Eisboch wrote:
It sure looks like GM may go down the tubes.
Their burn rate of available cash may not last until Obama takes office.

According to some analysts, Chapter 11, which keeps the creditors and
suppliers off their backs while they reorganize really isn't an option. Who
would buy a car from a company in bankruptcy? Furthermore, consumers have
pulled in their horns in terms of buying big ticket items in general with
concern of continued employment.

There's a 25 billion dollar government "loan" available to the auto industry
in general that is intended to help them finance the development of new,
high efficiency vehicles. Bush has recommended expediting the release of
funds associated with this loan, but is against a further "bailout" using
funds from the recent 700 billion TARP plan.

GM's burn rate is 3.1 million per *hour* and as of the end of September,
they had about 16 billion in cash.


Personally, I have very mixed feelings about this. A while back GM dropped
the Oldsmobile line due to poor sales and to cut costs. They also hinted
that another line .... either Buick or Pontiac .... would be on the
chopping block in the future if their financial situation didn't change.
That was a couple of years ago and nothing has been done.


The taxpayers have given AIG billions and billions, and all AIG does is
push around paper. I favor bailing out the automakers if they can be
restructured into companies that make what the market wants and needs,
and if competent management can be found to replace the slackers that
are there now.

Management, labor, and suppliers are going to have to eat some of the
weenie if they want the companies to survive. There are millions more
jobs at stake here than just those at the auto plants.

As for what Bush recommends, well, he ought to just leave town before he
does any more damage.