Just more of the same due to NAFTA and GATT. Supporting industries will fold and unemployment will skyrocket, local business bankruptcies will climb and welfare will become a larger government expenditure than defense. Hussein has already told you that.
GM should go under. I have never seen worse cars for years and even worse money management. The debt level alone is ENORMOUS.....$36 per share in net debt! Let 'em die b/c if the Gov gives them a "bridge" loan, they will be back in 6 months for more. What is their monthly burn rate? 2-3 BILLION??
From what I heard, if GM doesnt get any kind of bailout that within 3-6 months they will be bankrupt, they are using up about 1.25B a month to stay grounded, aside from that they said if one major auto company goes under there will be upwards of 2 Million job losses. Now tonight they are trying as hard as they can to develop a way to save these 3 US auto makers. I just dont understand how a company can lose BILLIONS and BILLIONS of dollars and still keep there doors open, sales are down 30-50% in just the last month. There is no way possible for them to stay in business even with these cash infusions with sales falling off a cliff. There used to be approx 16 million cars sold every year in the US, that number has fallen to 11 million today. I really think if this recession gets deeper this number will drop to the single digits forcing at least 1 of these 3 out of business over the next 18 months. There is also talk of a merger between GM and Chrysler, now I can tell you that this is not going to work at all, you will be lucky to see that combo last more than a year, there is really no way to get any of these 3 auto makers back on there feet, they have had years to change this industry around and havent. I dont think its fair to hand these companies billions of dollars to keep them from going bankrupt, how many cost cuts can they go through before seeing some kind of turnaround, if it hasnt worked yet, it WILL NEVER WORK.
Don't forget about the new Union Friendly Whitehouse and Congress. The feds will hold the automakers on the ground while the UAW rapes them right up to the end.
the auto industry in general (not just gm) needs to reduce supply to match dramatically falling demand. every manufacturer has seen double-digit sales declines from 2007 and it's gonna get worse in 2009, as it appears this recession won't be a mild one. gm and ford may go bankrupt or consolidate but they won't simply go out of business. bankruptcy may be a good thing because that's their only chance to weasel out of these profit-sapping union contracts and commitments to retirees.
Agreed, they need to go bust asap. Throwing money at this black hole is just delaying the inevitable. Problem is politicians will keep throwing billions of tax dollars at them to keep their voters happy. Just another layer of bs on the bs cake.