GM: Another American Icon to Fall

By Bill Glynn

GM is the latest American company to fall - as it is certain to declare bankruptcy or do a pre-packaged out of court deal. Either way, if you watch the happenings, bondholders and unions are inflexible waiting for a "better deal" and betting on the government bailout. I believe hope is not a strategy. One American icon company after another is falling. And there will be more. Our consumption economy has stalled and is failing to support businesses across every industry.

GM is a high profile case as was Merrill Lynch, AIG, and Lehman Brothers. In this case - and as I said, unions are a big part of the problem - instead of everyone pooling interests and rapidly executing a plan, the opposite is happening. The groups with a stranglehold on the business are just dug in and hoping that government will throw money down a black hole so they can continue to reap the rewards of a failed business and industry. This company and the industry is hamstrung and on a global basis, a dinosaur. Even if all works out for GM, no one is buying cars; so the whole pipeline, from manufacturing down to the auto dealers, is filled to capacity.

The government is trying new tricks to incentivize consumers to purchase cars, but people don't have a clue what all that means. All we know is that they're hoarding money and making do with what they have. How then can GM or Ford survive when the outlook for product sales is so grim? [more...]