So much for the Big 3. GM filed for bankruptcy today, becoming the country’s second automaker after Chrysler to go under in just over a month. Today was the end of the 60-day period the Obama administration gave GM to come up with a successful viability plan. The administration will give the car maker $30.1 billion in federal assistance to support GM’s restructuring plan. General Motors will enter into bankruptcy protection and is expected to emerge as a new company in 60 to 90 days.
I never thought the automakers had any long term strategy. Where are the smaller and more fuel efficient cars? Where are the cars of the future? They made tons of profits on SUVs and stopped being competitive with smaller cars. That killed GM when the gas crisis hit last year. They did not shift their focus to alternative energy vehicles. Most car makers didn’t care about making cars that would save gas because they were in bed with big oil! Everyone knew GM had too many car models and they couldn’t support it.
Bailing out the auto industry didn’t help solve the basic problems of the industry. Stop throwing good money at a bad problem! Federal money only slowed down the change that the auto industry needed to make. They needed change from top to bottom.
Here’s why I think GM went into bankruptcy and why it’s the best possible scenario for the company. Bankruptcy will allow GM to restructure and get out of some of their contracts. The bankruptcy process is not a bad thing. In fact, it should be embraced. Bankruptcy allows companies to do tough things they could never do in the normal course of business. It has helped many companies turn themselves around and come out even stronger. KMART went bankrupt a while back – they are thriving now. I expect to see GM do the same…
That’s How I Roll…