General Motors: Still on the Fritz
Thursday, August 6th, 2009
If you’ve been following the news out of the US recession at all, you’ll be aware of how General Motors recently beat all the experts’ expectations by successfully reorganizing under American bankruptcy laws (“section 363” and twenty-three skidoo!) within the actual forty days that the company and the Obama administration claimed was all that was needed. But according to Matthias Ruch, New York correspondent for the Financial Times Deutschland (GM, the little giant), it’s all going to be uphill from here on out. From his lede: “Opel’s mother-company is now celebrating her own rebirth. But this new beginning is more form than substance [German: mehr Schein als Sein]: the former auto-giant is just blundering on aimlessly.”
That rapid reorganization was indeed an impressive achievement, though it necessarily had to be accomplished in broad, slashing strokes: $40 billion in debts were canceled outright, and the former auto-making colossus was split into a “good” and a “bad” company, the latter (now with the catchy monniker Motors Liquidation Company, if you’re in the market for some cheap assembly-line equipment) now little more than a pile (better in German: a Schrotthalde) of discontinued brands and factories. But Ruch lets us know that the new company still retains financial “obligations” in the double-figure $ billions range. (more…)
