I made a comment last year on this blog that the Big Three were already bankrupt but didn't have the guts to admit it; as of Monday it will be true for two of the Big Three.
GM is set to go into bankruptcy on Monday; Chrysler is already there and restructuring. Ford looks like it's got it's act together and successfully changed course in time to avoid joining GM and Chrysler in bankruptcy court.
The sad part about this is that they could have avoided this problem many months ago, and adapted to changing conditions much more quickly. But they chose not to, preferring not to change their already-decided auto lines to match what was happening in the economy.
I'm not interested in who was more at fault in the bankruptcy of GM and Chrysler; the management vs. union debate has been going on for many decades before this, and will likely continue for many years into the future, once this crisis has abated.
The government needs to complete this work quickly, then get out of Detroit's business. Government doesn't have time to run the auto industry; they can barely manage Washington's problems as it is, without having two auto companies to run as well.
Showing posts with label bankruptcy. Show all posts
Showing posts with label bankruptcy. Show all posts
Thursday, May 28, 2009
Friday, May 22, 2009
Why Was Chrysler Taken to Bankruptcy Court in New York, and Not in Michigan, Where It's HQ Is?
I've been mulling over the Chrysler bankruptcy since it happened and one question keeps popping up:
Why did the government file for the bankruptcy in New York, and not in Michigan?
The federal government could just as easily have filed it at a federal courthouse in Michigan, as it did in New York. Many of Chrysler's debts are owed to Michigan businesses.
Not sure what the rationale was for filing this bankruptcy there instead of here, where Chrysler is headquartered.
Why did the government file for the bankruptcy in New York, and not in Michigan?
The federal government could just as easily have filed it at a federal courthouse in Michigan, as it did in New York. Many of Chrysler's debts are owed to Michigan businesses.
Not sure what the rationale was for filing this bankruptcy there instead of here, where Chrysler is headquartered.
Tuesday, February 24, 2009
Further Proof that Bailouts Just Delayed the Inevitable: GM Exploring Bankruptcy & AIG Needs Billions More Too
I had written a while back about my opposition to the bailouts and how the companies that were on the receiving end were responsible for their own problems, that the bailouts were pushing their failures a little further around the road.
I had also said that the auto industry was already bankrupt but didn't have the guts to admit it.
Trillions of dollars and a few short months later, we begin to see the danger signs that I predicted back in October. CITI Group is about to be nationalized due to their continued massive losses; GM is exploring three bankruptcy options, in addition to their seeking an additional $16 billion on top of the $13 billion they've already received, and AIG needs billions more on top of the $150 billion it's already gotten from taxpayers.
And they're STILL paying out their multi-million dollar bonuses to their executives. Tactless.
The bailouts were a mistake from day one. The companies should not have been nationalized; government shouldn't have put taxpayers on the line for NEARLY as much as they have. I can see some interventions, but only to prevent crippling the national currency against other markets. I'd rather have been on the hook for $200-$250 billion instead of nearly $5 trillion.
Government's running wild and needs to get a grip. Knee-jerk reactions haven't helped; they've only made matters much much worse. GM needs to get under bankruptcy protection this week. Would CITI's collapse weaken the dollar? What about AIG's?
There are some very stark decisions that will have to be made shortly. I hope everyone's up to it, because the writing's on the wall, and decision time is nearly at hand.
I had also said that the auto industry was already bankrupt but didn't have the guts to admit it.
Trillions of dollars and a few short months later, we begin to see the danger signs that I predicted back in October. CITI Group is about to be nationalized due to their continued massive losses; GM is exploring three bankruptcy options, in addition to their seeking an additional $16 billion on top of the $13 billion they've already received, and AIG needs billions more on top of the $150 billion it's already gotten from taxpayers.
And they're STILL paying out their multi-million dollar bonuses to their executives. Tactless.
The bailouts were a mistake from day one. The companies should not have been nationalized; government shouldn't have put taxpayers on the line for NEARLY as much as they have. I can see some interventions, but only to prevent crippling the national currency against other markets. I'd rather have been on the hook for $200-$250 billion instead of nearly $5 trillion.
Government's running wild and needs to get a grip. Knee-jerk reactions haven't helped; they've only made matters much much worse. GM needs to get under bankruptcy protection this week. Would CITI's collapse weaken the dollar? What about AIG's?
There are some very stark decisions that will have to be made shortly. I hope everyone's up to it, because the writing's on the wall, and decision time is nearly at hand.
Saturday, January 17, 2009
Circuit City Reorganization Fails: Entire Chain Will Close
Circuit City had been hoping to reorganize under the auspices of a Chapter 11 bankruptcy, but were unable to find a buyer for all or part of the chain. As a result, the entire chain will close, sending another 30,000 of it's employees into unemployment. All 566 stores will be liquidated.
That's too bad. They were no match for Best Buy or Walmart, which knocked the stuffing out of Circuit City to the point that it's suppliers wouldn't do business with them until their past debts were settled.
And in doing so, the suppliers will get paid off what they're owed, with no opportunity for repeat business, which will affect their own bottom line further down the road. Where does it end?
That's too bad. They were no match for Best Buy or Walmart, which knocked the stuffing out of Circuit City to the point that it's suppliers wouldn't do business with them until their past debts were settled.
And in doing so, the suppliers will get paid off what they're owed, with no opportunity for repeat business, which will affect their own bottom line further down the road. Where does it end?
Subscribe to:
Posts (Atom)