[VulcanRider]

November 15, 2008 Automakers Need Bankruptcy, Not Bailout by Andrew M. Grossman Legal Memorandum #33 The U.S. auto industry is in dire need of a shakeup. All of the Big Three are beset by plummeting sales and market share, high labor costs, aging fleets, and a surfeit of innovative automobiles in the pipeline. With General Motors, and perhaps Ford after it, facing looming liquidity crises, staying the course is no longer an option. But rather than face facts, the auto industry is seeking yet another government lifeline: a $25 billion bailout on top of the billions in subsidized loans already approved by lawmakers. While a bailout promises continued stagnation and decline, reorganization is the only chance that automakers have to rebound and survive in the global marketplace. Rather than throw even more money at the problem to little effect, Congress and the Administration should let the automakers take advantage of the same legal process to reorganize that thousands of other businesses use each year. The bankruptcy process is designed to address exactly the kind of challenge that the automakers now face: realizing the full value of assets and organizations that have been mismanaged and kept from reaching their potential. Conversely, outside of the bankruptcy process, the automakers will lack the legal ability, as well as the proper incentives, to confront their problems, restructure their operations, and return their assets and employees to productive service. http://www.heritage.org/Research/Economy/lm33.cfm

That was then, this is now...

U.S. to Steer GM Toward Bankruptcy Filing Expected as Chrysler Set to Emerge By David Cho, Peter Whoriskey and Kendra Marr Washington Post Staff Writers Friday, May 22, 2009 The Obama administration is preparing to send General Motors into bankruptcy as early as the end of next week under a plan that would give the automaker tens of billions of dollars more in public financing as the company seeks to shrink and reemerge as a global competitor, sources familiar with the discussions said. ...Under the GM draft bankruptcy plan, the company would receive just short of $30 billion in additional federal loans, a source said. The figure is a starting point in negotiations between the government and the company, the source said, and could change. A cash injection that large would boost the U.S. investment in GM to nearly $45 billion. The timing of the filing is also fluid, and could happen the first week of June. http://www.washingtonpost.com/wp-dyn...l?hpid=topnews

Someone please tell me what we achieved by bailing out the auto manufacturers, besides propping up the UAW...