With General Motors and Chrysler soon to follow Lehman Brothers down the toilet the question begs:

With bankruptcy appearing inevitable since the mid- 1980’s, why did GM get $13.4 billion from the taxpayers last year and what did they do with it? What about the $6 billion to GMAC?

Is it possible to get some of it back?

GM’s bankruptcy will be the largest and most complicated in US history. Reorganization will not save this behemoth and the company will be liquidated. Gone will be millions of manufacturing and production services jobs. Gone will be the tax bases of several states and municipalities. Gone will be hundreds if not thousands of automobile dealerships and hundreds of thousands of dealership jobs.

The company will have to pay billions out of receivership to secured creditors and tens of billions more will be simply written off; money due to dealers, pension obligations, mortgages on facilities and unsecured corporate loans. There will be billions in Credit Default Swaps triggered with more bankruptcies ricocheting throughout the already battered bond, banking and insurance food chains. With GM delisted a thousand points will come off the yearly lows of the Dow Jones Industrial Average. Car owners will be at sea regarding warranty coverage. Parts and service for GM rattletraps will become more difficult to find. Independent suppliers will lose their best – and in some cases only – customer … with tens of thousands more jobs lost as a result.

Chrysler’s bankruptcy will be monumental as well but behind the shadow if its big brother. Having spent the best of the last thirty years teetering in and out of default and failed in its embrace of Daimler its disappearance will be as that of Jacob Marley’s ghost save for the millions more ejected onto the unemployment rolls.

Other makers worldwide are in difficulty and will be severely affected by the GM bankruptcy; Opel, Fiat, Peugeot, Isuzu, Mitsubishi.

GM survived the Great Depression, World War Two, the blitz of German then Japanese imports in the 1960’s and 1970’s and was responsible for cultural icons such as the ’57 Chevy’ the Cadillac Fleetwood, the Oldsmobile ‘4-4-2’ and the Corvette. It also produced zillions of mediocre rolling junk piles that guzzled gasoline and were strikingly unsafe; its emphasis on large, heavy SUV’s and its bloated cost structure, garbled management direction(s), poor engineering, and oversized dealer network spelled its demise.

When GM finally disappears, what will remain of it?

Oldsmobile disappeared as a brand in 2000, a move that cost the company over $1 billion mostly in payments to Olds dealers who cried foul over their source of income being eliminated. Since then, other GM dealers re- wrote contracts with the company requiring exorbitant separation payments in the event of a brand suspension or a default. It will be interesting to see if or how these agreements can survive the Court.

Of the remaining brands within GM, there is little to attract other than the legendary Chevrolet, which is likely to be bought out of bankruptcy by Dubai’s or some other Sovereign Wealth Fund. They will then affix the nameplate onto some Euro- Jap shit- box. Consider ‘Chevy’ is as American as Budweiser yet that brand was also sold to a foreign interest last year so that America becomes less so with the proceeding of this depression. Cadillac may remain part of a radically smaller GM if the company can justify Chapter 11 rather than liquidation. Saturn was posted as an ‘Alternative General Motors’ when founded in 1989 but became another ‘Me Too’ division within the company, neither they nor Pontiac have any distinctive product lines that will give them a chance at outside survival.

Hummer is a GM branded vehicle made by AM General which manufactures the military HMMWV which is the predecessor for the civilian H1 or ‘larger’ Hummer. The marketing arrangement between AM General and GM will perish in bankruptcy and a new marketing arrangement made with another large company, with Ford being the most likely nameplate carrier. Since the H2 and H3 are based on GMC – Chevy light truck chassis it is likely the next carrier for the brand will have to provide a truck chassis upon which the Hummer components can be assembled. As boring and unoriginal as the Hummer is, there is a persistent if small market for extravagant consumption displays.

Other casualties are probably the GMC nameplate and the overseas GM operations that would be purchased by host- country operators.

GM says China business stay unaffected

Apr. 1, 2009 (China Knowledge) – General Motors China said on Monday its businesses in the country will stay unaffected after General Motors’ CEO Rick Wagoner was forced to resign by the Obama administration, China Daily reported.

GE and its partners are optimistic about the Chinese market and its future development plans in the world’s second-largest auto market.

The automaker will continue to introduce world-class products and services to China to meet local customers’ demand. In addition, it will roll out five or more new models in China under brands of Buick and Chevrolet over the next one or two years, according to the report.

Wagoner has placed much importance to the China market and made China the most important market in its global strategy during the past decade. His development and investment strategies in China helped the company maintain its leadership in the country for many years, said the paper.

As the largest overseas auto maker in China, GM earlier raised its sales growth forecast in the country for 2009. It expects its car sales there to grow 5% to 10% as compared to the previous less than 3%.

This would mean the Chinese would have to buy enough GM operations.capacity to continue to produce these cars, since the bulk of the unassembled cars are made outside of China. As the Chinese recession gathers force it is unlikely that even this will provide much comfort to US autoworkers looking for something useful and interesting to do. GM’s is part of the whole of world auto production overcapacity. If the Chinese market collapses there will be no work and if it doesn’t the Chinese will undoubtedly move the manufactuing in total to the Mainland.