Free Markets, Free People

Guess Who Is Back, Hat In Hand?

I suppose this too will somehow come as a surprise the left:

General Motors Corp., nearing a federally imposed deadline to present a restructuring plan, will offer the government two costly alternatives: commit billions more in bailout money to fund the company’s operations, or provide financial backing as part of a bankruptcy filing, said people familiar with GM’s thinking.

The competing choices, which highlight GM’s rapidly deteriorating operations, present a dilemma for Congress and the Obama administration. If they refuse to provide additional aid to GM on top of the $13.4 billion already committed they risk seeing an industrial icon fall into bankruptcy.

Tired of throwing money at a company which has a failing business model? Not interested in throwing good money after bad?

Well, then let them seek protection under the bankruptcy laws, reorganize (which means getting out from the labor contract the UAW refuses to renegotiate) and let them stand a company back up that’s able to compete. Heck, this is as good a time as any – they’re not selling any cars anyway.

Oh, and as an afterthought, if bank execs have to have salary caps, how about auto execs and labor leaders? No I’m not for any of that, but it does provide a vivid example of how arbitrary the rules Congress imposes are, doesn’t it?

~McQ

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5 Responses to Guess Who Is Back, Hat In Hand?

  • i guess they will wedge a tax credit in the next stimulus for buyers of American automobiles.

  • Quelle surpris! A company that is losing billions of dollars cannot turn itself around in a recession and pay back a thirteen billion dollar “loan”.  I distinctly remember saying it would never be payed back, and I cannot claim that I was the only one who saw this, either. Is there anyone who has even a shred of respect left for our political leadership?

    Bankruptcy is the obvious solution (to anyone outside of Washington), but wouldn’t that mean that management compensation would be subject to change to reflect actual performance? And then who would make all those corporate PAC contributions to Congress?

  • We have bankruptcy laws, we have foreclosure procedures, what’s the problem? Just get out of the way and let the problems work themselves through.

  • And the primary reason?  UAW walked out on the talks.

    GM is so screwed.

    #1.  If they want to receive the bailout and continue in business, then they have to go to the UAW to get labor concessions.

    #2.  If the UAW balks, then they have to go to the Congress to get help in the negotiations.  Unfortunately for them, the Congressis currently run by the Democrats, a wholly-owned subsidiary of thelabor movement.

    #3.  If GM decides to just say forget it and declare bankruptcy, then the only entity around that is big enough and interested enough to be debtor-in-possession is the US Government.

    #4.  The US Government is, of course, currently run by the Democrats, a wholly-owned subsidiary of the labor movement

  • This shouldn’t be a surprise for anyone with a memory span more than a month.  They got an amount agreed to upfront plus an addition amount in March pending meeting the terms of the Bush deal.  The total of which approaches the amount they had requested. 

    The surprise would have been if they didn’t seek the follow up amount.  But, I guess “surprise” is a necessary ingredient to build outrage.