The Democrats Had No Trouble Pulling the Plug on Terri Schiavo...
The federal government already owns some banks, is it time to add an automaker? General Motors is more insolvent than Medicare and Social Security. If Barack Obama intends to preserve this dinosaur, it’s going to take hundreds of billions:
[General Motors], dependent on government aid for survival, reported a fourth-quarter loss of $9.6bn, bringing the 2008 loss to $30.9bn. GM has racked up losses totalling $86.6bn during the past four years.
Adding to its woes, GM disclosed that its pension fund, one of the biggest in the US, has swung in the past year from a $20bn surplus to a $12.4bn deficit.
Kimberly Rodriguez, a restructuring specialist at Grant Thornton, described the going-concern tag as “a stamp on a situation that we all already recognise. The key is how people react. It does provide a vehicle for someone to get out of a lending situation or a commercial agreement.”
Ms Rodriguez said the doubt over GM’s status underlined the need for speedy decisions – one way or the other – on future government aid, not only for GM but also its parts suppliers.
GM has received $13.4bn in emergency loans from the US government and last week applied for another $16.6bn.
In addition, its foreign subsidiaries have asked for aid from governments in Canada, Germany, the UK, Sweden, Thailand and South Korea.
That’s seven countries that are paying to keep General Motors on life support. It would be much cheaper to start a car company from scratch - but that would sound a death knell for the United Auto Workers. Will Barack Obama stand with the union, or the taxpayers?