First the dodgy Op-Ed, penned by one sketchy Candidate. You really don't have to read the "fine print" to get who's side Mr. Dodgy is on ...
by MITT ROMNEY, Op-Ed Contributor, NYTimes.com -- Nov 18, 2008
That extra burden is estimated to be more than $2,000 per car. Think what that means: Ford, for example, needs to cut $2,000 worth of features and quality out of its Taurus to compete with Toyota’s Avalon. Of course the Avalon feels like a better product -- it has $2,000 more put into it. Considering this disadvantage, Detroit has done a remarkable job of designing and engineering its cars. , any bailout will only delay the inevitable.
Second, management as is must go. New faces should be recruited from unrelated industries -- from companies widely respected for excellence in marketing, innovation, creativity and labor relations.
The new management must work with labor leaders to see that the enmity between labor and management comes to an end. This division is a holdover from the early years of the last century, when unions brought workers job security and better wages and benefits. But as Walter Reuther, the former head of the United Automobile Workers, said to my father, “Getting more and more pay for less and less work is a dead-end street.”
You don’t have to look far for industries with unions that went down that road. Companies in the 21st century cannot perpetuate the destructive labor relations of the 20th. This will mean a new direction for the U.A.W., profit sharing or stock grants to all employees and a change in Big Three management culture.
A managed bankruptcy may be the only path to the fundamental restructuring the industry needs. It would permit the companies to shed excess labor, pension and real estate costs. The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk.
In a managed bankruptcy, the federal government would propel newly competitive and viable automakers, rather than seal their fate with a bailout check.
Hmmmm? There it is the famed "federal government guarantees" to protect the vehicle warranties. Not much else, would Romney "guarantee."
And why does Romney close his workers-be-damned screed with those references to "managed bankruptcy"?
Hmmmm? What is a "managed bankruptcy"?
(Will it convert "years of seniority" into 100-Lot shares of "profit-sharing stock"? Not likely, in Mr Romney's wealth-preservation world.)
This writer noticed too, Mitt's insistence on a "managed bankruptcy" for Detroit. Mr. Lubben draws out the implications behind this private equity advocate's "fine print" ...
by STEPHEN J. LUBBEN, dealbook.NYTimes.com -- Oct 23, 2012
The dispute between the Obama and Romney campaign turns on a 2008 opinion article that Mitt Romney wrote in The New York Times entitled “Let Detroit Go Bankrupt.” The Obama campaign focuses on the title, the Romney campaign on the end of the piece, where he urges that the auto companies go through a “managed bankruptcy.”
Neither campaign disputes the need for bankruptcy in the Chapter 11 sense. The crucial issue is whether Mr. Romney’s article was actually advocating something like bankruptcy in the Chapter 7 sense: appoint a trustee and liquidate.
Mr. Romney may not have actually advocated Chapter 7 for G.M. or Chrysler, but his ideas about a “managed bankruptcy” might have lead to the same place.
Chapter 7 ... Chapter 11 ... Aren't all bankruptcies the same?
Well, not really. One puts a focus on restoring the Business back to a viable operation. The other puts the focus restoring the Investors and creditors -- by selling the Business off for parts:
Chapter 7 of the Title 11 of the United States Code (Bankruptcy Code) governs the process of liquidation under the bankruptcy laws of the United States. (In contrast, Chapters 11 and 13 govern the process of reorganization of a debtor in bankruptcy.) Chapter 7 is the most common form of bankruptcy in the United States.
[...] A Chapter 7 Trustee is appointed almost immediately, with broad powers to examine the business's financial affairs. The Trustee generally sells all the assets and distributes the proceeds to the creditors. This may or may not mean that all employees will lose their jobs. When a very large company enters Chapter 7 bankruptcy, entire divisions of the company may be sold intact to other companies during the liquidation.
Fully secured creditors, such as collateralized bondholders or mortgage lenders, have a legally enforceable right to the collateral securing their loans or to the equivalent value, a right which cannot be defeated by bankruptcy.
In a Chapter 7 case, a corporation or partnership does not receive a bankruptcy discharge -- instead, the entity is dissolved. Only an individual can receive a Chapter 7 discharge (see 11 U.S.C. § 727(a)(1)). Once all assets of the corporate or partnership debtor have been fully administered, the case is closed.
Chapter 11, Title 11, United States Code
Chapter 11 retains many of the features present in all, or most, bankruptcy proceedings in the U.S. It provides additional tools for debtors as well. Most importantly, 11 U.S.C. § 1108 empowers the trustee to operate the debtor's business.
Chapter 11 affords the debtor in possession a number of mechanisms to restructure its business. A debtor in possession can acquire financing and loans on favorable terms by giving new lenders first priority on the business' earnings. The court may also permit the debtor in possession to reject and cancel contracts. [...]
All creditors are entitled to be heard by the court. 11 U.S.C. Sec. 1109 (b). The court is ultimately responsible for determining whether the proposed plan of reorganization complies with the bankruptcy law.
Which method of bankruptcy do you think a billionaire Corporate Raider would prefer?
One that protects Jobs and their Workplace... or one that protects Wall Street Investors?
Jonathan Turley gives us a few "concrete reasons" why Mitt Romney might have wrote off the Electoral-pivotal states so Michigan and Ohio, when he opined so callously on the the merits of a "managed bankruptcy" ...
by JONATHAN TURLEY -- October 21, 2012
The most prominent venture capitalist who was involved in the bailout bonanza was Elliott Management and its leader, Paul Singer. Mr. Singer and Elliott Management had many prominent investors, including Ann and Mitt Romney. “But Romney has done a good job of concealing, until now, the fact that he and his wife, Ann, personally gained at least $15.3 million from the bailout -- and a few of Romney’s most important Wall Street donors made more than $4 billion. Their gains, and the Romneys’, were astronomical -- more than 3,000 percent on their investment.” TruthOut.org
You read that correctly. Mr. Romney and his wife “earned” at least $15.3 million from the bailout because of Singer and Elliott Management’s involvement and ownership of a key supplier to GM and Chrysler. That key supplier was Delphi Automotive. Delphi was originally a subsidiary of GM, but it became a separate company in the late 90′s before filing bankruptcy in 2005. When the government task force began working on the bailout of GM and Chrysler they came face to face with the hungry venture capitalists that now controlled Delphi.
Romney has slammed the bailout as a payoff to the auto workers union. But that certainly wasn’t true for the bailout of Delphi. Once the hedge funders, including Singer -- a deep-pocketed right-wing donor and activist who serves as chair of the conservative, anti-union Manhattan Institute -- took control of the firm, they rid Delphi of every single one of its 25,200 unionized workers.”
According to Mitt Romney and his associates, it was those greedy Union Workers that were the source of all GM competitive ills.
Not the Outsourcing of all those "supply chain" jobs to the foreign lands of cheap labor.
Not the CEO salaries and their outrageous "golden parachutes" -- un-tied to actual results.
Not the Hedge Fund investor class who has turned our basic value-added commodities (like Auto-Parts), into their own private casinos.
NO, it's those workers expecting "job security and better wages and benefits" -- you know, that "holdover from the early years of the last century" --
THEY are the problem in Mitt Romney's world. Workers are the threat to Wall Street's million dollar short-term wagers.
That was why in Romney's world, the only wealth-preserving solution was to "Let Detroit go Bankrupt."
In a "managed proceeding" of course -- Chapter 7 style.
Where the Vultures are at the head of the asset-redistribution line ... And the workers are left out in the street. Without Job. Without a Pension. Without a benefit, earned from all their hard years of sweat-equity labors.
Without a profit-sharing "share" in sight. Kind makes you wonder, who really did build that in Romney's high-roller economy, eh? ... After all is said and parceled ... And ultimately cashed out.