 
Danny
Member
Username: Danny
Post Number: 7948
Registered: 02-2004
| | Posted on Tuesday, November 18, 2008 - 11:38 am: |    |
If the exclusive period expires before the debtor has filed and obtained acceptance of a plan, other parties in interest in a case, such as the creditors' committee or a creditor, may file a plan. Such a plan may compete with a plan filed by another party in interest or by the debtor. If a trustee is appointed, the trustee must file a plan, a report explaining why the trustee will not file a plan, or a recommendation for conversion or dismissal of the case. 11 U.S.C. § 1106(a)(5). A proponent of a plan is subject to the same requirements as the debtor with respect to disclosure and solicitation.
In a chapter 11 case, a liquidating plan is permissible. Such a plan often allows the debtor in possession to liquidate the business under more economically advantageous circumstances than a chapter 7 liquidation. It also permits the creditors to take a more active role in fashioning the liquidation of the assets and the distribution of the proceeds than in a chapter 7 case.
Section 1123(a) of the Bankruptcy Code lists the mandatory provisions of a chapter 11 plan, and section 1123(b) lists the discretionary provisions. Section 1123(a)(1) provides that a chapter 11 plan must designate classes of claims and interests for treatment under the reorganization. Generally, a plan will classify claim holders as secured creditors, unsecured creditors entitled to priority, general unsecured creditors, and equity security holders.
Under section 1126(c) of the Bankruptcy Code, an entire class of claims is deemed to accept a plan if the plan is accepted by creditors that hold at least two-thirds in amount and more than one-half in number of the allowed claims in the class. Under section 1129(a)(10), if there are impaired classes of claims, the court cannot confirm a plan unless it has been accepted by at least one class of non-insiders who hold impaired claims (i.e., claims that are not going to be paid completely or in which some legal, equitable, or contractual right is altered). Moreover, under section 1126(f), holders of unimpaired claims are deemed to have accepted the plan.
Under section 1127(a) of the Bankruptcy Code, the plan proponent may modify the plan at any time before confirmation, but the plan as modified must meet all the requirements of chapter 11. When there is a proposed modification after balloting has been conducted, and the court finds after a hearing that the proposed modification does not adversely affect the treatment of any creditor who has not accepted the modification in writing, the modification is deemed to have been accepted by all creditors who previously accepted the plan. Fed. R. Bankr. P. 3019. If it is determined that the proposed modification does have an adverse effect on the claims of non-consenting creditors, then another balloting must take place.
Because more than one plan may be submitted to the creditors for approval, every proposed plan and modification must be dated and identified with the name of the entity or entities submitting the plan or modification. Fed. R. Bankr. P. 3016(b). When competing plans are presented that meet the requirements for confirmation, the court must consider the preferences of the creditors and equity security holders in determining which plan to confirm.
Any party in interest may file an objection to confirmation of a plan. The Bankruptcy Code requires the court, after notice, to hold a hearing on confirmation of a plan. If no objection to confirmation has been timely filed, the Bankruptcy Code allows the court to determine whether the plan has been proposed in good faith and according to law. Fed. R. Bankr. P. 3020(b)(2). Before confirmation can be granted, the court must be satisfied that there has been compliance with all the other requirements of confirmation set forth in section 1129 of the Bankruptcy Code, even in the absence of any objections. In order to confirm the plan, the court must find, among other things, that: (1) the plan is feasible; (2) it is proposed in good faith; and (3) the plan and the proponent of the plan are in compliance with the Bankruptcy Code. In order to satisfy the feasibility requirement, the court must find that confirmation of the plan is not likely to be followed by liquidation (unless the plan is a liquidating plan) or the need for further financial reorganization.
The Discharge
Section 1141(d)(1) generally provides that confirmation of a plan discharges a debtor from any debt that arose before the date of confirmation. After the plan is confirmed, the debtor is required to make plan payments and is bound by the provisions of the plan of reorganization. The confirmed plan creates new contractual rights, replacing or superseding pre-bankruptcy contracts.
There are, of course, exceptions to the general rule that an order confirming a plan operates as a discharge. Confirmation of a plan of reorganization discharges any type of debtor – corporation, partnership, or individual – from most types of prepetition debts. It does not, however, discharge an individual debtor from any debt made nondischargeable by section 523 of the Bankruptcy Code. (1) Moreover, except in limited circumstances, a discharge is not available to an individual debtor unless and until all payments have been made under the plan. 11 U.S.C. § 1141(d)(5). Confirmation does not discharge the debtor if the plan is a liquidation plan, as opposed to one of reorganization, unless the debtor is an individual. When the debtor is an individual, confirmation of a liquidation plan will result in a discharge (after plan payments are made) unless grounds would exist for denying the debtor a discharge if the case were proceeding under chapter 7 instead of chapter 11. 11 U.S.C. §§ 727(a), 1141(d).
Postconfirmation Modification of the Plan
At any time after confirmation and before "substantial consummation" of a plan, the proponent of a plan may modify the plan if the modified plan would meet certain Bankruptcy Code requirements. 11 U.S.C. § 1127(b). This should be distinguished from preconfirmation modification of the plan. A modified postconfirmation plan does not automatically become the plan. A modified postconfirmation plan in a chapter 11 case becomes the plan only "if circumstances warrant such modification" and the court, after notice and hearing, confirms the plan as modified. If the debtor is an individual, the plan may be modified postconfirmation upon the request of the debtor, the trustee, the U.S. trustee, or the holder of an allowed unsecured claim to make adjustments to payments due under the plan. 11 U.S.C. § 1127(e).
Postconfirmation Administration
Notwithstanding the entry of the confirmation order, the court has the authority to issue any other order necessary to administer the estate. Fed. R. Bankr. P. 3020(d). This authority would include the postconfirmation determination of objections to claims or adversary proceedings, which must be resolved before a plan can be fully consummated. Sections 1106(a)(7) and 1107(a) of the Bankruptcy Code require a debtor in possession or a trustee to report on the progress made in implementing a plan after confirmation. A chapter 11 trustee or debtor in possession has a number of responsibilities to perform after confirmation, including consummating the plan, reporting on the status of consummation, and applying for a final decree.
Revocation of the Confirmation Order
Revocation of the confirmation order is an undoing or cancellation of the confirmation of a plan. A request for revocation of confirmation, if made at all, must be made by a party in interest within 180 days of confirmation. The court, after notice and hearing, may revoke a confirmation order "if and only if the [confirmation] order was procured by fraud." 11 U.S.C. § 1144.
The Final Decree
A final decree closing the case must be entered after the estate has been "fully administered." Fed. R. Bankr. P. 3022. Local bankruptcy court policies generally determine when the final decree is entered and the case closed.
------------------------------ ------------------------------ --------------------
NOTES
1. Debts not discharged include debts for alimony and child support, certain taxes, debts for certain educational benefit overpayments or loans made or guaranteed by a governmental unit, debts for willful and malicious injury by the debtor to another entity or to the property of another entity, debts for death or personal injury caused by the debtor's operation of a motor vehicle while the debtor was intoxicated from alcohol or other substances, and debts for certain criminal restitution orders.11 U.S.C. § 523(a). The debtor will continue to be liable for these types of debts to the extent that they are not paid in the chapter 11 case. Debts for money or property obtained by false pretenses, debts for fraud or defalcation while acting in a fiduciary capacity, and debts for willful and malicious injury by the debtor to another entity or to the property of another entity will be discharged unless a creditor timely files and prevails in an action to have such debts declared nondischargeable. 11 U.S.C. § 523(c); Fed. R. Bankr. P. 4007(c). |
Danny
Member
Username: Danny
Post Number: 7949
Registered: 02-2004
| | Posted on Tuesday, November 18, 2008 - 11:39 am: | |
The Role of an Examiner
The appointment of an examiner in a chapter 11 case is rare. The role of an examiner is generally more limited than that of a trustee. The examiner is authorized to perform the investigatory functions of the trustee and is required to file a statement of any investigation conducted. If ordered to do so by the court, however, an examiner may carry out any other duties of a trustee that the court orders the debtor in possession not to perform. 11 U.S.C. § 1106. Each court has the authority to determine the duties of an examiner in each particular case. In some cases, the examiner may file a plan of reorganization, negotiate or help the parties negotiate, or review the debtor's schedules to determine whether some of the claims are improperly categorized. Sometimes, the examiner may be directed to determine if objections to any proofs of claim should be filed or whether causes of action have sufficient merit so that further legal action should be taken. The examiner may not subsequently serve as a trustee in the case. 11 U.S.C. § 321.
The Automatic Stay
The automatic stay provides a period of time in which all judgments, collection activities, foreclosures, and repossessions of property are suspended and may not be pursued by the creditors on any debt or claim that arose before the filing of the bankruptcy petition. As with cases under other chapters of the Bankruptcy Code, a stay of creditor actions against the chapter 11 debtor automatically goes into effect when the bankruptcy petition is filed. 11 U.S.C. § 362(a). The filing of a petition, however, does not operate as a stay for certain types of actions listed under 11 U.S.C. § 362(b). The stay provides a breathing spell for the debtor, during which negotiations can take place to try to resolve the difficulties in the debtor's financial situation.
Under specific circumstances, the secured creditor can obtain an order from the court granting relief from the automatic stay. For example, when the debtor has no equity in the property and the property is not necessary for an effective reorganization, the secured creditor can seek an order of the court lifting the stay to permit the creditor to foreclose on the property, sell it, and apply the proceeds to the debt. 11 U.S.C. § 362(d).
The Bankruptcy Code permits applications for fees to be made by certain professionals during the case. Thus, a trustee, a debtor's attorney, or any professional person appointed by the court may apply to the court at intervals of 120 days for interim compensation and reimbursement payments. In very large cases with extensive legal work, the court may permit more frequent applications. Although professional fees may be paid if authorized by the court, the debtor cannot make payments to professional creditors on prepetition obligations, i.e., obligations which arose before the filing of the bankruptcy petition. The ordinary expenses of the ongoing business, however, continue to be paid.
Who Can File a Plan
The debtor (unless a "small business debtor") has a 120-day period during which it has an exclusive right to file a plan. 11 U.S.C. § 1121(b). This exclusivity period may be extended or reduced by the court. But, in no event, may the exclusivity period, including all extensions, be longer than 18 months. 11 U.S.C. § 1121(d). After the exclusivity period has expired, a creditor or the case trustee may file a competing plan. The U.S. trustee may not file a plan. 11 U.S.C. § 307.
A chapter 11 case may continue for many years unless the court, the U.S. trustee, the committee, or another party in interest acts to ensure the case's timely resolution. The creditors' right to file a competing plan provides incentive for the debtor to file a plan within the exclusivity period and acts as a check on excessive delay in the case.
Avoidable Transfers
The debtor in possession or the trustee, as the case may be, has what are called "avoiding" powers. These powers may be used to undo a transfer of money or property made during a certain period of time before the filing of the bankruptcy petition. By avoiding a particular transfer of property, the debtor in possession can cancel the transaction and force the return or "disgorgement" of the payments or property, which then are available to pay all creditors. Generally, and subject to various defenses, the power to avoid transfers is effective against transfers made by the debtor within 90 days before filing the petition. But transfers to "insiders" (i.e., relatives, general partners, and directors or officers of the debtor) made up to a year before filing may be avoided. 11 U.S.C. §§ 101(31), 101(54), 547, 548. In addition, under 11 U.S.C. § 544, the trustee is authorized to avoid transfers under applicable state law, which often provides for longer time periods. Avoiding powers prevent unfair prepetition payments to one creditor at the expense of all other creditors.
Cash Collateral, Adequate Protection, and Operating Capital
Although the preparation, confirmation, and implementation of a plan of reorganization is at the heart of a chapter 11 case, other issues may arise that must be addressed by the debtor in possession. The debtor in possession may use, sell, or lease property of the estate in the ordinary course of its business, without prior approval, unless the court orders otherwise. 11 U.S.C. § 363(c). If the intended sale or use is outside the ordinary course of its business, the debtor must obtain permission from the court.
A debtor in possession may not use "cash collateral" without the consent of the secured party or authorization by the court, which must first examine whether the interest of the secured party is adequately protected. 11 U.S.C. § 363. Section 363 defines "cash collateral" as cash, negotiable instruments, documents of title, securities, deposit accounts, or other cash equivalents, whenever acquired, in which the estate and an entity other than the estate have an interest. It includes the proceeds, products, offspring, rents, or profits of property and the fees, charges, accounts or payments for the use or occupancy of rooms and other public facilities in hotels, motels, or other lodging properties subject to a creditor's security interest.
When "cash collateral" is used (spent), the secured creditors are entitled to receive additional protection under section 363 of the Bankruptcy Code. The debtor in possession must file a motion requesting an order from the court authorizing the use of the cash collateral. Pending consent of the secured creditor or court authorization for the debtor in possession's use of cash collateral, the debtor in possession must segregate and account for all cash collateral in its possession. 11 U.S.C. § 363(c)(4). A party with an interest in property being used by the debtor may request that the court prohibit or condition this use to the extent necessary to provide "adequate protection" to the creditor.
Adequate protection may be required to protect the value of the creditor's interest in the property being used by the debtor in possession. This is especially important when there is a decrease in value of the property. The debtor may make periodic or lump sum cash payments, or provide an additional or replacement lien that will result in the creditor's property interest being adequately protected. 11 U.S.C. § 361.
When a chapter 11 debtor needs operating capital, it may be able to obtain it from a lender by giving the lender a court-approved "superpriority" over other unsecured creditors or a lien on property of the estate. 11 U.S.C. § 364.
Motions
Before confirmation of a plan, several activities may take place in a chapter 11 case. Continued operation of the debtor's business may lead to the filing of a number of contested motions. The most common are those seeking relief from the automatic stay, the use of cash collateral, or to obtain credit. There may also be litigation over executory (i.e., unfulfilled) contracts and unexpired leases and the assumption or rejection of those executory contracts and unexpired leases by the debtor in possession. 11 U.S.C. § 365. Delays in formulating, filing, and obtaining confirmation of a plan often prompt creditors to file motions for relief from stay, to convert the case to chapter 7, or to dismiss the case altogether.
Adversary Proceedings
Frequently, the debtor in possession will institute a lawsuit, known as an adversary proceeding, to recover money or property for the estate. Adversary proceedings may take the form of lien avoidance actions, actions to avoid preferences, actions to avoid fraudulent transfers, or actions to avoid post-petition transfers. These proceedings are governed by Part VII of the Federal Rules of Bankruptcy Procedure. At times, a creditors' committee may be authorized by the bankruptcy court to pursue these actions against insiders of the debtor if the plan provides for the committee to do so or if the debtor has refused a demand to do so. Creditors may also initiate adversary proceedings by filing complaints to determine the validity or priority of a lien, revoke an order confirming a plan, determine the dischargeability of a debt, obtain an injunction, or subordinate a claim of another creditor.
Claims
The Bankruptcy Code defines a claim as: (1) a right to payment; (2) or a right to an equitable remedy for a failure of performance if the breach gives rise to a right to payment. 11 U.S.C. § 101(5). Generally, any creditor whose claim is not scheduled (i.e., listed by the debtor on the debtor's schedules) or is scheduled as disputed, contingent, or unliquidated must file a proof of claim (and attach evidence documenting the claim) in order to be treated as a creditor for purposes of voting on the plan and distribution under it. Fed. R. Bankr. P. 3003(c)(2). But filing a proof of claim is not necessary if the creditor's claim is scheduled (but is not listed as disputed, contingent, or unliquidated by the debtor) because the debtor's schedules are deemed to constitute evidence of the validity and amount of those claims. 11 U.S.C. § 1111. If a scheduled creditor chooses to file a claim, a properly filed proof of claim supersedes any scheduling of that claim. Fed. R. Bankr. P. 3003(c)(4). It is the responsibility of the creditor to determine whether the claim is accurately listed on the debtor's schedules. The debtor must provide notification to those creditors whose names are added and whose claims are listed as a result of an amendment to the schedules. The notification also should advise such creditors of their right to file proofs of claim and that their failure to do so may prevent them from voting upon the debtor's plan of reorganization or participating in any distribution under that plan. When a debtor amends the schedule of liabilities to add a creditor or change the status of any claims to disputed, contingent, or unliquidated, the debtor must provide notice of the amendment to any entity affected. Fed. R. Bankr. P. 1009(a).
Equity Security Holders
An equity security holder is a holder of an equity security of the debtor. Examples of an equity security are a share in a corporation, an interest of a limited partner in a limited partnership, or a right to purchase, sell, or subscribe to a share, security, or interest of a share in a corporation or an interest in a limited partnership. 11 U.S.C. § 101(16), (17). An equity security holder may vote on the plan of reorganization and may file a proof of interest, rather than a proof of claim. A proof of interest is deemed filed for any interest that appears in the debtor's schedules, unless it is scheduled as disputed, contingent, or unliquidated. 11 U.S.C. § 1111. An equity security holder whose interest is not scheduled or scheduled as disputed, contingent, or unliquidated must file a proof of interest in order to be treated as a creditor for purposes of voting on the plan and distribution under it. Fed. R. Bankr. P. 3003(c)(2). A properly filed proof of interest supersedes any scheduling of that interest. Fed. R. Bankr. P. 3003(c)(4). Generally, most of the provisions that apply to proofs of claim, as discussed above, are also applicable to proofs of interest.
Conversion or Dismissal
A debtor in a case under chapter 11 has a one-time absolute right to convert the chapter 11 case to a case under chapter 7 unless: (1) the debtor is not a debtor in possession; (2) the case originally was commenced as an involuntary case under chapter 11; or (3) the case was converted to a case under chapter 11 other than at the debtor's request. 11 U.S.C. § 1112(a). A debtor in a chapter 11 case does not have an absolute right to have the case dismissed upon request.
A party in interest may file a motion to dismiss or convert a chapter 11 case to a chapter 7 case "for cause." Generally, if cause is established after notice and hearing, the court must convert or dismiss the case (whichever is in the best interests of creditors and the estate) unless it specifically finds that the requested conversion or dismissal is not in the best interest of creditors and the estate. 11 U.S.C. § 1112(b). Alternatively, the court may decide that appointment of a chapter 11 trustee or an examiner is in the best interests of creditors and the estate. 11 U.S.C. § 1104(a)(3). Section 1112(b)(4) of the Bankruptcy Code sets forth numerous examples of cause that would support dismissal or conversion. For example, the moving party may establish cause by showing that there is substantial or continuing loss to the estate and the absence of a reasonable likelihood of rehabilitation; gross mismanagement of the estate; failure to maintain insurance that poses a risk to the estate or the public; or unauthorized use of cash collateral that is substantially harmful to a creditor.
Cause for dismissal or conversion also includes an unexcused failure to timely comply with reporting and filing requirements; failure to attend the meeting of creditors or attend a Fed. R. Bankr. P. 2004 examination without good cause; failure to timely provide information to the U.S. trustee; and failure to timely pay post-petition taxes or timely file post-petition returns. Additionally, failure to file a disclosure statement or to file and confirm a plan within the time fixed by the Bankruptcy Code or order of the court; inability to effectuate a plan; denial or revocation of confirmation; inability to consummate a confirmed plan represent "cause" for dismissal under the statute. In an individual case, failure of the debtor to pay post-petition domestic support obligations constitutes "cause" for dismissal or conversion.
Section 1112(c) of the Bankruptcy Code provides an important exception to the conversion process in a chapter 11 case. Under this provision, the court is prohibited from converting a case involving a farmer or charitable institution to a liquidation case under chapter 7 unless the debtor requests the conversion.
The Disclosure Statement
Generally, the debtor (or any plan proponent) must file and get court approval of a written disclosure statement before there can be a vote on the plan of reorganization. The disclosure statement must provide "adequate information" concerning the affairs of the debtor to enable the holder of a claim or interest to make an informed judgment about the plan. 11 U.S.C. § 1125. In a small business case, however, the court may determine that the plan itself contains adequate information and that a separate disclosure statement is unnecessary. 11 U.S.C. § 1125(f). After the disclosure statement is filed, the court must hold a hearing to determine whether the disclosure statement should be approved. Acceptance or rejection of a plan usually cannot be solicited until the court has first approved the written disclosure statement. 11 U.S.C. § 1125(b). An exception to this rule exists if the initial solicitation of the party occurred before the bankruptcy filing, as would be the case in so-called "prepackaged" bankruptcy plans (i.e., where the debtor negotiates a plan with significant creditor constituencies before filing for bankruptcy). Continued post-filing solicitation of such parties is not prohibited. After the court approves the disclosure statement, the debtor or proponent of a plan can begin to solicit acceptances of the plan, and creditors may also solicit rejections of the plan.
Upon approval of a disclosure statement, the plan proponent must mail the following to the U.S. trustee and all creditors and equity security holders: (1) the plan, or a court approved summary of the plan; (2) the disclosure statement approved by the court; (3) notice of the time within which acceptances and rejections of the plan may be filed; and (4) such other information as the court may direct, including any opinion of the court approving the disclosure statement or a court-approved summary of the opinion. Fed. R. Bankr. P. 3017(d). In addition, the debtor must mail to the creditors and equity security holders entitled to vote on the plan or plans: (1) notice of the time fixed for filing objections; (2) notice of the date and time for the hearing on confirmation of the plan; and (3) a ballot for accepting or rejecting the plan and, if appropriate, a designation for the creditors to identify their preference among competing plans. Id. But in a small business case, the court may conditionally approve a disclosure statement subject to final approval after notice and a combined disclosure statement/plan confirmation hearing. 11 U.S.C. § 1125(f).
Acceptance of the Plan of Reorganization
As noted earlier, only the debtor may file a plan of reorganization during the first 120-day period after the petition is filed (or after entry of the order for relief, if an involuntary petition was filed). The court may grant extension of this exclusive period up to 18 months after the petition date. In addition, the debtor has 180 days after the petition date or entry of the order for relief to obtain acceptances of its plan. 11 U.S.C. § 1121. The court may extend (up to 20 months) or reduce this acceptance exclusive period for cause. 11 U.S.C. § 1121(d). In practice, debtors typically seek extensions of both the plan filing and plan acceptance deadlines at the same time so that any order sought from the court allows the debtor two months to seek acceptances after filing a plan before any competing plan can be filed.
I hope it would not happen to them. |
Mackinaw
Member
Username: Mackinaw
Post Number: 5482
Registered: 02-2005
| | Posted on Tuesday, November 18, 2008 - 7:36 pm: | |
The main upside to Ch.11 is that they can cancel bad contracts, e.g. with dealer-franchisees.
The main downside, from my understanding, is that the taxpayers would have to pick up any pension plans that the automakers are allowed to unload.
But, if you're purely interested in the corporate well-being of the Big 3 and Detroit, you'd vote for Ch.11 |
Lilpup
Member
Username: Lilpup
Post Number: 5658
Registered: 06-2004
| | Posted on Tuesday, November 18, 2008 - 8:00 pm: | |
No major car company that enters Chapter 11 will emerge. |
Ktkeller08
Member
Username: Ktkeller08
Post Number: 4
Registered: 10-2008
| | Posted on Wednesday, November 19, 2008 - 10:22 pm: | |
This clip just shows how the auto maker's troubles really could extend to every part of this country.
http://www.msnbc.msn.com/id/21 134540/vp=27811269� |
Lilpup
Member
Username: Lilpup
Post Number: 5685
Registered: 06-2004
| | Posted on Wednesday, November 19, 2008 - 10:40 pm: | |
Here's a tidbit I just dropped on a Cali oriented board - GM is partners with Boeing in the company that is Malibu's largest employer.
 |
Lefty2
Member
Username: Lefty2
Post Number: 2931
Registered: 07-2007
| | Posted on Wednesday, November 19, 2008 - 11:05 pm: | |
it's time for bk 11, let them reorginize. f the unions. |
Isle_of_fun
Member
Username: Isle_of_fun
Post Number: 53
Registered: 10-2008
| | Posted on Friday, November 21, 2008 - 4:56 pm: | |
get real!!!!!!!!!! Lefty2, what are you a baby in the woods or a bear who needs to get taught how to do it in the woods.
Does anyone even realize how devastating the demise of the a big 3 would be.
How can anyone calculate?????????
the emotional impact that would
be felt by ALL OF YOUR NEIGHBORS!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!
THOSE REAL PEOPLE---- THAT DID REAL JOBS----
THAT WERE
PROMISED JOBS, INSURANCE, RETIREMENT.
A sense of worth all to be ripped out from underneath them.
My Father retired from Old Michigan Bell,
he worked 40 years, he received his stock options,
monthly pension check, Insurance for himself and my mother .
NO need to stand in line for welfare , food stamps. or even home improvement assistance.
No need to go to a food pantry, coat shelter etc.
IT CAN BE Humiliating to always have to ask for aid. But very very grateful that it is there.
GET REAL!!!!!!!! Folks,
most of the people asking for assistance were/are good
wonderful full time employees with as many
dreams as anyone else.
THIS Economy sucks
and compassion, understanding and the
ability to not judge what went wrong
but to aid what can be done will be the
best attitude any of us can have.
Think, PEOPLE for the people by the people.
We are capable of humane compassion RIGHT?? |
Retroit
Member
Username: Retroit
Post Number: 509
Registered: 04-2008
| | Posted on Friday, November 21, 2008 - 5:10 pm: | |
Danny, do I get an Honorary Law Degree for reading through your posts? |
Be_in_va
Member
Username: Be_in_va
Post Number: 12
Registered: 08-2008
| | Posted on Friday, November 21, 2008 - 7:46 pm: | |
post on most of the logic of this thread, we need bailouts out to bring back A&P, the horse and buggy industry, steam powered railroads, etc.
economic darwinism, the weak die and the strong survive... |
Lilpup
Member
Username: Lilpup
Post Number: 5713
Registered: 06-2004
| | Posted on Friday, November 21, 2008 - 7:51 pm: | |
Then why are all the Wall Street banks and other financial entities still around? If they had been allowed to fail and be consolidated into stronger entities the automakers would have been able to function largely as usual and not feel the need to go to Congress. |
Retroit
Member
Username: Retroit
Post Number: 511
Registered: 04-2008
| | Posted on Friday, November 21, 2008 - 8:10 pm: | |
economic darwinism, companies that are protected by their governments survive and companies that aren't die... |
Lilpup
Member
Username: Lilpup
Post Number: 5715
Registered: 06-2004
| | Posted on Friday, November 21, 2008 - 8:49 pm: | |
I think in this case it might come closer to national darwinism |
Retroit
Member
Username: Retroit
Post Number: 515
Registered: 04-2008
| | Posted on Friday, November 21, 2008 - 9:07 pm: | |
national darwinism: countries that protect their industries survive and countries that don't die...
Yes, that certainly is historically accurate! |
Mwilbert
Member
Username: Mwilbert
Post Number: 447
Registered: 11-2007
| | Posted on Friday, November 21, 2008 - 9:24 pm: | |
Apparently Speaker Pelosi doesn't want the automakers to go into bankruptcy.
http://www.bloomberg.com/apps/ news?pid=20601087&sid=aguKJDkT XOys&refer=home
If Obama were in office, I think we would be looking at a pre-packaged Chapter 11 filing for GM (with the US providing DIP financing) but since they aren't going to last another 60 days without intervention, I don't know what is going to happen. I don't think that they can get a bailout through the Senate, but maybe I'm wrong. |
Retroit
Member
Username: Retroit
Post Number: 517
Registered: 04-2008
| | Posted on Friday, November 21, 2008 - 9:53 pm: | |
I think that Congress should "submit viability plans" and "provide 'a forthright, documented assessment' of their current operating cash position, short-term liquidity needs 'and how they will meet the financing needs associated with the plan to ensure the [country's] long-term viability.'"
These Congresspeople crack me up! They act like they are the exemplars of financial virtue. They demand that the automakers prove their worthiness of receiving "government" money, but when are THEY going to prove that they are worthy of MY tax dollars? |
Lilpup
Member
Username: Lilpup
Post Number: 5717
Registered: 06-2004
| | Posted on Friday, November 21, 2008 - 10:00 pm: | |
If Pelosi pushes the Dems in the Senate and all of Michigan's and other auto states Repubs are on board, it should pass. It's hard for anyone who voted yes on the banking bailout to say no now and some of those who said no then, like McCotter, will say yes now. Since the Wall Street steamrollers and media hype have died down everyone's had a chance to step back and reassess, plus Obama's whole mantra of getting people to work together will fall apart if Detroit gets slamdunked.
Y'all know I've often said over the years it seemed like there was general disdain for Detroit and a lot of people here said, no, they don't even think about us. I have to say I was stunned by the volume and intensity of the hate toward and ignorance about Detroit coming from both the (New York) media and the west coast liberals. |
Lilpup
Member
Username: Lilpup
Post Number: 5718
Registered: 06-2004
| | Posted on Friday, November 21, 2008 - 10:04 pm: | |
Retroit, I think a lot of what will be seen in the near future is political face-saving. These people knew nothing about the industry and have to answer to their constituents for what they do. Now they are, hopefully, more up to speed about things, at least somewhat understand it themselves, and can formulate good answers for their public. |
Retroit
Member
Username: Retroit
Post Number: 518
Registered: 04-2008
| | Posted on Friday, November 21, 2008 - 10:16 pm: | |
True. After all, the bank bail-out was at first rejected by Congress based on the outcry from the American people, but after the "news cycle" passed, they revoted on it and it passed. Let's hope history will repeat itself.
BTW, good job, Lilpup, on defending the US auto industry. We would have been better served if we sent YOU to testify before Congress. |
Mwilbert
Member
Username: Mwilbert
Post Number: 450
Registered: 11-2007
| | Posted on Friday, November 21, 2008 - 10:17 pm: | |
I don't know if people have disdain for Detroit, but they definitely have disdain for the US auto industry. In my opinion, they have good reason. I wouldn't want to give the morons running GM any money either, but I might do it if I thought the alternatives were worse. Maybe the Congress will end up thinking the same way. |
Lilpup
Member
Username: Lilpup
Post Number: 5719
Registered: 06-2004
| | Posted on Friday, November 21, 2008 - 10:24 pm: | |
Sometimes I think people forget that the losses from GMAC roll up to GM's overall numbers. The earlier losses from GMAC were horrendous. I haven't looked to see how they were last quarter. Not all of GM's problems are auto related. They've had some other on paper accounting charges that make them look weak, too, when the headlines hit.
Thanks, Retroit. |
Retroit
Member
Username: Retroit
Post Number: 520
Registered: 04-2008
| | Posted on Friday, November 21, 2008 - 10:45 pm: | |
Let's see if GMAC gets approval to become a Bank Holding Company so that it can be eligible for "bailout" funding.
www.freep.com/article/20081121 /BUSINESS06/811210342
Where there's a will, there's a way.
(Message edited by Retroit on November 21, 2008) |
Novine
Member
Username: Novine
Post Number: 868
Registered: 07-2007
| | Posted on Friday, November 21, 2008 - 11:17 pm: | |
One thing I don't get is the politics of this with Pelosi and Reid. I know their constituents are probably telling them "No!" to the bailout. But the UAW is a major player in Democratic Party politics. Any route that leads to bankruptcy will almost certainly lead to a massive loss of UAW jobs, rollbacks in wages for those who keep their jobs and threats to the retirement benefits and health care of retired UAW employees. I know that the UAW isn't as big as it was in its hay day. But turning your back on the fate of hundred of thousands of loyal UAW members, a large majority who are reliable Democratic Party supporters is foolish beyond belief. It seems like a really bad political move by both. |
Sstashmoo
Member
Username: Sstashmoo
Post Number: 2926
Registered: 02-2007
| | Posted on Saturday, November 22, 2008 - 12:49 am: | |
Quote: "But turning your back on the fate of hundred of thousands of loyal UAW members,"
The American consumer and banks have turned their backs on the domestic manufacturers. WHat are they supposed to do? They aren't selling cars, should they keep borrowing money to honor ridiculous and uncompetitive labor agreements? At the taxpayer's expense?
Deep concessions from the, or the abolition of the UAW are the only things that will save these automotive jobs. The politicians want a plan, and who can blame them? Keep in mind, the rest of the country doesn't "understand" the UAW the way Detroiters do. Demanding a "plan" is the first fiscally responsible interjection into the big 3's situation so far. Some sort of assurance that the money is not used irresponsibly. Like paying people to sit in layoff rooms. Buying people out, paying ridiculous sums for workers to terminate their labor agreements. These politicians won't come out and say it, but that's the "plan" they are looking for. |
Mikem
Member
Username: Mikem
Post Number: 3737
Registered: 10-2003
| | Posted on Saturday, November 22, 2008 - 2:34 am: | |
quote:Deep concessions from the, or the abolition of the UAW are the only things that will save these automotive jobs.
Keep dreaming. I just spent all day working with a guy from Indianapolis. He bitched and moaned about how his Mercury Mountaineer needed three brake jobs by the time it had 45,000 miles. He dumped and bought a Toyota Highlander. His other car is a BMW. That replaced his Corvette which he claimed was an even bigger piece of $hit. It went fast on a straight road, but something broke every time he started it. He's never buying American again.
I hear stories like that every week from some coworker, most of whom live outside the state. People the dealer experience to start with and ending up with an inferior product in the end burns them even more. Cutting pay and work rules isn't going to fix that. |
Sstashmoo
Member
Username: Sstashmoo
Post Number: 2929
Registered: 02-2007
| | Posted on Saturday, November 22, 2008 - 7:57 pm: | |
I keep reading on this forum about these horrific experiences with domestic autos. I can say quite honestly, I know many that drive domestics, I drive domestics, no stories like this. Corvette broke every time he started it? Can you imagine what the US media would do with that if it were true? Reference the Edsel. Which wasn't actually all that bad of a car, until Bob Hope made it part of his schtick. |
Lilpup
Member
Username: Lilpup
Post Number: 5727
Registered: 06-2004
| | Posted on Saturday, November 22, 2008 - 8:08 pm: | |
I know someone living down south who turned in an Escalade(!) early claiming it was nothing but problems.
Sometimes I think these people go to stupid or dishonest repair shops.
When the Big 3 pare down their dealership networks I hope they have some way of vetting good ones from bad ones because I think that's where some of the after purchase 'quality' issues arise, especially during downturns when the shops are pressured to generate more revenue.
(Message edited by lilpup on November 22, 2008) |
Retroit
Member
Username: Retroit
Post Number: 529
Registered: 04-2008
| | Posted on Saturday, November 22, 2008 - 8:44 pm: | |
I agree that the quality gap is more perception than reality, but there is, or was, a bit of truth to it. I think one of the reasons for the quality discrepancy is that the domestic auto-makers build/built many more models than the foreign auto-makers. The upside to that is people have more variety to choose from. The downside is that the engineering and quality control is more thinly spread among so many different models. Henry Ford's Model T philosophy of incremental improvement to a single product had some merit. There has to be a balance between giving customers variety and giving them a time-perfected product. |
Trainman
Member
Username: Trainman
Post Number: 810
Registered: 04-2006
| | Posted on Wednesday, November 26, 2008 - 10:10 pm: | |
I think a sales tax on fast food to support Ford is a fair. I work near Ford and they provide much to Michigan's economy.
If Ford goes then my job goes, so you DY'ers should support higher taxes for me, so I can buy things so then you will have a job too. |
Mikem
Member
Username: Mikem
Post Number: 3746
Registered: 10-2003
| | Posted on Friday, November 28, 2008 - 9:51 am: | |
http://online.wsj.com/article/ SB122783248646663009.html
quote:In our judgment, based on experience elsewhere in American industry, the most constructive role the government can play at this point is to provide a short-term infusion of capital with strict repayment rules that will essentially require the auto makers to sell off their assets to other, successful companies.
Why is such a dramatic step necessary? For the unavoidable reality that the fundamental problem the auto makers face is not their pension, health-care or other legacy costs. It is that they are not making cars and trucks that enough Americans want to buy. And this has been true to some degree since the first energy shock hit the U.S. in the early 1970s...
...Detroit faces very different problems. It has had a persistent product-line problem that may be even more severe than its labor problems, and in any event will not be solved by getting UAW wage rates in line with those at the U.S. plants of Toyota, Honda, BMW and Nissan by 2010. The gaps between U.S. and foreign competitors simply have become too large to make up by reducing labor costs or rationalizing capacity. Even if the overall economy rebounds and gives Detroit auto makers some breathing room to emerge from bankruptcy, they will likely face similar -- if not more severe -- problems in the next recession.
In the end, the capital and labor of these companies need to be reallocated into better hands. To this end, we suggest that assistance of some form -- short-term financing or government purchase of equity -- be granted under the condition that the Detroit Three restructure their labor relations so as to be able to sell some or all of their major assets.
We do not generally support government assistance to failing companies. But we think that our proposal will cost taxpayers less and, in the long run, be more beneficial to labor and the overall economy than either a straight bailout or bankruptcy.
Messrs. Crandall and Winston are senior fellows at the Brookings Institution. |
Novine
Member
Username: Novine
Post Number: 885
Registered: 07-2007
| | Posted on Friday, November 28, 2008 - 10:45 am: | |
The Big 3 have been losing market share for years. But of the foreign competitors, only Toyota and Honda crack the double digits of market share. One could argue that with all of the advantages that the foreigns have over Detroit, there's no reason that their market share isn't higher. Apparently, for a significant portion of the buying public, the foreigns don't offer a compelling product to buy. |
Mwilbert
Member
Username: Mwilbert
Post Number: 459
Registered: 11-2007
| | Posted on Friday, November 28, 2008 - 7:13 pm: | |
quote:Apparently, for a significant portion of the buying public, the foreigns don't offer a compelling product to buy.
This may be true, but I would make two points:
1) Most of the domestics' market share is light trucks. If the light truck portion of the market were stable or growing, the US manufacturers would be in much better shape. However, it isn't.
2) People are creatures of habit. A high proportion of the US manufacturers' customers are older (none of the ten models with the youngest buyers last year was a US brand--including trucks!), so unless they can appeal to a younger cohort, they face further declines going forward. |
Izzyindetroit
Member
Username: Izzyindetroit
Post Number: 153
Registered: 07-2008
| | Posted on Thursday, December 04, 2008 - 10:25 am: | |
Is anyone else watching this right now??
http://www.cspan.org/Watch/C-S PAN_wm.aspx |
Lilpup
Member
Username: Lilpup
Post Number: 5781
Registered: 06-2004
| | Posted on Thursday, December 04, 2008 - 10:33 am: | |
WDIV is livestreaming, too |
Mashugruskie
Member
Username: Mashugruskie
Post Number: 311
Registered: 09-2006
| | Posted on Thursday, December 04, 2008 - 11:34 am: | |
Best post I've read today from the Chrysler Topix Forum.
Legions of the clueless.
I'd like to believe what you say about the rest of the country starting to realize the vital importance of the domestic auto industry but I'm not sure if enough Americans are involved in actually making things to have a clue what's involved.
For at least a generation we've been sending a large number of kids to college even though many of them aren't really capable of true collegiate work (just ask college administrators and professors how so many freshman courses are actually remedial in nature) who think they are too good to do real labor and feel entitled to their station in life.
They're the ones who whine about how unfair it is that "uneducated" factory workers can make a good living. They don't know what's involved in actually making anything, so they don't respect those who do, and they don't have a clue what a manufacturing supply chain really involves.
They won't realize what's involved till they lose their own jobs and can't afford a latte at Starbucks and their cable bill is past due.
They tell us how their dad had a crappy American car so they won't consider anything American, while they buy disposable consumer electronics. Detroit invented planned obsolescence, they tell us, and then show off their new iPod that has a bigger hard drive, plays videos and comes in really cool colors, not like their old one.
Ronnie Schreiberr
Motown |
Sstashmoo
Member
Username: Sstashmoo
Post Number: 2977
Registered: 02-2007
| | Posted on Thursday, December 04, 2008 - 12:59 pm: | |
"I understand you all "Drove" here today?"
What a crock of shyt. |
Pffft
Member
Username: Pffft
Post Number: 1844
Registered: 12-2003
| | Posted on Thursday, December 04, 2008 - 1:13 pm: | |
I think the MSNBC live feed is the best:
http://detnews.com/apps/pbcs.d ll/article?AID=/20081204/AUTO0 1/81204002 |
Turkeycall
Member
Username: Turkeycall
Post Number: 90
Registered: 09-2008
| | Posted on Thursday, December 04, 2008 - 1:45 pm: | |
Maybe what the Detroit Three ought to say is: "Well, Senators, just keep the money, don't loan us any of it. We'll just close up shop, put all our employees out on the street, refrain from making retirement fund deposits and health benefit premiums. We're going to stop paying property taxes and inventory taxes, - hell, we're just going to disregard every tax bill that comes to us - and then we're going to stiff our suppliers. When the ripple effect reaches just about person in the United States, then you can take the blame. And then, Senators, you can be in charge of soup kitchens and bread lines." |
Larryinflorida
Member
Username: Larryinflorida
Post Number: 3394
Registered: 02-2007
| | Posted on Thursday, December 04, 2008 - 1:55 pm: | |
We now have an entire generation unfamiliar with domestic manufacturing. Perfect Consumers, who think milk comes from a supermarket, not a cow.. working in this bullshit "service economy" we are supposed to be getting used to for our future. Til the next Giant War..when we have no plowshares to beat into swords.
Mighty Dumb. |
Mashugruskie
Member
Username: Mashugruskie
Post Number: 312
Registered: 09-2006
| | Posted on Thursday, December 04, 2008 - 1:55 pm: | |
So much for Chrysler's bridge loan. |
Jams
Member
Username: Jams
Post Number: 9730
Registered: 10-2003
| | Posted on Thursday, December 04, 2008 - 3:00 pm: | |
Yet...
quote:The Washington Post devotes its top nonlocal spot to, and the Wall Street Journal fronts, word that the Treasury Department is considering a new plan that would lower interest rates on newly issued mortgages in an effort to revitalize the housing market. The Treasury would offer to buy securities that back up these new mortgages as long as banks offer interest rates that are lower than the market average. Figures are still being worked out, but it looks like banks that want to participate in the program would have to issue 30-year fixed-rate mortgages at a 4.5 percent interest rate, which is more than a full point lower than the current market average.
http://www.slate.com/id/220601 7/ |
Mikem
Member
Username: Mikem
Post Number: 1869
Registered: 10-2003
| | Posted on Thursday, December 11, 2008 - 6:55 pm: | |
Apologies if this has been posted elsewhere:
http://bigthreeauto.procon.org / |
Lilpup
Member
Username: Lilpup
Post Number: 4982
Registered: 06-2004
| | Posted on Thursday, December 11, 2008 - 7:59 pm: | |
plantation mentality still exists in the South |
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