Gerald Greenwald, a founding partner at Greenbriar Equity Group, joined CNBC today to give his opinion on the ailing economy and his hopes that GM can avoid Chapter 11 bankruptcy.
“Frankly it’s scary because I’m hoping that there’s an answer that keeps GM from bankruptcy; the federal government puts a plan together with them,” said the former vice chair of Chrysler. “But with this kind of burn rate, how much in loans are they going to need? How much federal money are they going to need and can they actually pay them off ever?”
Watch the video below to see what else Greenwald had to say about the economy
Greenwald continued, mentioning Conrail, the railroad company taken over by the federal government in the late 1970s.
“A scary thought that kept going through my mind the last couple of days, picture Conrail. We don’t really want a GM owned by the government for the next fifteen years,” Greenwald emphasized. At the same time, he explained the necessity of saving the floundering company, “It’s too much risk because we’re in a bad sect economy with high unemployment and it’s just going to spike unemployment if a company the size of GM goes down.”
General Motors released their fourth quarter earnings today, revealing worse than expected numbers. The company posted a loss of $5.9 billion for the last quarter and a total loss of $16.8 billion for 2008.