- January 27, 2009
- Posted by: admin
- Categories: Blog, Business Dynamics, World Economics
General Motors Chief Operating Officer Fritz Henderson said the automaker expected to receive a delayed U.S. government loan payment in the next several days that it needs to avoid running out of cash.GM received an initial $4 billion in emergency funding from the U.S. Treasury on December 31 and had expected to receive its next $5.4-billion payment from the government last Friday.
Mr. Henderson said GM had ruled out a voluntary bankruptcy filing because of the risks that it presents to sales, but could be forced into bankruptcy in a hypothetical case if the U.S. government were to withdraw its pledged financial support.
The U.S. government has pledged to loan $13.4 billion to GM for three years provided that it demonstrates that it has a plan to pay back the loans and become viable. Under the program, GM faces a February 17 deadline to show its progress.
Allegedly the biggest name in car manufacturing the world over, General Motors’ feared and anticipated ‘demise’ may well be one of the biggest blows to the world economy, esp. as it happens to be an integral part of the US taxation backbone (which is one of the reasons for the bailout approval).
Now to the question- what do we learn from it? Is it just another act of fate, bound to happen, one way or the other; or does it hint at a global shift in economic indicators, whereby oil-run economies and derivative manufacturing businesses shall no longer stay in the limelight.
If this is the case, then which industry sphere shall be the next big thing on our planet, thereby stimulating symbiosis with the worlds failing economies. If not, then how do we foresee a revival of this mutilated business sphere. Please state your answers with supportive facts/rationale.