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  • Has General Motors Earned a Bailout? [View article]
    Whether GM has earned a bailout or not is largely irrelevant. What really matters is that if we give GM $25 or $50 billion are we going to be in the same position a year or two down the road? In other words, is giving money to GM the equivalent of throwing money into a rathole?

    Given GM's current cost structure, it is hard to see a viable path forward. GM is basically paying $30/hr for labor more then the transplants when fully amortized (including legacy costs). This is a significant cost advantage which will simply, at some point, push GM back to bankruptcy's door again. So, the only finanical sense to make of this is that GM has to lower its cost structure to that of the transplants. Otherwise, giving them money just puts off the inevitable.
    Nov 26 11:00 am |Rating: +1 0
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