Saturday, December 13, 2008

Rescuing GM

National Journal Magazine reported Maybe GM could enter bankruptcy protection under Chapter 11, restructure, and emerge stronger.
Many companies have. That is the purpose of Chapter 11.
But maybe not. If customers and creditors fled, bankruptcy protection might quickly bring about GM's collapse.
If the company is in that bad a state, then throwing good taxpayer dollars into that black hole will only delay the inevitable.
"I think it is very risky," says Maryann Keller, a respected automotive analyst. A few years ago, in a stronger economy, the industry might have absorbed a body blow, but if GM were liquidated today, Keller says, it would take down much of the supplier base.
Are they not capable of making parts that stable car companies can use?
Then the failure "spreads out all over the place."

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