Friday, May 8, 2009

Maybe this is why the automakers are in trouble?

Swift thinking like this:

"People are concerned about bankruptcy, and that's the reason why we want to avoid it if at all possible," he (CFO Ray Young) said.

On the other hand, earlier in the article it says:

DETROIT - General Motors Corp. drew closer to bankruptcy Thursday, acknowledging that its revenue fell by nearly half as car buyers worldwide steered away from showrooms for fear that the auto giant would not be around to honor its warranties.

So they are worried about going into bankruptcy but on the other hand the fears about going into bankruptcy are killing sales which is…driving them toward bankruptcy. They don’t want to declare bankruptcy because it will hurt sales, but the fears that they will is already hurting sales. So lets keep clinging to the vain hope that bankruptcy can be avoided while the market conditions and the assumption that they are going bankrupt anyway is already leading inexorably to bankruptcy. Just file and get it over with, and lets move forward.

Tell me again why they didn’t just declare bankruptcy last fall and save the U.S. taxpayers billions in loans we aren’t going to get back?
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