Quote:
Originally Posted by TheMercenary
Well now that bankruptcy looks more inevitable what about their hundreds of suppliers and all those small/medium businesses?
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The longer that GM puts off the inevitable, the worse a bankruptcy becomes. Had GM done bankruptcy in 1991 (they were only 4 hours away), then GM may have fixed itself back then. Nobody (except executives) were harmed. But GM played money games for almost 20 years to avoid bankruptcy rather than fix the company. Even shorted the pension funds; then claimed unfair competition due to legacy costs. As a result, bankruptcy becomes almost inevitable and must now be quite painful.
Many are now talking about GM as only Chevy and Cadillac. I suspect that would be too ruthless. Buick should also survive. Not much more. For example, GM should have to sell off its locomotive division. GM has stifled innovation for so long that only ruthless and painful bankruptcy will save it (or something equivalent). That is the only salvation for its suppliers.
As we can see from the latest news reports, Wagoner again pretended it could all be fixed. His denial of problem was down to GM could maybe sell off a few divisions. Nonsense. Who wants divisions that were restructured so they could not be sold? Those denials only meant GM must downsize even more; that employees must even lose jobs. That many suppliers must also face bankruptcy. A disaster that would not have occurred had GM been forced into bankruptcy long ago when Wagoner was earning a reputations in 1991 GM as a shrewd finance guy who could 'make the spread sheets say what they had to say'.
Then we should be reviewing GM’s accounting for fraud prosecution. Why is this any different than Jeff Skilling?
Ford recognized they were in trouble when Jacque Nasser was running Ford into the earth. The fights between William Clay and Nasser were said to be so violent that on two occasions, security was called. Because Nasser was removed, Ford started designing a 70 Horsepower per liter engine. That engine has only recently come to market (little hint to those who learn that investing is all about the product). Therefore Ford does not need bailout money. It may be an ugly car (Futura), but it is one of few American cars worthy of a consumer's attention. Why does Ford not need a bailout? Unlike GM, Ford suddenly started innovating again some 7(?) years ago.
Chrysler has no hope of survival. Fiat may buy its pieces. But Chrysler is gone the same way that AT&T disappeared. Another trophy for the MBA Nardelli. And a slap in the face of Cerebus Capital who ran to the government and who has nothing in the Chrysler innovation pipeline. Chrysler even had a hybrid in 1999. Where is it? Cerebus also played money games rather than innovate. Welcome to why Chrysler's bankruptcy must be even more severe.