Wednesday, November 12, 2008

Faulty Logic - HF Style

This is what the Heritage foundations says.

An administration truly committed to “change” ought to consider this option: bankruptcy.

It’s not the end of the industry, but a new beginning.

Here’s why:

  • First, it’s really not so radical, in terms of magnitude.

  • Yes, shareholders would stand to lose out, but with GM’s current market capitalization of just $2.5 billion, they wouldn’t lose much. Apple, by comparison, is worth $87 billion.

  • *** I guess we will start using the argument
  • that is comparing - Apples to GM
  • BS

  • Second, reorganization would put the automakers on a sustainable course. Key are labor costs:

  • Gold-plated salaries and benefits packages for union workers mean the automakers lose a bundle on most cars sold.

WHO gets the REAL Gold-plated salaries and benefits packages ?

Workers or Executives?
Answer = Exec...

  • There’s no incentive to renegotiate when government dollars to pay those contracts are a real possibility. With a bankruptcy judge’s approval, collective bargaining agreements can be reformed to fit economic realities.

  • Third, bankruptcy is the only way to restore innovation to the U.S. auto industry. In the end,
  • the automakers make money by producing vehicles that consumers want.
  • *** But Detroit wants to TELL
  • and advertise
  • what Detroit

  • But any government money is sure to come with strings attached.

  • Pelosi, for example, said the government would exact a “recoupment” for any investment of taxpayer funds — specifically, a say in what kinds of cars it produces.
  • *** THAT is BS

  • That’s a recipe for certain failure and future bailouts. Bankruptcy, in contrast, strips a company down to its valuable assets and then sets to putting those assets to work in the marketplace. Whether it works or not, it’s the best chance for success.
***HF starts off telling Detroit what to do,
and then they end it wirh -