Argument: Chapter 11 bankruptcy may not deter car consumers

Support

“Saving Detroit”. Economist. 13 Nov. 2008 – “The carmakers retort that being in Chapter 11 will poison their business. Buying a new car is a long-term gamble on there being dealers, spare parts and a thriving second-hand market for your vehicle. Drivers overwhelmingly tell surveys that they would not take the risk when Mercedes and Toyota make perfectly good alternatives. But $50 billion is a lot to stake on a hunch. A wiser bet is that whatever consumers say today, the stigma of being in Chapter 11 would fade, obscured by price cuts, advertising and most of all news that the car companies were tackling their remaining problems. Remember that, in many ways, Chapter 11 is more stable and predictable than depending upon the government.”

Andrew M. Grossman. “Automakers Need Bankruptcy, Not Bailout”. Heritage Foundation. 15 Nov. 2008 – “no automaker that hopes to rebuild a sustain­able business would turn its back on its custom­ers, so there is no reason to expect that one undergoing reorganization would ignore its cus­tomer’s valid claims and expectations, which would be a recipe for certain failure.”