As I learned all too well when my old employer went bankrupt. The unions all sued claiming the company was hiding assets etc. The lawyers and accountants went over the books, inventoried the assets, and toted it all up. The pension fund could not meet its promises. The money was given to the PBGC and their actuaries looked it over. They decided who got what part of the remaining assets. In other words, what each retiree’s haircut would be. My observation was that it was done in as fair a manner as possible. That didn’t make it any easier to take. IMO, if the company had filed three years earlier, instead of dragging the failure out and wasting resources, the pension fund would have been in much better shape and the haircuts would not have been as bad. IMO, financial reality is always better dealt with earlier than later.

The awful truth is that those pension contracts are just pieces of paper when the money isn’t there. No bankruptcy court in the country can make them whole. I feel for the Detroit retirees that are going to get their pensions cut, but maybe their plight will be a wakeup call for all Americans. Recognizing our financial problems and dealing with them in a straightforward manner is the only way out.

In any event, Federal bankruptcy judges throw out contract provisions all the time.

The reason that Chapter Nine has been entered is because the money is not there, not because the Governor is mean spirited.

Her judgment consists of basically: this can’t be happening!

“Even if they wanted to change, it was made more difficult because of all their obligations to the unions. Short-sighted management and the UAW were instrumental in keeping the American auto-industry non-competitive for all these many years. ”

Right. And Carl acknowledges it with a glancing blow, but probably doesn’t recognize the full extent to which inertia, government, social, and legal pressure brought the car companies to the point where they were as he notes, describable with some hyperbole as pension plans that produced cars as a sideline.

Did the car companies lack a management voice that would stand up to all the parties and tell it like it was, rather than go along in order to get along, minimize conflict, endure, and sometimes profit big time? Yeah, but the car companies were not proprietorships anymore, and not many men have the courage to tell the US Government in the person of Ed Markey or whomever, to go to hell to his face.

When it pays to hunker down in your niche and collect your payout in a couple of years, rather than fight what amounts to a sociopolitical fight, that is what most non-ideological people will naturally do.

They get, for instance their lawyers to complain that the Japanese are manipulating the yen and hope that someone in government cares. Most don’t. So they try to move on.

http://www.detroitnews.com/article/20130719/METRO01/307190099/Ingham-County-judge-rules-Detroit-bankruptcy-withdrawn-Schuette-appeals

They are extremely serious about success, strength, and getting it done.

Hubris, carl. The U.S. automakers just couldn’t believe that people would buy those little gas sippers (the first Japanese cars were sub compacts) when they were offering “big iron.”

Even if they wanted to change, it was made more difficult because of all their obligations to the unions. Short-sighted management and the UAW were instrumental in keeping the American auto-industry non-competitive for all these many years. Toyota has now passed GM as the largest auto manufacturer in the world.

She goes on to rule that it’s the public sector union pension plans that cannot be touched.

What about federal preemption? [And where is it when you need it?]

I agree that in the past 8 or 9 years Ford seems to have done a better job than GM and Chrysler re styling and quality control, and I have admired the styling of the newer Fusions. Still, assuming the price to be the same for a comparable Japanese (or even Korean) vehicle – – not likely– I’d choose the Japanese (or Korean). IMHO cars are just too expensive (and they depreciate too quickly) to be worth tthe gamble; bottom line is that I’m reluctant to place my trust ( ans hard earned $!) in any vehicle made in (or by) Detroit.

A vignette (for I too own and American car): Trying to get an inexpensive, safe car for our college age son 4 years ago, we bought him a 1996 Oldsmobile Cierra station wagon from a “little old man” who had apparently taken pretty good care of it. The price was right but I have to say I was shocked the first time I sat in it and noticed just how pitifully and haphazardly the controls buttons knobs, gauges, etc were laid out; everything looked like it was just stuck on as an afterthought ( Example: the “up and down buttons” for the power windows were installed crookedly/askew in the doors. At the freaking factory!). Needless to say, the purchase was a terrible mistake and we’ve had nothing but trouble with this car ( had to have the engine rebuilt last year). On the other hand, we bought our older son a 1995 honda civic over 9 years ago and have never had a bit of trouble with it.

I agree that European cars might be “good” cars ( they certainly handle very well and area lot of fun to drive), but they require an awful lot of expensive maintanance. I’ve had bad experiences with all three Volvos I’ve owned (though they are safe and have wonderfully comfy seats).

I figured I might PO someone who just loves their American car; too bad it was the hostess! Figures. No offense intended.

Report on that status of that Fusion sometime; Ford went up in my estimation when it didn’t accept the post-crash bailout — and I do like their pickup trucks — but I still see them as part of the Detroit rip-off industry. Like all of them, their past sins ( e.g. Pinto, Edsel and all Lincoln and Mercury products) have saddled them with a heavy burden of proof.

Trust once lost is very hard to regain.