Here is one:
Re “For Detroit, Chapter 11 Would Be the Final Chapter” (Op-Ed, Nov. 24): Spencer Abraham, like all who have spoken in support of the auto industry, talks as if Chapter 11 would kill the American auto industry. When will he and others present a more realistic scenario?
A Chapter 11 filing may be the middle ground between the government-financed “trust me,” pain-free, business-as-usual path Detroit prefers and its straw man, the draconian forecast of Chapter 7 with its accompanying specter of a near-term liquidation of the entire American auto industry. It may also be the only way the automakers can revise their contracts to shrink their businesses to the existing market.
General Motors, for one, has too many models, too many plants, too many employees and too many dealers to support the 20 percent share it has whittled itself down to over 30 years.
Its leaders must demonstrate a willingness to make what’s good for the United States taxpayer good for G.M.
Roy Fuchs
Trumbull, Conn
Too many models? GM has too many BRANDS:
Chevrolet
Pontiac
Buick
Cadillac
GMC
Saab
Hummer
Saturn
Has anyone posted this aphorism, which appeared in the Saturday WSJ’s letters?:
[i]Capitalism without bankruptcy is like Christianity without hell.[/i]
Actually, the entire letter provides some instructive context:
[blockquote] GM CEO Rick Wagoner should heed Frank Borman, the president of Eastern Airlines before it went bankrupt, who stated: “Capitalism without bankruptcy is like Christianity without Hell.”
James F. Beley
Seattle
[/blockquote]
Good economics is bad politics.
Good politics is bad economics.
Politics trumps economics.
Tough. Get over it and fork over your money.
Chapter 11 is not necessarily the end (although it can be a prelude to Chapter 7).
Eastern Airlines did end up liquidating, but Continental, Delta and Northwest have all been through Chapter 11, and come through. They are not out of the woods yet, but Continental, in particular, came out much stronger.
What a great opportunity to get the unions off the backs of the shareholders.
This has nothing to do with the Big Three – but everything to do with the UAW. Honda just opened a massive new plant in Indiana this week. The Big Three should all file Ch. 11, get rid of the UAW and follow Honda’s lead.
I read a story this week about union auto workers who were being paid to sit around at work doing NOTHING. Some were reading, playing cards, and socializing for their entire 8-hour shifts, at $37 per hour; and all because of a “sweetheart contract” negotiated by their UAW local!
It’s called the “jobs bank” @ GM. Costs GM $9.4 million per week ( not counting pensions and medical ) as of 2006. There are 7500 people not working at any one time.