Sunday December 14, 2008

Report: GM mulling bankruptcy

This article belongs to the GM, Ford and Chrysler bankruptcy watch story arc.

peakoil.com -> foxbusiness.com :

General Motors has hired a team of lawyers and bankers to determine whether the ailing auto maker should file for bankruptcy protection, according to The Wall Street Journal. GM CEO Rick Wagoner pushed aside the notion of bankruptcy earlier, saying bankruptcy would severely hurt the company's viability because people would lose faith in warranties. Even if GM is able to secure government assistance, the company still might have to file for bankruptcy. Senior GM executives worry that suppliers might tighten up credit to the embattled auto maker, making it difficult for the company to continue business and possibly compromising any potential loan from the federal government. Some analysts say this could be a crucial next step for the auto maker.

- GM should have gone bankrupt a long time ago. There is no way it can continue in its present form such as it is, hindered by high wage costs, expensive healthcare and under-funded pension plans. The ongoing global economic collapse only serves to add fuel to the fire. If nobody's buying the cars, no bailout plan could help. Unless the government takes the bailout money, buys the cars at the end of the production line, promptly recycles them, and feeds them back to the start of the loop. That would be crazy, of course. But would you put it past them?

See also :

1. GM, Ford, Chrysler face bankruptcy risk on crisis : S&P
2. GM risks bankruptcy as it runs out of cash, losing $73 billion since 2004, suspends Chrysler merger
3. GM share price target cut to zero by Deutsche Bank
4. GM collapse could cost $200 billion in bailout, 2.5 million jobs lost
5. GM, Chrysler may go bankrupt after Senate rejects auto bailout plan as talks collapse

(2008-12-14 10:38:10 SGT) [Biz] Permalink

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