According to an article in Edmunds, General Motors is rumored to be in “intense” preparations for a possible bankruptcy filing.
The article said:
“GM will take whatever steps are necessary to successfully restructure our company,” said GM spokesman Tom Wilkinson. “Our focus remains on accelerating the speed of our operational restructuring and reducing liabilities and debt on the balance sheet. As GM has maintained for several months, restructuring the business outside of court is the best alternative for the company and its constituents. However, if GM is not able to complete the actions required over the next 60 days, it will have no other alternative than to pursue such action and we would be prepared to do so.”
If GM files bankruptcy, most analysts agree that they will attempt to form a new company using their “best assets” which might include Buick, Cadillac, Chevrolet and GMC. But there is a real possibility that filing Bankruptcy could have a devastating affect on consumer confidence in the GM brand. Already GM is experiencing massive declines in sales which may in part be caused by the bankruptcy rumors. That’s unfortunate because a bankruptcy may be just what GM needs to restructure its debt and become profitable again. Bankruptcy does not necessarily mean that a company is closed forever (although it could mean this). If done correctly, bankruptcy can benefit giant corporations such as GM (as well as individuals) allowing them to get a fresh financial start.