Cars and Drivers
A Pre-Packaged Bankruptcy For GM (GM)? Begging For A UAW Strike
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Bloomberg is reporting that the new administration may push for a pre-packed bankruptcy for GM (GM).
"President-Elect Barack Obama’s transition team is exploring a swift, prepackaged bankruptcy for automakers as a possible solution to the industry’s financial crisis, according to a person familiar with the matter."
In a prepackaged bankruptcy, an automaker would go into court with financing in hand after reaching agreement with lenders, workers and suppliers on what each would give up and on the business plan to be followed. The process might take 6 to 12 months, compared with two to five years if the automakers followed an ordinary Chapter 11 proceeding."
Since the UAW would have a great deal to lose from this, watch for a massive strike if the government tries to get it through. It will be the only leverage the union will have.
Douglas A. McIntyre
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