The CPA Says Let The Big 3 Go Bankrupt!


I consulted with a CPA this weekend and he gave me some unbelievable information.

First of all, one of the big reasons that the big three are going under is that they are paying huge pensions to retired workers. If someone works for them for 10 years, then they get full pension, including paid medical insurance. Apparently, $2,000 of every car sold goes to pension costs. Amazing!

If they go bankrupt they will have much greater leverage against the unions to renegotiate the pension packages. In addition, the companies' debts can be postponed while they are reorganizing. Get this: they won't even have to stop production. They can continue producing cars and gradually phase in new developments.

Instead of the taxpayer bailing them out, they will be forced to be profitable productive on their own merits. It will be difficult in the short run. Some people will be fired (especially inefficient managers), etc, but in the long run the car industry will reorganize and become efficient. That means they will have to move in the direction of future cars!

This site follows the emergence, application and development of transportation innovation. Reference to manufacturers, makes and models, and other automotive-related businesses are provided for informational purposes only and do not constitute an endorsement by FutureCars.com.

futurefuel