1. They stopped producing cars people wanted.

2. An enormous and unsustainable debt load.

3. The toxic work rules and unsurvivable cost of their union contracts.

Throwing billions at the problem, forcing the manufacture of cars people don’t want at prices they won’t pay, without dealing with the suicidal union work rules and costs won’t change that.

We’re pumping blood into a corpse.

I’m tired of the arguments that bailouts were necessary. They were not! They accomplished nothing. GM is still banko. It just took another year. Credit is still essentially frozen a year later, and we’re hemorrhaging money to cover the bogus debts of the financial institutions. They, too, will soon be banko. The investment banks and other banks do nothing on a large scale that can’t be done on a small scale. Other better-run banks would happily have picked up the market share and grown large. You either believe in free-markets or you don’t. Do not drink the Kool-Aid!

Bush was a fool to put Bernanke in as Fed Chair and Paulson as Treasury Sec. They’re both Dems, and they helped make this problem. Bernanke cut rates below inflation, contributing to the bubble (loose money policy). Paulson in 2006 was head of Goldman Sachs, one of the institutions needing a bailout. He got it into the mess it was in. So, they told Bush we had to bail them out, and it became the meme. This was nothing but a Friends of Paulson bailout plan. This is what comes of electing non-experts to POTUS. It also is what comes of electing moderate Pubs who drink the Dem Kool-aid and believe in bipartisanship. You get a Pub Prez with Dem policies. Lunacy.

Crysler would certainly have been split up and auctioned off in a real bankruptcy. Jeep would have brought in some decent cash for the bondholders – instead of Fiat getting it for free.

Whether or not GM executives are poor or not, the fact is that the legacy costs of the Big Three are due to the absurd labor contracts the companies have carried for decades. As David Thompson said, these costs alone make competitiveness extremely difficult–even with good products, market strategy and so forth.

What a proper bankruptcy would have done for Chrysler and GM–but which has prevented by the administration–is to cleanse these companies of significant legacy health care and post-retirement benefits so they can continue without that anvil around their necks.

Ultimately, the companies will still probably sink, only with massive taxpayer expenditures drifting to the bottom with them. Thanks a heap, Zero. You are now officially the worst president in history and you still have 1,326 days left to make your feat untouchable.

If we’re going to have “free market” economics, then lets actually do it. Everybody go for the best value – Everybody buy Japanese.

And why are we still blaming the unionized workers? How much of the legacy costs could we be spared if GM execs didn’t collect outrageous bonuses for running their company into the ground?

Anyone that invested in a company with a debt/asset ratio almost 20 times the wrong way was counting on a state bailout. No one that bothered to read any article on GM could have thought it was a sound enterprise. So their choice was simple: go into a straight BK and get nothing as administrative costs and fees consumed the few assets, or strike a deal with the contributor of new cash. It happens all the time.

If the Detroit Three want to build econo
boxes for profit they have to go to Korean
wage levels not Japanese ones. Large trucks
and luxury cars yeah, but not small cars.

And yet Honda and Toyota succeeded under the same regulations. Sorry, that excuse doesn’t pass whatever you think about the nature of CAFE.”

Honda etc succeeded because their (North American) labor cost per vehicle is much less than Detroit’s: they can still make a profit on low-margin compacts.

But wait, there’s more! Detroit has to price its small cars $2-4k lower than the equivalent Japanese, to compensate for their cruddy build quality- thanks, UAW.

CAFE rules have forced Detroit for years to sell econoboxes below cost: losing money on every single government-mandated sippy-cup sold, one great big cash hemhorrage.