Internet Powerhouse Andy Martin: GM should file for bankruptcy Monday morning
Barack Obama wants to politicize American industry. General Motors is giving him his first opening. The result will be corporate chaos and rule by commissar. Where are the Republicans when we need them?
Internet Powerhouse Andy Martin says General Motors should still file for bankruptcy Monday morning
For GM, the “knock at the door” came on Sunday; who’s next?
Andy says GM should thumb its nose at Barack Obama’s bailout and take its chances in the courts
“Factually Correct, Not
FOR IMMEDIATE RELEASE:
Obama ousts GM’s leader, says Andy Martin; Who’s next?
Obamaland is starting to look more like a political dictatorship, in which anonymous “task forces” with their sole loyalty to the “maximum leader” take control of America’s economy
GM should file for bankruptcy Monday morning and thumb its nose at any more government aid
(NEW YORK)(March 30, 2009) Over three years ago I proposed that General Motors file for bankruptcy. No one was listening. Last November, I renewed my suggestion.
GM executives thought a government bailout was preferable to bankruptcy. They are living to regret that strategy.
Sunday (March 29th) the “knock at the door” came for GM. Barack Obama announced he was effectively taking over the company by dismissing GM CEO Rick Wagoner. I am no admirer of Wagoner.
GM previously claimed “no one would buy a car from a company in bankruptcy.” Does anyone believe that people are going to buy cars from a company controlled by Barack Obama? Richard Nixon must be smiling. No one would buy a used car from him.
According to the New York Times, Wagoner was not “forced out.” He was just “asked to leave.” Yah sure. He was paid to go, and he was paid to keep quiet. Wait and see.
Today (Monday) Obama announces his “rescue plan” for GM and Chrysler. These companies would be better off filing for bankruptcy Monday morning and thumbing their nose at Obama.
Obama, of course, has an “auto task force” (New York Times). That “task force” is assuming effective control of GM without due process of law and without the supervision and intervention of an independent judge. Is this what American business has come to?
In bankruptcy, all sides would be forced to follow established procedures and timetables. There are strict laws and rules barring improper influence and secret dealing. In Obama’s “court” there is but one law, and that law is the rule of the Emperor Obama.
Is there any doubt that under Obama’s maladministration GM will be paralyzed and eventually populated by political commissars? That the very eventuality GM sought to flee, bankruptcy, will ultimately arrive? There is no doubt at all. None whatsoever.
General Motors faces two problems: inflated wages and benefits, and federal laws mandating the sale of high-mileage cars. Labor is not going to surrender without a fight, no matter what Obama says. Likewise, companies need to build what they can sell, not what bureaucrats order them to manufacture.
The auto crisis reflects a classic situation where “free market” principles are infinitely preferable to rule-by-bureaucrat.
Some people want small cars. They should be free to buy them from auto companies that are free to sell them. I want a large car, not a teakettle. I should be free to buy one without the company being penalized for selling me what I want. I trust the marketplace more than I trust Obama & Co.
My sympathies are with the men and women on the shop floor, not with the big shots in the executive suite. Ordinary hourly workers have been betrayed at every level of leadership. I may be a Republican, but I am a pro-labor Republican. I believe in supporting working families. Wall Street’s hedge funds looted America. Now, as the nation lies prostrate, Obama’s maggots are seeking to devour the carcass.
Workers are suffering. Tax cuts are not the solution for the automobile industry. Free markets are. Paychecks are. Freedom of choice is.
Bankruptcy would offer GM management a considerable measure of control. The claim that no one will buy a new car from a bankrupt company is nonsense. Some people won’t. But I wouldn’t give the issue a second thought.
In any event, GM’s analysis was and is flawed; sooner or later, the company is going bankrupt. Labor and capital, workers and investors, are not going to walk away from their claims without a fight; that fight will have to be conducted in a court of law, not in Obama’s private chambers.
The “new” GM and Chrysler will be somewhat different from their predecessors. Wages and benefits will be equalized with foreign-owned plants. American workers will become more competitive, not less, in a bankruptcy process. Left alone, Obama, who was elected as the champion of labor, will ultimately deal a death blow to the UAW. No surprise there, either. By law courts must protect the interests of all stakeholders, not just creditors.
Whether GM acts prudently, and files for bankruptcy Monday, or delays the inevitable while it dithers with bailout funds for a few more weeks, makes no different in the long run. People worked hard to acquire their jobs, benefits and creditor claims. They are not going to surrender their stakes without a fight. In America, fights of this type are sorted out in a bankruptcy court, not Barack Obama’s back pocket. Stakeholders are entitled to a free and open courtroom, not the closed doors of a politically-appointed “task force” accountable to no one.
So, File the Bankruptcy Petition! I can understand why Obama wants to play games with America’s economy. I can’t understand why GM’s management is playing along with Obama’s suicide pact. Rick Wagoner should have told Obama take a jump. Instead, he wimped out and quit. Great leader, he.
Truthfully? Labor will do better under a straight bankruptcy. And so will lenders and investors. And so will every American.
I don’t care whether Mr. Wagoner’s job is saved, or not. But anyone with a sliver of common sense should see bankruptcy is the only option; government bailouts are ultimately going to destroy and dismember, not save, GM and Chrysler.
Why am I right? Because a bankruptcy filing by GM’s management would call the government’s bluff. Obama wants to appear to be a “friend of labor,” even though he is not a friend of labor. The bailout process is not transparent; by its very nature the “auto task force” is the type of secret organization that U.S. Senator Robert Byrd has been railing against. The “task force” appears to be beyond the control of congressional oversight. Only in open court can the parties fight out their differences and arrive at a solution that leads to recovery or liquidation.
If GM managers don’t have the guts to make the tough choice and file for bankruptcy, they will all be replaced, one by one, by Obama’s commissars. Sunday, the knock at the door came for Rick Wagoner. Who’s next?
I was right in 2005 when I published my pioneering analysis of the automobile industry. I am still right.
FOOTNOTE: A tip of the hat to the University of Illinois Economics Department, and UI College of Business, for training me in business and economic analysis. They taught me well.
Readers of Obama: The Man Behind The Mask, say the book is still the only gold standard and practical handbook on Barack Obama’s unfitness for the presidency. Buy it.
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Andy Martin is a legendary Chicago muckraker, author, Internet columnist, radio talk show host, broadcaster and media critic. He has over forty years of broadcasting experience in radio and television and is the dean of Illinois media and communications. He is currently promoting his best-selling book, Obama: The Man Behind The Mask. Andy is the Executive Editor and publisher of http://www.ContrarianCommentary.com.
Martin comments on regional, national and world events with over four decades of experience. He holds Economics and Juris Doctor degrees from the University of Illinois and is a former adjunct professor of law at the City University of New York. He is an announced candidate for Barack Obama’s former U. S. Senate seat.
His columns are also posted at ContrarianCommentary.blogspot.com; contrariancommentary.wordpress.com.
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