• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!
  • Welcome to our archives. No new posts are allowed here.

an Explanation of Bankruptcy

iguanaman said:
How much GM stock do you own? Why would anyone buy stock in a failed company? The U.S. Govt. bought that stock when no one else would.
Click to expand...


Excuse me ?? The very best time to buy stock in a company is when they are in dire trouble … When Chrysler was in trouble in the late 70’s their stock dropped to around $2.00 per share. The government stepped in with 1.5 billion dollars of loan guarantees (1979) by 1983 the stock was over $26.00 per share and by 1987 it was $52.00 a share ..


At that time I was a very young man, but had a good paying job, some wise friends, and was willing to listen. I decided to only invest $1500.00 . Nearly 8 years later it was a rather good payout for me, for the friends that guided me into this investment, a couple of them became millionaires in 8 years


The reasons I didn’t act on GM or Chrysler this time, one is because of my age and need, the other was because there was and is too much government involvement that forced each company to retain to much of it’s pension debt , and did very little about lowering it labor costs,. In my opinion it was nothing but a short term fix, and in 10 years they are going to be facing many of the same problems they faced in 2008. Now understand that is just my opinion, and perhaps just like in the 80’s they will make people that invested in them now the same type of money.


That story aside, The auto industry is to important to this country. Anyone that believes that Romney or any other person in power, would have let and of then just disappear is a total idiot. There are many ways that the government could have help GM and Chrysler get though a bankruptcy. What Romney was saying was there was better ways in his opinion, and considering his experience in big business, I would tend to think he knows more then Obama .. Or anyone in here . .
 
The Barbarian said:
Excuse me ?? The very best time to buy stock in a company is when they are in dire trouble … When Chrysler was in trouble in the late 70’s their stock dropped to around $2.00 per share. The government stepped in with 1.5 billion dollars of loan guarantees (1979) by 1983 the stock was over $26.00 per share and by 1987 it was $52.00 a share ..


At that time I was a very young man, but had a good paying job, some wise friends, and was willing to listen. I decided to only invest $1500.00 . Nearly 8 years later it was a rather good payout for me, for the friends that guided me into this investment, a couple of them became millionaires in 8 years


The reasons I didn’t act on GM or Chrysler this time, one is because of my age and need, the other was because there was and is too much government involvement that forced each company to retain to much of it’s pension debt , and did very little about lowering it labor costs,. In my opinion it was nothing but a short term fix, and in 10 years they are going to be facing many of the same problems they faced in 2008. Now understand that is just my opinion, and perhaps just like in the 80’s they will make people that invested in them now the same type of money.


That story aside, The auto industry is to important to this country. Anyone that believes that Romney or any other person in power, would have let and of then just disappear is a total idiot. There are many ways that the government could have help GM and Chrysler get though a bankruptcy. What Romney was saying was there was better ways in his opinion, and considering his experience in big business, I would tend to think he knows more then Obama .. Or anyone in here . .
Click to expand...

I disagree on a couple points. One, the UAW accepted major concessions on labor costs. New hires are essentially making the same wages as workers in non-union plants, with no no pension and no raises or bonuuses for six years. The GM's labor costs are lower and will continue to improve as older workers retire. Labor is not happy about it. Unequal Pay for Equal Work | Labor Notes.

Second, it's very east to SAY that there were lots of other alternatives to the bailouts (without actually mentioning any), but as far as I know no one has actually provided a viable alternative that could have saved the companies.

But many auto industry experts, including the Obama administration's former car czar, Steven Rattner, a Democrat, and former GM Vice Chairman Bob Lutz, a Republican, say there was no private-sector financing available in 2009 and the bailout was the only way to keep the companies alive.
"He thinks we didn't try to borrow money from the banks?" Lutz told the Detroit Free Press in February. "The banks were even more broke than we were. Who had the money?"

Without financing during bankruptcy, GM and Chrysler would have had to go out of business, taking down many suppliers. That would have likely caused bankruptcies at the healthier automakers such Ford Motor (F, Fortune 500), who would not have been able to get the parts they needed to build cars. That is why Ford went to Capitol Hill in late 2008 pushing for the rescue of its rivals.

3 answers to the auto bailout debate - Sep. 6, 2012
Click to expand...

So the bottom line is that, based on Romney proposed solution, GM and Chrysler would have failed. Or, if you're willing to accept Romney's catch-all ass covering maneuver ("the policies I propose are bull****, but I'll come up with something that works if you elect me) then he would have done essentially the same thing that Obama did.
 
TurtleDude said:
Apparently many Obama supporters-as demonstrated by the most Current advertisement by Obama in Ohio-do not have a clue about bankruptcy. Now I don't depend to be an expert on this subject but having handled a several million dollar plus bankruptcy matters I can explain to the ignorant that a bankruptcy does not mean the filer is going to disappear.

There are essentially two types of bankruptcies that a business can undertake. ONE IS A LIQUIDATION in which the business assets are liquidated and the creditors-based on priorities-are paid with the proceeds of the liquidation. This is commonly called Chapter 7 bankruptcy.

THE OTHER IS A REORGANIZATION. MANY of the airlines you may have flown on have gone or are going through a reorganization managed by a federal bankruptcy Court. The idiots in the Obama ad who whine that Romney wanted the failing car makers to go through bankruptcy are lying when they claimed that this meant Romney wanted those businesses to cease to exist. He was suggesting a CHAPTER 11 bankruptcy
Click to expand...

Just got to Ohio for a family funeral and for the first time I realize that we have an election as the media here is covered with campaign advertisements. Just saw the ad talking about Obama saving the auto industry and jobs and not surprised how many people are fooled by the rhetoric. Romney was misquoted by Obama in the last debate and far too many people don't understand bankruptcy so thank you so much for posting this thread.

The ads certainly aren't telling the truth but what is typical of Obama and liberalism. This country is truly divided and after four years of division and months of negative campaign advertisements is there any question that Obama isn't the person to ever unite anything or anyone? Four more years of Obama will be an absolute disaster as evidenced by the last four and the ads.

I only hope that I don't break a TV the next few days by throwing something at it with the false advertising by the Obama Administration and surrogates.
 
Dusty Rhodes said:
Now let's use some common sense here. Romney has been in the business of helping failing companys. Who do you thiknk knows more about bankruptcy? Obama or Romney?
Click to expand...

if that is the criterion for election, then THE donald trump is your guy
 
TurtleDude said:
I hate to sound skeptical or even cynical but I really don't have much faith in your interpretations of what you claim Romney intended
Click to expand...

AdamT got it absolutely right
let's look at romney's on words from the opening of his op-ed:
IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.

Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check. ...
Click to expand...
[emphasis added by bubba]
http://www.nytimes.com/2008/11/19/opinion/19romney.html?_r=0

it is clear - despite what maggie pretends mitt intended to say - that mitt rejected the concept of government funding to preserve GM

how much more evidence is needed beyond mitt's own words to convince those on the right that mitt got it wrong
 
justabubba said:
AdamT got it absolutely right
let's look at romney's on words from the opening of his op-ed:
[emphasis added by bubba]
http://www.nytimes.com/2008/11/19/opinion/19romney.html?_r=0

it is clear - despite what maggie pretends mitt intended to say - that mitt rejected the concept of government funding to preserve GM

how much more evidence is needed beyond mitt's own words to convince those on the right that mitt got it wrong
Click to expand...

You obviously didn't read the analysis I posted nor do you care. GM has not succeeded and is likely to need a bigger bailout in the future in order to survive. A lot of people got hurt by the GM/Chrysler takeover by Obama but you don't hear about them. Romney was right on, it needed to be a structured bankruptcy with the company restructuring, cutting expenses including union contracts and then the govt. guaranteeing the private sector lenders to provide the funds to continue operation. As is it is now the taxpayers are in debt by well over 25 billion dollars and have to get $52 a share just to break even. Too many people, you included, live for today and ignore tomorrow and the costs that tomorrow will bring.

Four more years of Obama will bring more GM's and greater dependence. Apparently that is what you want
 
Conservative said:
You obviously didn't read the analysis I posted nor do you care. GM has not succeeded and is likely to need a bigger bailout in the future in order to survive. A lot of people got hurt by the GM/Chrysler takeover by Obama but you don't hear about them. Romney was right on, it needed to be a structured bankruptcy with the company restructuring, cutting expenses including union contracts and then the govt. guaranteeing the private sector lenders to provide the funds to continue operation. As is it is now the taxpayers are in debt by well over 25 billion dollars and have to get $52 a share just to break even. Too many people, you included, live for today and ignore tomorrow and the costs that tomorrow will bring.

Four more years of Obama will bring more GM's and greater dependence. Apparently that is what you want
Click to expand...

Why should Govt. make loan guarantees for private investors? What is fair about Govt. taking the risks and investors reaping the benefits?
 
justabubba said:
AdamT got it absolutely right
let's look at romney's on words from the opening of his op-ed:
[emphasis added by bubba]
http://www.nytimes.com/2008/11/19/opinion/19romney.html?_r=0

it is clear - despite what maggie pretends mitt intended to say - that mitt rejected the concept of government funding to preserve GM

how much more evidence is needed beyond mitt's own words to convince those on the right that mitt got it wrong
Click to expand...

No, it's quite clear he did not reject the concept of government funding:

The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk. In a managed bankruptcy, the federal government would propel newly competitive and viable automakers, rather than seal their fate with a bailout check.
Click to expand...

In fact, Congress later went on to investigate whether or not a managed bankruptcy was the best way to go, and determined that it would simply take too long. Further, GM did not get the type of bailout they asked for . . . which is exactly what Romney suggested:

IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye.
Click to expand...

The Obama Administration and Congress demanded many concessions from GM, including that its CEO's work for $1 for the next year, concessions from the UAW, the closing of X-number of dealerships...none of which was present in GM's original request -- the request Mitt Romney was talking about in the op-ed piece.

Mitt Romney made is crystal clear that GM was important to the United States and absolutely did not endorse letting it fail...as in liquidate. This is just one more gotcha' moment that sucks wind.
 
MaggieD said:
No, it's quite clear he did not reject the concept of government funding:
Click to expand...
maggie, no matter how many times you insist otherwise romney's own words speak loudly about his position:
IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye.
Click to expand...
he could not be clearer that he opposed the federal efforts to underwrite the re-capitalization of GM
In fact, Congress later went on to investigate whether or not a managed bankruptcy was the best way to go, and determined that it would simply take too long.
Click to expand...
offer us a cite so we can see what was actually conveyed by that analysis, and who performed it

Further, GM did not get the type of bailout they asked for . . . which is exactly what Romney suggested:
Click to expand...
again, let's see what romney, himself, wrote about this:
IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye.
Click to expand...
GM and chrysler had their hand out (ford did not, but it advocated the bailout to preserve its own supply chain). the federal government gave them the requested bailout - the one they asked for
The Obama Administration and Congress demanded many concessions from GM, including that its CEO's work for $1 for the next year, concessions from the UAW, the closing of X-number of dealerships...none of which was present in GM's original request -- the request Mitt Romney was talking about in the op-ed piece.
Click to expand...
and you bring up an opportunity to offer kudos to team Obama
the shrub threw the requested bailout cash at the automakers and left it up to Obama to effect the terms for the use and repayment of those funds
this modification of debt obligations you point to is what occurs in a chapter 11 reorganization. it is imprudent to throw taxpayer money at an organization that has filed for bankruptcy because it is short of funds - unless you impose changes to prevent the firm from returning to its same unprofitable condition. Obama did that when dicknbush did not
Mitt Romney made is crystal clear that GM was important to the United States and absolutely did not endorse letting it fail...as in liquidate.
Click to expand...
what is important to be understood is that romney's approach would have resulted in the demise of GM
without the federal infusion of capital, at a time the private sector was sitting on the sidelines, unwilling to loan GM the money it needed, the GM chapter 11 reorganization bankruptcy would necessarily have been converted to a chapter 7 bankruptcy liquidation
and mitt was very clear:
Detroit needs a turnaround, not a check.
Click to expand...
that's my emphasis to evidence mitt's adamant opposition to an infusion of federal bailout funds to salvage GM and the jobs that would be preserved if the company could be rescued

This is just one more gotcha' moment that sucks wind.
Click to expand...
and we agree on this
mitt stepped on his dick with that op-ed
he took a position in writing opposing government bailout funding for GM. a position that he is now unable to rescind despite his efforts to do so. those of us who are watching refuse to allow those of you on the right to shake his etch-a-sketch and pretend the wrong position he staked out was a sound one
 
I appreciate you're agreeing with me, Babba, but I think you've still got it wrong. The bailout that Romney was talking about in your first quote is the one proposed by GM. That bailout was basically just a blank check from the government, which is why Obama's task force rejected it. Romney was correct in saying it would have been a recipe for disaster if we handed them tens of billions of dollars without insuring that they restructured so they could be competitive going forward. Where Romney was wrong was in suggesting that they could have restructured without a bailout.
 
justabubba said:
maggie, no matter how many times you insist otherwise romney's own words speak loudly about his position:

he could not be clearer that he opposed the federal efforts to underwrite the re-capitalization of GM

offer us a cite so we can see what was actually conveyed by that analysis, and who performed it


again, let's see what romney, himself, wrote about this:

GM and chrysler had their hand out (ford did not, but it advocated the bailout to preserve its own supply chain). the federal government gave them the requested bailout - the one they asked for

and you bring up an opportunity to offer kudos to team Obama
the shrub threw the requested bailout cash at the automakers and left it up to Obama to effect the terms for the use and repayment of those funds
this modification of debt obligations you point to is what occurs in a chapter 11 reorganization. it is imprudent to throw taxpayer money at an organization that has filed for bankruptcy because it is short of funds - unless you impose changes to prevent the firm from returning to its same unprofitable condition. Obama did that when dicknbush did not

what is important to be understood is that romney's approach would have resulted in the demise of GM
without the federal infusion of capital, at a time the private sector was sitting on the sidelines, unwilling to loan GM the money it needed, the GM chapter 11 reorganization bankruptcy would necessarily have been converted to a chapter 7 bankruptcy liquidation
and mitt was very clear:

that's my emphasis to evidence mitt's adamant opposition to an infusion of federal bailout funds to salvage GM and the jobs that would be preserved if the company could be rescued


and we agree on this
mitt stepped on his dick with that op-ed
he took a position in writing opposing government bailout funding for GM. a position that he is now unable to rescind despite his efforts to do so. those of us who are watching refuse to allow those of you on the right to shake his etch-a-sketch and pretend the wrong position he staked out was a sound one
Click to expand...

Well, if the intent of this thread is to help get information out there, I think I did a good job. You don't agree. But your post is so long nobody will read it. ;) ;)

We disagree. You are waaaay too partisan on this issue, Bubba.
 
iguanaman said:
Why should Govt. make loan guarantees for private investors? What is fair about Govt. taking the risks and investors reaping the benefits?
Click to expand...

Ask Obama, the issue was what Romney said and how Obama lied again as usual.
 
You must log in or register to reply here.
Back
Top Bottom