BREAKING: US Gov. rejects GM and Chrysler plans… suggests bankruptcy.

Wow:

The Obama administration autos task force Monday rejected the turnaround plans of General Motors and Chrysler LLC and warned both could be put through bankruptcy to slash debts.

“We have unfortunately concluded that neither plan submitted by either company represents viability and therefore does not warrant the substantial additional investments that they requested,” said a senior administration official, who asked not to be named.

This on the heels of the news earlier this evening of GMs CEO Rick Wagoner departing….

On one level, congratulations… President Obama, I respect you for standing up to these companies and not settling for just any plan and sinking billions more into a failed business model.

On another level, if one or both of these companies go into any form of bankruptcy, it could mean tens of thousands of layoffs.

Do not doubt: This is a step, a difficult, necessary one, but a step indeed, in our ending our dependance on fossil fuel based personal vehicle transport.

3 thoughts on “BREAKING: US Gov. rejects GM and Chrysler plans… suggests bankruptcy.”

  1. The thousands…probably tens of thousands of hardworking employees in the auto sector should start looking for jobs on wall street. The taxes they’ve been paying have been helping keep companies like AIG afloat…to say nothing of the bonuses these crooks are receiving.

    Bravo for standing up to Detroit Barack, while forcing us all to bend over for the robber barons of world finance.

  2. So, have GM and Chrysler suddenly found some money for Chapter 11 reorganization? Or are we staring stark Chapter 7 for these companies right in the face? How likely is it that Fiat will agree to take on Chrysler’s problems?

  3. Gordie:

    You’re right that the same needs to come for the liks of AIG and CITI. I think it’s coming. The American appetite for bailouts has ended, business-as-usual is no longer acceptable. However, I do believe in the “too-big-to-fail” scenario for AIG as its demise would be catastrophic for central and private banks around the world.

    Troy: At this point I think it’s a 50/50 chance. Either the “bailout” that the Government agrees to will be the aforementioned funds needed to get through Chapter 11, or they’re just going to wash their hands for it and start the firesale.

    If the former, Fiat, I think, will run for the hills, if the latter, we might end up with an Italian invasion of the North American auto industry. 🙂

    Oh, and thank you both for visiting and leaving comments!

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