Last night while marshaling votes for the House’s eventual 237-to-170 vote in favor of nationalizing Detroit, House Majority Leader Steny Hoyer (D-MD) told the Wall Street Journal: “If we do nothing we face the risk that sometime soon there will be no American auto industry.” Hoyer has it exactly backward. A government takeover of the Big Three represents the biggest threat to their long-term existence, while a Chapter 11 restructuring is the best way to ensure the long-term viability of the industry. Bankruptcy Does Not Mean Death: The auto nationalization …
A few weeks ago, CEOs from Detroit’s Big Three flew to Washington in their private planes asking for $25 billion. They were ridiculed for flying private jets and Congress sent them home, demanding they needed a comprehensive plan to even consider loaning this kind of money to the automakers. They came back yesterday, making the 500+ mile road trip in hybrid cars, with a $34 billion plan. Let’s check out what these plans have to say. From Chrysler’s Plan: Providing Cars and Trucks People Want to Buy. “ Now that’s …
So the Big Three automakers returned to Washington yesterday, this time with slightly more specific plans on how they plan to spend taxpayer money to fix their faltering businesses. But it turns out that not all three of the automakers are really even asking for cash right now: While GM and Chrysler emphasized their immediate cash needs, Ford said it was financially prepared to weather this storm. Barring a bankruptcy by one of its domestic competitors or a more severe downturn, Ford said, it does not anticipate a liquidity crisis …
June 4, 2008, must seem like light years ago for Detroit. On that Wednesday night, the Detroit Red Wings hoisted Lord Stanley’s Cup in Hockeytown, U.S.A. Since then, it’s been nothing but the doldrums. The Detroit Lions have managed to lose every single football game in the 2008 season and are on the verge of remaining winless this season. Of course, the bigger news is that Detroit’s Big Three automakers are struggling, and the chief executive officers of Ford, GM and Chrysler will make their second trip to Capitol Hill …
Heritage Senior Research Fellow James Gattuso explains what happens when bankruptcy is declared and why it is a better option for Detroit Automakers [youtube]http://www.youtube.com/watch?v=6wKGODqsZ2o[/youtube]
When I think of bankruptcy I think of this. That’s right, the Monopoly Guy. Pockets empty. Shoulders shrugged. Game over. All the jobs will be wiped off the face of this earth and bulldozers will tear down the buildings. I’m guessing a lot of people think this way when they hear this word. Rich Wagoner, Chief Operating Officer of General Motors, seems to think this way. He recently declared that, “We are convinced the consequences of a bankruptcy would be dire and extend far beyond General Motors and therefore we …
