Un eiling riday the loan o the State o 13.4 billion to General Motors (GM) and Chrysler, George Bush was ery clear. I car manu acturers are not to the point a restructuring plan be ore the end o the irst quarter, will be time to organize their bankruptcy, and it will be "the only option", he said. The Obama administration inherits rom this threat. It is a stick to orce the sector to restructure, but it also implies the risk o the Go ernment that will handle one o the largest bankruptcy in American history.
Barack Obama, who takes o ice on January 20, not wrong. Next weeks to emphasize the "big three" and their leaders or patience. " This means that they will ha e to make di icult choices. "He spoke riday, be ore the Canada promise the same automakers, this weekend, assistance o $ 3.3 billion in exchange or the maintenance o important acti ities in the pro ince o Ontario, irst region in terms o ehicle production in North America.
"Actually, we do e erything to rebuild the bankruptcy without declaring it." "But gi en three months to GM and Chrysler to restructure makes no sense," said Thomas Philippon, New York Uni ersity economist, a ourable to an orderly restructuring o the two builders ("prepackaged bankruptcy"), under the aegis o Chapter 11. Despite the granting o inancial assistance in extremis, the "think tank" conser ati e American Enterprise Institute and the economist Joseph Stiglitz agreed that the simplest solution is to GM under Chapter 11 plan to allow a massi e surrender o recei ables and a drastic reduction in wages.
Risk o cascading ailures
Unlike Chapter 7, which leads to the inal liquidation o the company, Chapter 11 opens the door to a complex but e icient operation in the sense where it may preser e the acti ity o the company. It is the choice that has made the Group orum Co (editor o the "Los Angeles Times") to restructure debts $ 12 billion. Companies US airlines are passed by here and are ressorties, more small but reclaimed, until the rise o the cost o oil threatens again their results.
or Moody's analysts, this scenario is most likely. But they do not see this option "to occur be ore the second quarter o 2009. It would, in their iew, a reduction in the production o 20 and a reduced work orce o 50,000 employees. "The loss o creditors would be lower than that o a pure and simple, bankruptcy in which they would lose 75 to 100 o their assets", they note. But other analysts belie e that such a procedure would mean bankruptcy cascade o many subcontractors and suppliers, to the risk o urther destabilizing the economy.
In any e ent, that will take total much more to the "big three" that the are ad anced riday by George Bush. According to the Moody's Agency: i GM, Chrysler and ord continue their combined 50 share, it will cost about $ 75 billion to the Go ernment to a oid a bankruptcy... But i their penetration drops to 40 by 2010, the ederal addition is projected at $ 125 billion...