Dodd "very interested" in "prepackaged bankruptcy" for automakers

[Truth Teller]

...Dodd, the Connecticut Democrat who chairs the Senate Banking Committee, said today he is also very interested in the idea of a prepackaged bankruptcy proceeding for one or more of Detroit's automakers as a way for them to restructure without consumer confidence being completely destroyed.


In such a proceeding, deals would be worked out with creditors, suppliers and labor in advance as a way to ensure the automaker can keep making vehicles and has a clear, restructured path to future viability...

http://www.freep.com/article/20081119/BUSINESS01/81119054

[nadinbrzezinski]

1. Reminds me of Chrysler... back in the day

[Mind_your_head]

2. Prepackaged bankruptcy? Is that like hot dogs?

the 'tubes' are filled with garbage/waste product? :shrug:

[Demeter]

3. I Heard Dodd Was a Flaming Idiot--Now I'm Convinced

[Better Believe It]

4. That's A Call For the Destruction Of The Auto Workers Union

and even that won't "save" the Big three. They will fold. 2 or 3 million people will lose their jobs. Dodds plan will just ensure the destruction of all union organized automakers and the control of all auto production in the United States by non-union foreign owned automakers.

Why are so many corporate Democrats in Congress joining Republicans in the effort to destroy the labor movement?

[Truth Teller]

5. My concern, too

"deals would be worked out with creditors, suppliers and ***labor***"

[TahitiNut]

6. When they wipe out the blue collar middle class manufacturing jobs ...

... that'll put many nails in the coffin of the middle working class. This seems to be the DELIBERATE agenda of the corporatist/finance fat cats, INCLUDING the senior management of the Big 3. There's no larger manufacturing segment still remaining in the U.S. and the UAW has been one of the most successful and responsible unions. It's NOT the fault, in any respect whatsoever, that the Big 3 has been managed destructively. Having "bean counters" as senior executives in a manufacturing business like GM is like having a mortician for a doctor.

When these plantation masters are done with the Big 3, they will have wiped out $60,000,000,000 in jobs. The working class is going to take a BIG HIT if these bastards have their way.

[Canuckistanian]

7. I heard an economist on NPR say the same thing

His reasoning is this - if GM declared bankruptcy, they'd have to file for court protection against their creditors. A re-structuring of their debts.

They could get rid of enough debt that way (by negotiating) to get rid of the PUNISHING contracts they signed with all of their dealerships.

The problem with all those dealerships is that GM has SO MANY. And most of them are dedicated to just a few product lines (e.g Cadillac/Buick or Chevrolet/Saturn).

If they could COMBINE all those dealerships into ONE organization, it would save GM BILLIONS per year.

In the present scenario, they're LOCKED into this dealership contract hell.

[TheWebHead]

8. I agree w/ Dodd

GM's cash burn rate in the last quarter only had the last two weeks of September as a "scary" period, still not as bad as October and November so far, and they were getting creamed... They need to rapidly get expenses down and bk is the only way to go. Then the govt. should bail them out, since we're the lender of last resort, and govt should guarantee the service agreements so people aren't scared to buy a GM car.

but the economy is more concerned about the price action of the big banks the last two weeks, not the automakers. Citi is looking to be the next blow-up, bank america next... even JP Morgan, Wells Fargo and GE are starting to look iffy... and that's real scary.