Word: gm
(lookup in dictionary)
(lookup stats)
Dates: all
Sort By: most recent first
(reverse)
Creditors are not the government's biggest problem with GM, although they would like the public to think debt is the headache everyone should focus on. A bankruptcy judge could force a large cut in health and retirement benefits for UAW members. That would be on top of what is likely to be another round of lay-offs. With the national unemployment rate moving up as fast as it is and large numbers of pensions facing funding problems, the federal government may not want to be forced to support current and retired GM workers. Someone will have...
There are several estimates of what a GM bankruptcy would cost in terms of jobs loss, both at the company and suppliers. The figures which are over a million unemployed are probably not accurate. GM has already fired too many people and so have its suppliers. But, an event that pushes even several hundred thousand people out of work would hamper the Administration's efforts to get unemployment under control...
...issues of creditors, employment, and the survival of suppliers are not the real problem behind the government's concerns about the ultimate fate of GM. The real concern is that what happens at the auto company sets a precedent for the next bailout of a large American non-financial company. The government has been able to stay away from completely restructuring banks by providing them with enough capital to work their way through piles of bad assets and tight credit. The process is not over. Major US banks may need tens of billions of dollars more in government assistance when...
...most important reason for the government to expend this great effort on GM and Chrysler is that the car business is such a large employer. There is no longer a case to be made that the auto manufacturing business is "strategic". If the auto industry was ever in a position to enjoy that designation, it was when the American car companies had 70% of the market. At this point, Toyota (TM) and Honda (HMC) could buy the divisions of GM that they believe can be profitable and the domestic auto market would see very little disruption...
...industry that has the largest number of employees in the US is not automotive. It is retail. If the economy does not recover quickly, there is a case to be made that one or more large retailers could face problems not unlike those being faced by GM. The largest retailers have two advantages over car companies. For the most part, they do not have crushing debt loads. Secondly, they do not have the legacy labor costs that are a result of UAW negotiations with The Big Three, although some have pension plans that are not completely funded...