CNN's Velshi: Opponents of Auto Bailout 'Kind of Have Egg on Their Faces'
Despite the cost of the auto bailout to taxpayers, CNN hailed the subsequent resurfacing of GM as a "pretty amazing" feat and took a jab at the original opponents of the bailout, which included current presidential candidate Mitt Romney. Thursday's John King, USA featured fill-in host Kate Bolduan and business correspondent Ali Velshi wagging their fingers at Romney and the naysayers.
"And, by the way, Kate, I know you didn't ask me the question, but those people who fought against the auto bailout a couple of years ago kind of have egg on their faces right now," Velshi quipped. [Video below the break.]
After reporting the record profits of General Motors, Bolduan began the segment by pitting "that made-in-America pride" against Romney's opposition to the "government bailout and bankruptcy that kept GM going." Apparently, Romney not only stood against the bailouts but against the "made-in-America pride" of GM.
Bolduan took another indirect shot at Romney later when she marveled that "It's really amazing when you kind of look back with hindsight, because there were so many skeptics, Ali, when we were covering this when it was happening back in '09."
And the CNN host continued the narrative in her later interview with Michigan Governor Rick Snyder (R). She pressed the governor over his endorsement of Romney, and his opposition to the bailout. "Do you think, though, those words could come back to haunt him in this primary?" she asked of Romney's condemnation of the bailout in 2008.
A brief transcript of the segment, which aired on February 16 at 6:06 p.m. EST, is as follows:
KATE BOLDUAN: Today, General Motors announced it earned record profits in 2011, $7,600,000, pretty amazing.
(...)
BOLDUAN: Tonight, that made-in-America pride is bumping up against Mitt Romney's opposition to the multibillion-dollar government bailout and bankruptcy that kept GM going.
(...)
ALI VELSHI, CNN chief business correspondent: And, by the way, Kate, I know you didn't ask me the question, but those people who fought against the auto bailout a couple of years ago kind of have egg on their faces right now.
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Comments
Ford
Submitted by ArcherB on Fri, 02/17/2012 - 4:34pm.
Just imaging where Ford would be if they didn't take the bail out.
Oh wait....
"To send men to the firing squad, judicial proof is unnecessary."
--Ernesto "Che" Guevara
You are in
Submitted by bobsmom on Fri, 02/17/2012 - 9:35pm.
my head. My thoughts precisely. I own 2 Ford Escapes, an '08 and I just bought a '11 July of last year. Up here in the mitten state, every 3rd vehicle is a Ford, I kid you not. And at least one of those 3 is an Escape. Great vehicles. The only folks driving GM products are the die hard idiots still working for them. And those buying Chrysler products are the widows of dead Chrysler employees. Not trying to sound harsh, just a fact. This is a Ford nation up here. Chevy Volt be damned. Why should we pay more for a rechargeable car, than we pay for our Fords and home utility bills put together?
If Ford took the bailout they
Submitted by kg on Fri, 02/17/2012 - 10:44pm.
If Ford took the bailout they would be $14,000,000,000.00 richer thanks to taxpayers' dollars they wouldn't have to pay back. The UAW would own them and Ford would be paying out $7.000.00 bosuns to union workers while they screwed the salaried workers and former stock holders would be saying WTF?
"DumbAssity of Dope"
GM Growth Spurred by Stimulus Funded Fleet Sales
Submitted by libBuster on Fri, 02/17/2012 - 4:57pm.
What will GM look like in 2012 and 2013 when its sales pump will not be primed with large fleet sales to municipal, state and Federal agencies. Sales paid for by stimulus money.
Good point
Submitted by Galvanic on Fri, 02/17/2012 - 5:13pm.
The fact that GM is owned by we the taxpayers gives it a leg up when selling cars to the USG.
Does anyone have the numbers?
GM Fleet Sales
Submitted by libBuster on Fri, 02/17/2012 - 7:21pm.
GM Fleet Sales are about 30% of its business:
http://content.usatoday.com/communities/driveon/post/2011/06/gm-sales-down-1-in-may-vw-up-28/1
and http://www.inautonews.com/edmundscom-gives-a-positive-layout-about-the-new-us-auto-sales
Owned by Taxpayers?
Submitted by Kingfish17 on Fri, 02/17/2012 - 8:42pm.
When the feds took over GM, and GM emerged from bankruptcy, every taxpayer in the United States should have received one share of GM stock. Then GM would truly have been "owned by the taxpayers".
"You can’t go take a trip to Las Vegas...on the taxpayer’s dime." Barack Obama
Well, GM does have another advantage.
Submitted by UpNorth on Sat, 02/18/2012 - 8:59pm.
If you look at the new car lot at any of the GM dealers, most of the cars there have already been purchased. By. The. Dealer.
That's how GM convinces everyone that they're moving cars, they force the dealers to buy the new vehicles, before they'll ship them to dealers. Also, at least around here, the GM dealers are still offering "great deals" on 2011 new cars, trying to move them. There's a big dealer about 20 miles from me, and just about one-third of his lot is 2011 cars. He's offering $0-$0-$0 leases, $0 down, $0 security deposit and $0 first months' payment, just to try to move cars.
And what would GM's so-called profit look like if they hadn't gotten huge write-offs in the Bailout?
GM is making a profit
Submitted by shawn. on Fri, 02/17/2012 - 4:46pm.
And thousand of jobs were saved. Looks like it really was the right move. This could have easily been a Solyndra thing, good thing it wasn't.
So, when your favorite supermarket chain fails . . .
Submitted by Galvanic on Fri, 02/17/2012 - 6:27pm.
. . . should the US Treasury bail it out?
What is the threshold for bailing out businesses? If I'm a competitor and I pay my Federal taxes, is it morally right to use my tax $$$ to prop up my failing competitors?
This is inverted capitalism, where failure is rewarded by the successful.
With an infusion of $ billions from Washington, even an incompetent corporation can show a profit. Had GM gone into bankruptcy, it would've continued to produce cars (no appreciable job loss), but the UAW would've had to renegotiate contracts as it also lost value in its pension fund from the devalued GM stock.
The jobs we saved were those of the UAW officers.
From WSJ excerpts: "Today, its (GM's) car business is growing fast in China and North America, has little debt and $38.8 billion in liquidity. It also will pay scant U.S. taxes for years to come as a condition of the government rescue."
That's $50 billion of our money sitting there, and this company won't even pay its "fair share" of federal taxes 'for years to come.' So, as we pay the interest on the money borrowed to bail out this failure, GM returns nothing to us. And don't forget those big bonuses paid out to GM execs as well as the $7000 to each employee. We keep paying so GM can keep "profiting."
We the taxpayers are saps if we keep letting this kind of crap go on. This is worse than any of the deals big businesses lobbied for over the year. They could've save the cost of lobbyists and just failed to get a bail out.
And the forward shawn troll beclowns himself again.
Submitted by The Vet on Fri, 02/17/2012 - 10:49pm.
Yay says nwahs' forward brother. Always good when presidents flout United States law!
According to the article, published in the University of Illinois Law Review, the cumulative effect of the Chrysler and GM bankruptcies essentially erases the bedrock “positive law” that has been in existence for at least a century, while simultaneously heralding the death of the fundamental distributive principles that are the essence of bankruptcy law.
When examined from a historical perspective, what transpired in the GM case — and what the Second Circuit’s Chrysler opinion sanctions — was precisely what the Supreme Court prohibited in a series of decisions dating back to the late 1800s, the scholars say.
Those decisions ultimately formed the basis for Chapter 11′s codification of creditors’ priority rights in corporate reorganizations.
“What we’re dealing with in bankruptcy is the ultimate satisfaction of creditors’ claims,” Brubaker said. “So it goes back to a very basic question of what payment rights do creditors have when there’s not enough money to go around.”
Brubaker, the Guy Raymond Jones Faculty Scholar at Illinois, says the expectation of capital markets in legal history is that repayment rights established by contract are sacrosanct.
Unpaid funds
Submitted by Model850 on Fri, 02/17/2012 - 4:52pm.
Tell you what, Kate and Ali, try your mocking tone again once GM has repaid the taxpayers in full, 'K?
Had the GM bankruptcy been handled normally -- without taxpayer gifts to the UAW and "up yours" to the bondholders -- there likely would have been very little difference in the outcome. And the taxpayers wouldn't be on the hook for billions.
Bingo!
Submitted by Pilgrim1949 on Fri, 02/17/2012 - 5:20pm.
My first thoughts at reading that, too.
Repay all the taxpayer "loans" and then see how much surplus there was, not to mention the Chevy Dolt subsidies.
Do these fools have to change their underwear after every broadcast of orgasmic delight in Ozymandias-on-the-Potomac?
Sheeeesh.......Get a room!
"Ye canne change the laws of physics....." but some politicians believe that with the right legislation you can pretend they don't really apply to your own pet projects...
Chevy Dolt
Submitted by Tugboat Phil on Fri, 02/17/2012 - 8:53pm.
That's pretty good. I read a comment on Hot Air the other day and a guy referred to it as "Sparky Pinto."
Egg?
Submitted by mmilesll on Fri, 02/17/2012 - 5:03pm.
Is this guy kidding? GM and Chrysler both still have the union problems-the union owns part of both and the legacy cost. And if they keep up with really great products like the Volt-GM- and the Fiat 500-Chrysler I am sure they will shock us naysayers. Of course it would be nice if they would pay back the taxpayers, but that will never happen.
From the Wall Street Journal
Submitted by bkeyser on Fri, 02/17/2012 - 5:04pm.
Selected excerpts below:
But, none of that realy matters. What does matter is that CNN is dutifully promoting this as an Obama economic success. Funny though, how many media outlets are careful to couch this by noting the Bush Administration's initiation of the automotive bailout.
Any blue collar workers around here ever get a $7,000 bonus?
Submitted by SickofLibs on Fri, 02/17/2012 - 5:05pm.
.
Yeah, right!
Submitted by Pilgrim1949 on Fri, 02/17/2012 - 5:17pm.
Over my 62+ years years wearing many "collars" and now 20+ years as IT professional, I've never EVER(!) gotten any bonus even 1/5 of that amount!
"Ye canne change the laws of physics....." but some politicians believe that with the right legislation you can pretend they don't really apply to your own pet projects...
$7000 per Obama vote.
Submitted by Soldat44 on Fri, 02/17/2012 - 6:19pm.
$7000 per Obama vote.
Meanwhile, from the
Submitted by Reaver on Fri, 02/17/2012 - 9:33pm.
Meanwhile, from the WSJ
Leaner times for GM white-collar workers
“General Motors Co.'s union-represented workers will get record profit-sharing checks this year, while the company's white-collar work force is in for a pay freeze and reduced bonuses.”
So the unionized blue-collar workers get record profit sharing checks while the non union white-collar workers get pay freezes and pension cuts. Welcome to the Obama recovery, its all about "fairness".
true losses
Submitted by giatn on Fri, 02/17/2012 - 5:46pm.
As long as you ignore the $50 billion undeserved tax credit, the losses of all stockholders,
and the $20 billion stolen from secured bondholders, it was fantastic. It's amazing how successful a company can be when having all debt extinguished and the rule of law suspended!
Maybe the reason earnings are higher than ever is that the company no longer has to pay taxes
or interest on debt that was erased. Stop acting as if this was economic brilliance. It was gangster government and corruption worthy of Putin. The willful blindness and complicity
of the media is shameful. I am still waiting for an accurate assessment of the $80 billion
Obama awarded his favorite "greens" through the stimulus. It is very lucrative to be a bundler
for Obama or a union. Truth has no place in this administration. The media continues to
allow Obama to maintain a massive gap between words and actions with immunity. His
claims of having an "all of the above" energy strategy has the irony gods falling out of the
sky laughing.
Exactly.
Submitted by Soldat44 on Fri, 02/17/2012 - 6:15pm.
Exactly.
'Velshi: Opponents of Auto
Submitted by Soldat44 on Fri, 02/17/2012 - 6:15pm.
'Velshi: Opponents of Auto Bailout 'Kind of Have Egg on Their Faces'
Well then, why don't you get a spoon and scrap it off our faces and make yourself a sandwich!
If the bailouts are such a
Submitted by balboa on Fri, 02/17/2012 - 6:37pm.
If the bailouts are such a bad idea, why have Republicans OK'd them?
And understand that I know
Submitted by balboa on Fri, 02/17/2012 - 6:47pm.
And understand that I know there's more to it than just that.
Bal, had GM been allowed to
Submitted by inquiringmind on Fri, 02/17/2012 - 7:03pm.
Bal, had GM been allowed to go chapter 7 they would have kept operations going and been allowed to restructure their debt. Would they be turning a profit today if they had? Maybe not but you would not have wiped out billions in stockholder equity and bondholder assets.
The unions would have been forced to renegotiate contracts. Which was a big part of why Obama went the bail out route ( and Bush too).
All this did was kick the can down the road.
If GM had been forced into a Chapter 7 bankruptcy, there
Submitted by Jer on Fri, 02/17/2012 - 9:41pm.
would be no more General Motors. The company would have been liquidated, shares of stock would be worthless, Mom and Pop bondholders would have been wiped out, and the negative impact on employees, franchisees, distributors, suppliers, and co-dependent as well as peripheral commerce would have been staggering--and the damage to the American psyche incalculable.
There was no perfect solution available. But the one applied beat the alternative.
Jer
Jer
Submitted by Radical1979 on Fri, 02/17/2012 - 9:58pm.
It's possible that GM, or parts of it, would have been bought by another company. Bondholders would have been paid first. Denying bondholders their money was a truly staggering act, that has damaged my pysche, and the pysche of other investors. I now have no faith in the government protecting my right to my property. That scares the hell out of me.
It's only your opinion that the "solution" beat the alternative. I respectfully, disagree.
so what Jer*
Submitted by cajun2 on Fri, 02/17/2012 - 10:00pm.
The bondholders got nothing, the stockholders got nothing, lost everything they invested. There are other auto companies doing just fine. Yes, the unions are still in power calling the shots, yes the workers still have jobs. But millions of other people are out of work because other businesses went into the tank. The difference is that this company has survived, barely, with tax payer money, not customers. The economy is still in the tank, unemployment highest ever, DC still spending. THAT is the psychological damage done Jer.
I want my money back.
EDIT: sorry Ms Rad, jinx...LOL
Just another example of Jer's ---
Submitted by matthewdean on Fri, 02/17/2012 - 10:05pm.
KJOOS.*
MD
* Knee Jerk Obligatory Obama Support
That was a little mean Uncle Jer.
Submitted by The Vet on Fri, 02/17/2012 - 10:54pm.
The man meant chapter 11. Taking the ball and running with it down the field when you know someone made a simple mistake is a little more than mean.
Chapter 7 is when a company is disbanded and the assests sold to repay debts.
Chapter 11 is when a company is reorganized under court protection and is allowed to carry on business while the bankruptcy moves forward.
It wasn't mean at all, Vet. Not even a "little"....
Submitted by Jer on Fri, 02/17/2012 - 11:30pm.
"Mean" would have been my quoting the following:
Bal, had GM been allowed to go chapter 7, they would have kept operations going and been allowed to restructure their debt.
and then posting something like...
First of all, you idiot, you are describing the procedure under Chapter 11 rather than Chapter 7. And, second, you apparently missed the announcement that GM had in fact filed for Chapter 11 protection. It was in all the papers.
But, I didn't do that. It would have been mean.
Jer
Mean and rude.
Submitted by The Vet on Sat, 02/18/2012 - 1:02am.
Seeing how inquiringmind's nickname in Inqmi not Bal....
Oh, you were quoting there. Oh well. Say, that style in the hypothetical comeback you made there. Is that copying the style of..... Wait.... You are mean!
Nat Geo Wild
Submitted by Kingfish17 on Fri, 02/17/2012 - 11:34pm.
I decided to come check this thread during the commercial break of a show on Nat Geo Wild about crocodiles that lie in wait, lurking under cover in a muddy river with just their eyes and nostrils poking out of the water, in the hope that a gazelle or other unwitting creature comes to the river to get a drink, make a minor mistake, and end up as crocodile lunch.
"You can’t go take a trip to Las Vegas...on the taxpayer’s dime." Barack Obama
That's a nice little parable, Kingfish...
Submitted by Jer on Sat, 02/18/2012 - 12:03am.
And if it were your "unwitting creature", would you bail it out or allow the free market of nature to liquidate it?
Jer
No no no Jer
Submitted by RESTLESS 1 on Sat, 02/18/2012 - 12:21am.
GM was not the 0's unwitting creature. GM was a full grown adult, responsible for its own actions.
And so were the Mom and Pop bondholders...
Submitted by Jer on Sat, 02/18/2012 - 12:55am.
i.e. full grown adults.
Jer
The Bondholders
Submitted by Kingfish17 on Sat, 02/18/2012 - 10:51am.
The bondholders should have got exactly what was coming to them for having been dumb enough to buy GM bonds, and that would have been the equity ownership in the new corporation.
"You can’t go take a trip to Las Vegas...on the taxpayer’s dime." Barack Obama
⇒ And I disagree, kingfish
Submitted by Cool Arrow on Sat, 02/18/2012 - 5:50pm.
Up until the federal government's meddling in Chrysler, bondholders were first at the till for any proceeds from liquidation.
What people should consider in the future is that their money is in no way safe as long as a union is involved.
I think we are actually pretty close...
Submitted by Kingfish17 on Sat, 02/18/2012 - 9:23pm.
I don't disagree with what you are saying, CA. Being a bondholder in a reorg typically ends up in being the equity owner of the emerging company. If there isn't enough value in a reorg, then the creditors and bondholders get the proceeds from a liquidation. In the case of GM, there was a ton of value to be had in having a new car company emerge from bankruptcy, free of the burdens of the UAW and the old agreements.
"You can’t go take a trip to Las Vegas...on the taxpayer’s dime." Barack Obama
⇒ Then we agree kingfish
Submitted by Cool Arrow on Sat, 02/18/2012 - 9:30pm.
If a major corporation ever again gets perilously close to insolvency, and a union is involved, we can count on bondholders to take a big dump rather than trust to the honesty of this President.
It would be interesting
Submitted by Kingfish17 on Sat, 02/18/2012 - 10:11pm.
It would be interesting to compare the spreads on bonds issued by companies that employed workers belonging to a Democrat supporting union as opposed to companies that had no unions. If I was an investor, I would avoid buying bonds of any company where my interest could possibly be abrogated to another entity.
"You can’t go take a trip to Las Vegas...on the taxpayer’s dime." Barack Obama
Jer, Yes and as full grown
Submitted by Liberallies on Sat, 02/18/2012 - 6:19pm.
Jer,
Yes and as full grown adults they should be allowed to receive the rewards or punishment for making business decisions. But we live in a world where no one, Republican or Democrat, business person or unemployed, union or non-union wants to face the consequences of their actions. Instead, everyone wants to look at big papa, government, for some type of bail out, cover.
My Parable
Submitted by Kingfish17 on Sat, 02/18/2012 - 12:50am.
Gazelles have to drink, crocs got to eat.
"You can’t go take a trip to Las Vegas...on the taxpayer’s dime." Barack Obama
Jer, Hmmm...So, instead of
Submitted by Liberallies on Fri, 02/17/2012 - 11:07pm.
Jer,
Hmmm...So, instead of feeling the pain now, we will feel the pain later because GM will go down, much like Chrysler who is now owned by FIAT. And yes, GM will go down, it is just a matter of when, not if.
So, instead of us paying the price now, it will be our children who will feel the horrific pain. What is it with Democrats who love to pass our problems and pains to our children?
Why do Liberals love to postpone the unavoidable and throw money at the problem?
GM is still in the negative, owing countless of millions to the tax payers, its cars are horrific.
The, "too big to fail" idiocy is just that, idiotic. The reason Obama did not let GM under is because of the unions, it had nothing to do with anything else.
No company is too big to fail and the pain will come now or later, but it will come.
So, Liberallies...Obama acted solely for the unions,
Submitted by Jer on Fri, 02/17/2012 - 11:51pm.
while Bush had the best interests of "the American people" in mind?
President Bush on Friday unveiled a long-awaited plan aimed at helping the struggling U.S. auto industry avoid bankruptcy and massive layoffs that could deepen the nation's recession, offering carmakers $17.4 billion in short-term financing.
Speaking at the White House, Bush said General Motors Corp. and Chrysler LLC, both of which have said they are in danger of running out of cash soon, would have immediate access to the money.
"The American people want the auto companies to succeed, and so do I," the president said.
"If we were to allow the free market to take its course now, it would surely lead to bankruptcy and liquidation of the industry," he said.
"Allowing the auto companies to collapse is not a responsible course of action."
Or do you think Bush really didn't want to do it but was bending to the will of the people?
Jer
Both Bush and Obama
Submitted by Kingfish17 on Sat, 02/18/2012 - 12:52am.
Both Bush and Obama made a mistake.
"You can’t go take a trip to Las Vegas...on the taxpayer’s dime." Barack Obama
That's a possibility...
Submitted by Jer on Sat, 02/18/2012 - 1:17am.
But I think the judgment of history will record that the risks of doing nothing far exceeded the potential for harm resulting from government intervention. [An infusion of capital that was sought by the industry, it should be noted. And there was no private source willing or able to come to its rescue.]
Jer
History will also judge....
Submitted by The Vet on Sat, 02/18/2012 - 1:34am.
Maybe if they had stuck to the script, the legal script, and called a bridge loan a bridge loan and went to the head of the line as creditors, instead of muddling with bankruptcy laws that had been in place for over 100 years.....
On Dec. 19, President Bush approved up to $17.4 billion in loans for G.M. and Chrysler on the condition that they seek concessions from their lenders, creditors and the United Automobile Workers union to improve their competitiveness. G.M. has said it would begin talks with its bondholders and the U.A.W. on Jan. 5.
Jer, Of course no private
Submitted by Liberallies on Sat, 02/18/2012 - 3:40pm.
Jer,
Of course no private industry was willing to come out and help an utterly miserable, failing company which does not learn from its mistakes. The private sector had it right.
The government, like it always does, Republican or Democrat, intervened in the private sector, in the market and it has given false hope to a failing industry.
And like everything the government touches, it has created a disaster in GM, I give you the pathetic Volt which is only surviving thanks to government subsidies. Or the GM Cruze which steering wheel come off while you are driving!
GM is garbage and it has already failed. It is a matter of when, not if.
How many times has Chrysler been bailed out? and where are they now?
You are a strange one.
Submitted by The Vet on Sat, 02/18/2012 - 4:55pm.
There was no credit from private industry at the tail end of 2008. The banking system had frozen up. The private sector was frozen. There was nothing to have right at the time. We were right to give GM a bridge loan. They would not have made it to a bankruptcy had we not. Please knock it off.
Once again, like it or not, Uncle Jer is correct. To do nothing at that time would have been disastrous. To the auto industry. To the United States credit and banking system.
People may not like it, but he is correct in every single word. Every single sentence ---
"But I think the judgment of history will record that the risks of doing nothing far exceeded the potential for harm resulting from government intervention. [An infusion of capital that was sought by the industry, it should be noted. And there was no private source willing or able to come to its rescue.]"
What if GM had not made it to the "managed bankruptcy"?
Submitted by Kingfish17 on Sat, 02/18/2012 - 5:33pm.
What if they didn't get the supposed bridge loan? The old GM would have been liquidated, the equity wiped out, and the creditors and bondholders would have had to stand in line for the turn at the remaining assets. And it would have behooved the creditors and bondholders to allow the courts to restructure a new GM, owned by the the bondholders and creditors, to take possession of the plant and equipment, emerge from bankruptcy, and go back into manufacture of automobiles without the burdensome union contracts and healthcare obligations that brought them under in the first place.
Or were you being sarcastic?
"You can’t go take a trip to Las Vegas...on the taxpayer’s dime." Barack Obama
Kingfish17, What no one
Submitted by Liberallies on Sat, 02/18/2012 - 6:14pm.
Kingfish17,
What no one wants to talk about is that one of the main reasons GM has been doing so poorly besides making very poor business decisions and terrible cars is due to the union demands GM has bowed down to.
One of them being people still receiving an hourly wage and health benefits long after they left GM!!!
I have to look it up, but I remember reading an article, at the time GM was receiving the ridiculous bailouts from Bush and Obama, that about $2,000 to $3,000 of what we pay on a GM car goes directly to support union demands, not to create new capital, not to hire new people, not to improve cars.
GM has been making horrific business decisions for a long time, but the burden that unions have become on the auto industry is also one of the main reasons why the auto industry in the USA has been doing so poorly.
I don't deal with hypotheticals so well Mr. Kingfish17.
Submitted by The Vet on Sun, 02/19/2012 - 9:46am.
The old GM would have been liquidated, the equity wiped out, and the creditors and bondholders would have had to stand in line for the turn at the remaining assets. --- That is Chapter 7.
And it would have behooved the creditors and bondholders to allow the courts to restructure a new GM, owned by the the bondholders and creditors --- That is Chapter 11. Chapter 11 can take years. And the companies still need an infusion of cash to operate during that time.
I deal in knowns. The company got the loan from the Bush Administration. They got more money in the Obama Administration. They filed for Chapter 11. The Obama Administration perverted the process giving some creditors head of the line status (unions) over other creditors that had a legal right to be head of the line (various bondholders).
But if they had not received the bridge loan at the end of 2008, the bankruptcy, be it chapter 11 or 7, would have been much messier and taken longer. And it would have done it at a very bad point in time, right during a financial panic. As it was, even with the perverted bankruptcy process of the Obama Admin, both GM and Chrysler emerged in a matter of months.
Here is a known ---
Messy Process
Submitted by Kingfish17 on Sun, 02/19/2012 - 10:24am.
I agree that had they done a reorg without the federal government intervening, it would have been messier. I just don't see the downside, in the long run, of having the laws of the land upheld, having the investors retain their proper standing, and not having a "king" decide who emerged the winners and the losers, and having precedent established that will make any future bankruptcy a much more subjective matter.
Just as I believe that TARP was avoidable, given calmer heads and less hyperbole, I also believe that a forced liquidation of GM and Chrysler was avoidable. But the Feds didn't want to avoid either TARP or the takeover of GM and Chrysler. With the money comes the power.
"You can’t go take a trip to Las Vegas...on the taxpayer’s dime." Barack Obama
Jer, Why do you guys on the
Submitted by Liberallies on Sat, 02/18/2012 - 3:32pm.
Jer,
Why do you guys on the Left presume that we on the Right love Bush's policies? Bush bent to political pressure, sadly.
1) Bush was much farther to the Left than anyone on the Left is willing to admit. He wasn't as far to the Left as Liberals wanted, but he was far from a Regan Republican.
2) Bush, like Obama made a huge mistake. However, Bush didn't give the auto unions the huge power that Obama did.
Neither Bush nor Obama had the the best interest of America. Sorry, please don't assume what I think or do not think about Bush.
The, "...Bush did it too..." or "...Bush was going to do it too..." defense from Liberals does not work with me. What is wrong is wrong, regardless who did it. Don't be such a partisan and don't assume that we are all partisans like you.
Obama bent over the country, forced us to hold our ankles and allowed the unions to rape Americans from behind. Democrats are owned by the unions which are a monstrocity and a decese in America.
Interesting how you have refused to address the fact that despite the bailouts, GM is still on the negative, owing us millions upon millions and its cars are crap. How did the bailouts work? postpone what is coming.
⇒ Sorry, bal
Submitted by Cool Arrow on Fri, 02/17/2012 - 9:10pm.
Your track record precludes any assumption of in-depth knowledge on your part.
So, please share with us what more there is to it.
Rocky, So what Republicans
Submitted by Liberallies on Fri, 02/17/2012 - 11:09pm.
Rocky,
So what Republicans supported the bailouts....your point is? Republicans and Democrats are both wrong on this. All the bailouts did was postpone what is coming, it didn't stop it.
Just a little
Submitted by bobsmom on Fri, 02/17/2012 - 9:40pm.
aside, I work for a company that leases fleet cars, about 200 a year. Sadly, when they first started the program, they wanted something to make us stand out in the market place (and one of the owners was a friend of Rick Wagner's at the time), so they went with the Chevy HHR's. Holy yuck. They were the nastiest vehicles ever known to man. 3 years later, we're finally out of that contract, and we've now gone with Ford products. So, Bammy, stick THAT in your pipe and smoke it.
Question
Submitted by GregE on Fri, 02/17/2012 - 10:41pm.
If the federal government has the power (I know they don't, but liberals think they do) to mandate that an insurance company provide a free service, what obstacle is keeping them from mandating that every car company provide a free car?
When will John Deere be forced to provide me a free lawnmower? Kraft, free food? Firestone, free tires? My mechanic, free auto services?
<crickets>
Submitted by GregE on Sat, 02/18/2012 - 1:35pm.
And when they are not turning out a quality product?
Submitted by drsamherman on Fri, 02/17/2012 - 10:44pm.
Who will be left to bail them out? We already know the consumer surveys posted Chrysler's junk at the bottom of the barrel for dependability, and if GM continues on its present track with the Dolt (great name, BTW!) and other pieces of overhyped heaps, then what? Will the government then mandate that every third car sold has to be a GM? Or will there be a vehicular mandate called Obama-car?
Somehow the press conveniently omits the number of investors who were screwed over by placing the unions ahead of the bondholders. Thousands of small investors were left with pennies on the dollar when the indenture and convenants of those bonds were essentially disregarded to please the union Obagasm mob.
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Submitted by GregE on Sat, 02/18/2012 - 1:34pm.
delete
What......
Submitted by GregE on Fri, 02/17/2012 - 10:47pm.
.....in the US Constitution gives the federal government the power to pick a company, amongst the thousands in the USA, and give them money, that I earned by selling my time (a part of my life), that would otherwise remain in my possession to help me care for a family member, buy my food, and allow me to heat my home?
<more crickets>
Submitted by GregE on Sat, 02/18/2012 - 1:33pm.
Crickets no longer
Submitted by Kingfish17 on Sat, 02/18/2012 - 1:58pm.
The Good and Plenty Clause, of course! Also, the Good and Welfare Clause.
"You can’t go take a trip to Las Vegas...on the taxpayer’s dime." Barack Obama
Ohhhhhhhhhh thats right!!
Submitted by GregE on Sat, 02/18/2012 - 2:01pm.
I forgot all about that clause. LOL Thank goodness we have Mr. Conyers as one of the mere 545 people tasked with writing laws for the powerful and great United States of America and we it's sheeple.
Hate to Dampen the Phony "Recovery"...
Submitted by Motormouth KOS on Fri, 02/17/2012 - 11:06pm.
Is the Chevy Volt another shining example of the great success of the bailout?
Caught fire by itself...
NHTSA looked the other way for 6 months...
Cost a fortune to develop, and this was paid for with the bailout...
And as of today, each Volt represents about $250,000 in US Government subsidies...
Ethanol, anybody?
The Obamination... A crisis leading to a catastrophe..(please donate to MRC)
Given Fiat's decidedly tumultous financial history...
Submitted by Dave. on Sat, 02/18/2012 - 1:26am.
...(and that is being kind), you can bet they will be looking to dump Chrysler not too far down the road - just like the Germans did.
As for Goonion Motors, they are now run by UAW goons right along with government goons, so their demise is now all but assured.
LOL - I mean, could you even think of a more lethal combination running a car company?
-Dave
Vote for the American in November
All true, Dave,
Submitted by UpNorth on Sat, 02/18/2012 - 9:15pm.
but the execs from GM and the UAW will have one hell of a golf course to play on.