Some jaw-dropping numbers in this report:
Calling the federal government a reluctant shareholder, President Obama on Monday characterized the bankruptcy filing of General Motors as necessary to assure that the company remained a viable part of America in the years ahead.
President Obama said that the government had agreed to support G.M.’s reorganization because executives had worked tirelessly to produce a plan that met his demand for a leaner company focused on fuel-efficient vehicles.
***In its bankruptcy petition, G.M. said it had $82.3 billion in assets and $172.8 billion in debts. Its largest creditors were the Wilmington Trust Company, representing a group of bondholders holding $22.8 billion in debts, and affiliates of the United Auto Workers union, representing nearly $20.6 billion in employee obligations.
In a court affidavit, Fritz Henderson, G.M.’s chief executive, said that bankruptcy and a Treasury-sponsored sale of General Motors’ assets to a so-called “New G.M.” were the automaker’s only option to move forward. Failing that, he said, the company faced liquidation.
Good piece in TNR by Jonathon Cohn about the significance of this:
GM was the symbol of American industrial might and, for three-quarters of a century, the world’s largest carmaker. Now, in order to qualify or government financial assistance, GM is eliminating half of its brands, shedding dealers by the thousands, and laying off a third of its already diminished hourly workforce.
Even if the Obama administration’s plan works–even if GM re-emerges from bankruptcy as a leaner, more competitive company–it will never regain its iconic status. It will be just another company, albeit one whose majority owner is the U.S. government, at least for the time being.
What major manufacturing do we have left in the United States?