Word: gm
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Dates: during 2000-2009
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...engagement has become hand-to-hand as the fight to see who will make it out of the rubble of the GM (GM) restructuring comes to a close. The most recent development is that the car company's retired workers are blaming the firm's creditors for dragging their feet and pushing GM closer to bankruptcy. On the one side is a group that wants its money back and on the other are the people who worked on the assembly line for decades and don't want to spend their golden years without healthcare or a pension...
...government, the auto bankruptcy is not the issue. The issue is how well the process prepares it for the next industry bailout. At this point, GM is just a test case...
...issues of creditors, employment, and the survival of suppliers are not the real problem behind the government's concerns about the ultimate fate of GM. The real concern is that what happens at the auto company sets a precedent for the next bailout of a large American non-financial company. The government has been able to stay away from completely restructuring banks by providing them with enough capital to work their way through piles of bad assets and tight credit. The process is not over. Major US banks may need tens of billions of dollars more in government assistance when...
...most important reason for the government to expend this great effort on GM and Chrysler is that the car business is such a large employer. There is no longer a case to be made that the auto manufacturing business is "strategic". If the auto industry was ever in a position to enjoy that designation, it was when the American car companies had 70% of the market. At this point, Toyota (TM) and Honda (HMC) could buy the divisions of GM that they believe can be profitable and the domestic auto market would see very little disruption...
...industry that has the largest number of employees in the US is not automotive. It is retail. If the economy does not recover quickly, there is a case to be made that one or more large retailers could face problems not unlike those being faced by GM. The largest retailers have two advantages over car companies. For the most part, they do not have crushing debt loads. Secondly, they do not have the legacy labor costs that are a result of UAW negotiations with The Big Three, although some have pension plans that are not completely funded...