SocraticGadfly: Will GM clear bankruptcy in just 90 days?

June 01, 2009

Will GM clear bankruptcy in just 90 days?

First, the General has to go through the process of being separated into “good General” and “bad General,” the process that big, bad hypocritical Treasury Secretary Tim Geithner refused to consider for his banking best buds. (One more sign, per Paul Kennedy’s “Rise and Fall of the Great Powers,” that the U.S. is now a financial nation, not an industrial one, and therefore on the downslope.)

Next, there’s the “little” hurdle of getting some sucker enterprising business to buy “bad GM.” Of course, if no enterprising business is out there, President Obama may decide to go the sucker U.S. taxpayer route.

Meanwhile, you have bullshit public relations like this:
“It’s going to be a much smaller, leaner company but the industry in general is going to be a far more profitable industry with all the capacity that's been removed,” said David Cole, chairman of Michigan's Center for Automotive Research.

GM has the opportunity to “be profitable really quickly” once auto sales recover and has a solid plan and strong product portfolio, Cole said.

Solid plan? GM has done everything BUT that for 35 years now, since the first oil embargo. (Actually, before that, but, who’s counting?)

Strong portfolio? You mean like the Volt that it’s too broke to roll out? Or the Volt that probably would get swamped if it were rolled out? Or the pseudo-hybrid SUVs that some auto writers continue to tout?

Beyond that, though, Cole admits that “Calm Sea and Prosperous Voyage” isn’t playing on the stereo:
“The way they are managing this, this is probably going to be very clean and neat but there is a finite risk that it goes out of control,” Cole told AFP. “If one or a few of the key suppliers collapse, then everything is over with and we're in for a really serious problem.”


And, although much of David Brooks’ newest column is just stupid, he’s right about how GM’s corporate culture could make the bankruptcy process worse.

That said, per my poll on the issue, and contra the caveats here, I won’t personally consider GM to have “cleared” bankruptcy until the “bad GM” is sold – to the private sector.

So, when you hear Obama claim GM’s restructuring plan is “full of promise,” take that with a whole shaker of salt.

Free polls from
How long will a GM bankruptcy take? (As of June 1, 2009)
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