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Originally Posted by cobra de capell
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Even a bank would not have forked over billions to GM, why is it that the federal government can do it? Actually, it's not even about GM, it's about the UAW.
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The banks are the root of this problem with the credit crisis, they have trapped themselves in a situation where they could not lend the money to GM even if they wanted to.
Ford was lucky and refinanced their lines of credit prior to the financial crisis. GM and Chrysler had bad timing for their refinancing.
The banks have also refused financing to many consumers who would have lined up to purchase/lease new cars, but now they cannot. Causing pain to all automakers selling cars in the US. Plus you have the recession now.
The CEO of GM wanted to borrow money from the government and avoid bankruptcy. Much like Chrysler did back in the day. I'm sure GM brass was looking beyond this short term banking mess and recession. Hey they were the #1 automobile maker in the world for decades and only recently lost out to Toyota. Do you think the US market for new cars has permanently shrunk by something like 50%? Or do you think after the financial crisis and recession, we are not going to go back to buying new cars like we have been doing?
So what does the government do? They fire the CEO who sees beyond the short term, so they can force the company into bankruptcy and then put their cronies in charge to build the Pelosi-mobile. Hey the government has a 31 year old fresh out of grad school student to go in and run things. And they get to screw the shareholders and bondholder out of ownership.
I think GM is screwed with the forced bankruptcy and having government cronies put in charge. I'm sure if the government had acted this way in '79 firing Lee Iacoccoa, taking over Chrysler and setting up to build the Jimmy Carter mobile, there would have been a big mess. But instead they lent them money, let industry experts pull themselves out of a mess, and the government was paid back with a profit. I don't how GM is going to be able to fix itself if the government puts in a bunch of amateurs to run the show.