There's an interesting article at FoxNews which talks about top Republicans demanding that the ailing automaker General Motors file for Chapter 11 bankruptcy.
The article said:
Sen. John McCain, R-Ariz., said the best thing for the ailing automaker to do would be to go into Chapter 11 to reorganize some of its business agreements and come out stronger than before.
"I think the best thing that could probably happen to General Motors, in my view, is they go into Chapter 11, they reorganize, they renegotiate ... the union-management contracts and come out of it a stronger, better, leaner, more competitive automotive industry,"
Is Senator McCain right? Is a GM bankruptcy the best thing for them and most importantly would it benefit the thousands of Americans who depend on the automaker for their livelihood? A GM bankruptcy could possibly disrupt the already weak economy with massive amounts of job losses. And where would those workers who lost their jobs go? Many of the blue-collar workers working for GM enjoy benefits and high salaries that have long disappeared for the rest of America's unskilled and semi-skilled workforce. Senator McCain hints at this when he suggests that GM "renegotiate the union management contracts." Labor is often the costliest aspect of running a business and when businesses face bankruptcy it is labor that they cut first. But in this case, under the current deteriorating economy, massive job losses from a giant like GM could send a wave of loan defaults, foreclosures and personal bankruptcies sweeping the nation. And if that happened, who would buy those Hummers?