With General Motors now negotiating with debtors and union leaders for a drastic revision to current agreements, it's time to stand back and reflect on the bigger impact of this drama.
The most obvious impact of an imploding auto industry is the potential loss of hundreds of
thousands of jobs that hang in the balance as GM's fate is determined -- this cannot and should not be underestimated -- GM's bankruptcy will hit workers across America very hard.
But there is another consequence of great importance.
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Let's be clear about the goal of this reorganization: The elimination of significant debt and renegotiation of once sacred union contracts that at one point seemed untouchable.
While it is clear General Motors does not take these obligations lightly, they are going to take action. The Auto Task Force (the U.S. Government) has mandated that change must occur towards viability. This was not a suggestion. It is a requirement for additional funds that the automakers needs to avoid complete collapse.