Today the United States and the world witnessed one of the biggest bankruptcies of our time by a company that was supposed to be impermeable. General Motors has been around a hundred and one years, but today it could no longer sustain itself without going the route of Chapter 11. Rest assured, this is not the end of GM, it isn't like the Oldsmobile brand that has completely disappeared. The company has already spent money on a great PR extravaganza that promises a reinvention.
They say as much to the press:
"The General Motors board of directors authorized the filing of a Chapter 11 case with regret that this path proved necessary despite the best efforts of so many," GM Chairman Kent Kresa said in a written statement. "Today marks a new beginning for General Motors. ... The board is confident that this New GM can operate successfully in the intensely competitive U.S. market and around the world."
As it reorganizes, the fallen icon of American industry will rely on $30 billion of additional financial assistance from the Treasury Department and $9.5 billion from Canada. That's on top of about $20 billion in taxpayer money GM already has received in the form of low-interest loans.
"Our agreement with the U.S. Treasury and the governments of Canada and Ontario will create a leaner, quicker more customer and completely product-focused company, one that's more cost competitive and has a competitive balance sheet," CEO Fritz Henderson said at a news conference in New York. "This new GM will be built from the strongest parts of our business, including our best brands and products."
Of course, it didn't have to come to this. GM could have shed their arrogance decades ago to keep up with other car companies around the world. Yet they only cared about the bottom line and quick short term profits that ultimately led them to the the Chapter 11 filing that they so deserved. Now they'll have to lay off more than 21,000 workers on top of the thousands already gone and in the deal with the government, shrink the size of the company. Obama said that'll he'll let the day to day stuff be handled by GM but that might not be the best way to go. Instead, listen to someone that has filmed, covered and lived the life that GM bestowed upon Michigan. Make the company do the things that our country and world need, not just to let the executives claim to make changes on a spiffy commercial and through press releases. That change can happen now, and at this monumental (and bankrupt) time it should come quicker than ever.