Obama Transition Said to Consider a ‘Prepack’ Auto Bankruptcy

[dkf]

ov. 21 (Bloomberg) -- President-Elect Barack Obama‘s transition team is exploring a swift, prepackaged bankruptcy for automakers as a possible solution to the industry’s financial crisis, according to a person familiar with the matter.

Obama’s team has already contacted at least one bankruptcy- law firm to say that Daniel Tarullo, a professor at Georgetown University’s law school who heads Obama’s economic policy working group, would call to discuss the workings of a so-called prepack, according to this person.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aRfqFMhlj5lk&refer=worldwide

[INdemo]

1. A bankruptcy would still cost millions of jobs..prepackaged or not

The suppliers that are hanging there by a thread would close their doors..They would only receive a fraction of what they are owed and they would not survive...This would include the steel industry and a big three bankruptcy would leave a lot of vacant buildings..Northwest Indiana would then be in a depression.

[godai]

2. I agree with Obama that all parties need to compromise.

There is no certainty that 'millions of jobs will be lost'. If you understand the scheduled bankrupty, GM will continue to make cars, under the new post-bankruptcy rules. All the suppliers will be needed, so jobs should not be lost there. This is not simple but seems to be the likely path forward.