Michael sez: This is my friend Charles. He understands the financial dealings of business. If you read this you will also!
Why talks of GM going bankrupt and destroying the economy are a MYTH.
The fear mongers are out there trying to scare you into flooding billions of dollars into GM. They say it is to prop up the company. The truth is the money will be used to allow the smart money to get out and leave the stay behinds to take the hit when GM runs out of bailout money and fails a few months later.
The bailout money will not fix GM’s problem. The bailout money simply delays the day of reckoning by a few months or a year. Then the failure happens anyway (because the problems are still there) but the smart money isn’t around to get hurt in the failure. So let’s take a look at:
What happens when really big companies go bankrupt…?
Answer: Many really good things that the average guy can understand.
First, the court systems steps in and appoints a trustee. The trustee has the power to run the company and answers to no one but the court. The trustee has a single priority: to deliver as much money as possible to the people the company’s creditors. The best way to do this is to fix what is wrong with the company and keep it operating so it generates income.
The trustee almost always fixes what is wrong immediately. The trustee fixes problems the company could not or would not do. Executives making 40 million a year? No problem, you now make $250,000. Unprofitable plant you can’t close because of a union contract? Plant closed. Middle management bloated? Here’s your pink slip. Too many dealers? Half of you are gone. Retiree benefits too high? Benefits slashed.
Get the picture?
What doesn’t happen is that these big companies don’t just close their doors and lay everyone off. In the last 8 years 4 of the largest 8 airlines went into bankruptcy. Are they gone? No. Actually they are stronger than ever.
Everyone that tells you GM bankruptcy would result in 1 in 20 or 1 in 10 workers getting laid off is a liar or ignorant as hell.
I go with liar. They know if GM, Ford, or Chrysler goes into bankruptcy the jobs and wages will be slashed until these companies are profitable again. These changes are simply things that should have been years ago, but did not happen. So these companies lived beyond their means, wasted their savings, and failed to stay ahead of the power curve.
Don’t companies that are poorly managed deserve to fail? Or should you, the person who has probably paid these companies bloated prices for years, take of debt so these companies can live beyond their means for a few more months, then go bankrupt anyway since they still have not fixed their problems?
Don’t be fooled! A GM bailout fixes NOTHING and actually DELAYS the delivery of the medicine GM desperately needs.
After the bankruptcy you'll probably see 5-12 smaller healthier companies emerge from the ashes of GM. Will this leave a lot of people sitting on the curb without jobs? Yes. Is this sad? Yes. Will they find new jobs someday and somewhere? Sure. Will the new jobs probably pay less? Yes. Will the American economy die? No.
Don't be fooled. GM's failure will not wreck the economy. The bailout will only massively help the smart money get out of town and delay the badly needed day of reckoning for GM.
Don't be fooled. The bailout people say they are helping. Actually they are delaying the start of the healing for GM.
Don't be fooled. The GM bailout will not pay for itself. If it did pay for itself private investors would do it and then reap the profits. Most private investors are darn smart and highly mercenary people. If a GM bailout was profitable they would do it.
Don't be fooled. The GM bailout helps GM employees and takes money out of your pocket. Money that you will never be paid.
Don't be fooled. The GM bailout money will go to pay creditors for loans they should have never made to people who should have never taken them.
Don't be fooled. The GM bailout only make sense to fools and crooks.
Don't be fooled. GM NEEDS a total overhaul. Bankruptcy will cure GM, not kill GM.
Don't be fooled... you are smart enough to understand this.
Don't be fooled. Fight to protect what is yours!
NO GM BAILOUT!