Mister Jimmy

Time for GM to Declare Bankruptcy?

A GM bankruptcy is not likely. Treasury Secretary Geithner appeared on PBS earlier this week, and aid to the U.S. auto industry was one of the topics of discussion. He said the current challenge facing the industry is partially a result of a larger financial crisis. “The industry is facing just exceptional challenges. Part of the challenges they brought on themselves and part of those challenges are just the function of the fact that we’re facing such a huge collapse in demand around the world and a very difficult financing environment. And what we want to do is figure out what restructuring plan will leave these firms in a position where they’re going to be viable over time without government support.” Geithner said bankruptcy is not the best option for the auto industry right now. “We’re going through a very challenging period in the American economy as a whole, and as the President said and the previous administration said, a disorderly failure of these firms in this economy would cause enormous damage in terms of job loss across a whole range of industries and in a recession like this you have to consider things you would never consider in a more normal economic environment.”