13 Nov 2008
Can General Motors Survive??
As problems with the economy & finance/loans for the buyer begin to bite October US car sales plummeted an astonishing 45% like for like on last year
It is being suggested that G.M. is using up its capital at an amazing $2 billion a month. Projections also suggest that G.M. has around $16 billion of its own liquidity left, & either the U.S. economy has to buck the global trend of recession or G.M. along with many others will look to the government for assistance.
The problem with G.M. is it is very much at the heart of employment in the USA, not only to its internal workforce but to suppliers, manufacturers, freight with companies so reliant on this gigantic corporation worries are that suppliers may go bust affecting all other auto manufacturers in the US.
Obama has many big tests but he did promise the Detroit three and won Michigan handsomely. There is little doubt Barack Obama will have to hit the ground sprinting as the G20 meeting hosted by the moribund Bush this weekend will have little use until Obama hits the Oval Office, by which time General Motors liquidity could be no more, what will be the Obama priority the promise to the American people or squaring the rest of the world. After all India, China & the middle east hold all the cards & are certain to demand much more influence at the G8, United Nations & all things global with their manufacturing bases including their auto businesses looking to expand globally something somewhere will have to give, allowing something of the size of G.M. to fail would effectively free up any spare capacity in the global car industry indeed such is the size of G.M. its loss could create demand for manufacture OR could G.M. become inscrutable???
If G.M. were to fail or change hands the aftershock could hit the shores of the UK as its Vauxhall, Chevrolet & Saab UK operations & workforce may suffer from any G.M. decline.
Let us all hope Obama keeps his promise to the US car industry, companies of GM stature & reputation cannot be allowed to fail, particulary when its probelms are not of its own making. America needs its engine room intact for its response to the eventual upturn in the worlds economy.
O What a tangled web the global economy does weave
As the politicians hailed its qualities did they deceive?? |
