The news of the day domestically is about GM and its emerging from the Bankruptcy Chapter 11 proceeding. I haven’t seen the pleadings so I have to rely on the news accounts but apparently they did what is a 363 sale free and clear to create the “new” GM. That is a standard procedure in Chapter 11. It is used to sale some assets to raise money for creditors or to fund a portion of the Plan of Reorganization. It is intended to be only a step in the process and is not to be used to circumvent the requirements of Confirmation for a Plan of Reorganization. Those requirements are strict, technical and subject to the vote of all the affected classes of creditors and interest holders. In the past there were cases where the Debtor in Chapter 11 attempted to use the 363 sale proceeding to effectively do their Plan of Reorganization. The sale was so large and took the heart and soul of the company with it that it amounted to a Plan. The remaining assets were not sufficient to effectively do a Plan. Several of the circuit courts around the country have ruled on this issue and every time overruled the attempt to have a “sale” that in effect amounted to a Plan. You can have a sale as part of a Plan but a separate sale outside of the Plan if so large as to dwarf the remaining assets and issues is taboo.
As you have all heard by now GM is splitting into two entities with the good assets going to a new company majority owned by Government, Inc. and the unions and Fiat. Interestingly, Fiat is not putting up any money to get its share of the new company. If I had tried that the bankruptcy judge would have laughed me out of court. They are kicking in “expertise” whatever the hell that is. I mean have you been reading for the last few years about Americans screaming and begging to get Fiat quality? I guess I didn’t notice all those millions of Fiats on the roadways. The Italians are going to teach us engineering and industrial techniques? Have low have we fallen. Next we’ll be asking the Russians to give election and get-out-the-vote expertise to CORE. Those creditors and shareholders left behind with the old GM are toast and the Government just views them as roadkill along the way to a socialist Valhalla.
I have sad feelings for some of the workers and management folks at Government Motors but not much. They both are reaping what they sowed for several decades. We need responsible people in the workplace, both labor and management, and we need people who will accept responsiblity. Both of those qualities have been lacking for years at GM.
Remember the Government strong-armed this whole thing from the beginning. They acted like thugs muscling in on people with demands that couldn’t be refused. Those bondholders got bulldozed and ignored. The unions were pampered to no end. They have lots of votes. Bondholders have very few votes. The Government didn’t have to respond to the request for loans in the first place and didn’t have to continue with them after the first round. They could have and should have allowed GM to do its own Chapter 11. It would have been successful and a new company would have emerged without any government loans or help. They have valuable assets, someone would have paid a price for them and they can make good vehicles. The Government Inc. folks have poured in 50 billion so far and that is only the down payment. They will be subsidizing Government Motors for as long as they can convince the public to do it. The Obama team has and will continue to demand that GM build only green friendly cars which will be quite expensive and no one will want. They acted like pirates and mafia types in the negotiations with the parties involed except of course for the unions who were they partners in crime. The White House is counting on a triple out of this one: first they get to keep locked in votes from the unions; second they will blare the horns about their envoirnmental policies and saving mankind from global warming and lastly, it is a huge wedge into the central planning role for government. Rattner the 30 something car czar says that they will not micromanage how GM is run. But he takes his marching orders from 1600 Pennsylvania Ave. and the boss there constantly talks about the green cars that will be built. You can bet they will build green cars as long as they get the government subsidy. It is nationalizing without calling it that one of our major industries. Control and power is sought by Team Obama of all our economy. Just look at cap and trade and the health care issue and the ownership of our major banks and insurance companies. They do want to run the economy rather than allow the free market and people with their individual choices to determine where our economy will head. Barney Frank has already stuck his foot in the door with “suggestions” about dealerships. I don’t like our government being involved in private enterprise and I damn sure don’t like the government ignoring the rule of law and becoming the dominant player in our economy and market place.
I will never buy another GM vehicle. Hate that. I loved my suburbans and some of my kids have Tahoes now. They are good cars. But if you buy a GM product you are endorsing and ratifying the actions of the government with GM. Its bailout, its ownership of the company, its pandering to the unions for votes, its theories on global warming, and the idea that those green electric cars that go a whopping 100 per charge and cost a f0rtune are a reasonable price to pay for a green planet. Of course all that ignores the fact that even if we used no more carbon from this day forward the Chinese alone would take up all that slack in carbon emissions and they have made it clear they intend to be petroleum based for at least several more decades.
I don’t want Government, Inc. to ever get the idea I approve of what they have done. I don’t endorse their socialist activities nor their brutish behavoir and abandonment of the rule of law. I hope those GM cars gather rust on the lots. I’ll buy Ford. They ain’t perfect but they haven’t taken the fruit juice yet. Americans aren’t socialists despite what the current gang in Washington may think or wish. Just like the coming Tax Revolt I hope there is a car revolt and Chrysler and GM whither into nothingness. Government and their bureaucrats are running GM now and it will have the efficiency of the DMV in most states. Patriots will avoid these like those toxic assets the
Government wants to peddle.
“I know of no way to secure the repeal of bad or obnoxious laws so effective as their stringent execution”. — US Grant www.olcranky.wordpress.com