Re: Bankruptcy isn't the end of the world


[Follow Ups] [Post Followup] [Dodge Power Wagon Forum]


Posted by D Sherman on Friday, November 28, 2008 at 13:43:24 :

In Reply to: Re: Bankruptcy isn't the end of the world posted by Kaegi on Friday, November 28, 2008 at 13:12:21 :

I understand what you're saying, but ultimately, if nobody's buying the cars, they'll be out of business anyway. The government can't force people to buy products they don't want (well, maybe they can, but they shouldn't). In bankruptcy, the stockholders are SOL, but the creditors at least still have a chance. They may have to wait a while to get paid or they may have to settle for partial payment, but most of the time, they at last get something. As far as the parts suppliers go, I don't know the auto industry, but I know in the aircraft industry (I used to live in Everett, WA, where there's an airplane factory), most of the job shops that make parts for Boeing also make parts for Airbus, so when Boeing loses a contract to Airbus, it doesn't really hurt them.

If the problem with the big 3 is merely that they can't get credit from their banks due to the financial crisis, it might be worth having the taxpayers give them a short-term loan until the bond market improves. But that's not the problem. Their balance sheets stink, and any banker can see it. Without a business model that will make a profit, a government loan guarantee is just flushing money down the toilet. If you want to look at job loss, look at all the small contractors who are out of business because the housing bubble burst. Congress doesn't pay attention to them, though, because there isn't any one company that's big enough to make an impression.



Follow Ups:



Post a Followup

Name:
E-Mail:
Subject:
Message:
Optional Link
URL:
Title:
Optional Image Link
URL:


This board is powered by the Mr. Fong Device from Cyberarmy.com