“There’s an orderly way to do bankruptcy that produces a soft landing,” White House spokeswoman Dana Perino said today. “That’s one of the options.” As we’ve said before, the longer this goes on, the shorter the walk to bankruptcy court. Speaking of which, Bloomberg reports that “The federal bankruptcy court in Detroit, preparing for large reorganizations including possible filings by General Motors Corp., Chrysler LLC or Ford Motor Co., has changed some of its rules. Efforts to make the jurisdiction more business-friendly may prompt automakers to seek protection in their Michigan home, rather than in the traditional, big-business venues of New York and Delaware.” The court has passed a new administrative order that empowers the chief judge to choose a bankruptcy judge for any given case (as opposed to random selection). At the same time, they’re reviewing staffing, security and technology functions, waiting for the “big one.” Or two. Or three. “There is no district in the country that has a greater stake in the outcome of a filing by one of the Big 3 than the Eastern District of Michigan,” said Chief Judge Steven Rhodes. Ironically enough, it looks like there’s one part of Motown’s business where the state will fight outsourcing.
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Hard to believe…After 8 years, Bush would finally do something sensible?
Robbie:
I’m sure he will be able to snatch defeat from the jaws of success.
The bankruptcy court is probably the only organization in Michigan that’s forecasting a boom in its business.
What’s the old quote? “It’s ALL politics…”
When I saw last night that GM and Chrysler were talking again, my thoughts turned to Cerebrus’ real goal: make GMAC put out.
For years, GM made zippo on the selling of cars – the money came in the side door via GMAC. Cerberus knows (and as many of us posited, did from day one) that they’re gonna get theirs on the money play. They could care less about the product side of the equation, they want the financing.
Soo, I went into more detail on this theory in a coupla yesterday’s threads, but here’s the gist:
GMAC could easily get the money it needs to switch status to a bank (amounts are relatively small, in context) then the big bailout bucks come into play. For that to happen though, there needs to be a controlled environment (say, BK) and adequate political cover.
Giving money to Cerberus the privately held firm is political herpes. So, if Chrysler were to pledge some assets to a new co-op venture with GM, it goes down way smoother.
In return, GM throws the angry puppy some more of GMAC. Good times or bad, banks are where the money is…
If walks like a duck, talks like a duck and swims like a duck… its a duck…
Just cause we don’t call it chapter 11 won’t make it any less so.
I’m with porschespeed.
DC cannot give Cerberus a gift (it’s not a bailout, since Cerberus is, and would remain, a going entity even if it lost its entire $7B investment in Chrysler) and risk political suicide. There’d be a mob with torches and pitchforks in Washington in an hour.
The only way to make this palatable is for W to “declare victory” in “saving Detroit” by “merging two great American institutions” into an allegedly stronger one.
Mix up all the fed money in a big pot of C11/reorg/loan/guarantee/bailout/D-E swap etc and nobody will ever be able to tell which dollar went to whom…
RetardedSparks,
There’d be a mob with torches and pitchforks in Washington in an hour.
My friend, the mob should have been there about $5 Trillion ago. If they had, maybe the next 5 years wouldn’t suck quite as much as they’re going to.
Canada is contributing 20-percent to the Detroit-3 bailout, equal to its production share. Has anybody heard how much Mexico is kicking in?
I prefer “Obama Fun Happy Restructuring Time” to “bankruptcy,” at least in my faux-liberal smartass mode moments.
At the same time, they’re reviewing staffing, security and technology functions, waiting for the “big one.” Or two. Or three.
So this should be smoother and speedier then the Delphi filing???
“There’s an orderly way to do bankruptcy that produces a soft landing,” White House spokeswoman Dana Perino said today.
The landing is only soft if you’ve got a fat ass.