I’ve heard this refrain at least a dozen times on CNBC today. It’s been repeated so many times that it’s starting to take on the aura of fact.
Let’s dig a little deeper. Pundits are saying “people who are surveyed say they won’t buy a car from a bankrupt automaker”.
Well, guess what. The Detroit 3 (or at least GM and Chrysler are bankrupt!
The “fine hair” of difference is whether they go through a “bankruptcy proceeding” that potentially restructures them (and their burdensome union contracts) into a healthier condition.
I’m sure the survey question is — at least implicitly — “would you be more likely to buy a car from a financially healthy automaker or one that is bankrupt?” Obvious answer, right?
The question should be “would you be more likely to buy a car from an automaker in bankruptcy proceedings, or one that is hanging by its financial finger nails and likely to go into formal bankruptcy in a couple of monthes?” Rational answer: “none of the above”
What am I missing?
* * * * *
Want more from the Homa Files?
Click link => The Homa Files Blog
Leave a Reply