So what happens if GM goes under?

[Seen the light]

Any article to expected ramifications? How many people are going to lose their jobs?

[Idealism]

1. From personal knowledge

GM employs 250,000 people directly (not to mention supply-chain, local restaurants, etc.)

They are currently the 2nd biggest corporation (in terms of workers) in North America (1st- WalMart, 3rd-Citigroup)

[Seen the light]

2. But not ALL of them would lose their jobs right?

I assume there would be massive restructuring resulting in the losses of a LOT of jobs, but not all right? I admit that I'm not well-versed in this.

[Idealism]

3. Depends on what type of bankruptcy it is

If they have enough cash to maintain through restructuring (Chapter 11) then no, not all of them would lose their jobs, but i'd say over 3/4ths would.

The most likely thing, as GM is burning through over $1 billion per month currently, is that they won't have enough cash left to support their corporate functions and obligations through a restructuring process, meaning total liquidation would ensue. It would wipe out all 250,000 employees. This is the other type of bankruptcy, Chapter 7.

[Seen the light]

6. Um....

Holy crap!

I've fallen off in my news intake over the past couple of weeks, I see that was a mistake.

[Idealism]

11. The news wasn't welcomed around the world

Dow Futures are down 350 points, Asian markets are crashing all over...

http://money.cnn.com/data/afterhours/

[jwirr]

14. China will be on our ass again in the morning. We will be lucky if they

do not call their markers in.

[Idealism]

15. These are the markets currently open, they're all down

Australia ASX 100 -86.70 -2.92% 2,882.60 12/12 3:46pm
Australia ASX All Ords -95.30 -2.70% 3,438.90 12/12 3:45pm
Australia ASX Mid-cap 50 -106.30 -3.28% 3,137.20 12/12 3:45pm
Hong Kong Hang Seng -1,076.69 -6.90% 14,537.21 12/12 12:45pm
Hong Kong HSCC Red Chip -249.99 -7.27% 3,187.30 12/12 12:46pm
Japan Nikkei 225 -367.38 -4.21% 8,353.17 12/12 12:45pm


Japanese markets are wayy down, and they just opened up 49 minutes ago

[Truth2Tell]

4. Looks like we get to find out. nt

[MazeRat7]

5. They won't go "under" they will file Chapter 11 and get "restructured"...

under the bright light of their creditors, unions, and the federal government. In other words, they will be forced to change their "business model" to something that will be profitable for all (including paying their debt/pensions/etc) or in several years they will fold completely and their tangible assets (real estate, equipment, IP, etc) will be sold to the highest bidder.

Peace,
MZr7

[1gobluedem]

7. Sure...

And then we'll all join hands and sing kum ba yah and celebrate this wonderful event.

Millions of Americans will be negatively affected. That's what will happen.

[Idealism]

10. I wouldn't be so sure its headed for Chapter 11

More like Chapter 7, GM lacks enough cash to sustain its operations during a restructuring bankruptcy. Chapter 7 means bye-bye.

[amandabeech]

13. In order to reorganize under Chapter 11, the debtor, who is usually still running the company,

must have what is known as "debtor in possession" financing to keep them going through the reorganization.

If DIP financing is not available, then almost certainly the Chapter 11 reorganization would be converted into a Chapter 7 liquidation.

Perhaps once Obama is in, there will be a possibility of the feds providing DIP financing, but it may be too late.

Then there is the question of whether anyone will buy a vehicle from a "bankrupt" company.

A vehicle is a large, long-term investment, unlike airline tickets.

Bankruptcy may very well discourage anyone from purchasing from the bankrupt.

If GM goes down, it could take the others with it due to disruption in suppliers and the belief that if GM goes down, the others will, too.

Then there is the low-information issue. If GM goes bankrupt in any way, many people may assume that all U.S. automakers are bankrupt.

That would hurt Ford, which has been doing a lot of restructuring and actually turned a profit in the first quarter of 2008.

[roamer65]

8. The entire GM persion system will be dumped on the federal gov't

and retirees will get about 20 cents on the dollar.

[Double T]

9. The entire financial world will come to an end as the dominoes start falling......

in every direction. Man the torches, pitchforks and clubs; there is 'work' to be done.....

[Odin2005]

12. Great Depression II. n/t.

[defendandprotect]

16. We buy the plants - keep the workers - BUILD ELECTRIC CARS --!!!

[zagging]

17. My take

Aside from immediate panic,

1. UAW permanently busted
2. 2.5 Billion in common stock lost, pensions transferred to PBGC
3. PBGC gets permanent budget consideration
4. Ford stock crashes, Chrysler sold off in lots
5. Ford gets guaranteed preferential loans that GM should have also gotten
6. GM rises from the ashes of bankruptcy
7. GM management recycled with approval by Car Czar and clueless aides
8. New GM common stock issued
9. Ford barely able to compete with government sanctioned GM and unfair foreign trade

etc...