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vikas72 · Joined: 21 Dec 2007 Posts: 199

I was just reading this

http://www.bloomberg.com/apps/news?pid=20601087&sid=a262TsJduTzs&refer=home

June 1 (Bloomberg) -- General Motors Corp. once mattered so much to the U.S. economy that a two-month strike in 1970 helped trigger a 4.2 percent drop in gross domestic product for the fourth quarter, as national auto production fell 82 percent.

Then, GM accounted for about half the cars and light trucks sold in the country. Now, GM controls just 20 percent of the market, and analysts say its bankruptcy filing will barely register in the broader economy.

GM’s drawn-out restructuring, an increase in U.S. manufacturing by foreign carmakers and the recession-induced decline in auto sales all have meant more to the economy than today’s legal filing.

“Bankruptcy now is irrelevant in terms of the economic consequence of what’s happening to GM,” said Mark Zandi, chief economist at Moody’s Economy.com in West Chester, Pennsylvania. “Either way, it’s going to be a shadow of what it was, in terms of jobs and income.”

GM has been reducing payrolls for three decades. Its U.S. employment peaked in 1979 at 618,365, when it was the nation’s largest private employer and auto manufacturing accounted for 4.1 percent of GDP. At the end of this year’s first quarter, autos were 1.5 percent of the economy, and GM had 88,000 U.S. workers.
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madhu2300 · Joined: 30 May 2009 Posts: 25

Wall Street faces a historic shake-up next week as General Motors, a pillar of American industry, heads into bankruptcy, but the market could advance further if economic data signals the worst of the recession has passed.

siladitya223 · Joined: 30 May 2009 Posts: 25

Bankruptcies of automakers General Motors and Chrysler could cost as many as quarter million people their jobs over the next year and a half, a media report says.

According to a report in MarketWatch.Com, a publication of Dow Jones & Company, "If all goes according to plan, the bankruptcies of GM and Chrysler, which went bankrupt in late April, could cost about a quarter million people their jobs over the next year and a half."

madhu2300 · Joined: 30 May 2009 Posts: 25

GM customers check new cars in the showroom of Grossinger City Autoplex, Saturday, May 30.
(Nam Y. Huh/AP)
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Photos (1 of 1)
In GM’s bankruptcy, lessons for whole US economy

Is the automaker, an icon of brawny American capitalism, among the first to confront an 'era of diminishing expectations'?
By Mark Trumbull | Staff writer/ June 1, 2009 edition

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Reporter Mark Trumbull talks with CSMonitor.com's Pat Murphy about some of General Motors' history and what Monday's bankruptcy filing means for the company's future.

Reporter Mark Trumbull

The bankruptcy filing by General Motors on Monday marks a historic reversal for an iconic American corporation – and a cautionary tale for the whole US economy.

In its heyday in the 1950s and ’60s, no company symbolized the brawn of American capitalism like GM. The company opened the door for legions of blue-collar workers to enjoy middle-class lifestyles, set the benchmark for modern management practices, and with its tailfins and V-8 engines defined automotive style.

Now, instead of symbolizing America’s success, GM has become an emblem of some of the central challenges the nation faces in a new century. The factors paving its road to bankruptcy include rising healthcare costs, intensifying global competition, and making promises it couldn’t afford to keep.

These are all problems that go beyond GM, affecting corporations and America’s government balance sheet as well.

America is not necessarily in a period of permanent economic decline. But the financial climate has become tougher for corporations, the US Treasury, and households in ways that will last beyond the current recession. Some economists wonder aloud if the federal government is headed toward bankruptcy.

“At one point there was concern that GM’s market power was so great that it was a virtual monopoly,” says Jeremy Anwyl, chief executive of automotive information provider Edmunds.com. Now “the car companies are maybe the canary in the coalmine…. As a society we could be having to deal with an era of diminishing expectations.”