First, both bankruptcies were prepackaged by the government and the companies. The speed that they went thru the courts was incredible. The Obama administration had taken the mindset that the quicker this was done the better. The bankruptcies needed to be done quickly so not to hinder the already battered and fragile economy.
Basically, I agree with the administration that the bankruptcies were a necessary and unavoidable step. There was no other choice than a liquidation of the companies with the resulting loss of jobs in the automobile sector...then the job loses would continue into the other sectors....sending the fragile economy into a tail spin down.
It was projected that if the bankruptcy had not been quick and smooth, a protracted legal battle in court could have dire consequences that could be felt across the economy, with about 1.8 million jobs lost over the next 19 months, according to the CAR study.
A protracted legal battle could nearly destroy GM as a company and take down many of its suppliers, who also supply parts to Ford, Toyota and other automakers. It would take time to establish new supply chains if major parts suppliers failed.
So, a best car scenario for the economy was arranged thru a surgical bankruptcy...the impact to the economy was minimal. Several million jobs were saved along with saving the United States automobile industry from total collapse.
A number of people lost jobs and a number of people and organizations lost a lot of money.
1. Employees of GM, Chrysler and suppliers that will be laid off due to the bankrupcy.
2. Dealers that were closed due to the bankruptcies along with their employees.
3. Creditors that GM and Chrysler owed money. The bond holders which included individuals, pensions, various investment groups lost a great portion of their investment.
4. Shareholders - most lost a substantial amount of money.
THE UGLYThe worst part of the bankrcupties are the legal claims by victems that were seriously injured or killed by mechanical or structural vehicle failures. This actually applies to all the vehicles that GM and Chrysler made prior to each respective bankrupcy.
So, if some driving a 2009 vehicle that was manufactured prior to June was injured due to a mechanical failure...they would not have any recourse against the manufacturer. One such example is 10 year old Amanda Dinniga, she was riding in a GMC vehicle that crashed and the seatbelt did not work as designed. Amanda was left a quadriplegic and her family will not receive any funds to cover treatment or recuperation.
GM and Chrysler were so mismanaged that it is an American tragedy! I thought that a government sponsored bankruptcy was the best solution.....nothing that has transpired has changed my mind.
But, the government and the auto companies involved could have done a better job. Some people have been bankrupted by the loss of their paycheck, or pensions. Other people had money now they have much less....especially the retired that depended on their pension checks.
It is inexcusable that the government and the courts can let some of the abuses of legal process take place. The worst were the people that were killed or severely injured due to car companies negligence.