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GM bankruptcy: How will it impact the US?

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So far, GM's plans for downsizing its dealer network are on a slower track. It's possible that will change once GM enters bankruptcy, says Jeremy Anwyl, chief executive of the auto information company Edmunds.com. Shoppers might find some steals on wheels, but that isn't known yet.

What is clear is that the recession has made all car companies very hungry for customers.

"It's a great time for buying just about any car," Mr. Anwyl says.

Yet it's risky just to assume that a bankrupt car company must be offering great deals. Research by Edmunds.com found that Chrysler's profit margin actually went up in May – after a court filing on April 30.

Why?

Analysts at Edmunds.com figure consumers negotiated less aggressively because they thought bargains were already in the sticker price.

GM plans to sell or phase out its Hummer, Saturn, Saab, Pontiac brands, while retaining Chevrolet, Cadillac, GMC, and Buick.

One plus for consumers concerned about the risk of buying from a shaky firm: The federal government has said it will backstop new-car warranties on GM and Chrysler (maker of Dodge and Jeep brands) as they restructure with US aid.

What does this mean for GM car owners?

Any impacts should be small, most analysts say. Parts should remain readily available, even for phased-out brands like Pontiac, Anwyl says. In rural areas, however, the downsizing of the dealer network could make for longer trips for repairs.

How will the GM bankruptcy affect the economy?

Bankruptcy for one of America's biggest manufacturing firms sounds like a bad thing, but the the Obama administration is seeking to soften the blow.

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