Shocker! GM Will Default on Debt Payments
GM has confirmed that it will be unable to make its debt payments due on June 1st, 2009. The payment due on that date is $1 billion.
It’s a debt for equity exchange, so it’ll never have to be repaid. This is just posturing ahead of the June 1 deadline (that of course will never get extended…) to come up with a plan for viability. Trying to force the debt holders hand, as they have been the most recalcitrant in the negotiations. Read more
Supporters are Getting Upset with Their Guy
Did Obama actually think that his decision to cut off GM and Chrysler from the government’s faucet of money would be taken well by the labor faction of that industry? His biggest supporters were labor unions.
I personally suspect he will still give money to them in the long run, but his initial decision has not been taken well at all.
People are seeing a man who campaigned against special interests, lobbyists, rich fat-cats and Wall Street, but ever since he took office those are the only people he has been paying any heed to, promoting to his cabinet and giving more bailout money to.
I just hope that people wake up and realize that voting for someone on the “inside” of DC will always be on the “inside.” Look at a candidate’s record to see if they were willing to call anyone out in their own party or otherwise. Reform sounds like a nice word but actions count. Obama’s actions speak louder than his teleprompted rhetoric.
Many assembly line autoworkers reacted with skepticism and anger Monday to the Obama administration’s tough tactics, which stoked long-simmering feelings that the people who put the country on wheels get treated differently than the wizards of Wall Street.
“It’s the age-old Wall Street vs. Main Street smackdown again,” said Brian Fredline, president of UAW Local 602 at a plant near Lansing. “You have all kinds of funding available to banks that are apparently too big to fail, but they’re also too big to be responsible.”
The Auto Companies Manage to Hang On: Obama will Provide Another Bailout with Strings
Can we please just let them go under? What is the point of keeping companies that can no longer compete, produce or create profit and value? We may as well not have bankruptcy law anymore… I mean you can just ask for a bailout and the taxpayers will just keep your business afloat. I need to quit my job and just create a bad business, hoping that it fails, so I don’t have to pay anything – Taxpayers and those who do produce will just pay for me.
I come from a GM family, my father has been a GM mechanic for over 30 years, and he has quite a few ideas of his own – but being a peon and a lowly mechanic will not get you heard on Capitol Hill these days nor in the board rooms of the auto giants, which really is too bad. My Dad believes the following:
“File for bankruptcy, Chapter 11, restructure the debt, the union contracts and the management of the company – consolidate the brands (there are too many) – regain focus on only several lines of cars (i.e. get rid of cars like Buick, Saturn etc.) – create the focus much like the foreign car companies in the U.S. with a luxury-end vehicle (Cadillac) and the “regular” class vehicle (Chevrolet). Still keep some of the cars like Pontiac, or GM trucks etc. and their bodies/frames which are recognizable and likable, but just name everything Chevrolet again.”
I whole-heartedly agree with him and believe that bankruptcy is the best option for the companies, the taxpayers and everyone else involved whether they moan and groan or not. Filing Chapter 11 allows a company to hold off creditors while it attempts to restructure its finances. Which is why I do not understand the following quote from Obama’s recent Online Town Hall…
“We will provide them some help,” Obama said. “I know that it is not popular to provide help to auto workers — or to auto companies. But my job is to measure the costs of allowing these auto companies just to collapse versus us figuring out — can they come up with a viable plan?”
He added: “If they’re not willing to make the changes and the restructurings that are necessary, then I’m not willing to have taxpayer money chase after bad money.”
Earth to Obama – then let them file Chapter 11 – that’s the best way to force them to restructure!
