Tag: Bankruptcy (page 3)

Kevyn Orr, The emergency financial manager, was given an unworkable task. In a city that has been reassured repeatedly that it is too big to fail, the lights are going out. All manner of economic development incentive paid for by Michigan taxpayers as yet proves to be insufficient to generate the activity necessary for basic government services, and a sustained infrastructure. Four decades of progressive politics and fear of calling out bad decision making as it happened; fearing the sting of racial politics, and lack of compassion.

Its far too late now.

Banks that have loaned Detroit operating cash should count those loans as losses.  Retirees that did their jobs, and counted on their employer to manage finances and their retirement moneys appropriately might wish to reevaluate their portfolios. Orr's current status report?

"Excluding proceeds from debt issuances, the City's expenditures have exceeded revenues from fiscal year 2008 to fiscal year 2012 by an average of $100 million annually. These financial shortfalls have been addressed with long term debt issuances (e.g., $75 million in fiscal year 2008, $250 million in fiscal year 2010 and $137 million in fiscal year 2013) and by deferring payments of certain City obligations, such as contributions to the City's  two pension funds."

The accumulated unrestricted deficit was $326.6 million at the end of fiscal year 2012. Fiscal year 2013 (year ending June 30, 2013) is currently projected to add approximately $60 million to the accumulated unrestricted deficit balance (excluding the impact of the $137 million debt issuance).

There are some other interesting items that have a familiar smell

Welcome, ladies and gentlemen, to Happy Friday here on RightMichigan.com, where we're going to dig into the headlines and specifically and explicitly find a way to accentuate the positive!  

With Michigan moms and dads hurting the way they are it can be difficult accentuating the positive.  Mostly because there's very little positive to accentuate, amidst a landscape of hurt and tough times.  Today, though, seems to represent a perfect storm of happiness.

And what could possibly make anyone happier than hearing Detroit City Councilwoman Martha Reeves performing a one-song-tribute to Michael Jackson at a local Motor City eatery complete with electronic keyboard accompaniment?  The answer, if you're searching for it, is nothing.  Absolutely nothing.

Take a listen here, courtesy of the Detroit News.  

The video also features longtime Detroit Democratic political consultant Adolph Mongo claiming Governor Granholm "played the fiddle while the state's been sinking," then calls her "the worst governor in the history of me being alive."

And Reeves defending her decision to keep cash from the Synagro deal that's sending Monica Conyers to jail.

"The only way you can get into the political ring is by donations," Reeves said, explaining that her change in position from yes to no on the contract was a matter of conscience and good sense. "Am I going to give it back? No!"

Watch the video.  You'll want to cry. Some days I worry there's very little hope for the human race.

But her song is amazing as coffee-shop solos go.  *weep*

Seriously, though, happy news. Like this...

Booth Newspapers reports that GM is headed OUT of bankruptcy protection this morning with "no place to go but up."

GM is expected to close on a deal Friday in which most of its assets would be sold to a new company 60.8 percent controlled by the federal government...

GM, which was the world's largest automaker for more than 70 years and a symbol of American industrial might for much of the 20th century, filed for Chapter 11 bankruptcy June 1.

If the federal government controlling 61 percent of GM isn't good news then the fact that the UAW will control nearly 20 percent is even better.  So turn that frown upside down.

Because no matter what is happening at GM, in Congress, in City Hall or in the parking lot at Mr. Fish, big things are popping at Comerica Park where the Detroit Tigers learned yesterday that they'll be sending a FOURTH member of the team to the Summer Classic.

Brandon Inge won the fan voting and is now an All Star.  Congrats to the 2009 Gold Glove winning third baseman (knock on wood).

And sure, Comerica Bank which still has it's name affixed to the Tigers' home ballpark recently high-tailed it out of Michigan, relocating to Texas because that state offered a significantly better environment for job creation, but we're not dwelling on the past.

It's Friday.  Happy, happy Friday.

A House panel in Washington, DC yesterday unanimously approved a measure that would "save" 2,100 GM and Chrysler dealerships across the country. Which is great, right?  I mean, who doesn't want to take a single, simple vote that on her face looks like it'll do nothing but save thousands of Michigan (and non-Michigan) jobs.  

Except of course for the fact that the dealership cuts were one big leg of the stool the bankrupt automakers were standing on to save many more thousands of other Michigan jobs.  And you know what happens when you knock the leg off a stool.  The Ivory Tower:

The bill would turn back the clock to before the companies filed for bankruptcy, restoring the 789 dealers cut by Chrysler and 1,300 dealers GM chose to wind down...

Executives from GM and Chrysler have both told Congress that cutting dealers was essential to their survival outside of bankruptcy, saving each company billions of dollars a year and strengthen their remaining sales force.

"This legislation, if passed, would put our long-term viability at risk," said GM spokesman Greg Martin.

I get where the good Congress-people are coming from.  I really, really do. Those dealership closings were tough, particularly because they hit folks across the country, even in states where there's never been any other Big 3 related work force.  

If you could save fifty local jobs simply by pushing a button, wouldn't you push it?

The problem is, politicians are not (for the most part) businessmen.  And before the Obama administration started nationalizing major Michigan employers, no Congressman was any kind of boss at GM or Chrysler.

Suddenly, though, the Federalized Two have over 500 new quasi-members of their Board of Directors, and not a Utilitarian among them.  

Sure, you may save a few dealerships today but the entire company will be dead tomorrow.  

The market has been screaming for contraction for years. Excess dealerships are bleeding BILLIONS. Bankruptcy is targeted at helping these manufacturing giants contract as quickly and easily as possible so that they can survive into the future and eventually grow again.  

That can get sticky when every decision that gets made can suddenly be overturned by politicians and bureaucrats in DC who are more interested in reelection NEXT YEAR than a company's viability NEXT DECADE.  

Congress wants to save 2,100 dealerships?  Great.  We all do.  But it's going to take more than a single populist vote on the floor of the US House of Representatives.  Especially a vote that winds up doing much more harm than good.

How about we try something else, just as a change of pace... the Obama administration and Congress stop micromanaging Michigan companies and let the businessmen and the bankruptcy courts figure out the best way to save the most jobs the quickest.

Otherwise, all we're doing is prolonging the pain, delaying the inevitable and forcing thousands of working moms and dads across the country to float in one heck of a nasty breeze, tossed about by the whims of political expediency. That's not good business and that's not fair.

Hmm.  Not quite as pithy.  Nevermind.  Besides, you get the point.

I mean, we could discuss General Motors escape from Chapter 11 bankruptcy. The Ivory Tower even manages to poke a little fun at the Obama administration, which is a little bit jarring on first blush, but nice for a switch.

We could discuss the Associated Press's revelation of additional shady business from elected Democrats in the Motor City.  Shady unless you consider using emergency funds to purchase a $1,600 floral arrangement good stewardship.

Then there's the Detroit News taking the Granholm-Cherry administration out to the woodshed for lying about Michigan's graduation rates.  

(And oh so much more... please read on...)

This is bad. And it shows that the leadership in the Oval Office is an illusion. A mirage. A figment of the MSMs imagination. An empty suit sits there making things up as he goes along. Not ready to lead. Looks like Hillary was right. From NewsBusters (HT: memorandum):<span style="font-weight: bold;"> </span>Shotgun Wedding: Court Docs Reveal Govt. Likely Forced Chrysler Deal With Minimal Knowledge of Fiat.

Even if they ultimately lose their last-minute court battle, the Indiana pension funds defending their rights as secured first-lien creditors of Chrysler have done a valuable deed.

We have learned, among many other things, how at least one government lawyer characterized the funds' lawyer, Thomas Lauria.

A $10,000 Democratic Party donor, Lauria, despite clear evidence of intimidation of his originally larger pool of clients by Barack Obama himself (in his April 30 speech announcing the company's bankruptcy filing) and his car guys, has nonetheless bravely pursued the important contract law and fiduciary duty issues involved in the shortchanging of his clients for several weeks.

Wait until you see the word the government lawyer used to describe Lauria.

Go ahead.  We'll wait...

**twiddling thumbs**

**checking watch**

**looking out the window**

Oh, hi.  Welcome back.  

Howes wrote, in part:

The longer Public Michigan waits to reform the structure of government, to rationalize departments, to commonize retirement systems of public and school employees, to push consolidation of police and fire service among neighboring communities, the tougher the future will be. Ask GM.

Business knows this because successful business lives it, responding to changing conditions with dynamic management. Smart CEOs would look at the tale of GM, its predicament and see missed opportunities that, seized earlier, might have mitigated the today's pain.

Alas, smart CEOs have been in short supply in Michigan's executive office for the last six-plus years.  And if John Cherry's decision yesterday to duck the quasi-debate candidate forum up on the Island is any indication, the next two years won't bring us many bold or broad strokes either.  

But that's not to say there wasn't something worthwhile being discussed by the other candidates.  The Ivory Tower:

All five candidates said the tax structure of the state had to be reconfigured to make business taxes more fair, but only Cox said he would sign a pledge not to raise taxes.

"I wouldn't sign such a pledge," George said. "Because we don't know what the future holds."

I'd only reply that we DO know what the future holds should the current administration or the next raise taxes again.  We've experienced that nightmare before... and we're living through it now.

Who'd have ever thunk, for instance, that in the middle of May, well after the emergence of spring and the not-uncommon 70 degree day, with the planet dying and temperatures soaring while the sun turns the surface into a George Foreman grill, melts ice caps and roasts polar bears in their fur, Michigan's LOWER peninsula would suddenly find itself facing a FREEZE warning that threatens to devastate crops.  The Associated Press sounds the alarm!

Summer may be just six weeks away, but the northern half of Michigan's Lower Peninsula faces the threat of a hard freeze that could kill crops and early-season plants.

The National Weather Service has issued a freeze warning from midnight to 8 a.m. Monday for northwest Lower Michigan and from 2-8 a.m. for northeast Lower Michigan and the Thumb. Frost and subfreezing temperatures are expected in the region lying north of Interstate 96.

Brrrr.  Michigan hasn't gotten that cold a reception since the auto execs asked Congress for federal stimulus funding.  (*RIMSHOT* C'mon... that was awesome, wasn't it?)

Oh, and the bailout cash that they finally did convince the Democrats to funnel into the Motor City?  Too little too late.  

Read on...

Yesterday stood poised to offer observers one heck of a big, black thunder cloud but one city's effort (and, largely, one families) wrapped it in a pretty substantial silver lining.

When folks turned on the nightly news yesterday they were treated to the regular chorus of rotten news about Michigan.  On steroids.

The Obama administration is preparing to watch local manufacturing giant Chrysler, LLC go bankrupt next week.  Meanwhile, General Motors announced thirteen summer plant closings including four in the Great Lakes State that are expected to shake the foundation of handfuls of suppliers and other businesses, too.  Oh, and did you hear the news anchor mention that regional unemployment rates were up, again, in March?

On a normal day that'd be enough to make a guy change the channel, even if the only other option was a re-run of  Brett Michaels' Rock of Love Bus.  Except that yesterday it wasn't.  Yesterday the rest of the world was buzzing about Michigan and it had nothing to do with unemployment, job losses or shuttered manufacturing plants.

Rick DeVos's big reveal yesterday, that Grand Rapids would host the world's largest and most unique art competition this September has folks buzzing from Detroit to Charleston to Boston and San Francisco and everywhere in between (Albemarle, North Carolina, anyone?).

Even saw buzz on Twitter yesterday from Scotland.

This is the kind of news Michigan needs hitting the wires.  Our second largest and most vibrant big city is hosting a world class arts competition that invites the public from around the world to stop by, visit and participate.

Already making plans with some friends to spend a day or two this September backpacking and biking around the downtown canvas and daydreaming about the potential energy is exciting.  

Big ups and a big THANKS to Rick and the entire DeVos family for making this happen.  We've had a six-plus year string of rotten news in this state.  Nice to have something so wildly different to hang our hats on for a summer.