Posted on 11/01/2012 8:01:18 AM PDT by SeekAndFind
President Obama has been touting his bailout of General Motors as a reason for people in Michigan and Ohio to vote for him. However, there is one small problem with his argument. Regardless of the past, GM’s only hope for long-term survival nowis if Mitt Romney wins on November 6.
If Obama is reelected, GM is doomed to a second bankruptcy (or to another taxpayer bailout). This is because Obama is committed to doubling down on the two policies that drove GM bankrupt in the first place: a weak, unstable dollar, and unrealistic corporate average fuel economy (CAFE) requirements. In contrast, Romney has promised to replace Fed Chairman Ben Bernanke, and he has expressed skepticism regarding Obama’s insane 54.5 miles per gallon (MPG) CAFE target.
Hey, wait a minute! Isn’t GM highly profitable and doing great? No, it’s not.
GM’s U.S. market share continues to decline, its management is in turmoil, its Opel subsidiary in Europe is foundering, and its finances are far more precarious than bailout supporters would like to admit.
Here are two data points regarding GM’s overall financial condition:
* The Obama administration “invested” $67.5 billion* in order to create a company with a tangible net worth of $3.1 billion**.
* As shown here : http://politicalcalculations.blogspot.com/2012/08/is-gm-headed-back-to-bankruptcy.html, as of the end of the second quarter, GM’s “Altman Z-Score” was only 0.66. For a manufacturing company, an Altman Z-Score, “…of less than 1.81 indicates that a company is in the danger zone for going through bankruptcy proceedings in the future.”
(Excerpt) Read more at forbes.com ...
GM is on the brink of a meltdown.
They have far to many employees - union people on shut-down production lines are sitting around playing cards all day.
But their part owner - the US government - will not permit a layoff because it would upset the Obama narative and would drive up the unemployment numbers.
After the election watch for a big layoff, especially if Romney wins.
I’m not sure GM will survive Obama’s help. Public opinion of them has been so severely wounded that I’m not sure they can recover without bankruptcy, selloff, and reorganization.
I think “the big 3” is going to become the big 2 or big 1 before all is said and done.
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