GM, in a statement to the newspaper, said the board has discussed bankruptcy, but said the board did not view it as a "viable solution to the company's liquidity problems." So What's the point?
GM CEO Rick Wagoner says "bankruptcy is not an option." http://online.wsj.com/article/SB122688631448632421.html?mod=googlenews_wsj A lot can change in 5 days.
bankruptcy is the only real way that these fat cat execs will be forced to swallow the bitter pill to finally revamp these car manufacturers into more compact, leaner, more efficent companies. No matter what they say.... job layoffs due to less production and lower wages are sme of the things needed to fix this mess. A more streamlined, better product line, increased quality control...reduced wages.... they dont want to swallow the inevitable but its the only way. the only problem is those unions with connections in congress are virtually guaranteeing the absolute demise of these companies if they dont renegotiate wages. Unions in this case are yielding too much power, and its going to cost the jobs of all car manu. employees if they dont get a grip on reality.... Bankruptcy will force them to do these things....these proposed bailouts just DELAY the inevitable
Imbedded long term grown legal largesse is the most inefficient part of the price...... Unfortunately.....
is the same as an arrogant way - * for a worker to say "I don't want to get fired" * for a stockholder to say "I don't want my stock to go down" * for a union to say "I don't want to lose my 3x above market average pay" * for a CEO to say "I don't want to lose my multi-million compensation package" Since when a bankrupted company decides whether bankruptcy is an option or not? That itself is a laughable statement. The bankrupted company doesn't decided whether it is in bankruptcy or not. The creditors decide whether you are bankrupted or not. Another thing about people won't buy stuff from a BK company. lol. If that is a factor, people also won't buy product from a company that is on the edge of BK. silly arguments.
They have no choice but to consider how they would go about it. They don't have much time. Quick little history of a once great American Icon. http://www.media.gm.com/corpcom/history/hist01.htm See ya GM As they kids are so fond of sayin when in a boring conversation "Ya next...." Personally Id like to save um, but I have hard time arguing against "Its tossin good money after bad"
Here's an idea that could probably save their sales from being completely destroyed over warranty concerns... but they'd probably have to do it BEFORE declaring bankruptcy: 1) Start a new corporation whose purpose is to offer warranty coverage for GM cars. GM would own 100% of the shares, but the company's charter would officially lay out plans for continued existence should GM itself go under and lose ownership of it. 2) The policy premiums would be paid by GM upon purchase of new cars going forward, at rates that are high enough to keep the company solvent should GM itself ever go under, but basically run it as a revenue-neutral entity (setting premiums at a level high enough to avoid losing money, but low enough to be a de-facto "nonprofit" corporation). 3) The company would have prenegotiated rates with GM dealers just like GM does for warranty claims now, and customers would be required to have warranty repairs performed by GM dealers, just like they do now. At least, as long as GM dealers continue to exist. 4) If GM went under, and GM dealers ceased to exist, the company would transform into a de-facto extended warranty insurance company, with the same terms to car owners. Going forward, the company's new owners (who acquired the shares from GM during liquidation) would be required to honor the policies in effect, but could decide to either continue it as an extended warranty insurance company, or shut it down and liquidate it once and for all once the last policy expired. The key here is that GM puts the destiny of warranty repairs in a company that is controlled by GM (as long as they aren't liquidated), but passes legal muster as a regulated insurance company and will continue to exist for the duration of customer warranty claims, regardless of what happens to GM itself or whomever ends up owning its shares. If GM survives, it's out a few million dollars in legal fees and the cost of setting up a new company... but regardless of what happens, it enables GM to reassure potential buyers that the warranty coverage IS good for the duration. In fact, by steering buyers to buy extended-warranty coverage from the new company as well, it could actually become a profitable entity for GM since they'd no longer be outsourcing the extended warranties to a company seeking to profit from their business.
it's all semantics at this point. any government bailout is going to be structured like a bankruptcy anyway. they're not getting a blank check to spend however way they like.