You guys might think that I have way too much time on my hands. Maybe I do. But I'm convinced that there are way too few people really thinking about the impact that an "unmanaged bankruptcy" of GM would have on the country and our economy.

Here's another idea that I think has a lot of merit. One of the suggestions I like best is that a commercial bank be appointed to make the credit decision and manage the loan instead of anyone in the government getting involved. That has the advantage of keeping the politics out of the decision to either make the loan, or a subsequent decision to call the loan and force GM into liquidation. I'm sure the politicians would like to be relieved of that responsibility, as well.

A Bankruptcy to Save GM
By Joshua Rauh and Luigi Zingales,
The University of Chicago Business School

An op-ed suggesting that bankruptcy - not a bailout - is the best way to save General Motors was published in the Chicago Tribune on November 23 by Joshua Rauh, Associate Professor of Finance and Charles M. Harper Faculty Fellow, and Luigi Zingales, Robert C. McCormack Professor of Entrepreneurship and Finance. Read the Chicago Tribune article by clicking on the following URL.

http://ucgsb.convio.net/site/R?i=qVOEkkGB3IPRfaCct25iPg..

Read the full piece from the authors (in PDF format) by clicking on this URL

http://ucgsb.convio.net/site/R?i=Y8ktt66whbXZ_A8Gl0UumA..

Originally Posted by Villages Kahuna

You guys might think that I have way too much time on my hands. Maybe I do. But I'm convinced that there are way too few people really thinking about the impact that an "unmanaged bankruptcy" of GM would have on the country and our economy.

Here's another idea that I think has a lot of merit. One of the suggestions I like best is that a commercial bank be appointed to make the credit decision and manage the loan instead of anyone in the government getting involved. That has the advantage of keeping the politics out of the decision to either make the loan, or a subsequent decision to call the loan and force GM into liquidation. I'm sure the politicians would like to be relieved of that responsibility, as well.

A Bankruptcy to Save GM
By Joshua Rauh and Luigi Zingales,
The University of Chicago Business School

An op-ed suggesting that bankruptcy - not a bailout - is the best way to save General Motors was published in the Chicago Tribune on November 23 by Joshua Rauh, Associate Professor of Finance and Charles M. Harper Faculty Fellow, and Luigi Zingales, Robert C. McCormack Professor of Entrepreneurship and Finance. Read the Chicago Tribune article by clicking on the following URL.

http://ucgsb.convio.net/site/R?i=qVOEkkGB3IPRfaCct25iPg..

Read the full piece from the authors (in PDF format) by clicking on this URL

http://ucgsb.convio.net/site/R?i=Y8ktt66whbXZ_A8Gl0UumA..

Overall, it makes sense. It is logical, adheres to established business principles, keeps the bankruptcy court as overseer which would fulfill the court's traditional role in Chapter 11 reorganizations as well as being the monitor over the actions of the commercial bank disbursing funds according to a court-approved plan of action.

Now, will folks be "logical?"

Both of you gentlemen have left one ingredient out of your bailout formula and that is the political process. Washington will react only from direction given to them by the lobbyist. The process more specifically dictates that the public is not considered in most decisionmaking, but rather the monied gentry and political interest will assure that they are satisfied. If at the same time it benefits all of us in the trenches, then so be it. Most of us are of the position that GM, chrysler, et al, should not be given a pot of gold so they can continue to make an obsolete product which few will buy. In six months when that pot of gold runs out, do we give them another pot? Without the aid package, they will not go out of business. They will be forced to declare chapter 11, look at their organization in its totality and make the necessary changes. But Washington being what it is, you can be sure the big 3 will shortly be financially bigger.

Next week Exxon will be coming in for financial assistance because of the decline in gas prices. I, for one, would advocate that we do not give them more than 50 to 100 billion.

Originally Posted by k2at

Both of you gentlemen have left one ingredient out of your bailout formula and that is the political process. Washington will react only from direction given to them by the lobbyist. The process more specifically dictates that the public is not considered in most decisionmaking, but rather the monied gentry and political interest will assure that they are satisfied. If at the same time it benefits all of us in the trenches, then so be it. Most of us are of the position that GM, chrysler, et al, should not be given a pot of gold so they can continue to make an obsolete product which few will buy. In six months when that pot of gold runs out, do we give them another pot? Without the aid package, they will not go out of business. They will be forced to declare chapter 11, look at their organization in its totality and make the necessary changes. But Washington being what it is, you can be sure the big 3 will shortly be financially bigger.

Next week Exxon will be coming in for financial assistance because of the decline in gas prices. I, for one, would advocate that we do not give them more than 50 to 100 billion.

Agree. The plan will only work if the "K Street Mob" brings it forth as a good deal. After all, what do "we, the people" know....

for an airline that carries hundreds of thousands of us through the skies every day/year....than it is to allow the fat cat carmakers to do the same?
Politics and lobbyists aside (big assumption!!) anyone who understands the Chapter 11 process would have no problem allowing the big three to do so sooner than later.

The UAW must have a heavier hand in Washington than did the various airline locals!!!

Here again if we the people wailed as long and as hard at our law makers as the lobbyists do, there might be a difference....unfortunately that ain't gonna happen....

Chapter 11...dump the executive management....dump the board of directors...dump the unions = better run more profitable company.

BTK

So far the "Big-3" in my vehicle world (Harley-Davidson, Victory and Big Dog) have not sought any federal bailout. What do they know that GM, Ford and Chrysler haven't been able to understand.....Oh yeah, give the customer what s/he wants, build it and sell it at reasonable cost, and show pride in the product.

Steve I knew there was a reason why I liked you. Former Victory King Pin owner here. When it comes to styling, Victory got it right.



D.

Nice ride! The wheels are money!