General Motors “Chapter 11″
On monday, General Motors, the largest automotive company that has been part of American life decided to take chapter 11 bankruptcy protection, marking the biggest failure of an industrial company in US history.
GM, once the largest company in the world, has been losing market share since the early 1980s. It has been driven to bankruptcy by high production costs and the collapse in credit markets and consumer spending. It made losses of $30bn last year. It has been driven to bankruptcy by high production costs and the collapse in credit markets and consumer spending. It made losses of $30bn last year.(source:BBC News)
US Chapter 11 bankruptcy protection gives an American company time to restructure its finances while being protected from its creditors.
GM’s bankruptcy filing is the fourth-largest in U.S. history and the largest for an industrial company.
The company said it has $172.81 billion in debt and $82.29 billion in assets.
GM has 173,000 employees across the US, Canada and Mexico with some 20,000 US workers thought likely to lose their jobs as the firm streamlines its operations in restructuring GM.
Underscoring the government’s extraordinary role, President Barack Obama planned to announce his support for GM’s restructuring strategy at a midday appearance at the White House, much as he did in April when Chrysler sought court protection. Administration officials said late Sunday the federal government would pump $30 billion dollars into GM as it makes its way through bankruptcy court. That’s besides the $20 billion in taxpayers’ money that the Treasury already lent to the automaker.The money would come from what remains of the $700 billion rescue fund for the financial sector. (Source: The Associated Press)
We will see what the economic restructuring in Obama Governmental. Just reflecting us that anything it possible happen even the biggest one.
Welcome back!
Related Posts
(No Ratings Yet)
Loading ...
“Just reflecting us that anything it possible happen even the biggest one” - true, it really is a major reminder of the fallacies of the market economy of raw capitalism.
There was the problem of the company’s irresponsible costly funds for pensioners, which were introduced originally in the forties and fifties when the demand for laborers was at its peak.
There was the problem of easy, cheap gas/petrol which made GM ( and others) produce cars ( Hummers!!)which consume enormous amounts of fuel, which grew more and more expensive.
There was the problem of growing out of proportions with managerial overreach as a consequence, which in its turn caused a continuous number of disastrous decisions.
And now the company may try to restart from scratch (it actually will be a new company partly build on some the parts of GM). A project which mainly will be paid by ordinary taxpayers.
Not only in the US, but in Europe as well (Saab, Opel were/are GM brands) tens of thousands of people will loose their job. They also have to start from scratch. But a majority of them will be on the dole or have to live in poverty, for the rest of their life.
And the city of Detroit will deteriorate and change into a kind of ghost city. A total social catastrophe threatens (though Pittsburg proves it is possible in the long run to recover from this kind of blow).
It should be best if your warning would betaken at heart. My interpretation of it is: rethink capitalism.
Leave your response!