GM Bankruptcy Could Be the Best Solution

All this talk about GM, and I'm still baffed.

No more bail outs, bankruptcy would be the best way or suddenly everyone is suddenly going to buy cobalts and impalas where nobody was interested before

NO BAILOUT!! Welcome to the business 101 folks- companies without a clear corporate strategy that follows trends in their industry FAIL! Yes, jobs will be lost, but Lutz and all the pensioners won't give a cent outta their pocket to bail out their company. Guess what? Tough luck guys! Other manufacturers will quickly take the piece of pie. Markets always self-balance and those suppliers, IF their properly managed, will adapt and start selling to others. Business is much like nature, some die to fertilize the grounds for another life.

I am very glad that GM is restructuring itself. But very sad if the company goes under-why couldn't it be Chrysler!

I've thought about it a bit more. And I am against the bail out as well. You don't fix anything by throwing money at the problem. GM needs to restructure.

There are other Domestic car producers BMW, Toyota, Honda, Kia, for example have factories here in the USA and probably make just as many cars in the USA as the Big 3, (Many of the Chevy, Fords are made in Mexico) VW is planning a large plant in the USA soon. But our other car manufacturers are not asking for a handout!

Good luck getting rid of the UAW. That was precisely my point. I'm not wishing for GM to go under, I just don't think America should bail it out, sure some people will lose their jobs but it won't be the end of the world. What that means is that there will be plenty of skilled workers available and companies like Toyota wont need to import cars all the way from Japan,they will hire our local workers and manufacture cars right here in America. Tough luck if GM goes under, it's a company ran by people with 1960s mentality, it has no good products to sell and has a out of date corporate strategy, combined with a stronghold from unions and ridiculous pensions. The market will self-balance, I do have a clue about this my friend, the answer is NOT throwing money at it.

machida- problem is right now we have a guy with 700billion in credit, a blank check and no accountability. The auto industry lobby is working hard in Washington and trying really hard to spook people by saying the effects of GM going under will have disastrous repercussion in our economy. It's the old politics of fear. Don't buy into it. The solution is simple- like any company going under they have to cut costs, declare bankruptcy, streamline their products and rework debt. Throwing money at it is exactly what the fat cats want. You won't see Lutz or pensioners giving up their cut to bail out their own company. It's B.S.

What a way for Obama to start it's administration, eh, guys?

Im impressed, when it comes to serious problems you guys start a serios debate without hating and stuff. Keep it up! My opinion is that it is rather hard to predict the consequences of either GM going down or a miscarried (is this correct english?)bailout.

I don't know what the fuss is about. The UK lost its badly managed indigenous car manufacturer (MG Rover) but continues to make Toyotas, Hondas, BMWs and Nissans (also vans and engines for Renault, GM and Ford) and survive. fact is, no one is buying cars currently; least of all thirsty cars; and especially least of all cars that are not competitive. I agree these are exceptional times for most car manufacturers, but companies like GM, Ford and Chrysler have a stack of problems that even when times were good they did little to attempt to resolve. Now the chickens have come home to roost.

It sounds like a majority of our retail stores are running short of cash....should we have a retail store bailout also...look at all the jobs that could be lost!

We should be forming a alternative energy Work Program Admin(WPA)to supply new future jobs in the USA(solar, geothermal, natural gas cars(like honda), wind,biofuels etc. and not continue our dependence on the bad guys for oil. 20mpg hybrid Escalades are not going to save the planet.

I need somebody to explain something to me. One of the most popular attacks against Obama during the run up to the election is that he was a "socialist", and that he would threaten the very fibre of the American being - capitalism (you succeed; you make money. you fail; you don't). Isn't bailing out industies the very opposite of capitalism? and isn't (largely) the same people reccommending the bail out the very same who said that Obama showed Marxist/communist leanings?

Thanks good. Less crap on the roads

GM should hand over power to its European operations. They can at last build decent cars. Because if you cannot build reliable, decent cars in the market place and beat the Japanese manufacturers (as they do in Europe), you'll end up in a mess you're in now, only to be repaeated time and time again when the economy goes bad for whatever reason... ... and then only for GM to be on "welfare" when that happens.

9TNine - you raise what I think is the key point here - that in Europe, Europeans continue to prop up their auto industry, motivated by their indigenous media and a healthy desire to have their own companies succeed. Meanwhile, here in America, we seem to think it better to punish our auto companies for sins of the past, ignoring the fact that Ford and GM make fully competitive cars and trucks (yes, there are people who truly need trucks). Apparently, these folks (traditional media and bloggers alike) take pride in the notion that they are "objective enough" to criticize American companies. This criticism was constructive through the 80's and 90's, and has resulted in amazing improvement in the competitiveness of Ford and GM. It's time to take stock of this improvement, and make the decision (all of us) to support our own companies through these difficult time - believe me, it's no longer a sacrifice, and will pay significant dividends in the long run. I hope to be able to revel in the profits our indigenous automobile industry bring home from China, Russia, India, South America, etc in the coming decades due to our foresight to keep them above water in this terribly difficult time.

This is a tough one. While I'm not in favor of transferring private debt to the public as we've done in the financial markets, I can understand how the financial sector bailout because of how fear in the international finance world could bring things to a halt. This seems different. Yes, the new credit environment impacts people?s ability to buy new vehicles, but US manufacturers are at a per unit profit disadvantage due to the legacy UAW agreements. Wouldn't bankruptcy allow GM more leverage in remedying that problem? With 2009 being forecasted as a tough year for vehicle sales, the bailout may only enable the big three to hemorrhage longer. What degree of certainty do we have that the 2010 model offerings will be so radically different that everyone won?t be able to afford to continue driving what they have? Will the overall economy be moving sufficiently to allow the masses the luxury of replacing their vehicles? I?m for that, but is it realistic? What's to keep them from needing another bailout in another year? I'm not being rhetorical here, if someone has some inside understanding as to why this wouldn't be the case, I'd enjoy hearing it. I don't think limiting executive salaries or golden parachutes is going to be adequate to remedy the problem. Then again, Chrysler paid their loans off early in the 1980s. It would be interesting to compare the conditions of Chrysler then with GM's situation now and then look at the differences in the US economy in the mid to late 80s. When Chrysler got their loans, Lee didn't get a salary; he just got stock. I wonder how many GM execs would be willing to do that. (It isn't that uncommon here in Silicon Valley.) The timing of this seems suspect. Just two months ago, there were mutterings over a GM-Chrysler merger, then we have the $770B bailout, and now we're hearing their piggy banks are too low? While I mentioned not owning any GM product, I don?t have contempt for them or the other two (i.e., I?m not waving our marques). At this point, having them bailed out wouldn't increase my confidence in their long term viability. While Iraq may cost a billion every four days, a billion here, a billion there, pretty soon you're talking real money! (Sorry, I don?t recall the senator I?m paraphrasing.)