BrianGarst.com

Despite large infusions of taxpayer dollars, General Government Motors is expected by industry experts to file for bankruptcy.

For General Motors Corp., the task at hand is so difficult that experts say a Chapter 11 bankruptcy filing is all but inevitable.

To remake itself outside of court, GM must persuade bondholders to swap $27 billion in debt for 10 percent of its risky stock. On top of that, the automaker must work out deals with its union, announce factory closures, cut or sell brands and force hundreds of dealers out of business — all in three weeks.

“I just don’t see how it’s possible, given all of the pieces,” said Stephen J. Lubben, a professor at Seton Hall University School of Law who specializes in bankruptcy.

GM, which is living on $15.4 billion in federal aid, faces a June 1 government deadline to complete its restructuring plan. If it can’t finish in time, the company will follow Detroit competitor Chrysler LLC into bankruptcy protection.

Think back to the beginning of the U.S. government’s incursion into the automotive sector.  We were told bankruptcy would be the end of the world.  The entire U.S. auto industry – nay, all of manufacturing – was going to collapse and never return.  The govenrment, however, was uniquely positioned to save GM and Chrysler from bankruptcy.

Both of these claims was blatant hogwash.  The government never could stop the slide into bankruptcy, nor, as we will soon learn, would that inevitable outcome result in the death of U.S. automakers for all time.

The government lied, automakers died.  When will this administration admit that is is caught in a quagmire? Bring our tax dollars home!

General Motors