General Disarray II

How many people really think that throwing more than a trillion dollars into the banking industry was a better idea than spending a measly $30 million to bail out GM? Why should GM be saved? Read this.

That article is interesting for several reasons. First it states that GM has suspended all R&D spending, this all but confirms that the Volt has been mothballed if not canceled outright. Second, it would result in the direct displacement of 1,000,000 employees and countless other jobs that exist because of those jobs. That ripple would touch every corner of our entire economy.

Also, I read something scary the other day about what bankruptcy would mean for GM. General Motors has a very poor credit rating right now and a rather large amount of outstanding debt. This means that GM would not be able to declare the friendly version of bankruptcy...chapter 11 because no bank would be willing to loan the company the cash it needs to re-organize. No, GM would have to go to the dreaded chapter 7 bankruptcy which would force the company to liquidate assets in order to pay off creditors. This would basically destroy GM and would benefit NO ONE except some foreign auto makers that may be able to snap up GM assets at bargain basement prices.