Sorry, but this financial crisis stuff is just too big to let go for too long. It’s taken another twist today with GM’s boss Rick Wagoner doing an interview with Automotive News:
General Motors CEO Rick Wagoner says GM’s financial distress is so dire that it must line up financial assistance from Washington before President-elect Barack Obama takes office in January.
“This is an issue that needs to be addressed urgently,” Wagoner said during an exclusive interview today with Automotive News. Now is the time to “overshoot, not undershoot” when it comes to assistance for the auto industry, he added.
The problems with this scenario are numerous.
First, you’ve got the fact that President Bush still holds the reins until January 20, and he’s already said “no” once. GM are eligible for a share of $25billion that’s aimed at getting more fuel efficient cars on the road, but what they want is access to another $25billion just to keep the lights on.
There are a number of commentators now saying that maybe GM should get a payout, that the consequences of letting them go bankrupt would be too dire to contemplate:
“If GM goes down, it will take down companies like Lear and Johnson Controls,” Wolkonowicz says. “That will shut Ford down, and it would shut down production at Toyota and Honda. They would go down like dominoes.”
One supplier CEO agreed. “Any occurrence of bad debt would be a death blow to the industry,” said the executive, who asked not to be identified because he does business with the Detroit 3.
“If GM filed for bankruptcy, … the impact would be so catastrophic that it would make the current industrial downturn look like a walk in the park.”
But many are also saying that if they do get a payout, there should be some pretty serious strings attached. Strings that look like nooses, perhaps. Around the collective necks of the current powers that be. This from the Wall Street Journal: