5 ms·

and one wonders why bankruptcy is suitable for any other company in america, including airlines that have gone in and out of bankruptcy numerous times over the

and one wonders why bankruptcy is suitable for any other company in america, including airlines that have gone in and out of bankruptcy numerous times over the years...yet this same option is not permissible for the big3? this is exactly why ch.11 exists - to allow freedom to restructure

yummyfajitas 18y ago
A big 3 bankruptcy will be bad for auto workers, since the bankruptcy judge will rewrite their contracts. Since they currently get way above market rate, the judge will probably give them a pay cut, and authorize the layoff of many (1). Take a look at which politicians support the bailout. Then take a look at which politicians get UAW money: http://www.opensecrets.org/orgs/summary.php?id=D000000070 http://www.opensecrets.org/orgs/summary.php?id=D000000070 Coincidence? (1) Due to union contracts, the big3 are unable to lay off workers as a normal company would do.
- crabapple 18y ago
  A big 3 bankruptcy will be bad for auto workers yes, i think that is understood. they're going to live in the real world one way or another get them out of the big 3 and they can find work that the economy values. will they find it soon? no, but then again maybe trying to compete in the global economy with a high school education wasn't such a bright idea after all this is just about a huge chunk of our economy that has been living in the 70s finally forced to join the rest of us
misterbwong 18y ago
As I understand it, the big 3 are saying they _can't_ file for chapter 11 bankruptcy due to the current lending climate. They argue that since the financing climate is so harsh, no one will finance them while they restructure, thus forcing them into a chapter 7 bankruptcy-effectively causing a fire sale of the company and its assets. Sounds like Romney is advocating a "managed bankruptcy" where the government would facilitate a chpt11 bailout of the Big 3. Republicans want to avoid supporting an all out bailout whereas Democrats want help "main street" by helping the Big 3 avoid big-bad-bankruptcy. Obviously there is a lot of word wrangling going on in politics but it seems like this would be a good solution if it is communicated well.
- evgen 18y ago
  Technically, this is called debtor in possession financing. The DIP financing agent has a higher priority than existing debtors and bondholders when it comes to getting a payout after restructuring.
netcan 18y ago
Airlines have other vehicles protecting them. For example, Qantas (the Australian Airline) is one of the few airlines to have made a good profit consistently. This is mostly because they have the US/Australia route all to themselves. The US counterpart hasn't been highly functional for a while & no one else was allowed in. If United had gotten back onto it's feet at some point, they would have only had to face Qantas, who had themselves gotten cushy. The auto market will not save them their seats.

yummyfajitas 18y ago

A big 3 bankruptcy will be bad for auto workers, since the bankruptcy judge will rewrite their contracts. Since they currently get way above market rate, the judge will probably give them a pay cut, and authorize the layoff of many (1). Take a look at which politicians support the bailout. Then take a look at which politicians get UAW money: http://www.opensecrets.org/orgs/summary.php?id=D000000070 http://www.opensecrets.org/orgs/summary.php?id=D000000070 Coincidence? (1) Due to union contracts, the big3 are unable to lay off workers as a normal company would do.

crabapple 18y ago
A big 3 bankruptcy will be bad for auto workers yes, i think that is understood. they're going to live in the real world one way or another get them out of the big 3 and they can find work that the economy values. will they find it soon? no, but then again maybe trying to compete in the global economy with a high school education wasn't such a bright idea after all this is just about a huge chunk of our economy that has been living in the 70s finally forced to join the rest of us

misterbwong 18y ago

As I understand it, the big 3 are saying they _can't_ file for chapter 11 bankruptcy due to the current lending climate. They argue that since the financing climate is so harsh, no one will finance them while they restructure, thus forcing them into a chapter 7 bankruptcy-effectively causing a fire sale of the company and its assets. Sounds like Romney is advocating a "managed bankruptcy" where the government would facilitate a chpt11 bailout of the Big 3. Republicans want to avoid supporting an all out bailout whereas Democrats want help "main street" by helping the Big 3 avoid big-bad-bankruptcy. Obviously there is a lot of word wrangling going on in politics but it seems like this would be a good solution if it is communicated well.

evgen 18y ago
Technically, this is called debtor in possession financing. The DIP financing agent has a higher priority than existing debtors and bondholders when it comes to getting a payout after restructuring.

netcan 18y ago

Airlines have other vehicles protecting them. For example, Qantas (the Australian Airline) is one of the few airlines to have made a good profit consistently. This is mostly because they have the US/Australia route all to themselves. The US counterpart hasn't been highly functional for a while & no one else was allowed in. If United had gotten back onto it's feet at some point, they would have only had to face Qantas, who had themselves gotten cushy. The auto market will not save them their seats.