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I love the article up until the lame political statement at the end. GM / Chrysler bankruptcy != Business disappears and all suppliers go bankrupt. This is the

I love the article up until the lame political statement at the end. GM / Chrysler bankruptcy != Business disappears and all suppliers go bankrupt. This is the straw-man argument of the left. The American auto bailout was a purely political play to save the unions who supported the Democrats. With billions in hard assets and a huge intellectual property base, the auto companies would have made great investments to potential buyers. Does anyone actually believe that no one would even attempt to pick up the pieces of the auto industry, sans-unions, and try to come out ahead? If you agree with the media/government spin, then you believe that the auto companies would have fired all employees, sold all of the manufacturing equipment and plants, and closed shop forever. The reality is that the company could have used existing bankruptcy law to get rid of some of the union/pension overhead and return to profitability. This is exactly what American Airlines is doing right now. Only in the extreme case would they even need to sell the company.

mikescar 15y ago
> The American auto bailout was a purely political play to save the unions who supported the Democrats. Are you kidding? http://www.politico.com/news/stories/1208/16740.html http://www.politico.com/news/stories/1208/16740.html
- krupan 15y ago
  To be fair, the article this whole discussion is referencing says, "Obama was right in bailing out the auto industry when GM and Chrysler were going bankrupt." As usual, both sides want to take credit for the positives and blame each other for the negatives. :-)
- philwelch 15y ago
  Bush made the initial federal loans to keep them from going broke. Obama made a second bailout, but this time in exchange for equity, which gave the US government a commanding share in GM and Chrysler. It wasn't couched in so many words, but GM and Chrysler were actually nationalized.
functionoid 15y ago
I'd agree, current pay rates for GM workers are higher than the industry normal and in that case they cannot keep up with the industry in terms of cost. Formal bankruptcy where they could get rid of the parts which brought them to bankruptcy would have been much better. Yes it would have laid many workers but correction has to happen when wrong decisions are made and that is always better than to continue the path which nearly brought a company to its end.
snowwrestler 15y ago
I'm not sure how closely you followed the auto "bailouts", but that is exactly what happened. Chrysler was sold to Fiat, and GM was put through an orderly bankruptcy that cancelled existing contracts and returned them to profitability. Government money was used essentially as bridge loans to maintain operations until these processes were completed.

mikescar 15y ago

> The American auto bailout was a purely political play to save the unions who supported the Democrats. Are you kidding? http://www.politico.com/news/stories/1208/16740.html http://www.politico.com/news/stories/1208/16740.html

krupan 15y ago
To be fair, the article this whole discussion is referencing says, "Obama was right in bailing out the auto industry when GM and Chrysler were going bankrupt." As usual, both sides want to take credit for the positives and blame each other for the negatives. :-)
philwelch 15y ago
Bush made the initial federal loans to keep them from going broke. Obama made a second bailout, but this time in exchange for equity, which gave the US government a commanding share in GM and Chrysler. It wasn't couched in so many words, but GM and Chrysler were actually nationalized.

functionoid 15y ago

I'd agree, current pay rates for GM workers are higher than the industry normal and in that case they cannot keep up with the industry in terms of cost. Formal bankruptcy where they could get rid of the parts which brought them to bankruptcy would have been much better. Yes it would have laid many workers but correction has to happen when wrong decisions are made and that is always better than to continue the path which nearly brought a company to its end.

snowwrestler 15y ago

I'm not sure how closely you followed the auto "bailouts", but that is exactly what happened. Chrysler was sold to Fiat, and GM was put through an orderly bankruptcy that cancelled existing contracts and returned them to profitability. Government money was used essentially as bridge loans to maintain operations until these processes were completed.