According to gmfactsandfiction.com, the official PR website intended to dispel rumors about General Motors' dire financial situation, it's still a "fact" that bankruptcy is essentially out of the question.
"It’s just not in anyone’s best interest - GM; our customers, employees, suppliers and dealers; or U.S. taxpayers. GM’s restructuring out of court remains the best approach for all constituents."
Tom Wilkinson, the spokesman I interviewed about GM's future model cuts, also has a take on the GM corporate blog:
"Bankruptcy reorganization takes cash - lots of it. For a company like General Motors to operate in Chapter 11, it would need massive debtor-in-possession loans. With credit markets frozen, there is realistically only one source of such loans - the federal government. We estimate loans needed to reorganize GM in Chapter 11 could top $100 billion, far more than the out-of-court fix envisioned in our restructuring plan."
Fact: GM's own annual report for 2008, just released today, says this at the top of page 20:
"Our future is dependent on our ability to execute our Viability Plan successfully or otherwise address these matters. If we fail to do so for any reason, we would not be able to continue as a going concern and could potentially be forced to seek relief through a filing under the U.S. Bankruptcy Code." (emphasis mine)
The word "bankruptcy" is mentioned over 120 times in the report, and phrases like "potentially requiring us to seek relief under the U.S. Bankruptcy Code" appear 10 times in the section "Risk Factors" at the beginning of the report.
However, Northeastern University professor Harlan Platt brought a tingle of good tidings with this quote from the Associated Press this morning:
"I think the government has forced the hands of everybody," Platt said. "In 18 months to 24 months, I anticipate they will be profitable, in the black. A mean and lean competitor that will be world-class."
It's not over yet, but the rumor mill doesn't look like one anymore.
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About Boston Overdrive
|Clifford Atiyeh is an automotive writer and car enthusiast . He has spent his entire life driving cars he doesn't own.
In the garage: 1995 21-speed Iron Horse, 2002 Jeep Wrangler X (by association)
|Bill Griffith is a veteran Boston Globe reporter, having reviewed cars for more than 10 years and serving as assistant sports editor for 25 years. He was also the paper's sports media columnist.
In the garage: 2006 Subaru Baja
|John Paul is public affairs manager for AAA Southern New England, a certified mechanic, and a Globe columnist. He hosts a weekly radio show on WROL.
In the garage: Hyundai Sante Fe, Chrysler PT Cruiser convertible
|Craig Fitzgerald has been writing about cars, motorcycles, and the automotive industry since 1999. He is the former editor of Hemmings Sports & Exotic Car.
In the garage: 1968 Buick Riviera, 1996 Buick Roadmaster, 1974 Honda CB450
|Keith Griffin is president of the New England Motor Press Association and edits the used car section on About.com. He also writes for the Hartford Business Journal and various weekly newspapers in Connecticut.
In the garage: Mazda 5, Dodge Neon
|George Kennedy is a senior writer for WheelsTV in Acton, which produces video reviews for Yahoo, MSN, and other auto websites.
In the garage: Lifted 1999 Jeep Cherokee