GM Inside News Forum - View Single Post - The Case for Federal Support for GM and the U.S. Automotive Industry

stormwatcher · 11-19-2008, 05:21 AM

GM says "Chapter 11 would be catastrophic" with one reason being that buyers will not buy a car from an automaker in Ch. 11. But I bet quite a few buyers are already steering clear of GM products because of its financial situation.

If the federal government gives GM money to get throught the recession, what then?

GM would still come out of a recession with a junk bond rating, excessive debt (because now they owe the feds billions too) and still be saddled with more brands then GM can competently manage.

Since there is so much turmoil in the economy at present, I still support giving the domestics some money to go at least another year. That way Obama and the new administration have some proper time to look at things and the economy doesn't take the psychological hit of GM or Chrysler doing a Chapter 11 right now.

But, in the long run, Chapter 11 is likely the ONLY option. And there the feds could probably better help the domestics by providing financing to them in bankruptcy while the auto companies can properly restructure.

11-19-2008, 05:21 AM	#3 (permalink)
stormwatcher 6.0 Liter L76 V8 Join Date: Dec 2004 Posts: 2,126	Re: The Case for Federal Support for GM and the U.S. Automotive Industry GM says "Chapter 11 would be catastrophic" with one reason being that buyers will not buy a car from an automaker in Ch. 11. But I bet quite a few buyers are already steering clear of GM products because of its financial situation. If the federal government gives GM money to get throught the recession, what then? GM would still come out of a recession with a junk bond rating, excessive debt (because now they owe the feds billions too) and still be saddled with more brands then GM can competently manage. Since there is so much turmoil in the economy at present, I still support giving the domestics some money to go at least another year. That way Obama and the new administration have some proper time to look at things and the economy doesn't take the psychological hit of GM or Chrysler doing a Chapter 11 right now. But, in the long run, Chapter 11 is likely the ONLY option. And there the feds could probably better help the domestics by providing financing to them in bankruptcy while the auto companies can properly restructure.