Friday, November 14, 2008

NO "DREAMY CHAPTER 11" FOR GENERAL MOTORS

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The Automotive News pulls no punches when it opines what is at risk for the Detroit 3 if Congress fails to act to stabilize General Motors:

The alternative to government cash for GM is not a dreamy Chapter 11 filing, a reorganization that puts dealers and the UAW in their place, ensuring future success.

No, even if GM could get debtor-in-possession financing to keep the lights on (which it can't), Chapter 11 means a collapse of sales and a spiral into a Chapter 7 liquidation. GM's 100,000 American jobs will die. Health care for a million Americans will be lost or at risk. Hundreds of GM's 1,300 suppliers will die. Their collapse could take down Ford Motor Co. and Chrysler LLC, perhaps even North American transplants. Dealers in every county of America will close.


Overstated? Let's hope we never find out.

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posted by Editor at 13:13

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