Epic Fail: GM Failure Could Have Grave Consequences On Economy
November 14, 2008 by Lloyd
Filed under Automotive, Featured, GM, News
CNN recently posted a very interesting article about the dreadful consequences a failed GM would cause. Not only would the Automotive Industry suffer but the whole economic structure in America and abroad. Basically, it would be a serious shockwave that affects millions of people and not just the automotive workers who are out of a job.
I highly urge you to read in full the article posted on CNN.com titled “GM failure: The shockwave”. We don’t want to scare you; we just want to make you aware!
GM failure: The shockwave
If General Motors declares bankruptcy, industry watchers say, the entire domestic auto industry could be badly hurt.By Peter Valdes-Dapena, CNNMoney.com senior writer
Last Updated: November 14, 2008: 12:36 PM ETNEW YORK (CNNMoney.com) — If General Motors really does run out of money by the end of the year, as it predicted was possible, the impact would be felt far and wide – to hundreds of suppliers, rival automakers and ultimately dealers across the nation.
“Once the first domino falls, it rapidly takes out all the other dominoes,” said Dennis Virag, president of the Automotive Consulting Group.
Suppliers would be among the first to feel those effects since GM only manufactures the body, the engine and the transmission used in its cars.
In the United States alone, GM spends $31 billion on parts from 2,100 different suppliers. These include the “direct suppliers” involved in producing a vehicle – those that provide everything from steering wheels and seatbelts to brakes and airbags – as well as “indirect suppliers” – those that make things such as gloves, protective eyewear, shop rags and lightbulbs.
Although lawmakers appear to be souring on providing a $25 billion bailout to automakers, the impact of a GM failure on the industry as a whole – and therefore the economy as a whole – is weighing heavily in their decisions. READ FULL STORY…
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Chad on Tue, 18th Nov 2008 2:05 pm
Man this is sad…..freaking Congress needs to pass some legislation or a college to manage these big companies. They need better managers and overall system check to balance these companies. But then again, lack of insight, passion and risky decisions has them in this position.