/sarcasm

- Bush Tax cuts are temporary (I’ll take what I can get)
– John McCain (I’ll take what I can get)
I could go on…

I think it’s always valuable to study the personal psychology of any individual in a position of power.

I’m not sure I agree with your take on this though. I might agree that Obama has a tendency to support/value collective efforts over individual efforts because individuals have failed him so badly in the past.

I just don’t think it takes a dangerous psychology to see that Mr. Wagoner was not doing the best job. If he were doing so well he wouldn’t have come hat in hand to the taxpayers to begin with.

it will not be YOU who has to fill out the paperwork. It will be the auto-dealers. The idea is that you are populist by not putting a burden on the People, but rather on evil corporations.

We’ve been in that model for a long time. It is why Obama is saying that he will give tax cuts to 95% of the people, while he adds cap and trade on energy that will put a huge tax on 100% of the people because the cost must be passed on from the evil corporation to the consumer.

Francis can add the financial perspective.

Among other things, GM needs to reject its current labor agreement with the UAW. The seminal authority is the USSC’s holding in NLRB v. Bildisco & Bildisco, 465 U.S. 513 (1984). Bildisco sets out a process by which the debtor in possession can engage in bargaining with a union and essentially impose new wages, hours, and terms and conditions of employment thus abbrogating the current agreement. With the stakes here, that process would be long, nasty, and expensive. Francis has said that GM can’t get banks to put up the money to allow it to operate as a debtor in possession and thus shed its collective bargaining obligations. Thus, the Chapter 11 process of restructuring its collective bargaining agreements isn’t available to it as a practical matter; GM waited too long.

There is, of course, the political dimension. BHO and the Democrat Party are owned by organized labor. There is NO WAY that BHO’s NLRB is going to let any consequential employer use Chapter 11 to get out of a labor agreement.

If a company is forced into Chapter 7 proceedings and is liquidated, the purchasers must take on the existing labor agreements for their duration. It can then try to bargain its way to a sustainable agreement or the new owner can attempt to restructure the agreements through Chapter 11 bankruptcy – with all the political issues set out above.

So, only three things really work for the UAW and the DNC: GM can be liquidated and the new owner(s), assuming it is bought, can try to live, at least for awhile, with the CBA; GM can be nationalized – don’t rule it out, US automakers were essentially nationalized in WWII so there is a pattern and a precedent, or a deal can be struck with all the automakers that allows all of them to simultaneously shuck their legacy H&W and retirement costs and put them in the hands of the federal government and the taxpayers. I think this is ultimately what the good little communists at UAW and around BHO want. They can then use the “massive failure” of the auto industries benefit system as both the impetus and the infrastructure for nationalization of healthcare and retirement.

To my mind, the critical problem GM would face in a bankruptcy would be no access to DiP financing. That’s why a bankruptcy would quickly become a liquidation. I remember thinking this through pretty carefully last December, and concluding there was no other way it could go.

Even though it’s nothing short of breathtaking to see a $200 bn company fall apart in mere days!

But tell me how this has played out in the airline biz. That’s a capital-intensive business if ever there was one. When the various major airlines passed through bankruptcy, what, in your experience, was the impact on their access to capital? More expensive, and more covenants, but not no access, I would imagine.

Whereas GM hasn’t been able to line up any access to private capital since last spring, if memory serves. The GMAC unit took down a pile of TARP cash, of course.

Unlike GM, Ford Motor has long been solvent, in the sense of there being no serious question they had the cash flow to cover their long-term obligations. To anyone with eyes, GM was insolvent even before their market collapsed last fall.

That’s why so many people were surprised, including me, when F hypothecated all their assets to arrange a $20 bn or so bank line, must have been two years ago now. (Corrections welcome.) It seemed like a bizarre move then. Now it seems like a genius trade.

Government will provide the DiP and drive the bankruptcy. GM is burning $5 bn a month. If the bankruptcy lasts 18 months, you do the math.

For months now, I’ve been telling anyone who would listen that the GM workout would consume between $50 bn and $100 bn taxpayer dollars, and would result in no significant labor cost reductions whatsoever.

When GM and Chrysler LLC received TARP funds on Dec 29, the deal they signed obligated them to come up with an operating plan acceptable to the government by March 31, or else immediately return the funds.

The 60 day reprieve for GM is an acknowledgment that the original deal was just political garbage, and it signals that GM will get all the forbearance they ask for. There is essentially ZERO pressure on them to get their act together.

The 30-day deal horizon for Chrysler, on the other hand, is a death sentence. The Chrysler situation stinks to high heaven, because that company is owned by a handful of billionaires with tight connections to the government. They have plenty of money to pump into Chrysler, but they chose not to, figuring the taxpayers could be suckered into it. They were right.

Does your name mean “New World” or “New Peace”?

down the road and hasn’t yet decided what to do?

Although it does appear that the message the union got was dire as they are hot at Obama’s firing of the CEO and I am hopeful that Obama would insist on a pre-pacakged B/R in 60 days.

So I guess it was money well spent? 14 billion to stop them going bankrupt in november just so they can go bankrupt in april?

http://www.cnbc.com/id/29960093