GM Bankruptcy
Last year, the GM bankruptcy shook the economic fabric of America. How is it possible that one of the largest companies in America, and also the world, could have fallen so far as to seek out bankruptcy protection? The GM bankruptcy cost American taxpayers dearly to the tune of $65 billion. Today, General Motors is the quasi leaner and meaner company than the one it was prior to entering bankruptcy protection.
What caused the GM bankruptcy? There were many factors involved, yet hourly salaries had reached too high a level and were simply no longer sustainable in the current economic reality in which we now find ourselves in. The firm's employee entitlement programs also were a heavy burden at a time when the company was losing money on many brands. In the midst of the situation, GM's debt obligations continued to grow.
Today, a new board of directors is in place, unprofitable brands have been scrapped, and the company now prepares for an initial stock offering largely to pay back taxpayer money to the government. It shouldn't go without noting that a majority of Americans were opposed not only to the GM bankruptcy bailout, but also the government bailouts in general of the "too big to fails".
Dealerships were also shuttered, and many workers lost their jobs as part of the restructuring plan, and the no-cost health insurance plan was also rolled up. Yet, in the end despite taxpayer objection to the GM bankruptcy bailout, a venerable U.S. auto-maker was saved, and we as a nation are largely better because of it.
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