Then there is General Motors, ward of the state. Those who remember GM as the producer of such iconographic autos as the 1957 Bel Air may see its fall as a shame. Those who bought the awful 1970s Chevy Monza (or its evil twin, the Oldsmobile Starfire) may consider its bankruptcy well deserved.
The US government has already invested some $80 billion in tax dollars in GM and Chrysler. It probably will be at least a year before the Treasury can even begin to plan when it might sell government-owned shares in the company to recoup that cash.
Will the US ever get that money back? There are “reasonable scenarios” under which the taxpayer investment will be returned, said Ron Bloom, President Obama’s high-profile auto adviser, at a June 10 Senate hearing. “But by no means would I say that I am highly confident that will occur.”
That does not sound like a ringing endorsement, does it? Postbankruptcy, both GM and Chrysler will be shorn of debt and overhead, and theoretically will be better able to compete in a tough market. The key may be to what point US sales recover.
In January, the pace of vehicle sales in America fell below 10 million units annually for the first time in almost three decades. Some analysts see sales staying in a trough for years, as newly frugal consumers learn to do without leased Audi Q7s, and turn to the used-car market, or (gasp!) keep driving their old cars instead.