tunnelvision69
New member
absolutely nothing in the bush administration will look bad when the obama train wreck is over!
Headlines
Rumsfeld Exposed
- Thread starter jayboat
- Start date
Ratickle
Founding Member / Super Moderator
I hope you're wrong. But I'm very concerned you are correct. When they structured a deal to give Chrysler to a foreign corporation and a Union retirement fund by bundling it with up to $30 billion of free tax-payer dollars and completely ignoring US bankruptcy law......:ack2:
I about puked.
Biden is the Dem equivalent of Dan Quayle. How these guys get into office...
GWB should have slammed the door on Daimler when they were slipping out the back door.
The problem with Chrysler all along was their liabilities to past and present workers in the form of retirement and health benefits. When Daimler was trying to sell it a friend in the know said it was worth somewhere near negative $50,000,000,000. So what Cerebrus did was unload most of the debt to the union, which already in essence owns it. It is probably a really good deal for them anyway.
Ratickle
Founding Member / Super Moderator
Except that the Union is an unsecured creditor and the banks and others are secured. Under US bankruptcy law, secured creditors come first. This, to me, is akin to the government repossing your house and giving it to the credit card companies you owe instead of the bank that holds the lein.
MarylandMark
Charter Member
Can you say HIJACK? Where's Buoy on this one? 
Bush was a puppet mostly, and one with stage fright at that. He surounded himself with people who were smart, but had agendas that were larger than his. Each President inherits a load of crap from the prior one so really what's the point in dissecting every little detail?
Biden is a tool. Before the election I read a bunch of his old speaches; I agreed with a lot of his commentary, especially in the foreign arena. But so far he's been relegated to the locker room with the oversight of TARP. Can't say it's a bad thing the way he runs his mouth. But isn't that typical of someone from PA/NJ? :26:
As for taxpayer bailout of Chrysler, look at the silver lining: a bunch of that money is supposed to go to employees and suppliers here in the US. So it's not a complete waste. It really doesn't take much insight to realize that a legacy unionized company like that has a huge negative NPV over the next 50-100yrs. Not until you get the union out of there do you start to realize value.
Ratickle, I really want to understand your hangup with the whole bankruptcy law thing. Yeah, secured creditors are supposed to have first claim but like I said before - they have every right to subordinate that claim if they so choose. Or if they're told to by their largest investor - USTreasury.
Bush was a puppet mostly, and one with stage fright at that. He surounded himself with people who were smart, but had agendas that were larger than his. Each President inherits a load of crap from the prior one so really what's the point in dissecting every little detail?
Biden is a tool. Before the election I read a bunch of his old speaches; I agreed with a lot of his commentary, especially in the foreign arena. But so far he's been relegated to the locker room with the oversight of TARP. Can't say it's a bad thing the way he runs his mouth. But isn't that typical of someone from PA/NJ? :26:
As for taxpayer bailout of Chrysler, look at the silver lining: a bunch of that money is supposed to go to employees and suppliers here in the US. So it's not a complete waste. It really doesn't take much insight to realize that a legacy unionized company like that has a huge negative NPV over the next 50-100yrs. Not until you get the union out of there do you start to realize value.
Ratickle, I really want to understand your hangup with the whole bankruptcy law thing. Yeah, secured creditors are supposed to have first claim but like I said before - they have every right to subordinate that claim if they so choose. Or if they're told to by their largest investor - USTreasury.
jayboat
Banned
Did they have any other option? Isn't this better than putting the pieces of what would have been left on the auction block?
Ratickle
Founding Member / Super Moderator
Ratickle, I really want to understand your hangup with the whole bankruptcy law thing. Yeah, secured creditors are supposed to have first claim but like I said before - they have every right to subordinate that claim if they so choose. Or if they're told to by their largest investor - USTreasury.
You mean forced to by their largest creditor (and the same exact entity which allows them to practice their business).
My hang-up is that bankruptcy law in the US is one of the tools of capitalism which makes it work. It was not some overnight created garbage like is happening now with this knee-jerk TARP reactionary BS.
If the poorly run companies are allowed to exist in this country at the expense of the properly run companies, capitalism ceases to exist. Socialism is here, and it is another major step in the reversal of critical cornerstones that made this country what it was.
So, hundreds of Chrysler suppliers go bankrupt, thousands lose their jobs, and billions of US taxpayer $ are used to entice a foreign corporation to take over a US corporation. Name one winner in this scenario except those who caused the problem in the first place and a foreign corporation.
Plus, play out the long-term scenario in your mind. I still see a new bankruptcy filing if they ever even come out of this one. Plus, companies like Ford have to compete with this new foreign owned corporation which has approximately a 30 billion $ advantage?
Under this same template, we would have just given Madoff's investment company 60 billion $ and handed the company to the Bank of England.
I realize I'm cynical on this, but what is the incentive to create and run a successful business if the crap ones are supported by tax/phony dollars? Other countries will continue to surpass us and we will continue to degrade to the levels of countries where socialistic/communistic principles are followed.
Ratickle
Founding Member / Super Moderator
No. On the auction block, with the exact same $30 billion US dollars, they would have been a very successful business. The largest secured investors, four banks own around $7 billion secured, could have helped run the company under the bankruptcy procedures as they stand. Those guys are not stupid, instead we passed up all the secured creditors and gave the company (55%)to the Union, which is the most culpable of all the reasons for failure after the US government. And the balance to Fiat.
DOn't forget, the company has been appraised at 33.4 billion in a fire sale situation, and the total debt is only 55 billion. With the additional $20 billion the government threw into the soup, it is a even up company.
Ratickle
Founding Member / Super Moderator
So now instead of Chrysler footing the bill, taxpayer gets to foot the bill. Sounds good to me
Which, under law, are unsecured creditors....
:26:
I think the first thing you have to remind yourself of is that these are unique situations. So I would say there's still plenty of incentive to innovate and produce. If you're the stronger, successful, surviving competitor then you should gain market share and your profits should exceed your additional tax burden.
I just see Chrysler as a no-win situation. Daimler lost money, Cerebrus has lost money, and chances are Fiat won't get too far with the company as a whole. I don't think there is any realistic scenario that WOULDN'T have had the taxpayers on the hook for Billions.
I look forward to seeing what comes out of the MBA schools over the years to come as to what were the right and wrong moves for all the stakeholders.
:cheers2:
Geronimo36
Charter Member
What is this nonsense about a resolution to rename the Democratic party the "Socialist" party? I saw a quick blurb on yahoo news but don't know the details.
Geronimo36
Charter Member
"More Bullchit Afterwards" lol.... :sifone:
Ratickle
Founding Member / Super Moderator
Tim Hindle, who has written several books about business management, concluded the MBA of business was the number one cause of US business failure in this century. He believes, and displays in some of his books and studies, they only teach consideration, not action.
Ratickle
Founding Member / Super Moderator
I am not saying they would survive without US government loans. What I am saying, with a normal bankruptcy the company would have been no longer bound by the Union contracts for current liabilities, and the "Secured" creditors could have come up with an outstanding plan to make a joint effort with Fiat on small cars and been profitable within a couple years, paid everything back, and prospered going forward.
Yes, retirees would have lost benefits and had to purchase their own or used Medicare/Medicaid. But they would have kept their pensions up to $54,000 per year, and the company would have been able to compete without all that baggage. What everyone seems to forget, they negotiated those contracts knowing full well if the company goes bankrupt they are null and void.
You hand me that company without those benefit and union nooses around the neck, then lend me $30 billion interest free, and I'll make it profitable in less than two years. And it'll still be a US corporation paying US taxes.....
Aren't the MBAs the tools who got us into this mess to begin with?
jayboat
Banned
Republicans being Republicans. Nothing to see here.
Similar threads
