Ralph Nader urges President Obama to reconsider GM bankruptcy filing & proposes congressional review

CommonDreams.org
May 30, 2009

Letter to President Obama
by Ralph Nader

The hour is late. You seem bent on an orchestrated bankruptcy for General Motors on June 1, 2009. Before any irreversible moves are made-- the GM/task force reorganization plan should be submitted to Congress for deliberative review and decision. There are several major concerns with a precipitous bankruptcy declaration that have emerged over the last several days.

First, the previously understood rationale for bankruptcy-namely obstinate bondholders--no longer applies. Recent developments indicate that GM and the auto task force have revised the proposed allocation of equity in a restructured GM, and reached agreement with at least the most prominent bondholders. Although a June 1 bond payment is due, it certainly seems that that payment could easily be wrapped into the new bondholder offer, as effectively will be the case if GM enters bankruptcy.

With the bondholder problem moving toward resolution, or at least now clearly resolvable, there is no evident rationale for bankruptcy other than an unstoppable momentum of some hidden agendas. Given the high stakes, including job losses, communities devastated, the effects on consumer confidence in the GM brand and the socio-economic impacts of potentially excessive downsizing, a last chance to avoid the tyranny against the weak that is a Chapter 11 bankruptcy court.

Second, the matter of how GM's holdings in China will be treated in bankruptcy continues to demand attention before any filing. Kevin Wale, President and Managing Director of GM China, told CNN that "Our business is run as separate joint-ventures here in China in partnership with SAIC ... so we're profitable, we fund our own investment and we would be largely independent of any action that took place in the US." Yet the GM assets and profits in China must be included in any bankruptcy proceeding, and available to creditors, claimants and litigants who could, conceivably, petition to take the company into Chapter 7 liquidation.

Has GM clearly presented to the government its valuable holdings, large profits and contractual obligations in China as part of its assets in any bankruptcy? The task force has indicated some uncertainty about these questions.

Third, proceedings in the Chrysler bankruptcy have highlighted the manifold injustice being perpetrated on victims of defective Chrysler products -- and likely also to be perpetrated on victims of GM products. In the Chrysler proceeding, top Chrysler officials have acknowledged that they were ready and able to do a deal with Fiat that established successor liability for the emergent Fiat/"good Chrysler" company. In the course of bankruptcy or in preparing for bankruptcy, however, they reversed course, apparently just because they could. Now, hundreds of Chrysler victims are on track to have their claims extinguished, unless the bankruptcy judge or other court overrules this element of the bankruptcy plan.

There are many differences between the bankruptcy of the private company, Chrysler and the pending GM bankruptcy, but the GM restructuring plan is similar to Chrysler in the anticipated creation of a bad/old GM and a new/good GM that emerges without liabilities. Does the government as the major owner of GM plan to follow the Chrysler approach? Has President Obama and his Task Force given consideration to the suffering of real adults and children that will follow from such a move?

If the Obama officials intend to proceed with maneuvers effectively to extinguish their claims, they should at least talk to some of them first, and confront the human consequences of such actions.

The GM/task force bankruptcy plans appear geared to saving the General Motors entity -- but at a harsh and often avoidable cost to workers, communities, suppliers, consumers, dealers, and the nation's auto manufacturing capacity which will move faster, post bankruptcy, to China.

At this late stage we again urge President Obama to reconsider the bankruptcy filing plans, and to enable deliberative and meaningful Congressional review -- as many Members of Congress are seeking -- of the restructuring plans before irreversible steps are taken.

After all, Congress is more than a potted plant. The "first branch" legislated, after public hearings, the 1979 Chrysler bailout and the complex Conrail restructuring a few years later.

- The above is a public letter and is not copyrighted material. However, if you'd like to read the entire letter please go to:

http://www.commondreams.org/view/2009/05/30-0

If Obama has a meeting or even a phone discussion with Ralph Nader that would upset corporate sponsored "moderate blue dog Democrats and Republicans would launch a big red-baiting attack on that "socialist President" Obama.

As you probably know, Ralph Naders running mate in 2008, Peter Camejo, was one of the most prominent socialists in American.

The Republicans would surely point that out in any attack ad on Obama's discussion or meeting with Nader if that came to pass.

go, you silent but oh so insistent people who have read DU 'forever'! Pipe up!

and a few leaders of other countries aren't?

driving a Corvair !!!!

http://image.automotive.com/f/features/9413693+pheader/0805phr_01_z+1967_chevy_corvair+.jpg

Buckle up!

Come now. That's not even close to what happened.

The Corvair went the way of the Edsel.

And neither lemon caused Ford or GM to go bankrupt.

:rofl:

Lighten up a little why doncha

Now he's trying to save hundreds of thousands of GM workers, retired workers and related workers from financial ruin.

Nothing wrong with that.

He seems to hate the Democrats even more
than the Republicans.

Americans only have two realistic choices
in national politics, R or D.

Nader's third party efforts have only benefited
the Republicans at great cost to left of center
voters in the US.

Where is the gloating at the downfall of an evil corporation?

Now he wants it saved?

You hadn't noticed?

Your smart ass remark about "evil corporation" sounds an awful lot like anti-union crap I've heard from bosses who try to ridicule pro-union views that are critical of Wall Street and big business corporate interests.

If you don't think Wall Street crooks, corporate union bashers and banksters are evil a-holes you belong in the Republican party!

It's revealing that you are silent regarding Nader's statement.

It must be too anti-corporate, pro-union and liberal for your conservative tastes.

Al Gore is just like George Bush he said. I will never forgive him. Ever.

They thank you for letting them off the hook.

But he made it close enough to put it in their grasp. Without him, it was over.

Remember Leiberman, Albert Gore's right-wing running mate?

See the movie "Recount".

without a single American job saved or foreclosure halted. But the money is being put to great use by the banks. They're running up the price of oil again by speculating on commodities with the bailout money we gifted them and threatening to derail our fledgling recovery in the process.

It's possible that things will work out, but I think they are taking an unnecessary gamble.

One point he minimizes is that the Bankruptcy Judge is usually very knowledgeable and committed to avoiding many of the concerns raised here.

Even so, if bankruptcy can be avoided it is almost always preferable to avoid it.

There will be a review of events leading up to bankruptcy in much more detail if Congress does it without the pressure of bankruptcy deadlines. And if bankruptcy is filed, the review of events will be with a different purpose --how to maximize returns to creditors moreso than to determine what went wrong and who is most at fault.

The deadlines were designed to mainly put pressure on the auto workers, active and retired.

They are getting kicked while they are down.

One would have expected this kind of treatment by the Bush government.

One expected better from the Obama administration.

So much for change we can believe in.

He's never done any serious research or investigation on the auto industry.

He barely knows what a car is.

Everyone knows that.

Thanks for the heads up!

You so smart!

he survived the publication of Unsafe At Any Speed. After that, anything he says about the industry lacks credibility since he has no access to credible sources.

Don't know much about the auto industry and/or Ralph Nader, do you?

I was in the UAW.

Do you know what the UAW is or do we need to begin your education right now?

in 2000 or something like that, and become the most hated man in America?

Watch the movie "Recount".

And the most hated man in American is George W. Bush even if you'd like him to have a higher approval rating than Ralph Nader.

Ralph Nader is one of the most trusted men in American. And unlike so many politicians in Washington, D.C., Republicans and Democrats, he doesn't function as a corporate/Wall Street whore. That must really piss you off! :)

The massive character assassination swiftboat campaign by right-wing "moderate" DLC democrats (small d) against Ralph Nader didn't confuse people who are not political novices or hacks. If you're that gullible and so easily swayed by crude talking points propaganda, you must be a political novice, not wise and experienced in the art and methods of political propaganda.

I take it you didn't comment on the auto industry because you're completely uninformed on the subject, just don't gave a damn about what happens to auto workers or you simply are not equipped to challenge anything that Ralph Nader has to say on this subject or any issue. Is it all of the above?

Nader still talks as though anyone cares what he says!!!