Thursday, November 13, 2008

B to the K

I don't know for sure that just letting GM filing for bankruptcy is the best route, but if it isn't then it just means there's something wrong with our bankruptcy laws and/or our dealings with "too big to fail" companies.

But not everyone agrees that a Chapter 11 filing by G.M. would be the disaster that many fear. Some experts note that while bankruptcy would be painful, it may be preferable to a government bailout that may only delay, at considerable cost, the wrenching but necessary steps G.M. needs to take to become a stronger, leaner company.

Although G.M.’s labor contracts would be at risk of termination in a bankruptcy, setting up a potential confrontation with its unions, the company says its pension obligations are largely financed for its 479,000 retirees and their spouses.

The system needs to have standard ways of dealing with these things. If the ones in place don't work, we need new ones, not free money for failures.