Is bankruptcy a bad thing? Perhaps the market will digest it in...

Is bankruptcy a bad thing? Perhaps the market will digest it in another light to the popular view? Did the market crash last night on this news?

Go Bailout!
A’ll 3 are stuck with the insane demands from the UAW. Most UAW workers now cost over $75/hr (unsustainable). There is approximately US$2000 added to each unit for pension and medical benefits for former staff before they even put the tyres on. That’s right Honda and Toyota are already $2K ahead before they even start. The current incompetent management remain if the bailout goes ahead. UAW demands that prevent modernization of plants remain, paralyzing the companys chance of ever competing. So how will a bailout fix the problem? Even the politicians aren’t this stupid.

Go Bankrupt!
The companies can free themselves from crippling debt and find a new base to restructure the business. New competent management can be appointed. Crippling and unsustainable UAW demands can go to the wind. The US based plants can be modernized free of UAW strikes which currently prevent this. Ford plants in Brazil need half the labor of a US plant to produce the exact same car. What the!!! Insane UAW pensions to people that haven’t worked there in years can be removed. Under bankruptcy they might even be able to produced good stuff again.

Yeah there will be some unemployment, but that’s because there’s too many employees in the first place. It’s never going to work if they are bailed out, so it just delays the inevitable and wastes money. If the consumer cant but a GM truck, than they will buy a Toyota Tundra instead, who cares. Yes there will be some demand destruction due to unemployment, but that’s gunna happen regardless. Maybe the unemployed workers can even get a job doing something constructive? So I wouldn’t be surprised if the markets gets over the big 3 going into ch11 rather quickly. I see a GM, Chrysler merged and a new Ford out of the ashes. This will be a good thing.

WXYZ, i paid <$28 for my CBA. Yeah it probably will go all the way to $21, but hey im not using any margin for this one. Its about %60 down right? some might say its an OK spec. Lets see if im right when i dump it early next year.