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Wednesday, May 13, 2009

Auto Bailouts Success Rate Looks to Fall 0-for-2

Here's more news from on wasted government money:

For General Motors Corp., the task at hand is so difficult that experts say a Chapter 11 bankruptcy filing is all but inevitable.

To remake itself outside of court, GM must persuade bondholders to swap $27 billion in debt for 10 per cent of its risky stock. On top of that, the automaker must work out deals with its union, announce factory clo­sures, cut brands and force hundreds of dealers out of business — all in three weeks.

“I just don’t see how it’s possible, given all of the pieces,” said Stephen J. Lub­ben, a professor at Seton Hall Uni­versity School of Law who specializes in bankruptcy.

This further confirmation that all the bailouts done by Bush and Obama only delayed the inevitable outcome of bankruptcy.

Chrysler already declared Ch. 11. Now, GM is about to follow it. That's billions more down the drain.

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