Auto Bailouts - We lost money

ah ahh ahhh ahhhhh aaa ahhh...I iss iiss thisis whhhatyyourr taalllkoing aboout

Bottom line is if all you care about is money it was wrong, if you care about people it was right. Originally Posted by i'va biggen

ah ahh ahhh ahhhhh aaa ahhh...I iss iiss thisis whhhatyyourr taalllkoing aboout

Then both GM and Chrysler should have been shoved into bankruptcy and sold off to new creditors for a fraction of the stock value.

Stock holders AND unions would have taken a bath, but behavior and expectations would have been corrected on both sides.
Originally Posted by ExNYer

Yep. Goldman and the gang would have taken their bailout money and swooped in to buy the automakers.

WRONG! There were projects that if GM and Chrysler were allowed to go under that the result would be 40% unemployment in the US as all the support vendors closed also. The cost in terms of lost taxes, increased public assistance and the hit to the financial markets would have thrown the country into another great depression. EVERYONE says it was the right thing to do, well except you. Originally Posted by BigLouie

Absolute horseshit.

40% unemployment? Really? Where did you get those numbers?

From GM's attorneys or from GM's PR department?

Do you really think the failure of ONE company could boost unemployment from 10% to 40%? Ford was financially sound and Chrysler is too small. So you are basically saying that GM - by itself - would have boosted unemployment by 30% in a country or 310 million people. What are you smoking?

GM would have been sold for a fraction of the bailout money to its creditors in bankruptcy. They would have busted the union and began to make cars with about two-thirds the number of UAW members. Detroit would have taken a hit, but the rest of the country would have been fine.

We have TWO auto industries in this country - a domestic one (ford, GM, Chrsyler) centered in Detroit and a foreign one which is spread throughout the South and Southeast.

The Feds should have provided a liquidity boost of less than $10B while GM and Chrysler were shoved through bankruptcy.

Absolute horseshit.

40% unemployment? Really? Where did you get those numbers?

From GM's attorneys or from GM's PR department?

Do you really think the failure of ONE company could boost unemployment from 10% to 40%? Ford was financially sound and Chrysler is too small. So you are basically saying that GM - by itself - would have boosted unemployment by 30% in a country or 310 million people. What are you smoking?

GM would have been sold for a fraction of the bailout money to its creditors in bankruptcy. They would have busted the union and began to make cars with about two-thirds the number of UAW members. Detroit would have taken a hit, but the rest of the country would have been fine.

We have TWO auto industries in this country - a domestic one (ford, GM, Chrsyler) centered in Detroit and a foreign one which is spread throughout the South and Southeast.

The Feds should have provided a liquidity boost of less than $10B while GM and Chrysler were shoved through bankruptcy. Originally Posted by ExNYer

+1

Well stated.

IF GM had been allowed to go under taxpayers would have had to pick up pension plans with a $26 billion shortfall. Besides GM going under most of their suppliers would have gone under. There would have been a cascading effect as the suppliers go under, the people that work for them are out of jobs which closes other business. It's not just GM. Besides you are being extremely naive if you think Congress was going to let this happen. Stock holders of GM include not just individuals but a lot of institutions and banks and no way are they going to allow this to happen. Basically the money that runs this country says GM stays in business and so the loans were made. NO matter what you may think, there is no way it does not happen. And you are just a foolish if you think that all it would have taken was some Congressmen with backbone, well they know where their money comes from and it ain't the taxpayers and it certainly ain't you. If the big money that fuels campaigns wants GM to stay, GM stays.

+1

Well stated.

Originally Posted by CuteOldGuy

I agree, he did say it well, but the Ozombies... Will never get it... till it's to late for all of us.

If GM had been allowed to go the US would have lost 100 billion plus

If GM had been allowed to go the US would have lost 100 billion plus Originally Posted by skirtchaser79411

That's alright. We print 85 billion a month of fake money, every fucking month!

My bad they knocked it down to 75 billion this month.

100 billion, you are a funny guy...

The Feds should have provided a liquidity boost of less than $10B while GM and Chrysler were shoved through bankruptcy. Originally Posted by ExNYer

All these comments ignore a few facts. First, GM and Chrysler WERE shoved through bankruptcy. It was called a "managed bankruptcy" because it was pre-planned and accelerated in order to minimize the disruption to all concerned.

My problem isn't with the bailout itself as much as it is with the bankruptcy. As the leading creditor, the federal govt dictated the BK terms for everyone involved. Obama bent all of the long-standing rules of BK (regarding debt seniority and security interests) to reward the UAW at the expense of taxpayers and other creditors. It was a backdoor way to shovel tax dollars to his crony union supporters and avoid concessions they would have made in a normal BK. Taxpayers didn't have to lose $10 billion. The US Treasury could have been fully repaid two years ago if the normal rules of bankruptcy had been followed. The fact that it didn't happen was a huge scandal and represented political corruption of the highest order - yet the MSM ignored it.

Also, everyone seems to think Ford is better managed because it didn't need any bailout money. The reality is more complex. Ford made a decision to leverage up and borrow billions from its banks and Wall Street just before the crisis hit. That gave Ford a pile of cash to ride out the crisis. So a lot of it was sheer luck and good timing. Here's a link if anyone is interested.

http://www.nytimes.com/2009/04/09/business/09ford.html?

Allowed to fail? It did fail and the failure should be on the books. Instead a bunch of completely arrogant fuckheads who think they knew something delayed the pain for our kids and their kids, just as they did by stealing from the future by creating pensions in the first place. The company should have gone bankrupt, because they were bankrupt, a bunch of morally bankrupt fucks that went financially bankrupt, but that their friends cheated the system for them.

Funny how socialism haters don't hate pensions, certainly a form of socialism if there ever was one. Probably because they get to choose who benefits.

That's alright. We print 85 billion a month of fake money, every fucking month!

My bad they knocked it down to 75 billion this month.

100 billion, you are a funny guy... Originally Posted by IIFFOFRDB

Since we print 75 billion a month, why the crying over the supposed 10 billion loss to save 200,000 good paying jobs?

Since we print 75 billion a month, why the crying over the supposed 10 billion loss to save 200,000 good paying jobs? Originally Posted by Bert Jones

so the Chinese can buy up Detroit.. Duh

All these comments ignore a few facts. First, GM and Chrysler WERE shoved through bankruptcy. It was called a "managed bankruptcy" because it was pre-planned and accelerated in order to minimize the disruption to all concerned.

My problem isn't with the bailout itself as much as it is with the bankruptcy. As the leading creditor, the federal govt dictated the BK terms for everyone involved. Obama bent all of the long-standing rules of BK (regarding debt seniority and security interests) to reward the UAW at the expense of taxpayers and other creditors. It was a backdoor way to shovel tax dollars to his crony union supporters and avoid concessions they would have made in a normal BK. Taxpayers didn't have to lose $10 billion. The US Treasury could have been fully repaid two years ago if the normal rules of bankruptcy had been followed. The fact that it didn't happen was a huge scandal and represented political corruption of the highest order - yet the MSM ignored it.

Also, everyone seems to think Ford is better managed because it didn't need any bailout money. The reality is more complex. Ford made a decision to leverage up and borrow billions from its banks and Wall Street just before the crisis hit. That gave Ford a pile of cash to ride out the crisis. So a lot of it was sheer luck and good timing. Here's a link if anyone is interested.

http://www.nytimes.com/2009/04/09/business/09ford.html? Originally Posted by lustylad

You are correct about the perverted bankruptcy proceedings that occurred.

I was referring to a proper bankruptcy procedure when I said that GM and Chrysler should have been shoved into bankruptcy.

Obama strong armed senior creditors in the bankruptcy of GM because many of those same creditors were big banks that were in link to receive bailout money of their own. If they did not give up their rights in GM debt, then they would not participate in the bank bailout.

So the whole process was perverted.

lustylad has trouble understanding moral hazard