If GM goes Ch.11 and obligations are shed, Blue Cross/Blue Shield of MI goes belly up

[Bozita]

Might also be true for Ohio's BC/BS.

Harold Ford, former Democratic Congressman from TN, said it on Hardball.

Ripples. Huge fucking ripples!

Instead of hearing about this, my teevee screen seems to be filled with the faces and sounds of Senator Richard Shelby (R-Hyundai) and Senator John Corker (R-Toyota).

[BlooInBloo]

1. If Harold Ford told me the sun would rise tomorrow, that would be proof sufficient...

that the apocolypse was nigh.

[Captain Hilts]

2. Health insurance for current employees and retirees is a huge % of GM's expenses. nt

[David Dunham]

4. GM is likley going into Chapter 11.

[Tangerine LaBamba]

3. They can't go Chapter 11 -

the ripple effect from that catastrophe would be devastating. It would, I honestly believe, be a disaster from which we could not recover.

Shelby's an asshole without a clue. So is McCain. They haven't the slightest idea of what they're talking about. They probably mean Chapter 7, not 11, which is a reorganization, not a total collapse.

I remember when Chrysler needed a bailout back in - what? - the seventies. Lee Iacocca, who was the chairman, immediately went to a $1 a year salary.

Notice how many of the Big Three automaker chairmen have emulated Iacocca, who, by the way, pulled it off and paid back the $$$?

[David Dunham]

5. They will go into Chapter 11. Retirees will go to Medicaid or Medicare

[Tangerine LaBamba]

8. What happens to their pension recipients?

I don't know anything about the finer points of this sort of thing.

Medicaid is for the very poor. If the GM retirees have any kind of assets or other income (HA!), they won't qualify.

[amandabeech]

10. At a very large cost to the taxpayers.

Don't forget the pensions going to the PBGC, the unemployment payments, the Medicaid, food stamps, WIC, probable AFDC (or whatever it's called now), lower tax receipts across the board causing a huge call on the infrastructure part of the stimulus package. Of course, the whole thing may end manufacturing in the U.S. while the Japanese and European governments shore up their own auto industries.

Economic collapse is expensive no matter how it settles out in the end.

[Bozita]

11. ... or nothing. Zip, nada healthcare.

Early retirees, beware.

[Bozita]

6. Isn't Ch.7 a liquidation?

[Tangerine LaBamba]

7. I am punchy

I shouldn't be allowed near a keyboard when I'm this tired.

You're absolutely correct, and nice catch :toast:

Chapter 7 is a liquidation, Chapter 11 is a reorganization.

Thanks for pointing that out. I'll shut up now.

:)

[Bozita]

9. Not until ...

... :toast:

[IrishBuckeye]

12. PBGC is already $11 billion in the hole, a GM bankruptcy collapses the systems.

There are over 800,000 retirees and their spouses on GM's healthcare plans and pension plans. If GM goes belly up the pension fund will dry up fast and the cost to tax payers would easily eclipse $7 billion a year as those pensions which are protect PBGC...and that's just the start.