The story behind the Detroit bankruptcies

The Detroit News has published a long, long story today about the bankruptcies of GM and Chrysler.
For those of you who checked in day to day, watching and wondering what would happen to Saab and its corporate parent, this is a great reminder of the times we all went through.
It’s amazing to read some of the close calls that were made and some of the things were done and said behind the scenes.
For example:

  • Chrysler were incredibly close to dying. The auto task force was split 4-4 on whether to save the company or ditch it. “None of us were brave enough,” Rattner said. “We just said to ourselves, ‘That’s 300,000 jobs in one day, when you have an alternative that’s not stupid.”
  • GM quite possibly would have taken over Chrysler if more Chrysler jobs were in the US. The task force discovered that allowing that merger would have been cheaper and saved more jobs, but those jobs would have mostly been in Canada. They also found this out too late in the piece, so the merge with Fiat went ahead with a merger with GM held as a fallback option.
  • GM’s financial chief claimed their complex accounting system wouldn’t allow them to exit bankruptcy in the timeframe the task force wanted. His proposed delays would have cost as much as one billion dollars. One of the taskforce members wasn’t impressed, and said “I can’t think of a problem in the world I can’t solve for a $1 billion.” They got it done on time.

It’s a very interesting read and highly recommended.
One interesting side note…..
It does mention the offloading of Saab, Hummer, Saturn and Pontiac, but there’s no mention of the sale of Opel. I’ve always had the impression that this was part of the undertaking GM gave as a condition for assistance, but perhaps it wasn’t. That would go a long way to explaining why they could about-face they way they did.

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