It is looking more and more like the GM Bailout is not going to happen before Obama's inauguration. The Senate still has 49 seats controlled by the Republicans and even the Democrats in the Senate have their doubts.
However the $25billion loan that was already approved may be redone to eliminate red tape and get the money to them quicker.
All in all, I think it is only a matter of months before GM declares chapter 7 bankruptcy and is liquidated. Chrysler will do the same, I'm just not sure when it will happen. It will be a miracle if they can manage a Chapter 11 reorganization.
So what is going to happen after that? I have a few predictions...
Should GM declare Chapter 7 an liquidate:
1. immediate unemployment for nearly 200,000 people.
2. Stock market crashes again.
3. Oil drops below $40.
4. The Chevy and Caddy brands will be bought up. Hopefully by Kerkorian but I wouldn't be surprised if middle eastern money ends up buying them. Some of those jobs will resume eventually. Several models will cease to exist.
5. The GMC, Saturn, and Pontiac brands will be wiped from the face of the Earth.
6. The Buick brand will be bought by the Chinese, some of those jobs will resume. This will finally give the Chinese the inroad into the US market they've been looking for.
7. I have no idea what will happen to Saab or Hummer, but it won't be pretty.
8. THOUSANDS of car dealerships will close (like James Wood in Denton) Others will scale back drastically.
9. I'm not sure what happens to Opel and Vauxhaul. I think the Holden brand will be sold.
1. The Chrysler and Dodge brands will die almost immediately.
2. All dealerships without a Jeep brand will close.
3. Jeep will be purchased and resume production. However I think there is a very good chance that production moves overseas.
4. Chrysler's newer factories will be bought by other car companies like Hyundai.
1. Ford will survive intact and perhaps be very strong after 2011. Their upcoming product portfolio is just too damn good. Also, their re-organization has made a lot more progress than GMs has. The Ford Family is scared and actually listening to Mulally.
2. I think there is still a chance that Mercury will die. However Ford has made indications that some of their European products will be used rebuild that brand.
If GM manages to get itself into Chapter 11 and finds financing, they will probably kill off a lot of brands (if they have any intelligence). They will also dump retiree pension and health care plans. The UAW will not cease to exist but its influence will be greatly diminished.