Comments on: GM and Chapter 11 http://www.coyoteblog.com/coyote_blog/2009/03/gm-and-chapter-11.html Dispatches from a Small Business Fri, 19 Mar 2010 13:21:03 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: joe Freeman http://www.coyoteblog.com/coyote_blog/2009/03/gm-and-chapter-11.html/comment-page-1#comment-17227 joe Freeman Tue, 10 Mar 2009 00:57:23 +0000 http://www.coyoteblog.com/?p=7251#comment-17227 The basic premise of the original blog is entirely valid --the protection afforded the car companies by a chapter 11 filing would be better than continuing to try to operate in the chaos that now prevails. Whether the banruptcy courts could handle the sheer administrative volume of dealing with full blown chapter 11's for even one of the companies might be another matter without a clear exit strategy going in. Clearly the shareholders are wiped out, the bond holders will have to take a big haircut and the unions will have to take a big hit. But there are severe management pobems as well and excess compensstion exists at every level of management and "white collar" jobs. Tremendous problemes stand between now and viable car companies, but the answers are more likely to be found with these firms in chapter 11 than in bailouts that postpone the inevitable rather than solve problems Joe Freeman The basic premise of the original blog is entirely valid –the protection afforded the car companies by a chapter 11 filing would be better than continuing to try to operate in the chaos that now prevails.

Whether the banruptcy courts could handle the sheer administrative volume of dealing with full blown chapter 11’s for even one of the companies might be another matter without a clear exit strategy going in. Clearly the shareholders are wiped out, the bond holders will have to take a big haircut and the unions will have to take a big hit.

But there are severe management pobems as well and excess compensstion exists at every level of management and “white collar” jobs.

Tremendous problemes stand between now and viable car companies, but the answers are more likely to be found with these firms in chapter 11 than in bailouts that postpone the inevitable rather than solve problems

Joe Freeman

]]> By: Andrew Budd http://www.coyoteblog.com/coyote_blog/2009/03/gm-and-chapter-11.html/comment-page-1#comment-17053 Andrew Budd Mon, 02 Mar 2009 17:25:17 +0000 http://www.coyoteblog.com/?p=7251#comment-17053 If what you said about the press supporting the Detroit 3 was true - they probably wouldn't be in this mess. There is a big difference between the sales departments and editorial departments of media companies. 99 percent of so-called journalists are ANTI-domestic who think they would damage their journalistic integrity (now there's an oxymoran) if they supported the advertisers who pay their salaries. Most are city-dwellers with small families and drive pissant little hondas and toyotas. The American family of 5 with 3 kids under 16 needs more room and utility than you can get in a Honda Civic. So if you fit in this category - the Japs don't make anything other than a minivan that fills the need- and a lot of people wouldn't be caught dead in a minivan. The Detroit three build affordable vehicles that fit the needs of ordinary Americans. The proof is in the sales figures - GM is still the biggest automaker in America. Toyota only surpassed it in worldwide sales - many of which are in third world under-developed markets. My momma used to say "good or bad, everybody gets what they deserve eventually." Every newspaper in the country is struggling to make a profit - they've already laid off most of the sales and admin staffs - the reporters are next - I sincerely hope that they too, "get what they deserve" "good or bad". If what you said about the press supporting the Detroit 3 was true – they probably wouldn’t be in this mess. There is a big difference between the sales departments and editorial departments of media companies. 99 percent of so-called journalists are ANTI-domestic who think they would damage their journalistic integrity (now there’s an oxymoran) if they supported the advertisers who pay their salaries. Most are city-dwellers with small families and drive pissant little hondas and toyotas. The American family of 5 with 3 kids under 16 needs more room and utility than you can get in a Honda Civic. So if you fit in this category – the Japs don’t make anything other than a minivan that fills the need- and a lot of people wouldn’t be caught dead in a minivan. The Detroit three build affordable vehicles that fit the needs of ordinary Americans. The proof is in the sales figures – GM is still the biggest automaker in America. Toyota only surpassed it in worldwide sales – many of which are in third world under-developed markets. My momma used to say “good or bad, everybody gets what they deserve eventually.” Every newspaper in the country is struggling to make a profit – they’ve already laid off most of the sales and admin staffs – the reporters are next – I sincerely hope that they too, “get what they deserve” “good or bad”.

]]> By: The other coyote http://www.coyoteblog.com/coyote_blog/2009/03/gm-and-chapter-11.html/comment-page-1#comment-17051 The other coyote Mon, 02 Mar 2009 16:31:04 +0000 http://www.coyoteblog.com/?p=7251#comment-17051 If the shareholders would throw out current management, things would be better for GM. With a zillion dollars in market cap, though, it's hard for enough shareholders to get together to get a majority. Even worse, the company's pension fund and/or 401k could be the majority shareholder. Either Ch. 11 or Ch. 7 is the best course for GM. Thanks for pointing this out coyote. Have you ever considered turning your blog posts into guest columns? My local paper is run by a guy named Bob Weir from Highland Village, Texas who is a solid conservative, who occasionally guest posts at americanthinker.com, and who is a great story teller. He has a 2 page spread of op-eds, which is unusual for a suburban weekly. What the paper lacks are pieces with real economics (and of course sciences as well). I think you would reach an even bigger audience -- and hopefully reach the people who need some educating on the issues. I bet if you sent him a post or two, he'd turn them into op/eds for you. If the shareholders would throw out current management, things would be better for GM. With a zillion dollars in market cap, though, it’s hard for enough shareholders to get together to get a majority. Even worse, the company’s pension fund and/or 401k could be the majority shareholder.

Either Ch. 11 or Ch. 7 is the best course for GM. Thanks for pointing this out coyote. Have you ever considered turning your blog posts into guest columns? My local paper is run by a guy named Bob Weir from Highland Village, Texas who is a solid conservative, who occasionally guest posts at americanthinker.com, and who is a great story teller. He has a 2 page spread of op-eds, which is unusual for a suburban weekly.

What the paper lacks are pieces with real economics (and of course sciences as well). I think you would reach an even bigger audience — and hopefully reach the people who need some educating on the issues. I bet if you sent him a post or two, he’d turn them into op/eds for you.

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