Bloomberg News Service: GM Collapse Would Cost U.S. Taxpayers Up to $200 Billion, More Than Rescue

[marmar]

GM Collapse at $200 Billion May Exceed Bailout Plan (Update1)

By Alex Ortolani and Mike Ramsey

Nov. 14 (Bloomberg) -- General Motors Corp., seeking a federal bailout as its cash dwindles, would cost the government as much as $200 billion should the biggest U.S. automaker be forced to liquidate, a forecasting firm estimated.

A GM collapse would mean ``more aid to specific states like Michigan, Ohio, and Indiana, and more money into unemployment and extended benefits,'' Nariman Behravesh, chief economist at IHS Global Insight Inc. in Lexington, Massachusetts, said today in an interview. He prepared the estimate for Bloomberg News.

The projected expense of $100 billion to $200 billion covers funds for existing programs, such as unemployment insurance, and new measures that would be needed to revive economic growth after millions of auto-related job losses.

Such a sum would be an eightfold increase over the $25 billion bailout package that will be debated in Congress next week to help prop up Detroit-based GM, Ford Motor Co. and Chrysler LLC amid the industry's worst sales year since 1991.

GM said last week it may run short of operating cash by year's end, and projected it would be ``significantly short'' of what it needs by June unless the auto market improves or it adds capital.

A GM shutdown would cost jobs among suppliers as well as at the automaker itself, pushing the U.S. unemployment rate next year to 9.5 percent, compared with current projections of as high as 8.5 percent due to the weakened economy, Behravesh said. .......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=aNv90nwWR0Wg&refer=home

[liberal N proud]

1. It would completely destroy what is left of the US economy

Facilities in 28 states plus the suppliers and supporting business.

[msongs]

2. at current stock prices it's cheaper to BUY gm than give it a bailout - so buy it and

sell it to toyota with certain guarantees (whatever those might be) along with demanding gm use new technology to build cars that are better for America than the current cars it cannot sell.

Msongs

[Poll_Blind]

3. WHAT!?!?!??! WHAT?!?!?!?

:wtf:

PB