If GM And Chrysler Had Be Allowed To Go Out Of Business Where Would We Be Now?

How's Delphi doing these days?

Thought so. LOL!!

Hello? It did go "out of business", it filed bankruptcy. It was allowed to get rid of all its bad pension obligations and reduce its debts. All businesses are allowed the bankruptcy option when it's about to go "out of business"; it's when your cash flow is so small that BK is no longer an option. GM had good cash flow, its problem was all those bad stale union benefits on the books. BK allowed GM to get rid of all that and come out stronger. Don't you guys do research before asking these questions??

Read about the details of GM's 2009 bankruptcy here:
http://en.wikipedia.org/wiki/General_Motors_Chapter_11_reorganization

It would have reorganized in a different way and still be in business.

The other automakers that sold in the US would pick up the slack and their increased volume would have created jobs. The market was over saturated and the weakest ones began to falter. The exact same thing happened when the dot com bubble burst.

If the government hadn't backed the bankruptcy, GM/Chrysler would have gone under, their assets would be sold to a "new" GM/Chrysler, the union would have taken a hike, and all the suppliers might have been left eating the unpaid bills. If they were smart, they would go back to these companies and pay them back once they were clear again.

All the government did was step in and hand out money to everyone who would have been hurt by the actions.

Most likely for a while there would have been no US auto companies. Ford would have ultimately gone down due to the suppliers going out of business. Some transplants would have been seriously hurt as well if not some of them shutting down plants in the US. A further ripple effect of all this would have been a lot more foreclosure of homes putting further financial pressure on banks to lend any money. Credit would have tightened further strangling what ever small recovery our economy would have had.I think we could have gone into a deeper resession and would have taken us twice as long to recover from then what is an already slow recovery now.Unemployment would probably then be at about 14 to 15% instead of around 9% today.Over time other companes would have bought up the remains of the big three and perhaps restarted them. However most likely they would all be foreign owned like Chrysler is today.I'm guessing either Volkswagen or Toyota would have picked up GM or Ford. I don't think Fiat would have then picked up Chrysler if things were delayed 3 or 4 yrs.Maybe somebody like Nissan/Renualt could have been able to afford to do it.I think Fiat without the help of Chrysler would have declared bankruptsy do to the weak Euro car market. This would have potentially put Italy towards a worse path of unsolvency then it is today.This then might have been the catalast that eventually destroyed the EU and shoved the global economy into crises.

According to the U.S. Bureau of Labor Statistics, In 2010, the union membership rate--the percent of wage and salary workers who were
members of a union--was 11.9 percent. UAW membership is at around 376k.
Source: http://www.bls.gov/news.release/union2.nr0.htm
http://www.autonews.com/apps/pbcs.dll/article?AID=/20110331/OEM01/110339968/1424

So, are those anti-union bashers compelled to cling to their fairy tale beliefs that unions were responsible for the financial meltdown of GM and Chrysler because they refuse to hold those accountable at the top who made piss poor management decisions??

To the purposefully ignorant, facts don't matter.

GM and Chrysler had not made very good decisions. Chrysler, in particular, had junk for products. But the financial meltdown caused people to stop buying anything - and that included cars. When that happened, all the car companies struggled. Even foreign car companies reached out their hands to their governments for help. We're just so ignorant of overseas news we didn't hear about that. And the only reason that Ford wasn't in the same lousy shape as GM and Chrysler was that Ford had done such a lousy job that they had essentially failed 2 years before the financial meltdown. Back then credit was still cheap and Ford had been able to line up $22 billion in a line of credit that they could draw upon to save themselves. GM and Chrysler simply hadn't failed as badly and as early.

And they were singing,
"bye-bye, miss american pie."
Drove my chevy to the levee,
But the levee was dry.
And them good old boys were drinkin’ whiskey and rye
Singin’, "this’ll be the day that I die.
"this’ll be the day that I die."

The price of a Camry would be 45k due to little competition and all of the Japanese cars made in the states would be made in Mexico because Toyota would no longer need a reason to offer Americans a few token jobs to buy it's products.

What I find so incredible is that people don't get that when we buy something that is imported or is even assembled in the US from foreign made components, it means that money leaves our economy. Money that circulates within our economy is constantly being spent over and over - making jobs and paying salaries. When it exits our economy, that cycle ends. Just as we demand that the government live within their means, we have to, as a country, live within our means. And that means not buying more imports than we sell exports overseas. It's the exact same stupid problem and it is why we are collectively $60 trillion in debt!

If the US auto industry had been allowed to die, then our balance of payments with other nations would have only gotten worse as foreign car companies would profit from auto sales. That is our number one problem, money drains out of this country. When money drains out of the country, it has to be replaced with new money otherwise the money shortage would drive us into a deflationary spiral and we would end up in a gigantic depression. So to prevent that, the government prints new money which they "lend" into the economy. When money is "lent" into the economy, the result is that someone takes on debt. That debt might be federal debt or it might be mortgage debt. Either way, it is debt that allows "new" money to be added to the economy. That new money would then be spent on cars from foreign automakers which would drive the money out of the country and it would again have to be replace. The consequence of killing American industry is debt - and lots of it. That is what is destroying America - debt. We simply don't have enough real money to endlessly buy imports. The Republicans collectively are so blinded by their idiotic ideology that they don't understand this.

Romney would have let GM fail and destroy the economy. But hey... Anything is better than who we have in the White House now right? (Even though he Obama saved GM). Better to have a failed GM than an Obama presidency. Right?

And how’s that Rick Perry doing 009? LOL!!!!! Rick Perry makes George Bush look like an Astrophysicist. And that’s who you want to represent America? An incoherent hick LOL!!!!

The GOP debates are beyond comical. And those are the folks that some retards here want to put in charge?

As for the Republican field in general it is piss poor. The only one who has any intellegence at all is Newt Gingrich. Unfortunately I am at the opposite side of idealogically. There are lots of things i don't like about Obama. Frankly,however, I'm voting for him simply because he is better then all the Republican candidates put together.The economic problems that have been faced by this administration have not faced any other administration in over 70 yrs.There is not a single Republican candidate that his offered any compelling aurgument to solve the economic problems this country is currently facing. Other then increasing the defense budget by 300% and cutting virtually all remaining government programs,giving the rich a huge tax break at the expense of the middle class,making health care and social security somthing akin to investing in the stock market etc., there is excactly nothing coming out of these Republicans. It is the same old ideology and a complete lack of any concrete ideas.

Private or public funding is not the issue regarding the bailout. The bottom line is that the GM/Chrysler business model has for many years been flawed and headed towards bankrupcy. Where would this country be if any unqualified Joe with a failed business got an automatic bailout?? what makes GM/Chrysler so special?

Sure it would be painful but people (and organizations) learn (or should) from their mistakes. A lot of people would have been out of a job obviously. So what? anyone that underperforms should be at risk of loosing their job, if they have not been fired already! Why should taxpayers have to cover for underperformers?????

Whether GM did not have available private funding is irrelevant to justify going for a bailout. Their failed business model and poor product performance over decades is why GM needed help in the first place. Lets not desperately look where and who to blame.

Just like anyone that gets fired... you get up and look for something else, not whine as to why no one gave you a free handout like GM and Chrysler got.

...simply put ... in a BETTER place (in response to the title of this post).