And so General Motors will be eased into bankruptcy.
The New York Times reports it will be a controlled bankruptcy, essentially splitting the company in two much like the "good" and "bad" bank model. That will see good assets like Chevrolet and Cadillac being sold to a new company financed by the US Government and all those dud assets would stay in the old assets. The basic idea is to have a fresh and revitalized GM rising from the ashes.
But will it work? The great imponderable here is the state of the US economy. If it keeps deteriorating, bondholders and creditors could pull out of the deal. As Jeffrey McCracken writes in The Wall Street Journal, the surgery will be messy. If nothing else, it's likely to produce lots of law suits. Watch this space, it will definitely happen if the US economy keeps tanking.
Back in 1953, GM's president Charles Wilson declared before Congress that what was good for the country was good for GM and vice versa. His words have come back to haunt us. America's future as an economic power is now seriously under threat and GM and Chrysler have played their part in its demise.
no comment untill now