DrBenway

GMAC: Too Much Is Never Enough

GMAC could have been restructured if the government really wanted a sound solution. Split ResCap from auto-financing. Liquidate ResCap and keep the auto-financing company. A typical "good bank"/"bad bank" scenario.

Obama and Co. do not want to reform GMAC because it allows them to surreptitiously funnel taxpayers money to GM and Chrysler without explicitly stating so. I find it hard to believe that no other company could finance GM and Chrysler working capital and leases but probably at a higher costs. Hence a taxpayer funded subsidy.

Taxpayers money at work - all I can say!

Why GM's Wagoner and Not BofA's Lewis?

Lewis did everything (and more) the goverment asked him to do. He bought toxic Countrywide and dying Merrill so the taxpayers would not have to bail them out. The goverment has no reason to fire Lewis.

Wagoner, on the other hand, should have been working on pre-packaged bankruptcy last year when GM still had some liquidity instead of posturing by saying that bankruptcy was not an option. He has no credibility left now that GM is almost certain to go chapter 11 and deserves to be fired.

The BAC board of directors, on the other hand, is absolutely failed in its fiduciaries duties to fire Lewis who treated his bank if he had a massive short position in its stock. I am wondering where BAC would be trading today if he didn't buy Countrywide and Merrill?

GM Proves There Is an Alternative to Bailouts

I suppose UAW does not like "mark-to-market" accounting any more than banks.

Bank CEO: Our models show that our (subprime) CDOs are still AAA! This "mark-to-market" rule is destroying American companies!

UAW: Our studies (sic) show that we get paid the same as Toyota workers already. If we get paid market wages, there will be no more middle class in America!

P.S. A factory worker is a "working poor", is not a middle class. Middle Class in 2000 == college degree.

Free Marketeers for Wage and Price Controls

I fail to follow your logic. How insistence on paying "market wages" for which wages paid by your competitors is decent benchmark amounts to "wage controls"?

You do realize that Toyota keeps efficient young workers and will lay them off as they get older. Why UAW-controlled companies are FORCED to fire younger lower paid workers and keep the most expensive and least motivated workers with the seniority.

I just don't see how a union dominated company can compete with non-union ones in a long run in any economy.

I have a much better idea:

1. Talk to bondholders, GM managment, and all other stakeholders, exclude the union.

2. Agree to terms, as one would in a pre-packaged bankruptcy.

3. Re-interview the workers for their jobs. The ones who prove to be essential and want to work for market wages will keep their jobs. That is what a normal company would do in the restructuring.

Why even bother with talking to UAW? All the see big 3 as a union fund benefit program that accidentally also makes cars.

Should We Really Bail Out the Big Three Automakers with $73.20 Per Hour Labor?

1. Steelmakers.
2. Airlines.
3. Auto-industry.

Three worst perfmorming US industries in last 20 years. What is common? Unions!

Let's stop pretending that unions played any positive role at any point of history. It is the productivity growth that improved the worker wages and work conditions. Most white-collar workers have no unions and have been doing just fine.
If a GM worker gets paid 50% more than a Toyota worker, he has to be 50% more productive. I seriously doubt it is the case.
I also find it hard to comprehend and outright offensive how someone thinks that a low-skilled assembly worker with at best high school education should get paid 60-70K. Isn't is what a minimum wage for?