Tales from the Trail

The First Draft: End of an era for GM

June 1, 2009

AUTOS/Even though it was expected, it was still a jolt: GM declared bankruptcy this morning, the third-largest bankruptcy filing in U.S. history and the biggest ever in U.S. manufacturing.

Unthinkable a decade ago, now General Motors is yet another casualty of the cratered U.S. economy, with taxpayers putting up $30 billion for a 60 percent stake in the company. The GM filing followed just hours after a bankruptcy judge approved the sale of virtually all of automaker Chrysler’s assets to a group led by Italy’s Fiat SpA.

Within minutes of the filing, the headlines were rocketing around the Web:
The Washington Post: “Filing Marks the End of Financial Independence for Industrial Icon”
The New York Times: “A Risky Bet to Save an Icon of American Capitalism”
The Drudge Report led its page with a photo of the GM logo under a U.S. flag, headlined: “Government Motors.”

It wasn’t a total blue Monday for the U.S. economy, though, as consumer spending eased and personal income rose in April, the largest increase in almost a year.

President Barack Obama, fresh from a slightly controversial “date night” in New York City over the weekend, will be talking about the automotive industry at the White House around midday, before an afternoon visit to the National Naval Medical Center. The Senate returns from recess today, with the House still out.

Moving back to work after a gorgeous weekend in the Washington DC area, the morning television shows led with the disappearance of an Air France passenger jet over the Atlantic on its way from Brazil to Paris. There was condemnation of the fatal shooting of Dr. George Tiller, one of very few U.S. physicians who performed late-term abortions, who was gunned down at his church on Sunday. And there was also the inevitable post-mortem of the “Britain’s Got Talent” contest result on Saturday, in which sudden media star Susan Boyle sang well but not well enough to ace out Diversity, the winning dance troupe.

For more Reuters political news, click here.

Photo credit: Photographer: REUTERS/Rebecca Cook (‘Buy American’ sign, in support of Detroit’s auto industry, is seen in the back of an auto scrap yard in Detroit, Michigan May 18, 2009.)

Comments
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The United States is overwhelmingly dominated by a free-wheeling capitalism ideology. The tiniest hint of socialism would cause a convulsion. It is like talk of converting to Islam in a deep South Christian state.

In a span of a single year mid-2008 to today, that deep belief in an all-powerful all-righteous market capitalism was shattered beyond recognition. The fundamentalists in Wall Street and many high places of capital worship have indeed convulsed. 99% are still in denial.

For signs of capitalism failure are pervasive, latest being GM. It is socialism that’s coming to save the day. What an extreme irony. Time to re-write the text books.

Even more ironic, it is that majority sector of American people, the non-elite and non-worshiper, the working people, who elected a black president who is intellectually strong enough to solve problems with both capitalism and socialism.

And thus created a national exist strategy for getting out of a black hole nightmare created by capitalism gone amuck.

Posted by The Real Deal | Report as abusive
 

My last three new vehicles have been GM. But to show my dislike for the government running companies and my dislike of the greedy unions I will not purchase a Chrysler or GM product. I ask others to do the same. Show loyalty to properly run companies.

Posted by sluke | Report as abusive
 

“Show loyalty to properly run companies.”

Properly run companies would never get into the situation that GM has ended up in. I work in the automotive industry, and GM’s fate is no suprise. They are a classic case of a company that bought itself to the top through acquisitions and in the meantime forgot how to make good cars. They have been fighting against consumer demands for the last 10 years.

The government is not running GM, they are just making sure that its inevitable demise doesn’t bring the rest of the automotive industry crumbling down with it. The government has little option other than to take some level of control.

A well managed bankruptcy (with a severe slimming) may be exactly what GM needs. Hopefully in 10 years time it will be back to making decent cars again.

Posted by Andy | Report as abusive
 

Seems as though the general dislike for the bankruptcy covered in part of this story continues on this comment board. I also agree with the feeling of irresponsibility which led them this far into trouble.

http://www.newsy.com/videos/gm_refuels_w ith_bankruptcy

Posted by Zeke | Report as abusive
 

the harsh treatment handed out to the auto dealers and other parties involved in the auto bankruptcies ,has been done in a way that would typify the actions that liberals want you think would only happen in a clinical capitalist no prisoner taken environment.the only caution that has been shown in the whole process is how the obama government has”walked on ice”as it was careful to make sure that the unions were not penalized,if you look back at the postings over the last six months this was forecast many times.

Posted by brian lee | Report as abusive
 

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