Pab Sungenis
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Fri Nov-21-08 03:57 PM
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"Too Big To Fail" = "Too Big To Exist." Here's how to bail out GM the right way: |
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1. Instead of just plunging money into GM, Obama's Treasury Secretary would be authorized to purchase all outstanding shares of General Motors and place it into receivership. Since the stock is currently going for under $5.00 a share, that would be a bargain.
2. The receiver, appointed by the Secretary and answerable to Congress, would borrow a specific amount to cover current debts of GM, repayable under the same terms as the current bailout plan would have it.
3. The receiver breaks GM up into smaller, independent corporations for Buick, GMC, Chevrolet, Saturn, Cadillac, etc. Each share of GM is converted into one share each of the "Baby GM" companies.
4. The receiver names new management teams for each of the new companies.
5. After two years, and a hopeful return to profitability, the government can re-sell its shares in the new resulting companies on the open market, hopefully at a profit.
This way, all of GM's suppliers will still get paid and still get GM's business. All of GM's employees will still be employed. And hopefully the new, smaller companies will be more innovative and more competitive.
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