The UAW Union Bailout stalls and that’s a good thing
I have been part of a public corporation preplanned organized chapter 11 filing and emergence.
A couple of decades ago the largest nursery corporation in the country was American Nursery Products.
I worked for them. One day the CEO and President called us all into a meeting and explained that we were going thru a bankruptcy, debtor in possession, etc.
We filed. Here’s what happened.
Most of the suppliers didn’t get paid for what was owed them at that time.
The stockholders were wiped out to zero.
Banks who had lent money were given stock sort of in the emerging corporation.
Some assets were sold. Some were not.
Everyone was fired at once. Most were hired back. In my case at a raise.
We did business in that way for several years, bought, paid for, sold, collected. We did fine.
Eventually, in 3 years or so, we emerged from Bankruptcy. Most of the stockholders moved on.
We emerged not as a public corportaion, but as a private one.
Several of the entities were sold off as the company resized.
Most of them are still in operation. If you were to combine the entities that survived, they are larger and healthier than the one was.
So, IF the Automakers did what we did, they would split. Radically. Everyone fired. All starting over. Stockholders wiped out.
It would be painful.
BUT, we might just end up with a competitive American owned auto industry.
It might be that General Motors becomes 3 distinct companies. Ford is just Ford, No Mercury.
Chrysler just becomes Dodge and Jeep.
Suppliers take a beating ONCE, but they survive.
And Dealers are redistributed.
In the end the industry would be healthier and better.
Let the restructuring begin.
