Don Diego's Dream Car

What would have happened to them? There were no competing reorganization plans offered by any private investors. Since this was the only option on the table all of the jobs would have been lost if the government hadn't provided DIP financing. It is ludicrous to think competitors would have bought up old GM manufacturing faculties. Why would they do that when State governments all across the country are lining up to build them brand new plants to their specifications on the tax payers dime?

The loss of this many jobs (all of their suppliers would have went bankrupt too) would have dealt the economy a death blow.

Mal - who would have supplied the demand for cars if these 2 companies had dissolved? There would have been a multi- million shortfall in production.

Demand would have fallen off the curve once we entered the great depression. Secondly many of their competitors went on record and said a GM/Chrysler liquidation would have jeopardized their financial health too as they use many of the same suppliers, and those suppliers would have went out business after not getting paid. Toyota said their best case would be that they were able to get their U.S. output up to existing levels (no expansion) after 2-3 years if GM went under.

Automobiles are a complex business. They simply can't be churned out over night. Auto factories also can't be built or repurposed overnight either. It takes years. If your fully financed and have everything in place it takes five years to launch a new model.

The U.S. government spent years rebuilding the Japanese auto business. More recently the Korean government has spent years and billions of dollars building the Korean auto business. Most recently despite large amounts of government money Australia can't find an auto company willing to build cars there. GM and Toyota have closed shop, and Toyota says no matter how much money the government was willing to spend it just wasn't feasible to build automobiles there because of a lack of suppliers. To think conservatives were willing to give our whole domestic industry away.

I thought DD would be more of a pimp mobile person.

Mal - you answered the question would somebody have stepped up to buy the plants and the brands. There would have been a shortage of manufacturing capacity even for the reduced demand of the time. However the govt jumped in gave Chrysler to fiat and took over GM. Somebody would have stepped in to buy GM for pennies on the dollar. No govt money would have been spent.

Lol that is a bizarre way of looking at it, and ignores the reality of modern auto manufacturing. Nobody would have bought the plants and nothing would have been usable because it was a take all situation in order to have one functioning vehicle. Plus taxpayers would have been on the hook for quite a bit as a consequence of those companies being shut down.

It's easier for a company to give bonuses to their employees when the company doesn't pay federal income taxes. I would think that your frequent outcries about corporate welfare would negate any positive feelings about the GM employee bonuses....but since the government bailout (which really only guaranteed union pensions and screwed bond holders) cost taxpayers many billions of lost dollars was an ObeyMe action, it is all okay.

Potential trouble down the road - $24b in unfunded pension fund liabilities

"The company also reported that the underfunded gap for its U.S. pension plans grew to $10.9 billion from $7.3 billion at the end of 2013. The gap for its pension plans outside the U.S. increased to $13.1 billion from $12.4 billion in that same period."

If one deducts this unfunded pension debt from GM's already government subsidized profits, the company lost $1.3 billion. Hiding debt in this fashion doesn't make the debt disappear, although this game of "hide and go seek" does make Liberals feel better.