The Case for General Motors

They have improved profitability, because they have dealt with their healthcare costs.

The price for that was their liquidity "reserve", arguably, what they need to weather a normal-sized downturn. If we had had a single-payor system, that might have been an avoidable loss. At least, that's one way to see the two sides of the coin.

Anyway, the case for them might be centered around the fact that they have yet to realize their new levels of profitability, because of a cyclical volume downturn (oil, credit the proximate causes thereof...not "unions"). On the other side of the cycle, they might be quite competitive.

BANKRUPTCY

The case for bankruptcy seems to center on discharging debt and giving them the long-needed tools to manage their dealer network more ... ruthlessly.

The debt burden doesn't look huge. Is it?

On a strategic basis, a return of consumer lending and leasing seems to be at least as critical. They could sell their minority stake in the old financing arm and get assistance to start up a new, captive financing arm. That would be enormously positive for their long-term outlook, right?

RE-ORGANIZATION

The case for a radical re-make of the industry is not to put more and more manufacturers together, for scale and cost savings.

It might be, given the rapid pace of technology change we want from the industry, to imagine an industry, as it once was, with many manufacturers, not three-to-six.

Smashing the industry into bits, however interesting a proposition, seems well beyond the scope of what can be done in a short amount of time, however. Same for the cultural "issues" that plague the business mentality of formerly large, stable firms who are faced with change.

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