Archive for November 18th, 2008

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U.S. Auto Industry: How Filing Chapter 11 Could Work

November 18, 2008

Union contracts strangling the Big Three automakers with unmanageable terms, CxO level management making VERY bad decisions with respect to product development, distribution channels, operations management, and negotiating with the unions (GM has 7,000 dealers while Toyota has under 2,000 where both have about the same 20% market share of the U.S. market), and clearly the red ink is so RED, it makes the rest of the American taxpayers wonder why they (with an average salary/benefits of around $40/hr) should pay to bail out three unprofitable companies, so severely mismanaged and unprofitable (with no prospect of getting out of the deep end), who pay their workers an average of $70/hr (salary/benefits).  It took the union leaders and Big Three management to get in this hole – they’ll need to look in the mirror and give up some of their “wants” just like anyone else in financial trouble.  Even those not on the production line, retired workers, or those forced to retire while keeping benefits and pay maintain unbearable fixed costs on the Big Three – costs they in turn must build into a decreasing demand for their vehicles.  John Gapper of the Financial Times makes the case for letting them enter Chapter 11 and restructure their obligations, the only sure way to actually get some concessions instead of a taxpayer handout … so they can emerge as profitable entities.

– AP

 

The view that the Detroit big three should be pushed into Chapter 11 bankruptcy, and not simply be bailed out by the US government, is growing.

The big three argument against this, apart from the general view that they only need a helping hand, is twofold.

One is that it is very hard to get debtor-in-possession financing at the moment to allow an orderly Chapter 11 bankruptcy to proceed. If they are not rescued, their argument goes, they face the harsher Chapter 7 bankruptcy, and chaotic liquidation.

The second argument is that any form of bankruptcy will be counter-productive because people will stop buying vehicles from any company in bankruptcy. They will not believe that any warranty or servicing agreement will be honoured in future.

The first argument is weak since the government could provide financing for Chapter 11 rather than trying to keep the companies going in the present form. That would provide more assurance that a big restructuring would take place.

The second argument has more weight, but not enough to be a barrier. Americans are already used to travelling on bankrupt airlines – although that involves a shorter-term contract – and, if all of the big three are thrust into Chapter 11 at the same time, any stigma would probably be reduced.

Andrew Ross Sorkin, the New York Times business columnist, comes down in favour of Chapter 11 this morning, and has an interesting analysis of how the restructuring of a combined General Motors/Chrysler might work.

It would involve shedding several brands, possibly including the Chrysler brand itself, and reducing capacity heavily. There are lots of entrenched interests that would fight that, notably GM and Chrysler dealers, but it has the ring of necessity.

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Proposition 8 Protestors Getting Out of Control

November 18, 2008

This video is via hotair. Stories and videos like this have been coming out since election day and rather than dying down, they have only been escalating.  It’s as if all these angry liberals who wanted to vent at a McCain victory needed to put their hopechange frustration elsewhere. Michelle has a description of what happened:

After just singing and worshiping God for a while, Roger decided that we should all hold hands in a circle and continue singing. So we did.

Someone (Actually a person who came up and hugged and kissed some of us who he knew from the past) convinced some people that we were there to protest against the no on 8 campaign.

Then some guy who was dressed up like one of the sisters (The sisters of perpetual indulgence is a group of men who dress up like nuns and call themselves the spiritual authority of the Castro.) took a curtain-type thing (Which I think they use to curse people) and wrapped it around us.

Then a crowd started gathering. We began to sing “Amazing Grace”, and basically sang that song the whole night. (At some points we also sang “Nothing but the Blood of Jesus” and “Oh the Blood of Jesus”.) At first, they just shouted at us, using crude, rude, and foul language and calling us names like “haters” and “bigots”. Since it was a long night, I can’t even begin to remember all of the things that were shouted and/or chanted at us. Then, they started throwing hot coffee, soda and alcohol on us and spitting (and maybe even peeing) on us. Then, a group of guys surrounded us with whistles, and blasted them inches away from our ears continually. Then, they started getting violent and started shoving us. At one point a man tried to steal one of our Bibles. Chrisdene noticed, so she walked up to him and said “Hey, that’s not yours, can you please give it back?”. He responded by hitting her on the head with the Bible, shoving her to the ground, and kicking her. I called the cops, and when they got there, they pulled her out of the circle and asked her if she wanted to press charges. She said “No, tell him I forgive him.”

Afterwards, she didn’t rejoin us in the circle, but she made friends with one of the people in the crowd, and really connected heart to heart. Roger got death threats. As the leader of our group, people looked him in the eyes and said “I am going to kill you.”, and they were serious. A cop heard one of them, and confronted him. (This part is kinda graphic, so you should skip the paragraph if you don’t want to be offended.) It wasn’t long before the violence turned to perversion. They were touching and grabbing me, and trying to shove things in my butt, and even trying to take off my pants – basically trying to molest me. I used one hand to hold my pants up, while I used the other arm to hold one of the girls. The guys huddled around all the girls, and protected them.

The LA Times has discussed the issue going to the Supreme Court and getting decided by one man pretty much, Justice Anthony Kennedy. If such a thing were to happen, it would be the ultimate testament to overturning Marbury v. Madison (no, not all of us advocate that). The will of one man would override the majority of voters of the state of California who amended their Constitution.

To touch briefly on the subject itself, I (Yossarian, speaking for himself and no others on this site) don’t have strong feelings either way towards giving same sex couples visitation and inheritance rights beyond joint tenancy. What I do care about is keeping this as a state issue and not making it federal by amending the US Constitution or having a federal court make national law on the issue. We can cross that “full faith and credit” bridge when we get there. The best way to win over an idea is to change hearts and change minds. You can’t win concensus through fear by sending white powder to Mormon churches or attacking old ladies. I seriously doubt that Californians want this made into a law borne out of violent coercion.

Some ardent prosecutor can make a good political case for himself or herself out in Cali by getting on these protestors

Michelle has more on the escalating violence here, here, here and here.

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Obama and the Uninformed Electorate

November 18, 2008

This is very telling and sad. This what was found:

57.4% could NOT correctly say which party controls congress (50/50 shot just by guessing)

81.8% could NOT correctly say Joe Biden quit a previous campaign because of plagiarism (25% chance by guessing)

82.6% could NOT correctly say that Barack Obama won his first election by getting opponents kicked off the ballot (25% chance by guessing)

88.4% could NOT correctly say that Obama said his policies would likely bankrupt the coal industry and make energy rates skyrocket (25% chance by guessing)

56.1% could NOT correctly say Obama started his political career at the home of two former members of the Weather Underground (25% chance by guessing).

And yet…..

Only 13.7% failed to identify Sarah Palin as the person on which their party spent $150,000 in clothes

Only 6.2% failed to identify Palin as the one with a pregnant teenage daughter

And 86.9 % thought that Palin said that she could see Russia from her “house,” even though that was Tina Fey who said that!!

Only 2.4% got at least 11 correct.

Only .5% got all of them correct. (And we “gave” one answer that was technically not Palin, but actually Tina Fey) 

I will grant that some of these questions delve into the realm of minutiae that only the minute-by-minute hyperaware really care about, but the video speaks for itself.  The Democrats best chance to maintain and increase their leads in 2010 is to keep the electorate uninformed. It is our job to get information out there. A voter may not care that Obama got his opponents kicked off the ballot or that his other opponents’ divorce papers were magically unsealed, but they should have that information at hand.