To the new administration: General Motors (Symbol: GM) needs to re-organize through the bankruptcy process.
The U.S. Senate will vote tomorrow on a “Bailout Package” for the automotive industry. The SPECs do not think a bailout will have any effect on the financial problems associated with car manufacturers. NOTE: Former Senator, now President-Elect Obama just resigned from his Senate senate, removing any potential future blame if the bailout program doesn’t work. SMART MOVE Mr. President…
GM has over $40 billion in debt. They report a DROP in car sales each month. Their labor contracts with the UAW (United Auto Workers) is laughable. It was reported that each union member receives health coverage better than that of the Office of the President. Plus, financing for car purchases and lease transactions have virtually vanished.
No. A bailout without drastic cost-cutting measures agreed upon prior to release of funds would only delay a future calamity. Union members need to elect people whom negotiate on their behalf while having a business sense. No business, No paychecks!!! The GM labor situation was predicted to be the cause of the future downfall of the company 3 to 4 years ago. Now, here we are. The credit crisis has just heightened the labor picture and the financial problems of the auto industry.
If GM and other auto companies fail, fine. The reverberations will be felt immediately, but at least they will have time to constructively change their business model while removing current management and renegotiating labor contracts.