Originally Posted by Villages Kahuna

The reason I think that liquidation would be the result of a bankruptcy filing is primarily the UAW acting as an unsecured creditor. They would be the creditor most unlikely to agree to a plan of reorganization. Do you recall how long it took for the pilots, the stewardesses and the maintenance workers to finally agree on what they would get out of the United Airlines bankruptcy? It was more thyan a year. The UAW would be worse. And if the bankruptcy took a long time, sales would sink to next to nothing because people simply wouldn't take the risk of buying a car from a company that could be out of business soon. That doesn't even consider the dealer network, which would be likely to fall apart without the throughput of enough vehicles to keep them in business.

My idea would work, I think, as a "pre-packaged" bankruptcy, where all the creditors agree to the deal before the bankruptcy is ever filed. Then they file, take the plan to the judge, get it approved, and the company immediately comes out of bankruptcy with a different set of liabilities. But to get the UAW to agree to a prepackaged deal is unlikely, I think. It would take a most unusual and talented representative of the government to convince the union leaders of their dire circumstances and that the deal proposed would be better for their membership than liquidation of the company.

I don't think our elected representatives will ever think of something like this. If they do, I doubt they'd have the guts to take the political heat from unions and their supporters across America for making such a proposal. That wouldn;t make it wrong...it would just make it impossible.