[e-mail]

Lenders say General Growth Properties (GGP) overreached in its bankruptcy, including in its reorganization of some shopping malls without any financial problems. Lenders want the court to dismiss the Chapter 11 filing on these properties.

This is a trend that is very disconcerting: companies filing bankruptcy petitions either themselves or for their certain business units that do not belong in Bankruptcy and it appears the abuse is growing.
Second, and even more disconcerting, some of the creditors are pushing the debtors into bankruptcy and then submitting their own 363 sale/purchase and, in my opinion, stealing certain businesses and assets at the expense of unsecured creditors, shareholders and other stakeholders, instead of refinancing the debt. The creditors, (predominately hedge funds and private equity funds) and enriching themselves in the process and the expense of all others; this has gone too far.

The Worst Case Scenario (Someone Has to Say It)

Wow, don't count on that seven figure job in consulting and/or the next administration, and, unless its fiction, I wouldn't be counting on that book deal.
At any point in time the scenarios outlined above could occur, its just that many don't realize untile some event, like September occurs and they go from one extreme to the other.
You are the pendulum that has swung too far. And I would bet 10 years ago you were one of those preaching the "new economics" and the suspension of the business cycle.

Automakers: Senate's Carrot and Stick Strategy Undermined

The senate and your article is misfocused: thinking that the cost of absolute wage rates - the cost of an hour of labor paid to an employee even if it includes benefits - is the wrong issue and should not be part of the bridge financing the auto industry is trying to obtain.

Generally, good companies pay above average wages relative to its peers, however, good companies also have lower wage costs as a percentage of either overall costs and/or gross receipts. It comes back to the productivity of those labor costs, not the absolute wage rate. the relative costs not the WAGE RATE PAID TO AN EMPLOYEE is relevent
Second,
Although, the Auto industry is not innocent in this mess the big three are currently a victim of circumstance:
They are not responsible for the lack of car financing, at almost any cost or term; add the state of the capital markets: commercial debt financing is not available at any cost and compound that by the unavailability to access the equity market and you have the current state of affairs - all outside the control of the auto executives and their stakeholders - Blame Wall Street for this one.

Congress needs to take some responsibility too: add the gas crisis to the mix – cheap gas thru the nineties and early part of this decade to gas prices near quadrupling in six years, excluding the last three months or so. Add the incentives, through the tax code, to acquire large vehicles and no incentive through tax policy to build and/or acquire smaller, more fuel efficient vehicles and now you have congress as a contributing factor to this current mess.
Third,
Bankruptcy is not an option: Debtor-in Possession Financing, (DIP financing) would still have to be provided by the federal government, because DIP financing is not available from any commercial lender at least in the current finance/banking environment, and the Federal government still ends up providing the funding except the pain the auto industry would experience is only multiplied in BK and ripple through the economy to many other sectors.

Pundits and republicans should stop trying to exact a pound of flesh for some imagined slight perceived and invest in ourselves – our fellow Americans - and quit playing politics with the auto bailout.

Free Marketeers for Wage and Price Controls

The Auto industry is not innocent in this mess, but the big three are currently a victim of circumstance:

They are not responsible for the lack of car financing, at almost any cost or term. Then, add the state of commercial debt markets and compound it with the unavailability to access the equity market and you have the current state of affairs - all outside the control of the auto executives and their stakeholders - Blame Wall Street for this one.

Congress needs to take some responsibility too: add the gas crisis to the mix – cheap gas thru the nineties and early part of this decade to gas prices near quadrupling in six years, excluding the last three months or so., (and anybody who says this WH did not jack-up Oil prices by limiting Iraqi production to less than pre-war levels, at least until recently, and buying for the Strategic Petroleum Reserve, again until late this past string or that their was no market manipulation is kidding themselves)

And, for the people who keep pushing that its the unions fault , (republicans) and the rates of pay UAW members earn: you need to understand Labor should not be priced in absolute $'s but in relative costs, not inclusive of legacy labor and pension costs, that was a management decision to defer rather than fund those costs - now, we know the unions are too inflexible and thus killing their future especially with more flexible labor pools outside the unions, (Honda, BMW, VW, Nissan US transplants). Though that is a problem that has to be fixed, it is not a quick fix and should not be imposed through this $14 Billion loan-package-legislati... Even if all parties agreed to scrap all ideas of management and labor as they are and even if they agree on what the future labor management would look like it will take at least two years to implement. Allow them the time, help save this industry and its labor pool, dealers, suppliers, other, to not do so would be cutting your nose to spite your face. Lets get real and quit trying to exact some pound of flesh for some imagined slight and invest in ourselves.

Lobbying and politics have greater culpability than the players they are trying to impose your view upon: Labor.

Congress, has contributed greater damage to this industry: it did not create a gas tax to contain consumption, or any other approach to curtail consumption and thus reduce our dependency, which is also one of the greatest failings of the Clinton and Bush administration; congress did not focus on consumption with tighter CAFE standards; congress failed to address a consumption tax and actually incentivized acquisition of less fuel efficient vehicles with tax breaks to acquire Hummers and other large passenger vehicles. Republicans should stop trying to exact a pound of flesh for some imagined slight perceived and invest in ourselves – our fellow Americans - and quit playing politics with the auto bailout.

Congress should have PASSED A CLEAN BILL NOW AND LEAVE IT TO THE NEXT ADMINISTRATION AND CONGRESS TO SORT THIS OUT.

And I can say with Expertise, as having been a Court Appointed Chief Turnaround Officer in several bankruptcies, bankruptcy is not a viable option. Debtor-in-Possession Financing, (DIP financing) would still have to be provided for by the Government because the financing, even in bankruptcy, would not be available, not in this capital market.

Pundits needs to get off the false premise that BK is an viable option. Who is going to fund those legacy costs, (Pension and healthcare) other than the federal government if you kill the auto industry. Either way the government would have to pay for it. At least with the bailout there is a good chance the auto industry could meet their long term obligations and repay the federal loans.