
Many people really do not understand what bankrupcy means. Bankrupcy means that an entity does not have enough money to continue to pay its debts, and files for protection under bankruptcy law. It seems like airlines go bankrupt every few years. Kmart went bankrupt. Texico went bankrupt.
If General Motors files for bankruptcy protection it does not mean that it will totally disappear. The dealerships will not vaporize. The assembly lines will not vanish into thin air. The company will go into a harsh restructuring and emerge as a company the can *hopefully* actually make some money. Because as it is run now, it would have to be bailed out indefinitely because it cannot make any money!! This is way different than AIG, Fannie, Bear, WaMu, and Wachovia. If the financial system explodes, like a real total collapse, the world as we know it would be over. (In the Great Depression the unemployment was 25%, and we donʻt have a farm economy anymore to help absorb labor anymore!)
If GM goes into bankruptcy, they renegotiate their union deals, layoff a bunch more people, plunge forward with the Volt, and hope to emerge as a new company. Face it–people will get laid-off by GM whether or not they get a bailout. A bailout would just extend the inefficiency, bleeding and pain. The incompetence over the last 20 years of GM management would be paid for by the US taxpayer. This is not cyclical. They suck.
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