US ultimatum for carmakers: restructure or face bankruptcy

SP4: !Mar 30th, 2009 - 16:17:35

hahahahahahahahahahahahahahahaha! Obama.....hahahahahahahahaha!

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ahhhhhMar 30th, 2009 - 18:39:16

spasshole is back

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SP4 relegated to sheer incoherenceMar 30th, 2009 - 21:31:53

The only point he has to offer is the one on top of his head.

Hey, SP4 - how's it feel to have an adult for President, instead of a nincompoop?

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spamMar 31st, 2009 - 02:11:47

duly reported. Hopefully removed soon.

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spam deletedMar 31st, 2009 - 05:49:19

Thank you, Mr. Editor

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American public knows who to blameMar 31st, 2009 - 07:16:13

www.reuters.com/article/politicsNews/idUSTRE52U12D20090331

WASHINGTON (Reuters) - U.S. President Barack Obama benefits from a broadly held perception that others bear the bulk of responsibility for state of the U.S. economy, according to a Washington Post/ABC News poll published on Tuesday.

Asked who was responsible for the economic meltdown, 80 percent in the poll blamed banks, financial institutions and corporations. Some 70 percent also blamed consumers for taking on too much debt and the former Bush administration for lax regulation. Only 26 percent said the Obama administration was not doing enough to turn the situation around.

Two-thirds of respondents approve of the way Obama is handling the presidency, and 60 percent approve of the way he is handling the economy.

Sixty-four percent said were confident Obama's policies will improve the economy, down from 72 percent just before he took office in January.

Forty two percent said the country was now heading in the right direction, a five-year high. Late last year, when then-President George W. Bush was in its final months, as many as nine in 10 American said the country was heading in the wrong direction.

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(So much for idiot SP4's analysis of Bush - 9 out of 10 think that Bush led in the wrong direction. The other 10 percent were too stupid to pick up the phone)

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TruebritMar 31st, 2009 - 09:10:21

Previous posts,

In response to an earlier article on this subject I commented that 'GM and Chrysler could go in on 31st March, recite 'The tale of Mad Karoo' and still get the moolah.' At first sight, looks like I was being unduly cynical. Obama is at least talking tough with them. Implicit in this article, though, is that the companies had formed much the same conclusion as myself! It would be interesting to see detailed copy of the 'restructuring' plan presented by GM: And Obama's remarks seem to have bounced Chrysler and Fiat into a premature disclosure. I doubt that would have been forthcoming at this stage without the threat to turn off the tap.

And yet, I'm not convinced that the Sainted Barack will be able to resist the immense pressure to prevent either, particularly GM, going tits-up if such becomes imminent. He's rather nailed his pants to the mast by talking about letting your auto industry die not being an option. Seems that, like all politicos, he's trying to play to every audience at once. At least, with his intelligence, he should be able to do it convincingly.

As for your more general remarks about the financial crisis, remember that the trigger for this mess was over-exposure in the US sub-prime mortgage market. Now even Dubya was not responsible for that, though his administration did nothing to try to combat the problem. It had been building for years. Who was it that 'encouraged' Fannie mae n' Freddie mac to lend so much to poor risks on minimal security?

Step forward, Bill Clinton!

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Reply to truebritMar 31st, 2009 - 10:23:26

RE: It would be interesting to see detailed copy of the 'restructuring' plan presented by GM: And Obama's remarks seem to have bounced Chrysler and Fiat into a premature disclosure.

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The auto situation could not have remained in stasis - there would have been another request for funding, and after AIG (a silly minor issue in financial terms) the public is fed up with endless bailouts.

The government board decided that the Volt was too expensive, and would not earn a profit. Nice technology; wrong timing. GM has to scale down, and the bondholders have to be forced to take a haircut, along with the retirees. Wagoner had years to get the company straightened out, but consistently lost market share. This current management is bound to GM's legacy, and fresh blood in charge is needed.

Chrysler is privately owned - the problem would be the unemployment resulting from an uncontrolled shutdown. Fiat has been in talks for awhile, and is literally paying nothing for Chrysler. Product lines need to be dropped. GM has too many brands, leading to too-heavy marketing expenses.

Saturn is dead. Buick, once a profit-maker in Asia, is losing sales to BMW and Audi as the Chinese earn a better living, and want upscale vehicles. Pontiac is redundant, sadly - my first car was a 1967 Tempest Custom Hardtop with 4-bbl 326 CI, disc brakes, and CD ignition - which were rarely ordered back then. Pontiac will field a few models - hopefully, no more Azteks.

Most importantly, a bankruptcy will work around the franchise laws that protect dealerships - of which there are too many; counting all GM brands. Ford has fewer nameplates (Ford, Lincoln, Mercury, trucks) - and that's plenty. Saab is gone. Volvo is gone. The only way to shrink GM to a fighting weight is killing brands, and their marketing departments. Jaguar was Ford's mistake. Land Rover is the wrong vehicle in this economy. The majors should have improved their own vehicles, rather than making expensive acquisitions to gain total share.

www.bloomberg.com/apps/news?pid=20601087&sid=a1Fq6HpfvYAI&refer=home

March 31 (Bloomberg) -- General Motors Corp. faces a structured bankruptcy managed by the U.S. government if the company can’t meet a deadline to drastically reduce debt in the next 60 days.

GM Chief Executive Officer Fritz Henderson, on his second day running the largest U.S. automaker, said yesterday that a strategic bankruptcy with government backing is less risky than traditional Chapter 11 protection, though it’s still not GM’s preferred method of survival.

“I think bankruptcy is a very viable option, much better than a receivership,” said Ken Klee of Klee Tuchin Bogdanoff, a bankruptcy firm not involved with the automakers. “It needs to be treated as though it’s in the emergency room.”

At stake is $27.5 billion in GM debt that bondholders have been reluctant so far to exchange for equity and $20.4 billion in obligations to a union-run health care fund. It isn’t clear whether the government is using bankruptcy as a threat to hasten the exchange.

“While the company has made meaningful progress in its turnaround plan over the last few years, the progress has been far too slow, allowing the company to continue to lag behind the best-in-class competitors,” according to a task force report.

Obama said yesterday that company creditors, shareholders, workers, dealers and suppliers will be expected to make more sacrifices. “We believe that there could be a viable business within GM if the company and its stakeholders engage in a substantially more aggressive restructuring plan,” the Obama task force report said.

White House spokesman Robert Gibbs said the administration isn’t pushing for bankruptcy and there’s “no pre-determined deal.” “If that was the case we would have done that today,” Gibbs said in an interview yesterday. “Where this ends up is going to be determined in the next 30 to 60 days.”

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