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BAILING OUT A GENERAL - BAILING OUT A GENERAL The General...

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BAILING OUT A GENERAL The General Motors bailout was the most important bailout of the free ride that the government issued during these times of economic recession and turmoil. Allowing GM to fail was simply not an option. The reasoning is simple. GM has ties to corporation and employers that are far reaching. The sheer number of Americans that would lose their jobs in the event that GM closed its doors is staggering. One area that is not often thought of by the public is that of parts manufacturers. Companies like Delphi rely on contracts by the automotive industry. It is their bread and butter. They filed for bankruptcy and are receiving their own bailout to the tune of 6.2 billion dollars from The Pension Benefit Guaranty Corp. who took on the pension liabilities from the company. (The bankruptcy Case Number is 05-44481 (RDD) with the Jointly Administered United States Bankruptcy Court, Southern District of New York.) The impact is has also affected several other automotive parts suppliers have recently filed for bankruptcy-court protection Lear Corp., a major auto-seat maker, and American Axle and Manufactruing Holdings Inc. Other companies that rely on General Motors so heavily that a few weeks of no business would force them into bankruptcy. Aside from manufacturers, automotive dealers are tied directly to GM. Many have already been forced to close their doors as they have been handed “pink slips” by the car maker. More than one thousand of these dealers have been told that they would
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not have their franshicses renewed next year.
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