GM Faces Bankruptcy and Endless Bad News

While bankruptcy had helped the airlines in the past, the option may not be the right solution for General Motors, who continues to struggle amid plummeting auto sales. Bankruptcy would bring many problems to GM, including being faced by consumers that simply wouldn’t want to buy a car from a bankrupt company. Additionally, bankruptcy reorganization may restrict GM from raising the billions of dollars needed to keep the company afloat.

General Motors has been bleeding cash quarter after quarter. As a result, GM, along with Ford and Chrysler, has been pushing the federal government to provide billions of dollars in aid. But with growing concern among tax payers on how such money is spent, Oklahoma City GMC dealers realize that GM and Chrysler both need to do plenty of convincing before receiving more checks. That being said, analysts fear that if GM falls into bankruptcy, the cost may trickle down and affect the entire economy, while also resulting in job losses in the millions. This is exactly the fear of Connecticut Saturn which believes new vehicles coming down the pipeline at the automaker will be enough to turn things around. Meanwhile, critics of a bailout believe that bankruptcy will free the automaker from obligations that it simply can’t afford without taxpayer dollars being sacrificed.

Organizing such a large company will require a substantial amount of financing either way say Chevrolet Chicago dealers. Already GM’s plans to acquire Chrysler have failed in part due to a lack of financing available.  Meanwhile, GM continues to move inventory at dealers. GM’s financial arm, GMAC, also and made it more difficult for consumers to receive financing, resulting in dealers who are unable to finance customers who have credit scores below 700. To make matters worse, hundreds of car dealers are expected to go out of business by year’s end accord to NADA, placing more pressure on the automaker to stimulate sales or get a bailout from the government. Either way the picture doesn't look good according to one used car dealer Oklahoma City, but there is still hope if GM continues to receive air.

General Motors as well as other automakers are banking new models that highlight green technology, such as the plug-in electric Chevrolet Volt. While the Volt is getting plenty of hype, it’s uncertain whether a large volume of consumers will spend $40,000 on the car.

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