The red rubber bull-biting bald man by the name of Jim Cramer had a mouthful to say about the Motor City today — making clear his belief that if Motown gets showed D.C.'s checkbook, then we've seen the lows of this financial downturn. I tend to agree. Right now, according to Cramer, the issue isn't anymore whether you think GM deserves or doesn't deserve to be saved, it's whether you're alright with massive unemployment and an economic downturn taking this nation further into the murky unknown depths. Sounds to us like someone thinks people need to buy some "Save GM" t-shirts. That sentiment's shared by Keith Crain's Automotive News, where we saw an opinion piece today the likes we've never seen — essentially refuting an idea I'd held up until the past week, that Chapter 11 could allow for reorganization. The Op-Ed's entitled "The cost of GM's death," and you can hit the jump for the excerpts.
Let's be clear. The alternative to government cash for GM is not a dreamy Chapter 11 filing, a reorganization that puts dealers and the UAW in their place, ensuring future success. No, even if GM could get debtor-in-possession financing to keep the lights on (which it can't), Chapter 11 means a collapse of sales and a spiral into a Chapter 7 liquidation. GM's 100,000 American jobs will die. Health care for a million Americans will be lost or at risk. Hundreds of GM's 1,300 suppliers will die. Their collapse could take down Ford Motor Co. and Chrysler LLC, perhaps even North American transplants. Dealers in every county of America will close.
But that's not all. Here comes the call to action:
The taxpayer needs protection and an upside. GM's top management may need to go. Government-as-shareholder deserves a big voice. Those details can be worked out. The Detroit 3 CEOs and UAW President Ron Gettelfinger had better tell two critical congressional hearings next week what sacrifices they are prepared to make. But the stark fact remains: Absent a bailout, GM dies, and with it much of manufacturing in America. Congress needs to do the right thing — now.