I thought I did this, but commentor MIB is still saying he's waiting, so here it goes.
Let's assume GM files for bankruptcy protection. It doesn't mean they close shop, but it should provide the opportunity for them to get their North American operation in order. Please note I'm saying North American operation because their Europe operation seems to be performing well as is the operation in China.
Union Contract Restructuring
It provides an opportunity for GM to rework some of the provisions they previously agreed to with the unions. It seems the big concession should be health plan they provide their workers now and after retirement. There has been some "discussion" concerning GM's, and other U.S. auto companies, participation in the union job bank. This definitely needs to end but I wonder if it is overblown, considering the number of people who have lost their jobs at GM with no backup.
The workers get the bad end of this deal, but if the company comes out of bankruptcy in better financial position, then those workers who want to work for GM until they retire, stand a better chance of getting their desire.
Company Restructuring
The company should be freer to restructure to help cut costs. I think this would mean they could sell assets and/or abandon partnerships that would require a lengthy negotiation and legal processes. Even though what I've learned about the current mess is that GM is still involved in the legal process with former Oldsmobile dealers. And, maybe new management can come in and do more things that current management is afraid to do.
Does it mean they get to merge divisions? Get rid of Pontiac? Get rid of Hummer? Get rid of Saab? Even at losses but they are free to take a big loss without having to worry about shareholders?
Shareholders and Creditors
They definitely get a chance to restructure their current debt, but that means the share holders and creditors get the short end of the stick.
What It Won't Do
It won't give GM time to design better cars. It won't give GM time to quickly change their image of building unreliable cars. It may not allow the company to cut costs as much as may be needed.
Who Suffers?
Of course the employees suffer, but so do the suppliers and the companies and employees of the companies "down stream" that indirectly rely on GM. The mutual fund companies and pension plans holding GM stock suffer, definitely in the short term and maybe in the long term as well. The U.S. economy suffers because a company as big as GM suffering, can affect the overall economy of the U.S.
But, again, the short term there will be pain, in the long term, there should be growth.
More later, real dot life is calling
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