Blog: The Lehman of manufacturing
Dave Leggett | 20 April 2009
GM CEO Fritz Henderson said late last week that the strategy for the company remains to attempt to stay outside of bankruptcy as it restructures, but that the firm had to plan for the real possibility that it may have to go down that route.
Are the statements coming out of GM designed to put pressure on stakeholders? Maybe.
But there are growing concerns that the failure of a company as big as General Motors would have a shock effect with repercussions well beyond the auto industry.
GM filing for Chapter 11, some say, would make it the 'Lehman of manufacturing' and bring about a whole new loss of confidence, send stock markets back into reverse and prolong the global recession.
One thing to look out for is a new business plan from GM that is due by the end of this month. That will be a key event. Not much will happen before that, but when that emerges, it will either act as a catalyst to get negotiations with the UAW and bondholders rapidly moving in the right direction or make a Chapter 11 filing a racing certainty.
All sides need to consider their strategies very carefully. The stakes are about as high as they can get. When that new business plan emerges the time for bluff and counter bluff will be over.
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