A GM/Ford/Chrysler bankruptcy is not as big a deal as their CEOs say it is
A GM bankruptcy would reverberate through the U.S. economy, GM supporters contend. One in 10 American jobs is related to auto manufacturing. Automakers are the biggest buyers of U.S.-manufactured steel, aluminum, iron, copper, plastics, rubber and electronics. Tens of thousands of suppliers and dealers depend on the automakers.
All of these doomsday scenarios are total exaggerations. This is what would happen, in the worst case, if suddenly tomorrow these automakers didn’t exist - poof. That’s not what bankruptcy is kids. Bankruptcy is a way for an insolvent company to reorganize in an orderly fashion. It does not mean the company will disappear, liquidate or explode in a spectaular eruption of job-destroying fire.
What it does mean is that existing shareholders will be wiped out and they’ll be able to renegotiate their crippling labor contracts. Now if you’re the CEO (and a major stockholder) or a union boss - which scenario sounds like doomsday to you?
