More on bailing out Detroit: why not Chapter 11, with a federal guarantee of DIP financing?
First, a delightful trip down memory lane. This is from 1979.
Why should a huge company be bailed out, say critics, while thousands of smaller firms suffer bankruptcy every year? Where should the Government draw the line? GM Chairman Thomas A. Murphy has attacked federal help for Chrysler as “a basic challenge to the philosophy of America.”
Funny how things change. You should read the whole article — it’s astonishing how many of the same arguments are still floating around, largely unchanged, 30 years later.
Anyway, to the issue at hand, which seems to be whether GM should receive an immense infusion of cash from the government (presumably with some conditions designed to force it not to throw good money after bad), or whether it — like every other company in America that’s not in financial services — should file Chapter 11 if it can’t pay its debts. To the flip!