio subsidize not only a failed competitor, but in essence have his own taxation used to undermine his own hard work?

as for saving jobs and investment...most of the suppliers are already on death's door if they only rely on orders from detroit. investors have already lost 95% of their money on avg...nothing can reverse these losses

in the end the govt cannot give the big three their reputations back. lost reputation is why people do not choose these cars even though they are now comparable in quality. barak obama cannot force me to buy a buick

Re: Let Detroit Go Bankrupt

#12

Post by crabapple »

Locke wrote: post #7

It baffles me that we'd blow 700 billion bailing out financial institutions that caused our economic problems. Money that's now going towards bonuses and acquisitions instead of buying "toxic assets" as originally intended. Toxic assets that were created by these same wall street companies. As we save the companies that crippled the credit markets, we have no interest in spending a fraction of that same amount of mon…

As we save the companies that crippled the credit markets, we have no interest in spending a fraction of that same amount of money helping the companies most negatively effected by the condition of those same credit markets.

are you trying to tell me that gm is simply a victim of the credit crisis???

why would a bank loan them money now?? aren't we all about responsible lending now?? lending money to gm is the corporate equivalent of a subprime loan. we don't want banks making subprime loans anymore.

Re: Let Detroit Go Bankrupt

#13

Post by crabapple »

LogicHoleFlaw wrote: post #10
fallentimes wrote: post #4

The entire time I read this article I found myself nodding in an agreement. I found myself doing the exact opposite during Romney's campaign. As a Detroit native - and this is hard to write - the car bailout should not happen. GM, Chrysler & Ford are currently nothing more than welfare vehicles. Lots of people will go bankrupt and lose their jobs (my Dad already has), firms will die and Detroit will be in absolutely…

Romney has a proven record of turning around sinking ships. Both the Bain Company and the 2002 Winter Olympics were in bad shape when he took the reins in 1990 and 1999 respectively. He fixed both of them and remade them into viable ventures. I'm quite apt to take his word when he says a managed bankruptcy is the best option for the US auto industry.

and one wonders why bankruptcy is suitable for any other company in america, including airlines that have gone in and out of bankruptcy numerous times over the years...yet this same option is not permissible for the big3?

this is exactly why ch.11 exists - to allow freedom to restructure

Re: Let Detroit Go Bankrupt

#14

Post by fallentimes »

antidaily wrote: post #9
fallentimes wrote: post #5

Earlier quoted context omitted.

This might sound crass, but companies who knowingly and actively pay people to do nothing on a perpetual basis deserve to die: http://www.detnews.com/2005/autosinsider/0510/17/A01-351179....

Ok, but how about the hundreds of small businesses and suppliers that depend on the Big 3 for work?

In short; they're in trouble. That's why you should never ever put all your eggs in one basket.

As I noted in this post:

http://news.ycombinator.com/item?id=369994

my family has already been hurt by this. My Dad was laid off, my Grandpa was forced in to retirement. My other Grandpa lost his job. One of my Uncles who did supplies sales was laid off. Only one of the above actually worked at one of the US car companies - the rest were part of the supplies/small businesses.

Re: Let Detroit Go Bankrupt

#15

Post by uuilly »

Locke wrote: post #7

It baffles me that we'd blow 700 billion bailing out financial institutions that caused our economic problems. Money that's now going towards bonuses and acquisitions instead of buying "toxic assets" as originally intended. Toxic assets that were created by these same wall street companies. As we save the companies that crippled the credit markets, we have no interest in spending a fraction of that same amount of mon…

David brooks explained the difference really well. The bailout of wall st. Was a bailout of the entire financial system. If it didn't happen comapnies would not be able to borrow any money. Forget who it's from. If we don't bail out the big three we will all still be able to buy tons of different kinds of cars. (Can't send link from iPhone)

Re: Let Detroit Go Bankrupt

#16

Post by chaostheory »

antidaily wrote: post #9
fallentimes wrote: post #5

Earlier quoted context omitted.

This might sound crass, but companies who knowingly and actively pay people to do nothing on a perpetual basis deserve to die: http://www.detnews.com/2005/autosinsider/0510/17/A01-351179....

Ok, but how about the hundreds of small businesses and suppliers that depend on the Big 3 for work?

smart businesses (especially small ones) change and adapt. if not they fail. why subsidize bad practices and decisions?

Re: Let Detroit Go Bankrupt

#18

Post by fallentimes »

Locke wrote: post #7

It baffles me that we'd blow 700 billion bailing out financial institutions that caused our economic problems. Money that's now going towards bonuses and acquisitions instead of buying "toxic assets" as originally intended. Toxic assets that were created by these same wall street companies. As we save the companies that crippled the credit markets, we have no interest in spending a fraction of that same amount of mon…

Small businesses were affected by the financial crisis more than people realize. Businesses with long sales cycles (e.g. media companies, advertising companies) often use commercial paper to finance their short term recurring financial expenses (payroll expenses, rent, etc).

No bailout, no commercial paper, no paycheck.

Re: Let Detroit Go Bankrupt

#19

Post by yummyfajitas »

crabapple wrote: post #13
LogicHoleFlaw wrote: post #10

Earlier quoted context omitted.

Romney has a proven record of turning around sinking ships. Both the Bain Company and the 2002 Winter Olympics were in bad shape when he took the reins in 1990 and 1999 respectively. He fixed both of them and remade them into viable ventures. I'm quite apt to take his word when he says a managed bankruptcy is the best option for the US auto industry.

and one wonders why bankruptcy is suitable for any other company in america, including airlines that have gone in and out of bankruptcy numerous times over the years...yet this same option is not permissible for the big3? this is exactly why ch.11 exists - to allow freedom to restructure

A big 3 bankruptcy will be bad for auto workers, since the bankruptcy judge will rewrite their contracts. Since they currently get way above market rate, the judge will probably give them a pay cut, and authorize the layoff of many (1).

Take a look at which politicians support the bailout. Then take a look at which politicians get UAW money:

http://www.opensecrets.org/orgs/summary.php?id=D000000070

Coincidence?

(1) Due to union contracts, the big3 are unable to lay off workers as a normal company would do.

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