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Opinion - USA - Bankruptcy, Shmankruptcy
USA - Forbes, by Jerry Flint, -2 Feb, 2006: -- Enough already on General Motors and Bankruptcy. I am tired of the B-word. GM isn't going bankrupt this year; GM isn't going bankrupt next year... It's dangerous to go three years out, but no, I wouldn't expect GM to go bankrupt in 2008, either... Why not? The company has $19 billion in the kitty and just about $100 billion in the pension fund. But there's more here than the balance sheet... When I was a boy, there was one reason companies went bankrupt: They couldn't pay their bills. GM can pay its bills, so that's not a problem... The new reason for bankruptcy is to break a union contract. That works with airlines because there are always some Navy top guns who owe on their Corvettes and will replace your striking pilots. And there are lots of women left to replace your striking stews. But replacing 150,000 United Auto Workers members is another story. A judge could tell them to work for 10 cents an hour, but it's still a free country; they can strike, and they would. Plus, they are stronger than the company. The workers own paid-up houses, cars and boats and have working wives (or husbands). GM would have to negotiate any change in the contract, so the bankruptcy ploy just doesn't work here...
posted by Unknown @ 6:43 PM
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