How does General Motors going bankrupt affects our economy?
Why can’t we let it go bankrupt if it’s not making money? Why would you give money to a company that can’t make money back?
Is it possible that at some point a foreign auto company could take over GM with 51% by their decreasing stock price?
Nobody really cares for American cars nowadays except those rental companies, so what’s the point of keeping it?
welll.. with GM gone, they can get jobs at Japanese auto plants based in US.. so they can expand and make even nicer cars for the consumers.. American cars suck anyway.
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Letting GM and the other domestic automakers fall into bankruptcy would just shift all the current obligations to the taxpayers. Pensions, health care, debt, unemployment from the job losses, etc. Not to mention there would be tremendous loss of tax revenue from the federal down to the local level. Plant closings don’t just impact the people working at the plant, but the towns around them. Restaurants, small & large businesses, schools and hospitals all will end up getting hurt.
All the Tier I,II,III parts manufacturers for GM will go under. The real estate market and the advertising market will be severely impacted if they were bankrupt. This will end up costing the taxpayers hundreds of billions of dollars. Giving them a low interest loan is what they are asking for. And that will have to be paid back. With the current credit markets frozen, businesses can’t get the capital they need to get them through tough times.
You can argue that GM made mistakes in their product plans but they were responding to market conditions (as did Toyota, Nissan, Honda, BMW, Porsche and Mercedes with trucks and SUVs). This country needs to maintain a manufacturing base. Otherwise we will all be stocking shelves at Walmart with products made in China.
Have you by chance read J.D. Power or Consumer Reports lately? You will find the domestics are just as good and some cases better then the foreign models. C.R. will not automatically ‘recommend’ Toyota anymore because of their major slippage in quality the past few years. It’s sad that the perception of quality has not caught up with reality for so many people yet.
Did you know that GM has licensed their intellectual property to many other well known auto companies, like BMW and Ferrari? BMW has been buying GM transmissions for years and Ferrari uses their Magnetic Ride Control in their quarter million dollar 599. Yeah, we all know they built some sub-par models the past 20 years, but not everything they built was sub-par. Their trucks and SUVs are top rated. They are coming out with a really nice hybrid, the Volt.
And no, I don’t work for GM or any of their subsidiaries.
because gm and ford and chrysler make alot of jobs and are the largest companys in the us
It is not only GM workers affected by this but many smaller business who’s biggest is GM, like tire, batteries, even door locks etc. It is said that if GM goes down it would affect 10% of the working force in the USA
4 million US jobs would be lost and other associated businesses would also be lose. This would be like you having your right hand smashed with a 50 pound sledge hammer and you are right handed pitcher on a professional baseball team. It would cripple our already weak economy to the point of gasping for air. We can not afford this kind of lose now we can start making fuel efficient cars that run off ethanol and other sources that can bring GM back in play so there is still hope .
Q: With GM gone, can’t workers get jobs at Japanese auto plants based in US so they can expand and make even nicer cars for the consumers because American cars suck anyway?
A: This is a very, very short-sighted view of the world. Every country supports its domestic auto industry except the United States. One could successfully argue that it is very patriotic to support your domestic auto makers. In any case, GM, Ford and Chrysler build decent cars that would be better than any Jap, Korean or German car if our car companies weren’t saddled with health benefits (which Jap , Korean and German car companies don’t pay) and the UAW gave concessions to match the labor rates at Honda, Toyota and other non-union US plants. I’m sure they would provide wage parity to save their jobs.
Q: How does General Motors going bankrupt affects our economy?
A: America would suffer massive losses in housing, finance and many other parts of the economy by allowing Gm, Ford and Chrysler to go bankrupt. It’s not their fault that demand for cars has plunged 50% in the last 2 months due to the collapse of the mortgage market and poorly managed bankruptcy of Lehman Bros.
Q: Why can’t we let it go bankrupt if it’s not making money?
A: Simple, Car manufacturing has always been a cyclical business. When times are good, they are very good for GM, Ford a Chrysler. When they are bad, they are very bad for the 3 domestic auto makers.
Q: Why would you give money to a company that can’t make money back?
A: GM, Ford and Chrysler all have the capacity to repay their loans – and then some.
Q: Is it possible that at some point a foreign auto company could take over GM with 51% by their decreasing stock price?
A: Not likely. GM has like $300 Billion in debt in their name. No other company would want to assume such a liability given the lousy climate for gas guzzlers and houses – which is what most of the debt has financed.
Q: Nobody really cares for American cars nowadays except those rental companies, so what’s the point of keeping it?
A: Absolutely a false statement. GM, Ford and Chrysler do make cars that people want. It is just that they make lost of other cars that people don’t want, at the moment. Correct the health care problem, pension problem and current wages and all three companies will make America proud again.