RANDOM THOUGHTS GM CRISIS ET AL.

Are the auto makers going to get a loan? The House approved the measure by over a 60 vote majority last night. Regrettably, the Republicans in the Senate are grandstanding and playing personal politics. It appears that the temporary "bailout" is in jeopardy.

The Republicans are wrong for the right reason. A company that has been mismanaged doesn't deserve to b e saved at the taxpayers expense. Chapter 11 Bankruptcy would give the company time to restructure, become efficient and dump the executive officers who have mismanaged the corporation while collecting obscene salaries and bonuses for their great operational skills. The Directors who are paid to oversee the corporation and the officers responsible should be subject to legal action. They should be forced to pay back the improper bonuses received over the past few years.

That should apply to GM, but Chrysler is a slightly different situation since the "owners" are an investment group that recently purchased controlling interest in the company from Mercedes Benz. Their problem is that they over leveraged their purchase.

What the opposition doesn't take into account is that bankruptcy will not only affect GM's employees, its dealers, and the numerous suppliers who may also become bankrupt with the accompanying loss of thousands more jobs nation wide, but although creditors and bond holders will get back through the reorganization some of their investments, the stockholders will lose all.

Why is that a problem? It will affect every individual who owns stock in their retirement plans, personal portfolios and almost every Mutual Fund holder. The big stock holdings are in the funds. One company is only a small percentage of their holdings so they can absorb one company's failure, but not a snowball. The millions of individuals who have a relatively small percentage of the outstanding stock,but whose investment is vital to their economic well being especially in the retirement years will not be able to weather such a loss.

Fortunately for me I do not own any automobile maker's stock. However I am sure that my IRA/ pension plan Mutual Funds all have a large degree of exposure. I am also sure that there are very few pension plans that will not be affected either by direct holdings or by large investments in the suppliers. I doubt that there are many that will escape financial loss if GM goes bankrupt.

The impact on the workers will be great, their union contracts will be worthless. But a large number will still be employed although at reduced income. Labor costs have been a prominent part of the company's problems. The unions have done some restructuring of their contracts. Larger changes will be needed and I am convinced that the union leaders recognize the importance for compromise and will act accordingly.

That brings us full circle. The "bailout loans" are essential for the country's economy. Their leadership, Officers and Directors who failed in their fiduciary responsibilities must go and not profit in any manner from the "bailout". They are probably immune from monetary damages through their Officer and Directors insurance plans.

The politicians must stop playing politics and act as if they are truly concerned about this country.

Why do I gripe? Once again the savers who tried to plan for their future and believed in old fashion depression enhanced "American Values" are the ones who are truly getting "screwed". Those that maxed out as many credit cards as possible or always believed in the political philosophy of " spend now and think about paying later" may have to pay the piper but did enjoy life beyond their means. And worse of all; the bankers, company executive and the politicians whose legislative actions contributed to today's problems will be smelling like roses.