I suspected it, and now a report in the Detroit News confirms it: “Advisers, lawyers and consultants have billed General Motors Co.’s bankruptcy estate more than $90 million in fees and expenses since last summer, a figure that will grow as unwanted assets such as real estate, equipment and factories are liquidated.”Yeah well, I wouldn't hold my breath waiting for that.
Where are those Astroturf busloads of protesters who marched against AIG bonuses last year?
Perhaps our president should issue a proclamation that you cannot go to Detroit on the taxpayers dime.
No small part of the GM problem is that it is an additional $1,600 in "legacy costs" has to be tacked on to the price of every vehicle sold. Legacy costs refer to the health care and pension benefits guaranteed to each and every retiree* by their UAW contract. Guess who is backing up those costs now.
The only reason GM continues to exist is the largess of the taxpayer. But in this country when a company fails to adjust to market forces that company deserves to go under. We are a free market society not a socialist society. At the risk of being called naive, I believe that had the taxpayers been forced to come to GM rescue the company and the UAW would have found some way to pull their own fat out of the fire. As it is, they have no incentive to innovate or trim expenses.
GM has emerged from bankruptcy but the taxpayer remains on the hook. The time has come to pull the plug.
*For an eye-opening look at what "legacy costs" are doing to individual state budgets courtesy of bloated SEIU contracts see Doug Ross' post The New Math: Union Pensionomics Levies Crushing Debt on State and Local Governments.