On Wed, 03 Dec 2008 13:53:21 -0800, Jim Stewart
wrote:

Note that in the process of developing these plans over two
weeks, the projected "bridge loans" needed increased from 25
billion to 38 billion.

Now if this were most any other company, they
would default on their loans and pension plan,
go into receivership, be sold off for a fraction
of their current worth, and start producing product
with a labor rate of $40/hr instead of $75/hr.
Which, of course, would be the best thing for
the majority of the country.

Instead, the government, i.e. us, will continue
to flush money down the gopher hole without fixing
the problem.
--------------
Indeed!!

While her field is literature, linguistics and radical
feminist/anti-colonial politics, Gayatri Spivack correctly
observed, "at some point the quantitative becomes the
qualitative."
http://en.wikipedia.org/wiki/Gayatri_Chakravorty_Spivak

In this respect the Detroit Poobahs are correct when they suggest
a bankruptcy of one, will is almost certain to result in the
bankruptcy of the other two, because of their highly convoluted
finances and supplier base, which in turn will greatly intensify
the recession and possibly result in a depression, and thus there
is a qualitative difference, because of their size and importance
to the economy, justifying tax payer funding of private
corporations.

This is yet an example of the truth of the observation "when you
gott'em by the balls, their hearts and minds will follow,"
regardless if they are radical, liberal, conservative,
reactionary, Republican or Democrat, Washington insider or
political maverick.

Looking beyond the immediate problem of a possible Detroit
collapse, it appears that the new administration *MUST* take
steps to either reduce the size of corporations so they are NOT
too big or too important to fail, or if this is not practical, to
impose some sort of "public utility" regulation with an oversight
board, and possible citizen representatives on their boards
including the "executive" and "compensation" committees. It is
unconscionable that *ANY* private company or individual should be
in the position of holding the taxpayers to ransom.

As indicated in another post, while Detroit corporate management
may not consider bankruptcy to be an option, it only takes three
"major" creditors to file a bankruptcy petition with the courts,
and there are far more than three p***ed off vendors, franchise
dealers, and other creditors that will be determined to take the
corporations down with them, if they are forced into bankruptcy
through "deferred/extended payments," price "re-negotiations," or
additional/continued abuse of the warranty "charge back"
provisions. An involuntary bankruptcy petition for any of the
Detroit three, with 50 or 100 "major" creditors, would be a
"stake in the heart," if they can't/won't come up with the cash.


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).