Behind The Wheel
- Growing Sub-Prime Auto Loans - New Troubles for Automakers?
- Savings at the Pump Still Supreme for Car Buyers
- GM Says It's Dropping Out of Super Bowl Ad Race
- Two New Models, Two Different Drivers in Mind
- GM Still Likes Its No-Facebook Ad Strategy
- World's Biggest Brands Flex Their Muscles
- A New World Record: 80 Million Vehicles... and Counting
- Is Toyota Back?
- Ford Cuts Summer Idle Time at US Plants, Will GM Follow?
- Auto Stocks Stuck in Neutral
MOST SHARED
- Greece to Leave Euro Zone on June 18: Wealth Manager
- With or Without Euro, Europe Must Raise Its Game
- Labor Board Member Resigns Over Leak to GOP Allies
- Why German, UK Bond Yields Will Go Even Lower
- Italy 2-Year Borrowing Costs at Peak Since December
- Greek Party Leading Polls Pledges 'Business-Friendly' Country
- Southern Europeans Wire Cash to Safer North
- Olive Oil Price Dip Adds to European Woes
- TNK-BP CEO Resigned for 'Personal Reasons': BP
- Newedge to Leave Greek Stock Market
- A New Look at the ‘New Poor’
- Six Pack: Beer Buzz of the Week
- Greek Exit Could Trigger 50% Fall in Euro Stocks: Analyst
- Under Pressure, FHA Skews to Wealthier Home Buyers
- Big Stock Upside for Hudson City Deal: Analyst
- 5 High-Yield Stocks Ready to Boost Dividends
- Yoshikami: Four Things You Need to Know About Gold Now
- Steinbock: The Euro Zone Endgame Begins
- Option Bulls Take Another Shot on Idenix
- Greece to Leave Euro Zone on June 18: Wealth Manager
- Main Players in the Greek Election
- Italy 2-Year Borrowing Costs at Peak Since December
- Euro Bond Wins Supporters, but Details Remain Vague
- German, UK Bond Yields Will Go Even Lower
- Labor Board Member Resigns Over Leak to GOP Allies
- Loan Scheme Launches for Youth Business Start-Ups
- Southern Europeans Wire Cash to Safer North
- With or Without Euro, Europe Must Raise Its Game
RSS FEED
$50 Billion! How's That For A Sticker Price?
Text Size 
CNBC Reporter
 |
$50 Billion!!!!!!!!
If that doesn't make your eyes roll, think about this: The price tag could go past $50 Billion.
This is ugly cost of re-structuring the country's largest auto maker. We knew it would cost a fortune, but many people are shaking their heads right now and saying to themselves, "How much are we going to spend to clean up GM?" Since December, the Treasury Department has loaned GM $19.4 Billion. Now, the company will need $7.6 Billion after it goes into bankruptcy next week.
None of this should surprise people who have followed this story from the beginning. Remember, when the big 3 CEOs testified on Capitol Hill last fall, economist Mark Zandi said the auto industry would need between $75 Billion and $125 Billion to avoid bankruptcy. In other words, saving the Big 3 as they restructured was going to be a $100 Billion project. So now that two of the big 3 have gone into Chapter 11, why are so many people recoiling at that price tag? My guess is because nobody knows for sure exactly how much GM in bankruptcy will cost.
One thing is clear, the Treasury Department is so far down the road with GM, it can't turn back now. It's already committed to making GM and Chrysler leaner and more competitive. If there's any good news for Treasury it's the fact Chrysler has gone through bankruptcy quicker, and with fewer hiccups than expected. In fact, the "new" Chrysler could be out of bankruptcy and part of an alliance with Italy's Fiat by the end of next week. The old liabilities of Chrysler will be fought over in bankruptcy court for months to come. GM will not have as smooth or as quick of a trip through bankruptcy court. It's a bigger, and far more complex company than Chrysler. And as we are now learning, GM in bankruptcy will cost taxpayers far more than many originally expected.
Addicted to Oil
Tonight at 8 Eastern on CNBC, be sure to watch a special report. CNBC Reports: Breaking the Oil Addiction. Over the course of an hour we'll look at how several industries are trying to re-make themselves with new energy sources, new technology, and a new commitment to thriving on less oil. It's an hour that promises to shed new insight into how far American business.
_____________________________________
Click on Ticker to Track Corporate News:
- Ford Motor [F
Loading...
()
]
- General Motors [GM
Loading...
()
]
- Toyota Motor [TM
Loading...
()
]
- Nissan [NSANY
Loading...
()
]
- Honda Motor [HMC
Loading...
()
]
_____________________________________
Questions? Comments?
Data is a real-time snapshot *Data is delayed at least 15 minutes
