Over the last 20 years or so the management had decided to keep dividends to the owners UP and investments in plant and tools DOWN.
They found a magic car called the SUV where they could make piles of money. Their attention to their other lines wandered.
In effect, GM was LOOTED by its management.
At the same time the UAW (the Union) had made a deal with GM to take over management of the health benefit program and all GM had to do was pay them $25 billion.
Well, surprise, surprise, GM didn't have the $25 billion to pay, and it was time to 'fess up!
Ordinarily a company would have been busted down to its jockey shorts and had its assets sold on the open market. The employees would be paid. Postage accounts balanced and paid and closed. Taxes paid. Bondholders paid. And so on according to law.
All things considered I think a sale of the assets would have ended up yielding barely enough money to pay the employees (and that would include payments to retirement funds held in trust, and quite possibly to the health care fund).
Even the post office would be cut out of the picture ~ because this was going to be a very bad bankruptcy.
Now that the Chinese deal for the Hummer has fallen through, it's possible the enabling legislation was not really sufficient to keep the company in money, and this successor organization is going to go bankrupt as well ~ probably in weeks.
Only a bunch of doufous downtown Chicago Democrats with Cadillacs on their minds would think it of great public benefit to bail out a looted company like GM.
Interesting analysis. I will be watching. One of my gnomes and I if have noted, and when they try to go public, you are buying a big chunk of VEBA liability no matter what they say. Their is no their-their. Chrysler is dead man walking, GM has product but like I said, my jury is still out. I wish I had more of how and why you think they only have weeks...