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General Motors Files For Bankruptcy

From an elated Reuters:

A Cadillac Eldorado outside Tavern on the Green in New York City circa 1958.

GM files for bankruptcy, Chrysler sale cleared

By Kevin Krolicki And John Crawley

DETROIT/WASHINGTON (Reuters) – General Motors Corp filed for bankruptcy on Monday, forcing the 100-year-old automaker once seen as a symbol of American economic might and dynamism into a new and uncertain era of government ownership.

The bankruptcy filing is the third-largest in U.S. history and the largest ever in U.S. manufacturing.

The decision to push GM into a fast-track bankruptcy, and provide $30 billion of additional taxpayer funds to restructure the automaker, is a huge gamble for the Obama administration.

But in a sign of progress in the government’s high-stakes effort, a bankruptcy judge approved the sale of substantially all of U.S. automaker Chrysler’s assets to a group led by Italy’s Fiat SpA in an opinion filed late on Sunday.

Chrysler’s bankruptcy, also financed by the U.S. Treasury, has been widely seen as a test run for the much bigger and more complex reorganization of GM.

The GM plan is for a quick sale process that would allow a much smaller GM to emerge from court protection in as little as 60 to 90 days…

GM alone employs 92,000 in the United States and is indirectly responsible for 500,000 retirees…

Even if GM and Chrysler emerge swiftly from bankruptcy this summer, the autos task force will stay in business — shifting to an investment management role.

Senior administration officials said on Sunday there was plenty to keep the task force staff busy, monitoring the government’s stake of about 60 percent of GM and less than 10 percent in Chrysler.

GM’s bankruptcy is the most carefully orchestrated Chapter 11 filing in the history of American business…

Founded in 1908, GM rose to dominate the U.S. and global auto industries under the stewardship of pioneering chief executive Alfred Sloan, who famously pledged that the automaker would deliver "a car for every purse and purpose."

By the mid-1950s, at the peak of its success, GM had some 514,000 employees. It accounted for about half of U.S. car production and its sales were twice as large as the No. 2 corporation, Standard Oil.

GM’s stock fell to 75 cents on Friday, a level last seen during the Great Depression.

Say what you will about General Motors, it is an American institution. Those who are getting the most satisfaction out of this are the people who hate the US, and who want to see us to fail in all things.

And speaking of which, where is Michael Moore? And, for that matter, where is Ralph Nader? Shouldn’t the media be getting their thoughts on GM’s bankruptcy?

They both have had a lot to do with it. They have a lot to be proud about. Remember how ‘unsafe’ the Corvair was, according to the book writing lawyer Ralph Nader?

It was actually a nice fuel efficient car. But Mr. Nader deemed it to be unsafe and it was stricken from GM stable.

Meanwhile, the lack of such a economy car in the US opened the door to imports from Europe and Japan. Starting with the far more unsafe Volkswagen Beetle — about which Mr. Nader never made a peep.

And where is he today, when the environmentalists are demanding unsafe cars which will go at much greater speed?

Oh, that’s right, Mr. Nader is the Green Party’s perennial candidate. Obviously safety is no longer an issue with him. Not that it ever was.

Destroying GM — and capitalism in general — was always his real goal.

This article was posted by Steve on Monday, June 1st, 2009. Comments are currently closed.

19 Responses to “General Motors Files For Bankruptcy”

  1. JohnMG says:

    With 92,000 U S employees and 500,000 retirees, is it any wonder this pyramid scheme collapsed? Thank you so much, UAW. You should be proud of your “Vote Democrat” shtick every four years. In a small way you’ve helped bankrupt every taxpayer in this country.

    ‘Y’all buy American now, Ya’ heah?

    • Right of the People says:

      Youse better shuddup about da UAW or I’ll have Guido and Luigi come an’ talk to youse.

  2. proreason says:

    Isn’t it ironic that an Italian company will own Chrysler…..the Italian’s after all were the quintessential fascists.

    And John’s point about the 5 to 1 retiree to employee ratio for GM brings up an interesting side bar.

    Obviously, GM was gambling with the funding of it’s pension fund. Certainly, management has known for years that they were running a ponzi scheme and that the company was inevitably heading for ruination since they simply could not grow fast enough financially to fund those pensions.

    But even more mysterious…….isn’t our all-knowing government supposed to monitor private pension funds? Our betters should have forced action on this matter 20 years ago.

    What gives? Do our betters support ponzi schemes?

    Oh wait……..

  3. GetBackJack says:

    http://online.wsj.com/article/SB124381203054570397.html

    Ion Mihail Pacepa

    Google everything you can read from this former high Communist spy master.

  4. Liberals Demise says:

    We are now the proud owners of a “White Elephant” that can’t be driven and will eat us out of house and home. THANKS BARRY!!!

  5. BillK says:

    Just to be clear – roughly $50 billion of your money flushed down the toilet to “prevent” GM from doing… what they just did today.

    Why was bankruptcy “not allowable” again, and why is it now?

    • proreason says:

      Because bankruptcy then would have resulted in the demise of the UAW.

    • BannedbytheTaliban says:

      Also because bankruptcy then would not have allowed the government to expand its powers to the private sector.

    • Right of the People says:

      You’d better talk to Bill Ayers if you want clarification of the gameplan. What’s next, the DH for the national league? Is nothing sacred?

  6. pdsand says:

    “Even if GM and Chrysler emerge swiftly from bankruptcy this summer, the autos task force will stay in business — shifting to an investment management role.

    Senior administration officials said on Sunday there was plenty to keep the task force staff busy, monitoring the government’s stake of about 60 percent of GM and less than 10 percent in Chrysler.”

    But I thought Obama had no interest in running a car company?!?

    • proreason says:

      “But I thought Obama had no interest in running a car company?!?”

      He doesn’t want to run it so much as control it.

      As long as the companies jump when he farts, he’s happy.

    • TwilightZoned says:

      Since he’s so full of it, maybe the new alternative fuel should be the methane gas continually erupting from his mouth and anus.

  7. JohnMG says:

    So Michael Moore weighs in with this pearl;

    …..”Within months in Flint in 1942, GM halted all car production and immediately used the assembly lines to build planes, tanks and machine guns. The conversion took no time at all. Everyone pitched in. The fascists were defeated…….”

    “The fascists were defeated.” How quaint. What would this fat tub of shit know about defeating fascism? He can’t even identify it while it’s happening all around him. I can hear it now. “Y’all better knock it off or I’m going to hit myself in the head real hard. Then you’ll know what your dealing with.” This piece of human rubbish doesn’t even realize that what he advocates IS fascism.

    I can’t say as I’d mind if he did take himself out, though.

  8. BigOil says:

    GM plans to layoff 34,000 of the 92,000 GM employees. This is great news. CEO Obama has just saved another 58,000 jobs. It’s a stroke of genius to save or create 3.5 million jobs through bankruptcies.

    • proreason says:

      Right on BigOil.

      you can 5x the 58K jobs saved, because every saved job saves that many others.

      Obamy is a genius.

      And this is just GM.

      Imagine when he really gets the bankruptcy engine going.

  9. Steve says:

    Well, Mr. Nader has chimed in:

    Nader Statement On GM Bankruptcy

    Jun. 1, 2009

    WASHINGTON, June 1 /PRNewswire-USNewswire/ — Consumer advocate Ralph Nader today issued the following statement on GM’s bankruptcy filing:

    Today’s bankruptcy declaration in federal court by General Motors is an avoidable, crude weapon of mass devastation for workers, dealers, auto suppliers, small businesses and their depleted communities. For GM’s voiceless owners — the common shareholders — it is a wipeout.

    The proximate cause of the bankruptcy was supposed to be the inability of GM and the government’s auto task force to reach an accommodation with GM’s bondholders. But late last week, the bondholder problem was moving toward rapid resolution, and was clearly resolvable. Why then are GM and its multibillion government financier proceeding with bankruptcy?

    The bankruptcy and the GM restructuring plan are the product of a secretive, unaccountable, Wall Street-minded government task force that assumed power because of a Congressional abdication of historic magnitude. By all rights, the restructuring plan should have been submitted to Congress for deliberative review and decision.

    There is little doubt that GM’s chronic mismanagement and the deep recession require restructuring and scaling back the auto giant. But the bankruptcy and restructuring plan appear poised to do so in ways that will needlessly harm the stakeholders meant to be helped by Washington’s rescue of GM?

    Many, many jobs will be lost that could be preserved. There is reason to question whether too many plants and brands are being closed — a matter that should have been taken up in Congress. Just the closing of hundreds of (GM and Chrysler) dealerships will cost more than 100,000 jobs. These sacrificed jobs will fray communities and impose enormous expenses on government entities that will have to provide unemployment and social relief, while suffering lost tax revenues.

    The unionized workforce will see the wage and benefit structure slashed — even though auto manufacturer wages make up less than 10 percent of the cost of a car — so that new jobs at GM will no longer be a ticket to the middle class. This will drag down the wage structure of the entire auto industry — exactly the wrong direction for the country.

    America’s manufacturing base will be further eroded, as GM pursues its Grand China Strategy — increasing manufacturing outside of the United States, and increasingly from China, for import back into the United States. Unanswered questions persist about how GM’s valuable operations in China, and unrepatriated profits, will be treated in bankruptcy, or excluded from bankruptcy.

    Victims of defective GM products may find themselves with no legal avenue to pursue justice. In the Chrysler bankruptcy, with complete disregard for the real human lives involved, the Obama task force and auto company have maneuvered effectively to extinguish the product liability claims of victims of defective cars.

    In a worst case scenario for the GM bankruptcy — involving an extended court proceeding or severe impairment of consumer confidence in the GM brand — all of these problems will be magnified. Again, given the path to resolution with the bondholders, this is an avoidable gamble.

    The GM/task force bankruptcy plans appear geared to saving the General Motors entity — but at a harsh and often avoidable cost to workers, communities, suppliers, consumers, dealers, and the nation’s manufacturing capacity. It will also prove to be a complex political nightmare for President Obama.

    With the company entering bankruptcy, the next challenge will be to ensure that the government exercises its ownership rights to undo and mitigate, to the extent possible, these damages. Among other measures, this should involve revisiting the serious drag-down, concessionary wage terms imposed on the United Auto Workers; demanding a moratorium on GM’s outsourcing of production of cars for sale in the United States; and establishing successorship liability for the new GM, so that victims of dangerous and defective GM cars can have their day in court.

    http://tinyurl.com/n7oozc

    • proreason says:

      “The bankruptcy and the GM restructuring plan are the product of a secretive, unaccountable, Wall Street-minded government task force that assumed power because of a Congressional abdication of historic magnitude.”

      Ralph Nadar seems to have the unique ability to frequently be profoundly wrong, and at other times, like now, TO BE PROFOUNDLY RIGHT.

  10. proreason says:

    Larry Kudlow, a free market guy (and a noted optimist), sees some good economic signs today:

    “But new statistics showing economic recovery is on the way provided the much bigger news for stocks today. The ISM manufacturing index rose for the fifth-straight month. And the new-orders component moved to 51.1 — an actual recovery. Meanwhile, private construction surged in April by 1.4 percent. That includes a 0.7 percent monthly gain for housing and a huge 1.8 percent increase for commercial building — the third-straight monthly rise. China’s manufacturing index gained, too, showing the third-straight month above 50. That’s a big recovery signal.”

    http://kudlow.nationalreview.com/

    He’s dismissing Obamy’s 5 or 6 interventions into the free market.

    Told ya he’s an optimistic guy.


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