Let them all bankrupt

[scooterbob]

The country would, on the whole, be better served if the automobile companies and others with similar financial problems filed for protection under the Bankruptcy Code.

 

Obviously, these companies would file what is known as Chapter 11 (Reorganization). They would not go out of business as many seem to believe. However, bankruptcy would allow the companies to reorganize and, hopefully, become profitable. A creditors's committee would help oversee the process. It could, and should, allow for such needed changes as trimming of the excess fat- both in management and in the unionized labor force- and increased productivity and quality.

 

Some years ago it worked for Walt Disney (as it has through the years for many others) and it can work for these companies. Of course, if the problems cannot be worked out through this approach, they probably need to lock the doors and move on. We need responsibility instead of bailouts.

[Mr.Fundamental]

Amen!

[HHSDad]

What about all of their employees?

[scooterbob]

What about all of their employees?

 

Although we all have compassion for them and their families, I would think that a successful reorganization for the auto companies would require the employees to take a cut in pay/benefits. If we are honest, we must admit that the companies are as they are as much because of excesses to employees as to excesses to management. It works both ways.

 

Need an example? AK Steel in Ashland is going to be "idled" for a while. The newspaper interviewed a wife of one of the employees who stated that, with subpay and unemployment, her husband would be bringing home $500.00 per week. She said that it would be difficult for them because that means that his take home pay each month would be about what he brought home each week when working. Figure it for yourself. That, even using a 28 day (4 week) month translates to take home pay of $104,000 per year (these are her figures-not mine). With benefits added in, I am surprised that AK hasn't been forced to "idle" long ago.

[cch5432]

What about all of their employees?

We have unemployment benefits until they can find another job. We have the TAA and the ATAA to help with those who have lost their jobs to shift in productions outside of the country.

 

If our economy's growth is not held back by an $810 billion tax bill, then more jobs would be created for those who lost them. In this situation, the tax bill keeps growing, the unproductive business behavior keeps happening, and everyone keeps losing.

 

But I am sure you already knew that.

[Da champ]

Although we all have compassion for them and their families, I would think that a successful reorganization for the auto companies would require the employees to take a cut in pay/benefits. If we are honest, we must admit that the companies are as they are as much because of excesses to employees as to excesses to management. It works both ways.

 

Need an example? AK Steel in Ashland is going to be "idled" for a while. The newspaper interviewed a wife of one of the employees who stated that, with subpay and unemployment, her husband would be bringing home $500.00 per week. She said that it would be difficult for them because that means that his take home pay each month would be about what he brought home each week when working. Figure it for yourself. That, even using a 28 day (4 week) month translates to take home pay of $104,000 per year (these are her figures-not mine). With benefits added in, I am surprised that AK hasn't been forced to "idle" long ago.

 

 

Would you buy something from a bankrupt company?

[cch5432]

Would you buy something from a bankrupt company?

I can't speak for him, but I'd actually consider buying stock in a bankrupt company. I can't imagine the profit that those who bought Disney stock in '04 are making now.

[Da champ]

I can't speak for him, but I'd actually consider buying stock in a bankrupt company. I can't imagine the profit that those who bought Disney stock in '04 are making now.

 

Its pretty cheap right now. Ford is $1.70 and GM is $2.80

[HHSDad]

Its pretty cheap right now. Ford is $1.70 and GM is $2.80

Which do I buy? A gallon of gas or a share of stock? Hmmmm.

[Da champ]

I can't speak for him, but I'd actually consider buying stock in a bankrupt company. I can't imagine the profit that those who bought Disney stock in '04 are making now.

 

So stock yes and car no ?

[cch5432]

So stock yes and car no ?

 

I would have no problem buying a car from Ford, other than the fact that their MPG's are generally horrible.

[CCH05]

Which do I buy? A gallon of gas or a share of stock? Hmmmm.

 

 

Think long term buy the stock.They are great values.

[scooterbob]

Would you buy something from a bankrupt company?

 

Absolutely and without any hesitation. Under the circumstances, the chances of getting a bad product are less if they are under the scrutiny of their creditors and the court.

 

Buying shares of stock would be more risky but, at the present prices, it may well be a good longterm investment.

[The Red Rambler]

Someone can correct me if I am wrong but if they file Chapter 11 that absolves from paying pensions. So essentially tens of thousands of retired autoworkers would lose their retirements. I can't see how that is good for anyone.

[All Tell]

I blame two entities for the current situation of the "big 3"

 

1st the big three themselves. They have to be drug kicking and screaming to any change. For years they produced products that were inferior to foreign competetors and now that it looks like they have remidied that situation there were far to many people driven away from their products. I know several people who staunchly say they will never own another vehicle produced by American manufacturers. They ahso fought any meaningful fuel economy restrictions and very foolishly chose not to make theyr most fuel efficient vehicles available here.

 

2nd the unions. They have negotiated so many inflated contracts that the companies can now not afford to honor them. How many people are being paid that are completely non-productive? How much in befefits do retirees get? Union greed is a huge factor in this.

 

And I agree, let them declare bankruptcy.