The Wall Street Journal lays out the case for GM to let the bankruptcy process resolve their issues here
This is exactly why the bankruptcy law was created in the first place. It allows a company with an unviable business model to either do the things it needs to do to fix itself, or be sold off or dismantled in way that protects the interests of the people who are owed money or who have purchased the company’s products in the past.
Having worked inside GM (not as an employee), the thing that I think the Harvard Law Professor is missing is the “cost” of cutting loose those “legacy” costs of the promises to the UAW workers. Many of the people in the UAW are third generation auto workers. Reducing the pensions and retiree benefits to a current worker’s father and grandfather will lead to sabotage, aggression, violence and deliberately defective products. I can’t see a GM filled with angry UAW workers surviving, and I doubt Toyota wants to buy additional assembly plant capacity and the “legacy” that GM leaves behind.
TheStreet.com seems to be thinking the same thing.
Tags: bankruptcy, GM