Detroit is nothing less than the backbone of the US industrial base and the giant of Detroit, General Motors says that without the government's help in terms of a rescue loan for the industry, it will run out of cash by early next year and might have to file bankruptcy which is turn will start a domino effect that will hit thousands of jobs and hundreds of its suppliers and dealers as well as its Detroit rivals. The help expected is in terms of a $25 billion rescue loan which several members of the congress are opposing while some others are supporting. One thing is for sure that if GM dies, then so will several other of its rivals and the auto companies in US which are already in a soup will no longer be in a position even to keep the shop floors operational. Recently GM's stock worth based on the predictions for the next 2 quarters and industry outlook for auto manufacturers in US was valued at around $1.
If this does happen, we might have a catalyst which could multiply the current economic crisis several folds.
2 comments:
hey
GM is all that big infact that the employee no which would get effected counts to 3 million including indirect employement.
If the congress doesnt support for this loan which they badly need for liquidity, the company would have more likely chances to close which is estimated to reduce the earnings of about 150 billion $ in one year and almost 500b$ for nxt 3 to 4 years.
I hope congress in US wouldn be stupid enough to loss that many tax payers earnings
they already did yaar...Congress denied the relief package for the auto industry...GM has cash which would do just till Jan end...post that there are high chances that GM will go bankrupt...if that happenes, over 7.5 million jobs (direct and indirect) will be lost over 2 years.
Post a Comment