What Happens if GM Goes Bankrupt?

[Robert Oak]

A very good post on the The Economic Populist is Much Ado About GM, goes into all of the dire ramifications if GM is allowed to go bankrupt.

Affected are workers, pensions, health, share holders plus an entire chain of other businesses, i.e. a domino effect.

It's really good and while most of us think GM executives deserve a good thrashing, it's a whole other ball game if this company goes down for working America.






raw link:

http://www.economicpopulist.org/?q=content/much-ado-about-gm-part-2-3

[Esra Star]

1. If? if? the emperor has no clothes. nt

[thunder rising]

2. Well, I guess we'll be forced to buy better cars for the same price.

[Robert Oak]

3. you won't have any money to buy any car

that's the point. it could trigger a depression.

[last1standing]

4. So you don't give a fuck about 3 million workers or their families.

You deserve all the pain that you so callously accept for others.

[TankLV]

7. Nobody cared about the Steel Industry - which lost MILLIONS of workers...

not to mention related industries - and we seem to have done OK - except for the Older North Eastern Cities...

Why should we care NOW for these particular workers?

[last1standing]

10. My father was one of those steel workers.

He spent 30 years at the mill just to have his pension and health benefits stolen away from him. We were left in poverty that he was never able to recover from. I know about all that much too well. Reagan left us all to sink or swim and most sunk.

I don't want to see millions more go through what my family endured. There was no excuse for it in the '80s and there's no excuse now.

[Robert Oak]

14. no kidding

What happened to the steel workers is still with me.

I just posted over on The Economic Populist a video saying the pension guarantee system when a corporation goes bankrupt is in trouble as well.

I think some sort of nationalization where the US starts making autos with US workers, targeting alt. energies is in order. Something to also boost past Japan/Korea in technology.

[thunder rising]

28. UAW was right in tune with not insisting the industry keep an eye toward the future.

[kirby]

5. Sounds like Corporate Blackmail to me...

Let's see. I will buy the politicians from both parties to let me run the company however I like, even against the nations security. Then using this advantage of power, I will expand the company to 'too big to fail status' and then when failure comes, I will expect the government to prop me up or else.

I mean seriously, why should all the workers (taxpayers like me) have to pay for the pensions and health care that a specific Union bargained for with GM? Especially since this would come from taxpayers who themselves dont have health insurance or a retirement plan?

The Pension Benefit Guaranty Corporation cannot handle such a large systemic failure without turning to the taxpayers. And even if it does, people will get pennies on the dollar of what they were promised.

[last1standing]

8. Because a lot of elderly and sick people will die otherwise.

I have my own problems with handing more money over to corporations without strings, but this libertarian 'I got mine so fuck you' attitude I keep reading on DU is disgusting.

[kirby]

9. Did you read what I said?

I didn't say 'I got mine so fuck you'. I said how/why should people who do not have pensions themselves have to pay for those that lost theirs due to a GM failure? Or how/why should people who will rely on Medicare have to pay for the better healthcare plans GM promised and failed to deliver?

[last1standing]

12. I read what you wrote and my response stands. n/t

[kirby]

13. Ok, so what is a solution?

Health care reform so health care is not tied to an employer would help. However, that probably will not provide some of the generous health care plans that Unions get.

Requiring companies to fund their pensions is needed, but how will that happen now?

And sometimes companies say they cannot afford something but the collective bargaining requires it so they agree to it and it goes unfunded. It becomes a problem that is just out of sight/out of mind until times like these.

[last1standing]

17. A national health plan would beat nothing, wouldn't it?

Everyone seems to think that if GM and Ford go under the executives who mismanaged them will suffer, but that's not true. They will rape the companies of every asset then leave the workers to face the music.

Turn the employees over to a national health system and loan the auto companies the money they need with extremely strict guidelines with criminal consequences. The auto companies are essential manufacturing bases in times of war but they have to be held accountable for their actions as well. Remove ALL bonuses for executives, cut their pay and put them on the exact same health plan as their employees. Any executives who quite can easily be replaced with far better candidates.

[kirby]

20. I agree...

I think unions could be much more effective in their bargaining if they were free from spending all their time negotiating for health care issues.

One thing about 'executives'. Many white collar managers who are not union also have unfunded pensions. They are going to be hurt too and will not walk away in good shape.

I am concerned that Obama's ideology is along this line and that is why Detroit is trying to get something pushed through during Bush's lame duck session without any strict guidelines or limitations.

[kiranon]

24. Agree. We desperately need a national health plan.

[Anna Lee]

25. Thank you. I agree.

[raccoon]

22. Thank you!

"I mean seriously, why should all the workers (taxpayers like me) have to pay for the pensions and health care that a specific Union bargained for with GM? Especially since this would come from taxpayers who themselves dont have health insurance or a retirement plan?"

[Jackpine Radical]

6. If the company goes bankrupt, could the workers buy it out

and go into the car business for themselves? Like, become a collective enterprise instead of a corporation?

The whole idea of worker-owned businesses intrigues the hell out of me.

[Demeter]

11. There Isn't Any Business Left to Go Into

The auto giants are like hollow trees--ready to dissolve into sawdust from the busy little termites that ate out its infrastructure and cut its supply lines.

To manufacture you first need a design. They got nada. It was intentional, too.

Then you need equipment and labor. That they might be able to pull together.

Then you need cashflow. And that's where it gets sticky.

[Jackpine Radical]

21. This is one of those situations that demand creative solutions.

Put together a group of small-time venture capitalists willing to each throw in a few bucks, add some government startup $$, get a good design for an all-electric car, get something out on the road quickly. What about the design for the Volt? Just start with that.

Maybe it can't be done, but maybe it can.

[Robert Oak]

15. It's not clear

I just don't want to see happen what is happening with the financial sector, none of those executives are suffering even losing their extra martini olive for their irresponsibility.

[sam sarrha]

16. what'll happen .that wetbrainalcoholic drugaddictpsychotic motherfucker will get what he wants

the end of the middle class.. and i am sure his forign compeditor friends will reward him well

[Citizen Number 9]

27. I hope you're talking about Rush Limbaugh...

...and not President Bush. I realize you are angry after eight years, but that's no way to talk about the President of the United States.

[sam sarrha]

29. screw you anf the Fascist bastard pResident propaganda you rode in on..

[Terry_M]

18. I realize the pain that a huge company going down causes

but I feel it is unacceptable to keep spending public tax dollars bailing them out unless the bailouts are accompanied by reforms meant to prevent the same thing from happening again. I don't know if that means more regulation, anti-stupidity policies so that dumb executives can't stay around long enough to drive companies into the ground, policies to favor shrinking companies so that in the future when one goes down it doesn't make as much of a mess, or something entirely different. But if we don't do anything, well we're just settings ourselves up for having to bail some other giant out 10 years from now, whether that's Microsoft, Google, GE or who knows what else.

[last1standing]

19. I agree with all of that.

No bailout will mean a thing if it is not tied to regulations and benchmarks for improvement. Without those we are just pouring money into the pockets of the ultra wealthy.

[Citizen Number 9]

26. Aw, Hell'n Damnation...

We have to bail out GM. We don't have a good option. Too many jobs are at stake and it is all about jobs for at least the next couple years.

But, if we're gonna do that we need something different. Something has to change. What is it that the big auto companies do so poorly? I decided it was strategic planning; we're always bitching about what kinds of choices they give us; too damn many gas guzzling SUV's; not enough fuel efficient or basic vehicles, and why has it taken so long to get hybrids, plug-ins or alternative fuel vehicles on the market?

In exchange for the bail out, we want the power to set product specs and quantities. We want to MAKE GM be a leader in new auto technology and boot them into being the automaker that has to take some market risk by introducing it first.

If it works, they'll do well and lead the way for the other automakers. If it doesn't, well, we'll have only ourselves to blame.

[kiranon]

23. Tesla wants to build cars at high and low end. Joint venture w/gov't at GM

Let GM go into a Chapter 11 so the management will have to face what it has done. Have the US govt and perhaps Michigan and the labor unions partner with Tesla Motors to retool some of the capacity of the GM plant to build Tesla high and low end electric cars. Perhaps solar panels could be made there but the last thing this country needs is GM churning out vehicles few want to buy. If GM is successful overseas, leave some of the capacity for that but it's not right for taxpayers who have no pension plans or bonuses to pay for the bonuses and pension plans of others. Feel the same way about the government pension plans that are paid for by taxpayers who have no such pension plans of their own.

Perhaps instead of giving the banks and other financial institutions money that they use to buy other banks or pay themselves large bonuses that money could be put into a decent unemployment insurance plan that auto workers could get for up to 3 years including money for job training, health benefits and travel expenses if needed to go where the jobs are. I would rather the workers get it than the financial people who put this country in the mess it is in now and are profiting from it.

[phantom power]

30. They get bought out by Toyota?

[Dover]

31. Bankruptcy has become a 'strategy' for many corporations.

Just another step in reorganization and a way to unload 'burdensome' things like pensions, union agreements, etc. I'm not familiar enough about GM's current situation to know if that is the case here, but a few years back there was much talk about the automakers unloading pensions via bankruptcy.

GM also does a lot of work through military contracts. Don't know if that is an issue in these negotiations or not.