Stick a fork in it: GM is done

Today Reuters is reporting that General Motors Corp is going to be announcing a massive loss for 2008, and that their auditors (Deloitte) will be issuing a “going concern” warning. Essentially, that means that the auditors doubt GM is a viable business that can keep running for much longer.

And we’re surprised by this why?

Even before our government made the unwise decision to hand over billions of dollars to the automakers, many of us could have predicted that they wouldn’t be able to stay alive even through this year. They have cost structures that simply aren’t viable in a down economy.

GM’s financial woes include:

  • $12.4 billion owed to pension plans
  • A $30.9 billion net loss for the year (which follows a $38.7 billion net loss for 2007)
  • Burning through $6.2 billion in cash in the fourth quarter alone

And the money received from the government?$4 billion in loans that will obviously not be repaid. How anyone could have thought that $4 billion would even put a dent in GM’s problems is beyond me. But since they were spending my money and your money, our politicians didn’t seem to care.

This concept that the auto industry in America can’t fail is ludicrous. It can, and it should. Sadly it has become something that is not worth saving. (And actually, that was clear several years ago.)

Let’s let these automakers file bankruptcy and either reorganize with a viable business model, or let them go out of business all together. The moaning about loss of jobs is ridiculous. One way or another, those companies will go under and jobs will be lost. Let’s not prolong the pain.

Besides, if the U.S. automakers go away, other companies will step up to fulfill the demand Americans will still have for cars. And that will create new jobs, hopefully not supported by my tax dollars.

GM wants $30 billion from taxpayers. Let’s hope our politicians have the good sense to finally say no.

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