America’s storied auto behemoth, General Motors, stands on the edge of a financial cliff. Should it jump? Or should the government throw it yet another rope in an attempt to shore it up and save the giant from bankruptcy?
Truth is GM can’t pull itself out of the tailspin it’s in. GM should file for bankruptcy and remake itself as a much smaller and focused car company if it hopes for a legacy to be part of the future.
Here are five good reasons why GM should file for bankruptcy:
1) GM must realize filing for bankruptcy won’t hurt the company’s already beleaguered image and brand. The cloud of bankruptcy won’t keep people from buying GM cars. Hell, no one is buying them now.
2) In an effort to save itself, GM is reducing research and development spend, which means little or no new, green-friendly hybrids (i.e., the kinds of cars people want to buy). Bankruptcy gives them a chance to refocus on marketable cars of the future.
3) GM can’t compete. Mercedes has a plan to transition its entire lineup of cars to alternative fuels by 2015. GM is cutting R&D by $1.5 billion by 2012, which allows them to stay operative for…one month.
4) The brain cluster at GM continues to lobby California lawmakers to prevent a law requiring car makers to reach an average fuel efficiency standard of 36 mpg. Kinda says it all, doesn’t it? Bankruptcy might help GM understand the landscape has changed since the 1960s.
5) Even with the government’s tens of billions in bail-out money, people at GM will lose their jobs. Bankruptcy will likely save more jobs than the bailout will provide.
Why should we care? Isn’t it more wise to see billions of dollars diverted to things that have a chance of survival vs. burning that cash on the GM fire.
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