Here's Why GM Won't Be Going Bankrupt Any Time Soon; Wasn't Clinton's PNGV Supposed to Fix Detroit?
Not since Lee Iaccoca got on an airplane and flew to Washington, D.C. to seek a federal bailout for Chrysler has there been so much talk of bankruptcy for one of the Big Three, only this time it's the truly unthinkable being discussed - the General filing Chapter 11.
The problems for GM - and Ford, let's not forget - are familiar: Declining market share and growing competition worldwide from lower-cost competitors; high fixed labor costs, including exploding healthcare costs, enforced by one of the most powerful unions in the world; immense pension obligations; too slow to respond to market changes, a bloated dealer universe and too much reliance upon trucks at a time of high energy costs.
Sounds like a sure prescription for bankruptcy, right? Actually, those factors may be exactly why GM is not going to be calling on a judge for help, according to The Car Connection's Jerry Flint. Also, don't miss Joseph Szczesny's roundup of the latest GM speculation here.
My view? If I was Rick Waggoner, I would leak a draft of a bankruptcy filing, then when the media frenzy is well underway pick up the telephone and tell the UAW leadership they will determine whether the papers are filed or not.
While we are on the subject of Detroit's survival, anybody remember the Clinton administration's much-ballyhooed "Partnership for a New Generation of Vehicles" and the hundreds of millions of tax dollars that went with it?
That was the program that was going to give us "technologies for a new generation of vehicles up to three times more fuel efficient than today's, a technological challenge comparable to or greater than that involved in the Apollo project," according to a White House statement at its unveiling.
So, what happened?
UPDATE: 30,000 Jobs gone, Nine factories shut down
There will be more. Here's Just-Auto's report.