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Out of gas
General Motors is expected to file for bankruptcy today as part of the Obama administration’s plan to shrink the automaker down to only its more profitable plants, brands, dealerships, and contracts. A New York dealership started the process early this morning by filing for bankruptcy protection. A wave of other court filings are expected to follow.
GM will move forward with four core brands – Chevrolet, Cadillac, Buick and GMC. The company plans to cut 21,000 employees, about 34 percent of its work force, and reduce the number of dealers by 2,600. GM was announcing plans to close 11 facilities, idle three others and name the buyer of its Hummer division. GM’s stock dropped to its lowest price in company history Friday, closing at just 75 cents. The shares will be virtually worthless in a Chapter 11 reorganization.
Later today Obama will discuss the latest development followed by a news conference with GM President and CEO Fritz Henderson.
back to top22 Comments to “Out of gas”
There is plenty of blame to be cast around and no doubt much will be. There are even now profitable car manufacturers operating in the USA, particularly in the Southeast. GM and the big 3 shoulda packed up and moved to Dixie long long ago.
As one car exec phrased it, he heads up a health care company that makes trucks. He originally thought he’d head up a company that makes trucks with a health plan offered on the side. Somewhere way back, the mgt and labor both got completely emancipated from global economic reality. Pity!
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Hey, Democrats, did you elect Obama to do this?
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Government has no business in business. I wonder how many dealers will be shut down and if the “pattern” of cronyism (keeping them open) and anti-Republican dealer shut downs will continue in moves that have to be called economic fascism.
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Let’s see. Obama promised to add or keep how many jobs? Was it 2 or 3 million new and preserved jobs? I guess he meant in government.
And a note to Ivan:
“The chief business of the American people is business.” Calvin Coolidge, Speech in Washington, Jan. 17, 1925
I guess since the we are a government of the people, by the people and for the people, Obama is taking us to the most logical conclusion of Coolidge’s statement.
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I”m at a loss. Where does Obama get the power in the US Constitution to do this? Aren’t any of the stockholders going to complain about this government takeover and dilution of their stock’s ownership of the company? Why is everyone rolling over and playing dead?
I have to stop thinking about “The Audacity of Hope!” that Obama spreads around like organic lawn fertilizer. I want to scream!
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PETER L-
I agree with Calvin Coolidge – business is private enterprise, not government owned & operated. Obama is committing economic fascism.
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If we want to continue to be a viable capitalistic society in the future, we just can’t allow any company to get so large that it affects too many people and businesses—or becomes ‘too big to fail’. No company has any business being that big or powerful.
If both parties had worked together for reasonable regulations I doubt we’d be in the position we’re in. Both parties really need to begin to work together to help the country get out of this mess. They both did their fair share to help us get here.
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Barack Obama is failing. And he forced General Motors into bankruptcy. When will we remove him from office?
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Barack Obama is the worst president the US has ever had.
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Not only that, the socialists are coming, the sociolasts are coming!
When will we remove him from office?
Peacefully, I hope.
Barack Obama is gthe worst president the US has ever had.
Even worse than Warren G. Harding!
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#7
Do you realize what you are saying?
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#11
I do. I’m letting it be known that I have nothing better to do at lunch time than spit in the wind. Better duck.
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Barack Obama is far worse than Warren Harding. The teapot dome will be a pimple compared to the scandals that have already occurred and will occur under Obama.
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Obama is saving GM; with the government’s help, it’s bankruptcy and restructuring and eventually rising again. Without the government’s help, it would be dissolution and liquidation of assets, and the permanent loss of one of America’s greatest companies.
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Not sure why Steve is calling GM one of America’s greatest companies, but it is clear that this move (aimed at saving 42K jobs) is a step in the right direction.
I’m a little worried (yet not surprised) that WMB’s are repeating the bogus conspiracy theory that Obama (who has no role in deciding which dealerships will close because those decision are being made by GM — duh!) is selectively targeting GOP aute-dealers. There really is egg on the face of conservative bloggers everywhere in basic debunking goes ignored by extremists. Auto-dealers are already disproportionately Republican.
Montyfisher,
Something about you’re posts makes me want to welcome you to the discussion purely on the grounds of encouraging political participation of America’s high schoolers. Besides there not being any major scandals in Obama’s first 5 months, you’re tacit future predictions of scandal’s too come don’t lend you any ethos. The U.S. will have a chance to remove Obama from office in 2012, it’s already scheduled. But if the right doesn’t start showing a great depth of insight than those of a typical conservative teenager, it will become increasingly less likely.
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“Obama is saving GM; with the government’s help, it’s bankruptcy and restructuring and eventually rising again. Without the government’s help, it would be dissolution and liquidation of assets, and the permanent loss of one of America’s greatest companies.”
As long as they cant manufacture to the demand profitably, no amount of govnt. intervention will help GM. The track record of government involvement isnt so good that one should hedge any bets on the matter.
GM has made many mistakes over the last decade to drop it from being the leader of the auto industry down to bankruptcy. If they cant survive on their own, then they should go the way of the dodo.
We should not be afraid to lose big companies even American, because as long as there is a demand, someone will come along to fill that demand or create competition. Let the market work itself out rather than manipulation.
“Not sure why Steve is calling GM one of America’s greatest companies, but it is clear that this move (aimed at saving 42K jobs) is a step in the right direction.”
Because it used to own the majority of the auto industry in sales?? I’d say thats pretty big at least…
Someone would buy the GM label anyway..at least Chevy, and most likely fill in the demand by buying most of the old plants. Of course this wont happen as long as the government has any strings attached…
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As a Michigan resident I have a dog in this fight: better a structured working out than an unstructured one.
As the old NAPA ads had it, “pay me now, or pay me later.” You can “rescue” GM or you can let it fail and then invest your money in the communities and states shattered by its fall. The second path is far more expensive and long-lasting in its damage.
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The market is up 200 points today.
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Bob #5: The words are The Audacity of Hope. The actions are The Audacity of Power.
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Has the government ever run a business that actually made money?
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#15 Mynock
“…but it is clear that this move (aimed at saving 42K jobs) is a step in the right direction.”
It is not clear to me. I don’t believe the US government should be interfering in private business. Why do you think it should?
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Sometimes private enterprise works well and benefits society. Sometimes it works poorly and harms society.
Sometimes government works well and benefits society. Sometimes it works poorly and harm society.
The devil is in the details.
It’s simply a right wing cliche to proclaim loudly and repetively: business always good; government always bad.
If this were obviously and consistently true, most of America and Europe and Australasia would be run by libertarian governments because they would be elected over and over again.
Neither liberals nor conservatives have a reliable theory or system for running the world. That is why liberal governments and conservative governments are frequently turned out of office in countries with reasonably free elections.
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