GM and Chrysler LLC shades off dealers for the sake of survival

On June 3, 2009, at a Senate Commerce Committee hearing executives of the GM and Chrysler LLC said that the elimination of their dealers is a critical step for their survival. The two major American automakers went bankrupt and declared to eliminate more than 2,300 dealerships. This means an estimated 100,000 people will lose their jobs which forced the government to look into the matter.

In his testimony, Frederick A. Henderson, interim CEO of GM, said that his company had no choice but to sacrifice for the sake of a “stronger and more viable GM.” In his testimony, Jim Press, Chrysler President, said that in order for a successful merger with Fiat SpA, the company required a “quick turnaround of its dealer network.”

However, Senator John Rockfeller, chairman of the panel, was not satisfied with their explanation. He said that the companies, who received government bailout money and not helping their local dealers and customers, were doing wrong.

This move by the two auto companies shows failure of the Obama administration to protect US jobs. However, the government has to admit that only giving away money would not change the financial condition of the companies. I think, along with stimulus packages, the present American government should work on reforming their overall business and corporate sector to survive in the future.

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GM Bankruptcy: Toughest Challenge for Barack Obama

The expected thing happened today- General Motors filed for bankruptcy. The company had no other option but to do so. I know that many people are wondering what went wrong for the company that has been for many years the largest employer in USA. The emergence of the company 101 years ago perhaps took place at the same time of America’s entrance in the global scene as the largest economy. The company has already received nearly $20 billion from the government and another $30 billion is supposed to come. In return, the US government will get roughly 60% of share. So, Obama government will be at the helm of this company for sometimes.

The plan is very simple- to cut cost, to shed off many workers, close some manufacturing plants and thus the company will become much smaller than it is now. Obama and his team think that a smaller but more efficient company will emerge and it will become profitable soon. If it happens then no problem. Obama will get all the praise and people will remember him as a great president for many years. However, many people are skeptical about the turn around of the fortune of this company and to be honest with you, I am one of them.

That is perhaps why, I feel some sympathy for President Obama. After all, economic recession did not start during his reign and the same goes for GM problems. He just inherited them from George Bush. It is a bit unfair that he Obama has to deal with both these two huge problems that have affected US economy in a very negative way. So, if the condition of GM worsens in the next few years then it may have serious political implication for his reelection bid in 2012. That is why, I feel that it is very important for Obama and his team to give this message to the people that the condition of General Motors is very bad and if it goes worse then they should not blamed unfairly. Instead, I would advise his PR team to focus on the fact that he did not try to avoid the issue. Rather, he accepted the challenge and tried to do something about it.

General Motors Getting Bankrupt: May be it is Good

For quite some time, we have heard a lot of rumors about the problems of General Motors and other US automakers. According to a CNN report: General Motors on the brink. From the heading of the report written by Chris Isidore, you can easily understand what is going to happen. Many Americans considered GM to be an “icon of American manufacturing”. So, this icon is failing and falling very hard. If there is a take over from the US government then before that, GM needs to get some kind of bankruptcy protection from the court so that it can decrease many costs involving the stake holders. So, many workers would get much less money from the fallout and in the end, they are going to suffer a lot.

There is no doubt that many people will lose jobs in the coming months in GM. Also, the company will have to close down some factories to cut cost. Many retired workers will also suffer some kind of reduction in their pension. Many dealers and their workers (in dealer shops) will also suffer. So, it will send some kind of a shockwave to the US economy.

President Barack Obama will give a speech to the nation tomorrow and in it, he is expected to talk a lot about GM bankruptcy. He thinks that it is best for the company and for the US economy. I have similar idea too. I think that General Motors is in dire condition now. If the problem is not addressed at this moment then it can be too late to do something later. Do you agree with me?