WASHINGTON, April 12 (Reuters ) – The U.S. Treasury Department is directing General Motors to lay the groundwork for a bankruptcy filing by June 1, even though the automaker has publicly stated it could reorganize outside of court, The New York Times reported on Sunday.

GM is operating under emergency U.S. government loans. It has been told by the Obama administration's task force overseeing its bailout that it must cut costs and reduce its debts in order to continue to receive aid.

The White House-appointed autos task force has given GM 60 days to come up with a restructuring plan and it is trying to determine whether the automaker can be a viable company.

Quoting sources who had been briefed on the GM plans, the Times said the goal was to prepare for a fast "surgical" bankruptcy.

The newspaper said preparations are aimed at assuring a GM bankruptcy filing is ready if the company is unable to reach agreement with bondholders to exchange roughly $28 billion in debt into equity in GM and with the United Automobile Workers union.

A plan under consideration would create a new company that would buy the "good" assets of GM after the carmaker files for bankruptcy, the Times said.

Less desirable assets, including unwanted brands, factories and health care obligations, would be left in the old company, which could be liquidated over several years, according to the paper.

Treasury officials are examining one potential outcome in which the viable GM enters and exits bankruptcy protection in as little as two weeks, using $5 billion to $7 billion in federal financing, a person briefed on the matter told the Times.

The Times sources declined to be identified because they were not authorized to discuss the process. Both GM and Treasury Department officials declined to comment, the newspaper said.

Last week, GM's chief executive said the automaker wanted to restructure out of court, but also preparing for a bankruptcy filing.

http://news.yahoo.com/s/nm/20090413/us_nm/us_autos_gm

Quick silly question, if a company can restructure and reorganize in less than 2 weeks by filing for bankruptcy, why bail them out?

If the company is forced into bankruptcy its suppliers and debtors will be forced to accept large losses as well.
Not good for an ailing country.

In the end the Gov will still end up giving them money, bankruptcy or not.

The US Auto Industry is not just an industry. Its survival is a National Security concern!

This might help you understand the conflict. It is about the Chrysler bankruptcy filings in 1979!

http://www.heritage.org/research/regulation/bg276.cfm

Understand your point but what is not good for an ailing country is giving away money to companies that cannot function on their own. Suppliers and debtors extended credit, had this company produced a profit they'd have not a care in the world. A gamble a lot of companies are trying to recover from, so recover or close your doors, simple.

All businesses produce a domino effect, but the again in my perfect little world, everyone should be accountable for their actions including these large corporations. Treat them as we treat the small mom and pop companies.

You could just allow them to fail, but
Every Auto manufacturer is suffering, not just American Auto-makers.

There are so many businesses tied to the Auto-Makers that if the US Auto makers were permitted to fail, estimates are that unemployment in the USA could reach 25%.
Unfortunately the American Auto companies are suffering directly from legislation passed over the last 30 years which makes it hard for any American company to compete. Compete here at home or anywhere.
GLOBALIZATION and the lifting of trade tariffs!

Then you have the National Security issue.
Even allowing them to fail, would not take away the need to loan them money!

You didn't read the article did you?
We do have history to guide our actions today!

So what will this do to the net GNP of this nation?

I think GM is a old dinosaur that is dying from starvation. Time to die!

GM didn't "get with the picture" when other auto makers did including FORD actually. Ford screwed up as well but not as bad as GM. Bailing out GM to save a completely mismanaged industry makes no sense. What have the UAW offered to help alleviate the problems in the Auto Makers?

Zilch, Nada, zippo, zero, Nil, Nicht, NOTHING!

You are right brother...

I fully agree that the push for a global market hurt us here in America more than anything...

I also agree that it would be disasterous in the short run to allow a company like GM to fail.

Long term though, it is disasterous to subsidize these companies.

Take a look at the original bailout. You know the ones where the CEO's were still given bonuses, and where the majority of money went?

Imagine if you were a CEO to a major company organization. Without government subsidies when you make a risky move, such as giving out high risk loans, you would definitely be taking the risk. If it failed, the company failed. Even with legislation to pressure giving out these risky loans, such as the CRA, would you be funding like hell to lift that legislation for fear of losing a business.

But, if you are too big for the government to allow you to fail, than there is no risk involved. High risk = low chance for gain, but if it works the gains are the highest. So you have nothing you would lose for failure, and everything to gain if you succeed.

It takes the competition out of a free market. Unfortunately competition is the driving force of nature. Survival of the fittest. Remove that, and the weak may prosper, and the strong may fail.

Just a thought. There is a long term affect, and a short term affect.

You are right as well...but take into consideration the presssure set on GM and companies of that sort, when it came to legislations. We subsidize outsourcing... Funny thing, Ford makes cars in Mexico to help with production costs.

So i guess GM wasn't doing enough outsourcing to survive. Not sure, but it would be my guess.

The Heartbeat of America!

National Security is a major long-term concern!

unemployment rates could be closing in on(20-25%) that now. tent cities are popping up everywhere, and when someone is on unemployment and it runs out..... they mark him as going BACK to work, not homeless or destitute and on gov't aid. there aren't many new jobs available, and this new trend is not what the gov't is seeing. they are in shelters and with friends, and the homeless are increasing at an alarming rate! i believe with this hypothesis, you could double, or maybe triple the actual number of unemployed. at any rate, the count is far from accurate. in my county here, the unemployment has been 45% every winter since the car ferries closed down in 82' and it's all summer businesses. no winter work except for a ski lodge, and that employs only so many. i would say judging from this winter, it's 55% here. it was a really bad year, with a bad summer, too cold, so not many visitors. it's bad all over mich. new orleans is not much better either, but there is building going on at least, but half of the french quarter businesses are closed down, stuff that has been open for two centuries! and some are closing 2-3 everyday!

You are correct Fanta, did not read your link - may later but so tired of all the hoopla given to these large corporations that right now I am just sick and tired of the whole shebang.

Treat large corporations and small mom & pop outfits alike. GM fails, see ya hate to be ya.

*Drivin* - A catch 22 situation, damned if we do, damned if we don't; damned when we do, and damned when we don't. Just guessing who will ultimately pay for either course taken (hmmm) us?

TWO WORDS!

PROTECTIVE TARIFFS!

this is all tragic comedy

Why would you imagine such a thing?

Are you in the generation of Americans who can't remember a strong dollar with a self sufficient economy and military?

Are you among the generation brainwashed into thinking free-trade benefits America!

Wrong!
We are the largest consumer market in the world.
We used to be self-sufficient!

Wed, Oct 8, 2003

In response to the growing political agitation over the “jobless recovery” and the loss of manufacturing jobs under the impact of imports and outsourcing, the Bush Administration has launched a media campaign touting the importance of industry to the economy and the nation’s security. In his Labor Day address, President George W. Bush said,. “I understand for a full recovery, to make sure people can find work, that manufacturing must do better. And we've lost thousands of jobs in manufacturing....some of it because production moved overseas.”

In a recent Washington Times column, Commerce Secretary Don Evans wrote, “manufacturing represents the backbone of our economy and the muscle behind our national security.” A fine and true sentiment, but is the administration doing anything more than trying to soothe public opinion? One example, drawn from the very nexus of manufacturing and national security, clearly indicates that the administration is not interested in reversing America’s industrial decline, but furthering it. The sector involved is none other than the defense industry itself, where much of the Bush Administration is explicitly encouraging the foreign outsourcing of jobs and production capacity.

The 2004 Defense Authorization bill written by the House Armed Services Committee (HASC) under chairman Duncan Hunter (R-CA) mandated that the Pentagon draw up a list of components and technologies that are critical to the production of U.S. weapons, and that the industrial capacity to produce such items be located within the United States.

The Senate version of the bill did not include any of Hunter’s language. Indeed, it expanded the waiver authority in current “buy America” provisions to allow the easier outsourcing of defense work overseas at the request of Defense Secretary Donald Rumsfeld. The issue has been stalled in the House-Senate conference.

Large defense prime contractors such as Boeing, Lockheed Martin and Raytheon—who assemble parts and components produced by smaller firms, oppose the HASC legislation and have been lobbying the White House hard to block it. These giant defense corporations are succumbing to the same temptations that led firms in the commercial sector to become dependent on fragile “global supply chains” for their operations while sending millions of jobs to foreign lands.

To break the impasse, Rep. Hunter and Deputy Defense Secretary Paul Wolfowitz negotiated a compromise. According to published reports, Hunter's concessions included dropping the 65 percent U.S.-made content requirement, keeping it at the current 50 percent level [alarmingly, the defense primes claim they cannot build more than half of major weapons systems here anymore]. Hunter also agreed to accept a less rigorous standard for the foreign sourcing of military items, and to drop the requirement that military production be done with U.S. made machine tools. He held to the position, however, that the most essential pieces of weapons systems be built in America. It seemed like a workable solution, hammered out by two men who have made national security issues their lives’ work.

Unfortunately, other senior administration officials, who deal with trade and economic theory, such as the U.S. Trade Representative and the Council of Economic Advisors, are trying to block the compromise. They oppose any limit on the right of corporations to outsource jobs or move production overseas. Their “free trade” ideology raises real questions as to whether either trade negotiations or economic calculations in the Bush Administration are really predicated on a desire to gain advantages for the United States, or whether they are simply guided by academic sophistry.

The basic problem with this kind of interagency approach is that the defense industry is not like the commercial sector. National security cannot be risked by letting such a vital industry be hollowed out the same way so many commercial sectors have been. It is the government’s duty to set the parameters within which the defense industry will operate. The defense industry exists only to fulfill public policy: to secure the preeminent position of the United States in world affairs and to secure the homeland, including everything needed to keep Americans safe and prosperous. Defense managers used to take pride in their contributions to America’s strength. It is tragic to see a new, more venal corporate culture tarnish this patriotic image.

Advocates of military outsourcing claim they need access to alleged superior European technology and to integrate their commercial and defense operations. Yet, since the 1991 Gulf War, a wide gap in capabilities has opened between the United States and everyone else. American forces continue to improve their weapons and doctrines while Europe invests little in new military technology as their defense budgets fall. Indeed, the European defense industry is in deep trouble and is looking for the American taxpayer for a bail out. The record of joint European defense projects is often one of delay and disappointment, making for unreliable partnerships.

And American corporations are not just looking to Europe for integration, but to Asia – and particularly to China, which raises a host of security concerns. Beijing has just announced that General Electric will cooperate with Chinese industry to produce a new jet engine with both commercial and military applications.

By letting private business desires override considerations of national security and economic revival, the Bush Administration is revealing why it cannot be trusted to back its high-sounding rhetoric about manufacturing and job growth with effective action. As long as the corporate managers who want to send jobs overseas and buy foreign-made goods have influence in the White House, policy will continue to be made in their special interest, while the needs of domestic American enterprises and their workers will be dismissed.

http://www.americaneconomicalert.org/view_art.asp?Prod_ID=899

Here's a suggestion.
To save GM, they could pack up the entire operation and move it to Mexico. There, they wouldn't have to pay near as much.
They could use bailout money to do that.

November 9, 2005


Developing a National Strategy for Technology Competitiveness

As recommended in the Commission's 2004 Report to Congress, the U.S. government must develop a coordinated, comprehensive national technology competitiveness strategy designed to meet China's challenge to U.S. scientific and technological leadership. America's economic competitiveness, standard of living, and national security depend on such leadership. The Commission therefore recommends that Congress charge the Administration to develop and publish such a strategy in the same way it is presently required to develop and publish a national security strategy that deals with our military and political challenges around the world. Such a strategy should:
Identify future technology base goals;
Recommend policies for directing funds toward maintaining the U.S. technology base;
Initiate a national educational program similar to the programs developed in the post-Sputnik era to enhance the level of math and science education at the K-through-12, undergraduate, and graduate levels in the United States;
Recommend appropriate tax and investment policies to encourage high-technology-related research, development, and manufacturing activities in the United States.


More@,,,,,,,

http://www.uscc.gov/pressreleases/2005/05_11_09pr.php

JAN 2007

The U.S. Department of Defense is dependent on a healthy commercial steel industry for the production of its many weapon systems, according to according to
prep.
1. As stated or indicated by; on the authority of: according to historians.

2. In keeping with: according to instructions.

3. the major U.S. steel The United States Steel Corporation (NYSE: X) is an integrated steel producer with major production operations in the United States and Central Europe. The company is the world's seventh-largest steel producer ranked by sales (see list of steel producers). trade associations and the United SteelworkersUnited Steelworkers (USW)

historic labour union representing workers in steel, aluminum, and other metallurgical industries for much of the 20th century. In the U.S.
..... Click the link for more information. Union. "If we continue to lose our manufacturing base due to market-distorting foreign competition or U.S. economic policies that are hostile to domestic investment and U.S.-based manufacturing, it could become impossible to produce here," say the groups in a 28-page study. "The U.S. military would lose its principal source of strategic metals and we as a nation would become dangerously dependent upon unreliable foreign sources of supply."

http://www.thefreelibrary.com/Steel+industry+tells+DOD+that+health+of+U.S.+Mfg.+sector+is+essential...-a0181486443

It gets worse as our defense is reliant on every sector of our manufacturing base.

I don't think we should bail them out, but regardless of what I think, betcha I'll be paying for any decision made.

question......do you guys have this incredible amount of information stock-piled in your documents or something? JUST for these discussions? no way could you look it up that fast, or maybe i'm reeeally old school, and just don't understand.....and i can't possibly type that fast, for these long THINGYS!



makes for somme fascinating reading.....i must say. it's just that you don't expect three pages to be put up in seconds....very funny!