Quote:
Originally Posted by fbodfather
GM made it very clear -- ONCE AGAIN - that bankruptcy is not something we want to contemplate..........
It would be very easy to go chapter 11 -- and pass all of our legacy costs on to the U.S. Taxpayer.......but it isn't the RIGHT thing to do...........
So -- please - no more talk about 'Bailouts' - -let's calm down - panic serves no one other than foreign manufacturers.
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Scott, I'd like to draw your attention to this paragraph from Yahoo.com (
http://biz.yahoo.com/prnews/081107/clf042.html?.v=101)
Even if GM implements the planned operating actions that are substantially within its control, GM's estimated liquidity during the remainder of 2008 will approach the minimum amount necessary to operate its business. Looking into the first two quarters of 2009, even with its planned actions, the company's estimated liquidity will fall significantly short of that amount unless economic and automotive industry conditions significantly improve, it receives substantial proceeds from asset sales, takes more aggressive working capital initiatives, gains access to capital markets and other private sources of funding, receives government funding under one or more current or future programs, or some combination of the foregoing.
What this says, is that at the current pace liquid assets will basically fall to the mimimum level needed to keep the lights on and the water running by early next year. If the govt. does not provide the loan GM asks for, what do you do?
I ask you now, what would have cost GM more in the last few years? Eliminating more divisions (Buick, Pontiac, Saab, GMC) and facing the bombardment of lawsuits by dealers, or a complete meltdown of the entire company? GM is surely in no better shape today keeping with what I now consider frivolous nameplates (Chevy and Cadillac are the only nameplates GM needs right now, and I know this is a bold statement to make to you but with all due respect I can argue why there hasn't been a need for anything but Caddy and Chevy for the last 5 years) than they would have been had they eliminated them, and dealt with the aftershock accordingly.
This is all, of course, assuming banckruptcy is off the table, as you, Rick Wagoner, and every one else is steadfast on.
I totally agree that chapt. 11 should remain an abolute last ditch effort. The stigma of buying a car from a bankrupt company will not go over well with the general public.
However, the flip side of chapt. 11 is that you can restructure the company almost without recourse from dealers. You can toss all the UAW contracts out the window. Axe the divisions and models that don't sell or sell without profit, and do so rather quickly.
And when the proceedings are over, GM could emerge as a smaller but leaner, meaner company that can generate profits and move forward.
It is unfortunate but true: GM is just too big for it's own good.