As GM Goes, So Goes the Nation? GM Files for Bankruptcy

Increasing number of deeply concerned Americans begin to ask serious questions about the General Motors 'bailout.'

WASHINGTON (Catholic Online) - In a much anticipated move, General Motors, now often referred to in Press Reports as "Government Motors", has filed for Chapter 11 Reorganization in Bankruptcy. All of the billions of dollars transferred to the ailing automobile company apparently did nothing to accomplish what was promised.

Reuters News, in an article entitled "TIMELINE: Key dates in General Motors' history" which detailed the long history of the company since its founding in Flint Michigan in 1908, included the following recent events of particular interest:

"Dec 2, 2008 - GM seeks U.S. government aid of up to $18 billion. Dec 19, 2008 - GM and Chrysler granted $17.4 billion in government loans. Jan 21, 2009 - Toyota Motor Corp surpasses GM as the world's largest automaker for the first time. Feb 5, 2009 - GM announces plan to slash its global salaried workforce by about 10,000, or 14 percent and cut the pay of most remaining white-collar U.S. workers. Feb 17, 2009 - GM raises U.S. funding request to a total of $30 billion, announces plans to cut global workforce by 47,000 and close five U.S. plants by 2012.Feb 26, 2009 - GM posts 2008 loss of $30.9 billion.

"March 5, 2009 - GM's auditors raise "substantial doubt" about its ability to survive outside bankruptcy. March 30, 2009 - GM Chief Executive Rick Wagoner ousted by U.S. government, replaced by Chief Operating Officer Fritz Henderson. Company (was) also given 60 days to develop new restructuring plan. April 17, 2009 - GM says readying detailed plans for bankruptcy filing as it races to complete a business plan under federal oversight. April 22, 2009 - GM says unlikely to make a $1 billion debt payment due June 1.

"April 27, 2009 - GM offers final plan to reorganize outside bankruptcy by slashing bond debt, cutting over 21,000 more U.S. jobs and emerging as a nationalized automaker. GM warns it would file for bankruptcy if an offer to exchange bonds for company equity failed to cut $27 billion in debt by about 90 percent of bondholders. May 5, 2009 - GM details plans to all but wipe out the holdings of remaining shareholders by issuing up to 60 billion new shares in a bid to pay off debt to the U.S. government, bondholders and the UAW. May 7, 2009 - GM posts a first-quarter net loss of $6 billion and a cash burn of $10.2 billion.

"May 15, 2009 - GM announces plans to drop 1,100 of its smaller, less-profitable dealerships.May 21, 2009 - GM announces a new cost-saving labor agreement with the UAW, under which UAW-aligned healthcare trust will receive half of the $20 billion debt GM owes the fund in the form of stock and new debt, instead of cash. May 22, 2009 - GM borrows another $4 billion from the U.S. Treasury and reaches deal with Canadian auto workers. May 27, 2009 - GM's offer to exchange $27 billion in bond debt for a 10 percent stake in a reorganized company fails.

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"May 28, 2009 - GM and the U.S. Treasury make new equity exchange offer under which bondholders would be offered 10 percent of a reorganized company and given warrants to purchase another 15 percent. June 1, 2009 - GM files for Chapter 11 bankruptcy protection at the U.S. Bankruptcy Court in the Southern District of New York."

The old adage "As GM Goes, So Goes the Nation" is being heard in a much different way these days as an increasing number of deeply concerned Americans begin to ask serious questions about the General Motors "bailout." Serious questions remain unanswered concerning how the Federal government has conducted itself throughout this entire process.

Among those questions are the following; Why were billions of dollars given from the Federal treasury, taxpayer dollars, to allegedly hold off bankruptcy reorganization when such a filing was apparently inevitable? Why were even more billions given as late as last month from the US Treasury - taxpayer dollars - and no explanation given to the taxpayers? How was this transfer of taxpayer dollars any different than illegal preferential transfers made in anticipation of other Bankruptcy filings? What did the Federal Regulators know about the inevitability of this bankruptcy filing and why were those facts not fully disclosed to the U.S. public?

The volatility in the Auto industry is only one small concern in what is becoming in the minds of many Americans an economic tsunami.

Ironically, on the day of the filing, the U.S. stock market surged.

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