Olo Baggins of Bywater says:

Benjamin…I don’t think you respect the scope of GM. No startup is going to replace them in the next 20 years. Meanwhile, Japanese manufacturers will own the US market, buying off pols with the new campaign finance freedoms.

I agree GM was a behemoth, and they need to slice inefficiencies wildly. But letting them fail would be a huge disaster.

Guyver says:

22, Olo Baggins of Bywater, The loans only postponed the inevitable. GM still declared bankruptcy and went “under”. Bankruptcy forces the emerging shell of its former self to address inefficiencies aggressively as well as trim the fat.

The biggest problem for GM has been the Union. The government stepping in only allowed the union to have more leverage than it should have.

Getting rid of inefficiencies should allow for a company to relocate its business when things get out of hand. GM could not do that due to bad deals it made with the Union. On the flip side, a company like Boeing is moving a 787-line to a plant in South Carolina which is a right-to-work state (unlike Washington). Although jobs may be lost if and when they close their Washington plant, new ones will be created in South Carolina (arguably more).

ECA says:

#23
you are correct.
But the $10,000 profit margin still fits.
After the auto industry takes $2000 profit
The middle man Profit $2000
reseller profit $2000
Sales person Profit $500-$1000
COupon/savings/deduction price at the time of sale…$2000-6000.. Its totally ridiculous..

Yes I watched the PBS special on the closing of the plants, and those folks claimed they were only making $15 per hour, and the cost of living in those areas, made them POOR.

Which leads to an OLD fact.
During the Gold rushes, small groups would settle near those areas and Sell to the miner at EXORBITANT prices. Insted of letting the minors travel 30-100 miles to get supplies.
These companies made MORE money then the miners.
The same happens today. The price of the goods WHOLESALE/manufacture isnt much diff from 1 area to the next..ONLY the resale/middlemen price is AFFECTED.
Corps got pissed at Walmart, only because they CUT the middleman and could sell at even HIGHER profit margins.

Did you notice that when the Gov was giving Cuts in the price of cars, there were NO OTHER sales going on? and NOW I see cuts at $6000.
If they were BOTH around you could have saved over $10,000 on most Vehicles.

omnicbex says:

lets do the math…
Total in gov. loans to gm, about 15bn
total employed (globally) by gm, about 230,000
first figure divided by second…
Hmmm… would you get bought out of a gm job for roughly 65 large?

Rick Cain says:

Ford survives the recession, time to give their executives a nice bonus, move jobs overseas and bust some more unions.