All year, General Motors CEO Rick Wagoner has been insisting his company will never declare bankruptcy. “We’re well positioned,” he said in August. Company spokespeople reiterated that in October, despite the big stock market plunge. Even the company website states that “bankruptcy protection is not an option GM is considering.”<\/p>\n
Well, guess what. While announcing a $2.5 billion third-quarter loss, GM also said that its “estimated liquidity during the remainder of 2008 will approach the minimum amount necessary to operate its business.” That means the company is spending way more than it’s earning and, unless something changes, will run out of cash sometime early next year. The company itself hasn’t raised the possibility of a Chapter 11 filing. But at this dire juncture, Wagoner and his lieutenants ought to be fired if they’re not doing contingency planning for bankruptcy\u201d\u201dsince that’s where companies end up when they run out of money and can’t pay their bills.<\/p>\n
There’s one alternative, of course. No, it’s not a desperate merger with Chrysler, which GM has now disavowed, since Chrysler is in even worse shape than GM. Salvation lies in\u201d\u201dyou guessed it\u201d\u201da government bailout.<\/p>\n