Is General Motor Still in Deep Pit-Hole?

General Motor has been said to be in bankruptcy for a while. I am pretty sure that consumers won’t buy a car from a bankrupt company that lead to the reason why GM says its sales would drop even faster than they are now while it’s in bankruptcy court. Plus, the bargain hunters who might want to buy a GM car would want a discount or further negotiate, in my opinion. If GM is right and their sales drop by 2.5 million vehicles and rebates climb another $4,000 a car, the company would need another $11 billion in addition to the $12 billion they already say they need for a loan. That’s $23 billion in DIP financing that the government has to support just for GM!!!!.

The notion that consumers will shun the cars of a bankrupt carmaker is unproven. But what those bleating for a GM bankruptcy are calling for is the government to lend, instead of $12 billion to $18 billion, maybe $23 billion to $29 billion. And they are willing to do it without knowing if buyers will come back to GM brands after the public beating that the company will take in the press for ending up in bankruptcy. No one will know what will happen next to General Motors.

However, based from Bloomberg Businessweek, they said: "GM paid off $8.4 billion in loans to the U.S. Treasury and the governments of Ontario and Canada about five years early" (Bloomberg Businessweek Autos). But I think that they haven't yet since returning $8.4 billion soon after they decleare boarderline of bankruptcy. If they did manage to recover and pay back, I would have seen it on TV and other major publications. Anyways, what do we know? GM is starting to to recover, but it's going to take some time.


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