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Let Detroit Go Bankrupt

nytimes.com

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Re: Let Detroit Go Bankrupt

#31

Post by prospero »

Prrometheus wrote: post #26
crabapple wrote: post #11

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 inves…

Detroit fills Democratic Party campaign coffers. And before anyone says its a non-partisan thing, look at where opposition to this bailout and the previous one came from. That's right: the guys we just voted out for being war-mongers and Big Brother supporters. Ain't democracy grand?

40% of Democrats opposed the original bailout package, compared to 66% of Republicans. That's a difference to be sure, but the vote was obviously not down party lines. Furthermore, Bush was a strong supporter of both packages, and was vocal in his disappointment when the first failed to pass.

Facts exist independently of your opinion; you don't get to make them up to fit your argument. Please try to remember that.

Re: Let Detroit Go Bankrupt

#32

Post by hugh »

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.

Romney has a proven record of turning around sinking ships.

Was that a deliberately mixed metaphor? Turn around a sinking ship and all you get is a wreck which faces in the other direction.

Re: Let Detroit Go Bankrupt

#34

Post by Prrometheus »

prospero wrote: post #31
Prrometheus wrote: post #26

Earlier quoted context omitted.

Detroit fills Democratic Party campaign coffers. And before anyone says its a non-partisan thing, look at where opposition to this bailout and the previous one came from. That's right: the guys we just voted out for being war-mongers and Big Brother supporters. Ain't democracy grand?

40% of Democrats opposed the original bailout package, compared to 66% of Republicans. That's a difference to be sure, but the vote was obviously not down party lines. Furthermore, Bush was a strong supporter of both packages, and was vocal in his disappointment when the first failed to pass. Facts exist independently of your opinion; you don't get to make them up to fit your argument. Please try to remember that.

In a congress that passes bills by majority, a clear majority of one party supported it and a clear majority of the other opposed it. House Republicans are consistently the most conservative caucus in Congress, and deserve praise for when they do the right thing as much as they deserve the opposite when they are wrong.

Re: Let Detroit Go Bankrupt

#35

Post by netcan »

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

Airlines have other vehicles protecting them.

For example, Qantas (the Australian Airline) is one of the few airlines to have made a good profit consistently. This is mostly because they have the US/Australia route all to themselves. The US counterpart hasn't been highly functional for a while & no one else was allowed in.

If United had gotten back onto it's feet at some point, they would have only had to face Qantas, who had themselves gotten cushy.

The auto market will not save them their seats.

Re: Let Detroit Go Bankrupt

#36

Post by dionidium »

fallentimes wrote: post #5
antidaily wrote: post #3

I'd rather bailout GM and Ford, who are not just hurting because of bad business decisions but also because of the credit crunch and high gas prices then, say, Bear Stearns.

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....

We can probably all agree that's it's silly to require that workers play dress-up and come to a non-existent job every morning.

But, assuming that requirement were dropped, you haven't exactly explained why it was wrong of the workers to ask for a piece of the (extraordinarily high [0]) earnings the company enjoyed at that time, or why it was wrong of the company to pay it.

Am I wrong to assume that the company thought it to be the best terms they could negotiate at that time? What should the union have done? Accept less than they could negotiate for? What should the company have done? Insist on more favorable terms even if the cost of a protracted labor dispute were actually more expensive?

I keep hearing people refer to outcomes that appear to be the natural result of difficult negotiations in strictly moral terms. This seems silly. Help me understand why I'm wrong.

[0] http://www.mlive.com/business/index.ssf/2008/09/a_brief_hist...

Re: Let Detroit Go Bankrupt

#38

Post by prospero »

Prrometheus wrote: post #34
prospero wrote: post #31

Earlier quoted context omitted.

40% of Democrats opposed the original bailout package, compared to 66% of Republicans. That's a difference to be sure, but the vote was obviously not down party lines. Furthermore, Bush was a strong supporter of both packages, and was vocal in his disappointment when the first failed to pass. Facts exist independently of your opinion; you don't get to make them up to fit your argument. Please try to remember that.

In a congress that passes bills by majority, a clear majority of one party supported it and a clear majority of the other opposed it. House Republicans are consistently the most conservative caucus in Congress, and deserve praise for when they do the right thing as much as they deserve the opposite when they are wrong.

That doesn't parse. You're treating two different types of majorities as the same thing.

It's fairly common that bills will be voted on down party lines, which means all Republicans vote one way, and all Democrats vote another. The standard deviation from this is generally pretty small, which is why the small majority held by the Democrats in both houses is such a big deal.

Two-thirds of Republicans repudiated the pressure coming from the Bush administration and voted against the bailout. Democrats were only able to muster a simple majority in support of the bailout. That's as close to non-partisan behavior as you're likely to see in our government.

Re: Let Detroit Go Bankrupt

#39

Post by evgen »

misterbwong wrote: post #23
crabapple wrote: post #13

Earlier quoted context omitted.

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

As I understand it, the big 3 are saying they _can't_ file for chapter 11 bankruptcy due to the current lending climate. They argue that since the financing climate is so harsh, no one will finance them while they restructure, thus forcing them into a chapter 7 bankruptcy-effectively causing a fire sale of the company and its assets. Sounds like Romney is advocating a "managed bankruptcy" where the government would f…

Technically, this is called debtor in possession financing. The DIP financing agent has a higher priority than existing debtors and bondholders when it comes to getting a payout after restructuring.

Re: Let Detroit Go Bankrupt

#40

Post by evgen »

crabapple wrote: post #11

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 inves…

FWIW, a large part of this problem has already been solved. You may not have noticed it, but a while back the UAW made a deal with the big three that in exchange for a large cash payout they would take over retiree pension and post-retirement healthcare obligations.
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