Bankruptcy

Talk About Bad Timing

By mcbride

The administration?s new rules tightening regulations on greenhouse gases emitted by cars and increasing gas mileage could not come at a worse time for car makers.  These rules while perhaps laudable in a perfect economic environment will increase the cost of the cars to be sold and will increase the cost of making those vehicles at a time when the car companies are on life support.  It is indeed ironic that the government is using our tax dollars to make ?loans? to car makers so they can remain in business and then in at least one instance thus far, converting those loans into common stock, and at the same time imposing new rules on car makers which will make it tougher on the car companies to repay the government loans and adding further burdens to the companies thus further endangering their very existence.  One could argue that this additional regulation is the opposite of what the car companies need right now to insure their survival. 

 Here is a link to one article on the federal government?s new rules: http://www.nytimes.com/2009/05/20/business/energy-environment/20emit.html

 Michael

Full post as published by Texas Lawyer Blog on May 19, 2009 (boomark / email).