I said it when the auto industry came begging the government for money that it was likely even after the bailout these companies would fail and now I prove myself right again. Today GM announced that that there was a good possibility that they may have to file bankruptcy and close their doors for good.
NEW YORK (CNNMoney.com) — General Motors Corp. said in a government filing Thursday that its accounting firm has found there is “substantial doubt” about the automaker’s ability to survive.
The question is where this leaves tens of thousands of middle class employees. GM was bailed out to prevent their employees from failing financially. We can let the company fail, we don’t need a over bloated mega auto maker that hasn’t ability to plan for its own future even when the writing has been on the walls since the early seventies. However letting their huge employee base in already hard struck areas fail will be disastrous.
If you think it is bad now in places Detroit, Dayton, and Oklahoma City not to mention the number of places with smaller facilities you haven’t seen nothing yet. According to Wiki GM has two hundred fifty thousand employees worldwide and probably ten times that many employees in subsidiary companies relying on GM business. At the drop of a hat it could all go away.
Is there hope? Sure, but not as much as you would think. The facilities closing are going to need significant cleanup since most are toxic high pollution zone. While good for the environment and those who can be hired to do the cleanup, those are short term benefits at best economically. We could always make our own version of the Tata Nano. That in my mind is one of the best options and will be discussed in the follow up post.
In the end, GM’s failure is long over due. I know that sounds horrible, but with GM out of the way we will have cleared one obstacle keeping us from progressing towards a new future rather than just maintaining the status quo.
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