Tags: gm | bankruptcy

Hoekstra: GM Bankruptcy Will Be 'Devastating'

By Jim Meyers   |   Thursday, 28 May 2009 03:03 PM

Rep. Peter Hoekstra tells Newsmax that with Chrysler having declared bankruptcy and General Motors poised to do the same, taxpayers may never get back any of the bailout money they provided the troubled automakers.

The Michigan Republican also expressed concerns that as tensions rise on the Korean Peninsula, "someone could do something stupid" that would trigger a shooting war.

Newsmax.TV's Kathleen Walter asked Rep. Hoekstra for his thoughts on the apparently imminent bankruptcy of General Motors.

See Video: Rep. Hoekstra describes the dangerous state of the American auto industry- Click Here Now

"It's going to be devastating to the American automobile industry," he said. "It's going to be devastating to my home state of Michigan. Hopefully they can go through bankruptcy very very quickly."

Walter asked Hoekstra if the auto industry bailout is working.

"Combined with some of the other decisions that the president has made, I think many people are having second thoughts, including myself, as to whether this is working the way we had intended it to work as we started down this road," Hoekstra responded.

He cited "the president firing the CEO of General Motors and then browbeating the bondholders that they weren't taking enough of a hit, when all they were doing was protecting the rights of bondholders, of their investors, exercising their fiduciary responsibility.

"I think there are a lot of concerns that government has gotten too involved in this process, and there are decisions being made for political reasons rather than purely business reasons."

Walter asked Hoekstra if taxpayers can expect to get any of the bailout money back.

"I think the expectation is that we will," Hoekstra declared.

"But I think Chrysler and GM are going to come out of this and then face a very difficult environment for the next 12 to 18 to 24 months. And just because they go into bankruptcy and then come out of bankruptcy does not mean they will survive for the long term.

"It's a very competitive market out there, a very tough economy. If they come out of bankruptcy and then find it very very difficult to compete, and they continue losing market share, taxpayer dollars may be at risk. We may never see them back. I think that's a possibility we ought to consider. Absolutely."

North Korea has renounced the 1953 truce that ending fighting in the Korean War, and recently tested a nuclear device and short-range missiles. How serious is the possibility that North Korea and South Korea will go to war? Walter asked.

"I find it hard to imagine that they will get into a shooting war," Hoekstra said. "But as we recognize the increased tensions between North and South Korea, you start worrying, Could someone do something stupid that would trigger a shooting war?

"I don't think the North Koreans and South Koreans want a shooting war. But with the actions the North Koreans have taken over the last week, over the last three months, clearly they are changing the environment on that peninsula.

"And as they change the environment, is it possible that someone will make a mistake that will lead to tragic consequences? I don't expect it, but I believe that we are closer to that today than we would have been three months ago."

Walter also asked about President Obama's nomination of Sonia Sotomayor for the Supreme Court.

"We've got to take a very hard look at the president's rationale for this nomination, and then take a very hard look at her record on the bench to see how she's applying the law," Hoekstra said.

"If she's applying the law based on her reading of the law and the legislative intent of the law, that's fine. If she's based it on her life experiences and her empathy for the people that are judged under the law, then I've got major concerns."

See Video: Rep. Hoekstra describes the dangerous state of the American auto industry- Click Here Now

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