There's dumb, and then there's dumber. Dumb was allowing automobile financing in the first place as it encouraged auto companies to cannibalize next year's sales to meet the next quarter's earnings forecasts. Dumber is reinstating such lending after it contributed to the bankruptcy of an auto manufacturer:
GM must be angling for a return trip to bankruptcy court. Maybe the unions want to force out other shareholders (including the government?!) by making them so sick of losses that they throw in the towel. That way the unions can own the rest of the company. With unlimited lending from Uncle Sam's next TARP (remember, this administration is very union-friendly), they can finance even more uncompetitively priced cars at 0% just to avoid further pension and health plan givebacks.
My scenario isn't all that fanciful. Are America's corporate executives and union leaders really this dumb? I'm afraid so, readers.
Full disclosure: No position in GM, GMAC notes, or anything else from these people, thankfully.
General Motors Co. executives want their own auto-financing arm so they can offer more competitive lease and loan deals, according to a person briefed on their plans.
The executives want to buy back the auto financing business from the former GMAC Financial Services or start their own operations, said the person, who asked not to be identified because the plans have not been made public.
GM must be angling for a return trip to bankruptcy court. Maybe the unions want to force out other shareholders (including the government?!) by making them so sick of losses that they throw in the towel. That way the unions can own the rest of the company. With unlimited lending from Uncle Sam's next TARP (remember, this administration is very union-friendly), they can finance even more uncompetitively priced cars at 0% just to avoid further pension and health plan givebacks.
My scenario isn't all that fanciful. Are America's corporate executives and union leaders really this dumb? I'm afraid so, readers.
Full disclosure: No position in GM, GMAC notes, or anything else from these people, thankfully.
