GM Gets To Dump Its Polluted Sites

ParticleGirl writes with this excerpt from the Detroit Free Press: "GM's unusual, government-engineered bankruptcy allowed the Detroit automaker to emerge as a new company — and to shed billions in liabilities, including claims that governments had against GM for polluting. Environmental liabilities estimated at $530 million were left with the old GM, which has only $1.2 billion to wind down. Administrative fees and other claims will soak up that money, and state and local officials told the Free Press they fear the cleanups will be shortchanged. ... The New York Attorney General's Office, seeking to protect environmental claims for cleanup at Massena and other sites, argued that federal and state regulatory requirements should not be eliminated by a bankruptcy sale. ... But [US Bankruptcy Judge Robert Gerber] ruled otherwise."

Comments

Re:Both GM and Chrysler were handle poorly

[larry bagina]

It's even worse. Ford (or more accurately, CEO Alan Mulally) saw the impending doom and got ahold of as much cash and lines of credit as they could and were able to avoid bankruptcy. Car companies (especially GM!) don't make money by selling cars so much as they do by financing car sales. GMAC was also the recipient of multiple rounds of government financing and has FDIC backing and access to below-market government financing. In order to increase GM sales, GMAC lowered their standards (sound familiar?) and offers 0% loans. Meanwhile, Ford Motor Credit needs to borrow money on the open market at rates of 10% or so.

If you look at Edmund's analysis of the CARS program, Ford has 4 of the top 10 (including the higher margin F150 and escape SUV). The official government figures, however, are broken out so that high milage (and mostly foreign) cars look more popular.

Re:Here is a Reason Why the Free Market Works Best

[FriendlyPrimate]

I used to be a full-fledged Libertarian who believed the mantra that all regulation is bad. But unfettered capitalism is not the panacea you think it is. Unregulated capitalism is like a race car without brakes. It can go really fast, but is prone to horrific crashes. And unregulated capitalism essentially means NO middle class. If you want to see what unregulated capitalism looks like, look at what it was like in the United States at the turn of the 20th century (or look at China today). You had two classes of people...the haves and have-nots. The lower class had to work 14-16 hours a day, 6 days a week, for slave wages, with no job security (you get hurt, you get fired). Don't like working like a slave? Tough luck! It was good for the economy though. Sick people didn't live long enough to be much of a drain on the economy. The so-called "socialist" policies put in place during the 1930's resulted in the expansion of the middle class in the 40's and 50's. Otherwise, you'd likely still be working in a sweatshop right now. Of course too much regulation is bad for the economy. But no regulation at all leads to hell-on-earth working conditions for most, and all wealth concentrated in a very small population. Therefore, the best choice is some limited regulation and intervention by the government when absolutely necessary.