Bush Considering ‘Orderly’ BK For Big 3

On the heels of GM closing 20 US plants for a couple of weeks and Chrysler shutting down all plants for a full month, President Bush has said, and Dana Perino, Press Secretary confirms, that Bush is considering an ‘Orderly’ bankruptcy for the Big 3. In a very detailed AP report,  Bush admitted there were dangers in the process and said he has made no decision. He even mentioned a ‘federally directed’ process.  [My question: How is that done? Does Bush mean he can somehow take over the Federal Bankruptcy Court and predetermine their actions?  The Constitution says we have three branches of government not two.]

Because none of this would be happening if the credit markets hadn’t closed and Wall Street fallen on it’s face why does the President consider the most dangerous option of them all?  All of the automakers could have made it without government involvement if the credit markets, destroyed by Bush Administration policies, were open. I repeat, NONE of the Big 3 would have been at the governments door in normal circumstances. NONE of them, along with all the imports, would have taken massive hits in sales starting in September, if the Wall Street scare hadn’t occured.

In the eyes of many, the fact that this option is on the table means that the White House just doesn’t get the problem.

Here’s the question: Would you or I buy an expensive big screen plasma television from a company that is in bankruptcy? It’s an expensive item.If the company is in bankruptcy, even with a ‘predetermined’ outcome, how could we believe in their maintenance and warranty contracts?

We aren’t senior secured debt holders. We would be at mercy of the court to instruct the company to honor it’s warranty contracts. The court might not order that option. We have no way of knowing.

So, again, I ask the question would you buy an expensive electronics item if the company was in bankruptcy? I wouldn’t. My guess it that you wouldn’t either.Then how can we assume, in the face of polls that show that nearly 50% of the American pubic would refuse to buy from a company in bankruptcy, that sales will continue and, with this immediate recession shock behind us and credit again flowing, that sales will increase.

The ‘prepacked’ bankruptcy process that has been used successfully in other circumstances was based on the concept that routine credit facilities would be available while in bankruptcy reorganization.

The auto industry knows that is not the case today. Where would be the credit they need simply to operate in the best of times? In a situation where the credit markets are so tight that larger businesses, as well as small,  are unable to get credit even with the best of operating results what is the guarantee that those credit markets are suddenly going to open for the Chapter 11 bankruptcy of GM and Chrysler?

It’s a ridiculous assumption and one that could be deadly for ten’s of thousand of workers. If the markets and the politico’s are freaked out at reports of 539,000 lost jobs in a month how are they going to react when it’s double or triple that number?

In my next article an expert speaks out about the fallacy that Detroit makes simply bad cars.

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2 Responses to Bush Considering ‘Orderly’ BK For Big 3

  1. Keep the Crackin in the cage ! Not sure we have a choice and if we don’t bail them out, it effects all the other dealerships, with strong management. Stuart,icebergs ahead Rhee reform ! See Washington Teacher blog. Need rescue ships with writers.Once you check this out, you’ll understand. Happy Holidays to all ! Tell Pamala ! Send rescue ships with professional political communication writers ! “End the mandates on NCLB,it’s not working !” Hillary Clinton ! 1.4 million teachers across the US,” on watch “concerning DC Rhee ! Also,see Washington Post and City Desk-=Loose Lips ! We don’t like that contract and this educational reform may remind you of the Twilight Zone ! See Voices Across America question # 1 ! End the mandates on NCLB ! Alleged discriminatory intent and principles are resigning due to unethical proceedures as Rhee pushes her radical reform, contractual agreement and Abolishment Statute with Fenty in appeals. We don’t do discriminatory intent or unethical practices in Public Education ! We have a Civil Rights Act and Federal laws about that ! NCLB ,bad press and that rat 10% ! Read Manufactured Crisis ! Election 08 ? Needed political detox and scared now they’ve turned me into a political junkie. 18 million cracks and still cracking at it ! Hillary for Secretary of State ! Foreign policy ! That democratic roll call was the toughest day in the primary of election 08. That and the ground 0 day when Obama and McCain called it truths. Keep the Crackin on this economic crisis in the cage ! Don’t let him out and we all as Americans see his ugly head ! Don’t forget to send rescue ships and writers for support with this radical bee eating, Rhee Twilight Zone reform ! Roudolph with your nose so bright ,guide us past this Rhee reform contractual terms for flight ! She’s not so driven for the decentralization of goverance. Might be the reincarnation of Hitler and she’s got a hostile political agenda take over going on. We’re not sure she has a democratic spirit and seems more driven towards the republican approach. They hired her a political communications fellow from the Al Gore and Wesley Clark campaign and he was a consultant. That’s when I rode here fast ! Uh oh ! Do the Orginal Hampster Dance ! “Throw the water ,” said the Tin Man ! We’ll have her broom to the Wiz on that Abolishment Statute in this contract ! Oh hecks,bells and cocktail shells,I’m off topic on this article ! Oh shoot,just send the car folks the money ! It’s the workers not the golden parachutes. They flew in on their private jets and the next trip drove cars. Laugh,it’s the only thing that’s free ! Go Hillary Clinton and razzle,dazzle Obama !

  2. We’re going to have to get behind and support Hillary Clinton ! She’s got some trouble makers in our world and some of them throw shoes. Fair balance of interests and Peace out ! Merry Christmas Democratic Daily and God Bless all you do ! Tell those Puma cats to stay in the saddle and lean with the trees ! Ho,Ho,Ho ! Merry Christmas and Happy Holidays !