It’s almost becoming inevitable the General Motors will be filing for Chapter 11 bankruptcy as the clock ticks down to the government-imposed June 1 deadline for the company restructure or face a fate similar to the one Chrysler did earlier this month.
Many analysts and industry experts are saying that a GM bankruptcy will be much more complex, costly and painful when compared to Chrysler’s filing a few weeks ago.
“The biggest difference is scale: GM is a much larger company,” Stephanie Brinley, senior manager of product analysis for the consultancy AutoPacific,” told MSNBC.com.
There is no doubt that GM has more plants than its rival Chrysler, nearly 5 times as many employees and twice as many dealers. As such, we don’t expect that the 30 to 60 days of “surgical bankruptcy” Chrysler is undergoing, will be anywhere close to how long GM will remain in court. Not to mention, GM has a broad network of international operations, including Saab and Opel, in which bankruptcy would cause an “international ripple effect.”
Oh and of course, no one is there to hold the General’s hand after it comes out of bankruptcy, as was the case with Chrysler with Fiat taking majority control in the long-term. While some may look at that as a negative, Brinley says that it could work in GM’s advantage.
“I think that’s an advantage. GM, in one way or another, is in a little bit more control of their own destiny,” Brinley said.
We’ll find out soon enough.
– By: Omar Rana