GM Enters Stretch Run To Exit Bankruptcy
It may not emerge from bankruptcy as quick as Chrysler, but GM is entering the stretch run, and can see the finish line. Tomorrow, the country's largest auto maker will be back in bankruptcy court to finalize plans to sell the "good assets" to a new GM that will emerge from bankruptcy with a clean balance sheet.
For all the objections we will hear, I see little that will stop this process from being completed in a few weeks.
To quote one veteran of corporate bankruptcy, "After seeing the courts back Chrysler in objection after objection, there's little reason to believe GM won't get the same treatment." On top of that, GM is getting full financial support from the U.S. Government. It's the backing of Uncle Sam that riles up many people. I doubt the court will care about whether or not cleaning up GM was a wise move by the Obama administration.
That won't stop those critical of the GM bail out/government supervised bankruptcy from continuing their boycott campaign against GM. From their stand point, buying a Chevy, Buick, Caddy, or GMC is a vote approving government intervention. They've been vocal in calling on Americans to turn their back on GM as a protest of Washington saving GM. I understand their arguments and frustrations, but do not agree with their call for a boycott.
Here's the problem with a boycott. What will it change? Will a lack of sales prompt the government to sell its stake in GM quicker? No. Will a lack of public support help GM find its way back to profitability? No.
In my opinion, protesting government intervention by boycotting GM is as flawed as the calls to "buy American simply because it's made in America." For years I have had people tell me they bought American even though they knew the quality of the car or truck was not first-rate. That makes no sense. You should buy the best built vehicle to meet your needs. If it's American-made, fantastic. If it's not, it will force the American auto makers to do better with future models.
Competition has forced Ford to step up its game. It will also force Chrysler and GM to do the same post-bankruptcy. Soon, GM will get a second chance with a cleaner balance sheet, stripped of debts. The company needs to show the new GM can win, not because it's an American company, or because it's being backed by the Federal government, but because it will make cars and trucks every bit as good as the competition.
- On CNBC.com - Special Report: The Fall Of General Motors
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