Convexity123

Detroit's Hail Mary: Saving the Automakers

GM has been on the road to bankruptcy for years. It is just now getting close to the end. Injecting $20 Billion of taxpayer money into GM won't accomplish anything other than delay the inevitable. Has GM laid out their plan to return to prosperity?

GM's gameplan to prosperity seems to be to destroy $10+ Billion in capital investment (via the shutdown of factories and layoff of thousands of employees). I guess GM figures that if it reduced auto supply (i.e., effectively shut down Chrysler) will help raise prices, and all the Chrysler buyers will turn to purchase GM products. Hmmm? Somehow I don't think this will work ...

I seriously doubt the above strategy will work.