BoatBanter.com - View Single Post

Tom Francis - SWSports

On Thu, 13 Nov 2008 06:50:27 -0600, wrote:

On Thu, 13 Nov 2008 11:38:58 +0000, Tom Francis - SWSports wrote:

On Thu, 13 Nov 2008 02:12:16 -0500, "Eisboch"
wrote:

"D.Duck" wrote in message
news:G_Odnc2FKtknEYbUnZ2dnUVZ_tfinZ2d@giganews. com...

My hope is that the GM/Ford/Chrysler problems are resolved (if
resolvable) in bankruptcy, not throwing more tax payer dollars at
them.

Duck, I couldn't agree with you more. Chapter 11 isn't permanent. It
allows for "reorganization" which is exactly what the auto industry
needs to do right now. Revise business plans, products and
re-negotiate the union contracts under the watchful eye of a bankruptcy
judge.

Handing them a pile of taxpayer money, calling it a government
"investment" just to keep them in business under their current
organizational structures won't do a damn thing.

I agree.

Tough call. I don't like these bailouts, but can we afford not to? In
this country, 1 in 10 jobs are connected to the auto industry. If the
auto companies fail, we're talking depression, not recession. All of
this, could get real scary, real quick.

I don't disagree with that - in fact, I'm with you.

The advantage of a pre-pack (and I'll admit, I had never heard of a
pre-arranged and negotiated Chapter 11 bankruptcy before just the
other day on CNBC) is that most of the major debtors/creditors agree
on a time frame and general framework for negotiations.

The whole point of backruptcy under Chapter 11 is to allow for
reorganization - it gives protection to creditors and the company
allowing for reasoned renegotiations of existing contracts and
conditions in addition to capital access during the bankruptcy period.

Seriously, airlines have been doing this for years - I've flown United
in the middle of a bankruptcy - didn't seem to make a freakin'
difference - why can't the auto industry.

I agree with supporting the banking system - that's a plus and a must.
What I don't agree with is supporting a manufacturing corporation who,
through it's own stupidity, got itself into a mess and now wants the
average taxpayer to bail it out.

I ain't buying it.

Personally, I think Sheila Bair has the right idea - buy up all the
fluky mortgages, take a small haircut, renegotiate the terms to keep
people in their homes and gradually sell the new assets back into the
system. It's cost neutral to the taxpayer and actually has the
potential to make the taxpayer money.