Straight Up General Motors

The top story this week was the creditors’ rejection of General Motors’ restructuring plan. On news that the government-imposed deal had failed, bankruptcy seemed imminent. And everyone had something to say about it.

Robert Farago inventoried the future of GM’s brands on The Truth About Cars.

The Associated Press called it: GM is set to enter popular parlance as “Government Motors.” When the automaker files for Chapter 11, the nickname will stick, as the debate over GM’s future centers on whether or not the United States government should own a commercial enterprise. To which the only possible answer is no. …There are lots of reasons why “new” GM is a bad idea. But here’s the most important impediment: Government Motors doesn’t have the vehicles it needs to survive.

Our own Stephen Kersey pondered when GM’s bankruptcy will actually occur.

Considering that the federal government has given GM a deadline of June 1st to find a suitable solution for all of their creditors and considering that GM’s creditors are far from happy, the writing appears to be on the wall. If the filing for bankruptcy doesn’t occur at the end of this week, it very well could take place at the beginning of next week.

The Financial Post reported that Canadian taxpayers would join their American counterparts in bailing out the automotive giant.

Political and economic observers expect the federal and Ontario governments to take a portion of GM shares in exchange for offering the automaker an estimated $10-billion in financing to help it reinvent itself and pay its bills while it is under court protection.

GM even gave out made payroll early this week to calm employee fears that a bankruptcy could mean no paycheck.

Employees’ pay would not be at risk in a bankruptcy, but the company wanted to reassure workers they will get their checks, GM spokesman Tom Wilkinson was quoted as saying.

There’s a solid chance we’ll all soon be shareholders in Government Motors. Who should we fire first?

Image Credit: Ricky Flores