Record profits? Where is the demand coming from??

 

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It is easy to become profitable when you declare bankruptcy and get rid of all those pesky liabilities that were holding you down.

Yes you let them fail, from the ashes will arise a much leaner company.
Not to mention the 3 or 4 spin offs that rush to fill the void.

http://www.aptera.com/

 

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The group that was really saved from the auto bailouts were those relying on a pension from GM.


The fact that this group had to get bailed out is a travesty that was brought on by private business. It is a fine example of how private business can totally screw people over. Of course public institutions also screw people over in the same way.


Imagine that.

 

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I read somewhere that the Fed gov't was ordering fleets of cars from GM. There's prolly info somewhere about that but I never pursued it.

 

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I think GM's pension plan is still underfunded by about 10 billion USD, take or give a few billion.

 

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Pensions are a bad idea to begin with, management always messes up the calculations, and it should be done away with. Give people more pay and let them save/invest for themselves.

Your confusion about my analogy is central to your confusion about this general topic every time it comes up.


Here is an example for you:

In 2009 a very large company with huge revenue numbers but massive liability problems was on the brink. This was not a company that should be liquidated based on the solid sales....they produce products that people really want. In spite of good sales, the company has too many promises....and the fault for that lies with both parties, the company and the lenders who did a bad job estimating the companies future ability to pay. To maximize value to current lenders and the future economy, you dont liquidate for pennies on the dollar a company that needs to restructure its liabilities.


Normally a lender will provide funding to keep the company afloat while it restructures and makes deals with those it has made future promises. In 2009 the companies that usually do this were in meltdown mode and had no funding to pass along. The private market could not fill the needed role of lender because the major lenders were all wondering if they too were about to go belly up.


Further evidence that the private market failed in this instance is coming right now as that company that was failing in 2009 is posting record profits a few years later after it restructured. Letting the private market work in 2009 would nto have created any value for anyone. Lenders would have lost more money on liquidation and a currently successful company would have been snuffed out....not to mention all the other secondary failures (suppliers, dearships, Ford). In 2009 the lending industry was not functional, the government filled that role for a brief period and saved hundreds of thousands of jobs while creating bilions in economic value for everyone involved.


I know analogies confuse you, maybe this was easier.

Pension plans would have a better job working if management wasn't incompetent and immoral.


I would much rather have the money they say is going towards my pension (and reitree health for that matter) go right into a 401K or health savings account or something.

 

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