GM CEO says bankruptcy would cause liquidation

[Omaha Steve]

Source: AP

DETROIT (AP) - General Motors Chief Executive Rick Wagoner says the automaker would end up being liquidated if it enters Chapter 11 bankruptcy protection.

Wagoner says restructuring out of court would accomplish 99 percent of what could be achieved in bankruptcy. But he says it wouldn't have the risk of scaring away customers or the huge expense of Chapter 11.

Wagoner made the statements Tuesday at a breakfast in Washington, D.C., sponsored by the Christian Science Monitor.

Read more: http://apnews.excite.com/article/20090317/D96VSTSO1.html

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McCain wants GM to go Chapter 11. But then what was it McCain said about his understanding of the economy?

[defendandprotect]

1. We should take over the plants and the workers and begin building electric cars . . .

also, start remodeling gas-guzzlers to turn them into hybrids.

[Name removed]

3. Deleted message

Message removed by moderator. Click here to review the message board rules.

[PM Martin]

2. Vietcong John McCain also was for bailing out AIG

but tells the laborers of GM to drop dead!

[david13]

4. Why should I be concerned about what GM does?

The GM people should be, and they are not. The top execs have looted the company for years now, and now they want to loot the federal treasury.
Why would anybody be in favor of that?
If you want to help the workers, give the money to the workers, not the rip off top (multi-millionaire) execs.
dc

[D-Lee]

5. Because they have GOOD JOBS and are a MAJOR U.S. INDUSTRY!

Of course you should care.

The auto industry is not as amoral and parasitic as the higher reaches of the financial industry has shown itself to be.

[tomm2thumbs]

6. all these officers/soldiers returning from Iraq should replace management at GM

sounds like an easy answer to the issue - plus, they'll know how to make those humvee's safe since they were in the damn things over there

[antimatter98]

7. GM liquidates, but the Obama White House hands billions to the banks--no strings. n/t

[pfitz59]

8. The nation is saturated with Automobiles!

Where is the market? Should convert to railcars, urban electric vehicles and buses! The era of the private, gas powered auto must end!

[sarcasmo]

9. How many parts suppliers would go under if GM goes Bankrupt?

[Earth Bound Misfit]

10. GM bakruptcy would devastate the US economy

According to this report by The Center for Automotive Research:

CAR Research Memorandum:
The Impact on the U.S. Economy of a Major
Contraction of the Detroit Three Automakers

Summary
A full or partial contraction of the Detroit Three would have the following impacts on the
U.S. economy:

Total Impacts After 3 Years
Scenario 1 Scenario 2
Personal Income ($ billions)--------------Scenario 1 -398.2----------Scenario 2 -275.7
Combined loss of tax receipts and increase in
transfer payments ($ billions)------------Scenario 1 -156.4----------Scenario 2 -108.1

The model represents only the impacts resulting from the initial contraction of the Detroit
Three within the U.S. economy. It is reasonable to expect that a permanent contraction
in the U.S. auto industry would negatively impact the auto industries of Canada and
Mexico, since producers in these regions rely heavily upon U.S.-produced parts and
components. This interdependency of the NAFTA automotive producers means that the
total economic impacts presented here underestimate the full impact of the scenarios.
The decline of Detroit Three production in Canada and Mexico would result in further
U.S. losses in employment, income, and government revenues. Finally, the bankruptcy
of any of the Detroit automakers may have serious implications for their pension funds
and the level of obligations of the Pension Benefit Guarantee Corporation, as well as
funding of the nation’s health care system. The Detroit Three are directly and indirectly
responsible for funding the health care of 2 million employees, retirees, and dependents
of their own companies and their suppliers.

Full report: http://www.cargroup.org/documents/FINALDetroitThreeContractionImpact_3__002.pdf

[sarcasmo]

11. Kick back to the top. A GM Bankruptcy would spiral us into a more serious situation.

It's not just GM people, it's all of the GM suppliers and their suppliers too, the people who work at your local car dealership and their suppliers, it would be a nightmare.