Is GM Going Bankrupt?

I am probably going to get a lot of heat from GM people and consumers who are GM owners and followers of the product, but don’t kill the messenger here.

The US government now has a "working group" on the automobile industry and are expected in Detroit friday for talks with representatives of troubled US automakers seeking government help and their unions.
The group are going to meet with top managers of General Motors and Chrysler along with leaders of the United Auto Workers (UAW) union as they try to chart a way to restructure the two companies to avoid bankruptcy.
The announcement came after GM's auditors last week voiced "substantial doubt" about the struggling automaker's ability to survive a collapse of global auto sales amid a deepening recession

GM chief executive Rick Wagoner has repeatedly warned that the largest US automaker would likely be unable to survive a bankruptcy filing because consumers would be unwilling to buy GM's vehicles.
GM is funding its operations with 13.4 billion dollars in emergency loans from the US government and said last month it will need an additional 22.6 billion in government aid if it is to survive.
But on Friday, it denied reports that it was considering a prepackaged reorganization financed by the government under the "Chapter 11" provisions of the US bankruptcy code as a solution to its financial woes.
But, two top Republican senators on Sunday called for struggling General Motors to seek bankruptcy rather than fresh government aid as the best path to long-term recovery.
"I think the best thing that could probably happen to General Motors, in my view, is they go into Chapter 11," John McCain, President Barack Obama's beaten opponent in last year's election, told "Fox News Sunday."
"They reorganize, they renegotiate their union-management contracts and come out of it a stronger, better, leaner and more competitive automotive industry," he said.
Richard Shelby, the top Republican on the Senate's banking committee, said the government should stop propping up the US auto industry as well as giant banks such as Citigroup.
"Subsidization of anything for very long never works," he said on ABC's "This Week."

Meanwhile, the Canadian Auto Workers announced a tentative deal with GM on Sunday to freeze wages and pensions, and cut paid vacations, as part of GM's North America restructuring.
In the United States, the United Auto Workers last month reached an outline deal to allow Ford to restructure its 13.2 billion dollar obligation to a trust fund for retirees' health care benefits.
A similar agreement is expected shortly at GM and Chrysler because the UAW union maintains similar contracts at each of the Detroit Three.

My prediction is that GM or Chrysler will probably file for chapter 11. A big problem they all have is the UAW, they have bled the auto industry dry for the last 30 years. The next few weeks will be interesting to say the least. What about Ford? That will be a future blog.
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