My thoughts?
A total disaster.
Yes, the market does have a discpline but the failure of GM will end a way of life across North America and is a symbol of an economic meltdown that makes that of the early 1990's look tame.
It's easy to compare the current crisis to the Great Depression, and that's overkill, but we look to be facing a crisis worse than any seen since the 1930's.
The Great Depression ended largely because of the Second World War; while we do not have men like Hitler in charge of great states today we certainly have the potential for great wars. We are presently in a small but nasty war in Afghanistan, and America, of course, is tangled up in Iraq.
President Obama has a tough road ahead. Prime Minister Harper, though I disagree with much of what he has done, seems to be approaching the economy as well as could be done. Yes, the deficit was unnecessary, but we are where we are and any reasonable government would recognize a deficit may be needed now. A bailout in Canada is pointless unless the US goes along -- so absent movement in America Canada might as well not provide funding.
GM failing seems almost beyond belief -- but I never thought Eaton's would fall... .
GM bankruptcy likely imminent, expert warns
Kristine Owram
THE CANADIAN PRESS
It's highly likely General Motors will be forced to seek bankruptcy protection if the U.S. and Canadian governments don't reach a decision soon on a multibillion-dollar bailout package for the auto sector, a move which could put thousands of Canadian GM employees out of work, plus thousands more in spinoff industries, analysts say.
Joe D'Cruz, a professor at the University of Toronto's Rotman School of Management, said there's a "high likelihood" the auto giant – which reported a US$2.5 billion loss in the third quarter – will run out of cash before January, leaving the automaker with few choices.
Legal provisions in both Canada and the U.S. protect large insolvent companies from going out of business – under Chapter 11 of the U.S. Bankruptcy Code and the Companies' Creditors Arrangement Act in Canada. But using those laws will force a massive restructuring to make the company viable again.
Story here: http://www.wheels.ca/article/473810
1 comment:
i had read this famous chinese proverb, "the best time to plant a tree was 20 years ago, the second best time to do it is now...Remember it is never too late to do something...until it is" had they gone green like their Japanese counterparts years ago, they wouldnt have been facing such rough weathers now!
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