The best indication as predicted some itme ago is that the Obama administration will let General Motors and Chrysler go to bankruptcy.
President Barack Obama believes a quick, negotiated bankruptcy is the most likely way for General Motors Corp. to restructure and become a competitive automaker, people familiar with the matter said.
Obama also is prepared to let Chrysler LLC go bankrupt and be sold off piecemeal if the third-largest U.S. automaker can’t form an alliance with Fiat SpA, said members of Congress who were briefed on the GM and Chrysler situation before the president said two days ago that the automakers’ viability plans were insufficient.
The president gave GM 60 days to come up with deeper cost and debt reductions than the biggest U.S. automaker proposed in its plan submitted last month. The “quick and surgical” bankruptcy his administration said was also an option appears to be inevitable, said the members of Congress and two other people familiar with the matter. Obama personally signed off on asking GM Chief Executive Officer Rick Wagoner to step down, which he did on March 29, they said.
A GM bankruptcy would mark the fall of a corporate icon that as recently as 2004 posted a $2.8 billion profit and in 1962 controlled 51 percent of the domestic car market. A plunge in sales of sport-utility vehicles and pickups as gasoline prices soared, coupled with the seizing up of credit markets, caused GM to lose $82 billion in the last four years and seek government help to survive.
Kind of makes the eyeballs hurt, just reading that. There are erstwhile voices asking whether it really would be good to let GM, Chrysler and their investors go to the wall, but it is also the case that the US government can't continue to just keep on handing over money to keep them afloat, month by month.
The smart money seems to be that if and when GM goes into bankruptcy, it will have to be broken up into 2 companies in the restructuring process - the profitable parts of the business will be bundled together and emerge from bankruptcy quickly while, the problem children of the business will be shepherded through more slowly. GM Holden in Australia is most likely to be in the former group, but it maybe the case that sections of GM might simply be sold off to interests who can afford them. Chrysler seems to be headlong on its way to bankruptcy, "don't pass go, don't collect $200.00", as Monopoly would tell us.
Now, speaking of colossal failures in capitalism...
Back In Ostraya, Remember John Hewson?
Does humor belong in music? Or does the Pope live in the Vatican?
John Hewson has recently written some article on a pay- site that basically says there's no going back to the way it was before because it was all so screwed up to begin with - or words to that effect. He's been makin some noise lately, Dr. Hewson, so I also wanted to link to Gerard Henderson having a go at him here.
Hewson lost the "unlosable" election that year. After leaving for the corporate world, he created a resume littered with disputation. Last week there was more bad news about the collapse of Elderslie Finance Corporation, where Hewson was chairman before matters slid out of control, leaving 4000 investors behind.
Before that, Hewson departed from the board of Pulse Health Group in a shake-up. Before that, he quit as chairman of Natural Fuel amid a boardroom battle. Before that, he lost a bitter boardroom struggle for control of Sports & Entertainment Limited. Before that, he departed Belle Property amid a dispute. Before that, he resigned as chairman of Network Entertainment prior to the company's collapse. Before that, as dean of the Macquarie Graduate School of Management, he had a spectacular falling out with the university. Before that, he helped lead a Macquarie venture in Singapore, which collapsed. Before that, CBD Online, where Hewson had been chairman, failed.
When it comes to authority in the worlds of business and politics, Hewson is a dead man talking. Only one field would treat this resume as a qualification for authority - the media - and so it was that Hewson provided the most lurid example, thus far, of the self-generated, self-feeding media speculation around Costello for the past month.
Pretty funny. Nothing makes for such fine autumn reading as old politico-warhorses having a jab at one another.
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