Can GM Avoid Bankruptcy?
The new chief executive at General Motors (GM) says bankruptcy isn’t inevitable for the automaker.
Maybe.
Henderson told NBC’s Meet the Press that he planned to meet President Obama’s 60-day deadline to show results.
“We are planning to get the job done,” Henderson said. “Our preference would be to do it outside the bankruptcy process. If it cannot be done outside the bankruptcy process, it will be done within it.”
Why prolong the agony and delay the recovery, assuming GM survives?
Henderson became GM’s top dog a week ago after the White House rejected turnaround plans submitted by General Motors and Chrysler. He replaced Rick Wagoner, who resigned March 29 at the request of the White House.
In the last year, the US auto industry, including dealers and suppliers, slashed about 400,000 jobs while losing billions of dollars.
Last year, General Motors received about $13.4 billion in federal bailout bucks and has asked for another $16 billion. Chrysler also seeks additional aid.
According to press reports, Chrysler wants an alliance with Fiat, and may sell to the Italian company. Fiat now owns about 35% of Chrysler.
Cynics carp that a Chrysler-Fiat deal would guarantee employment for auto mechanics because Chrysler generally ranks lowest in quality among the Big Three and Fiat has never been known for building reliable cars.
Many have quipped that GM now stands for “Government Motors.” The company’s restructuring will tell us if that’s just a smart-aleck remark, or if the jokesters have a point.
The current wrangling also shows how shrewd Ford (F) was to avoid federal bailout money and all the kibitzing from Washington that comes with it.
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There are certainly well-intentioned people, and some not so well-intentioned , who repeat the mantra about GM being a vital American company. And, I agree that the ripples from a GM bankruptcy would inevitably be felt far and wide. Now, having said that, so what?
Fixing GM, even if it can be done, and it's a big if, will accomplish very little. Their only significant product is cars. So, if we save them, what do we do with the cars they make? The question isn't rhetorical. The car market is nearly moribund and that is unlikely to change anytime soon. How long is the taxpayer expected to prop GM up? And, at what price?
their new offer to the bond holders is just getting them more entrenched NOT to accept anything but bankruptcy
why???
Because why would I tender my GM bonds for stock ONLY
no cash, no new bonds JUST STOCK
this is going to be rejected by 100% of bondholders - don't you think
at least I have to give the incompetent management credit for sticking to bama wama guns of a major restructuring
