Originally Posted By: LS2JSTS
The arrogant dopes are the ones who held the Corporation at knife point and extorted ridiculus wages and benefits from them.
Agreed. And the management that took those deals, knowing that some other management team in the future would have to deal with it.
Originally Posted By: LS2JSTS
The arrogant dopes are the government officials who think they can legislate what the market wants to buy.
Not sure what you mean by that- do you mean congress passing efficiency/pollution laws? Maybe I'd agree with that- wherever there are laws that say manufacturers have to use this system or that, rather than just mandate the goal. Or laws that say that an entire car maker's fleet of vehicles produced must meet some target or another- this just promotes building two tiers of vehicles- easy, inefficient vehicles sold at tremendous profit; and cheap, efficient cars that nobody wants. Nobody buys them, and then the maker has to take a loss to unload them before the next batch arrives. Instead, the laws ought to be targeted at the vehicle itself, using some kind of variable formula that combines passenger seats and/or cargo volume versus fuel usage versus actual tailpipe emissions during an EPA test. That way, every vehicle has to compete on its own, against other vehicles in the same class. That way, a clean running but powerful car can compete against an underpowered, but dirtier vehicle on the same playing field. So the producers and buyers have the freedom to determine what vehicles get purchased via market forces, rather than GM having to produce a bunch of tiny garbage cars that the market doesn't want, just so it can produce vehicles in its truck division. Where a company like Honda or Toyota (until recently) could produce better cars across all lines, because it didn't have to de-tune its smaller cars to make up for the CAFE requirements of the larger vehicles it didn't have in its line.
But if you are saying that the government is sitting in the design rooms signing off on car designs, I really don't think that's happening. Even if it was, that would be their right and responsibility as the representatives of their portion of the ownership. And if GM doesn't like it, they can feel free to buy the government out.
Originally Posted By: LS2JSTS
The arrogant dopes are the people who forced this take over at the cost of investors and bond holders.
I disagree. When you buy stock in a company, you are buying not just a right to any profit in the company, but also taking the risk that if the company goes bankrupt, you lose your investment. That's just the way corporations work, whether the stockholders know that or not. Like any other investment, they should have done their homework. And there is no evidence the bond holders would have gotten ANYTHING if GM were liquidated rather than restructured.
Originally Posted By: LS2JSTS
The BK procedings were entirely illegal and unprecendented,
How so? I don't see anything illegal about it. We can disagree about whether the government should be doing things like this, but I don't know of any legal reason why the government can't go to the bargaining table with a bag of cash like anyone else. Nobody else stepped up, and the government believed that it was in the interest of the people they represent to invest in the company and bail it out.
(It's a common misconception to look at tax dollars as OUR money. It's not ours anymore. We can only control what gets done with it by complaining to our reps and voting for the people we believe will handle it the way we feel is right. The government is just like a big condo association or union or any other group. The group votes on leaders, the leader with the majority wins, and gets his shot at shepherding the organization for a while. If a majority agrees next time, he keeps his job. If they disagree, he doesn't.)
I'm no financial historian, but I'm quite sure there are bankruptcies every day where parties to the suit bargain for their own interests and work deals where everyone gets something, rather than walk away with nothing.
Originally Posted By: LS2JSTS
GM would have been better off walking from the table like Ford did.
I'm not sure that's true. If a deal weren't reached, GM would surely have been liquidated. In that environment at that time, the value of their assets was FAR less than what they owed. That's what bankruptcy is- saying we can't do it any more, giving up the money we invested in the company, and handing everything over to the court to try and come up with the most equitable resolution. A person or a company can't just file bankruptcy because they feel like it (and the government can't force a bankruptcy because they feel like it). There has to be evidence that the company is indeed nearly insolvent.
Ford went to the table because they wanted to see how much a bailout would have cost them. When they realized that they would suffer less by going it alone, that was their right. But Ford was in a far better position than GM or Chrysler. GM was too big and in too much debt to be bought, and Chrysler (seemingly) was gutted by DCM. Their choice was: take the deal or fail. Something is better than nothing.
