General Motors is a huge multinational company with operations and "headquarters"/divisions spread all over the globe.

My question; were GM (the GM we know in Detroit) to shut its doors; what happens to the international pieces of GM? Do they go out of business too?

Does the whole world "loose" GM of do just their holdings in the U.S. go away (and not, I'm not saying "just" here to in anyway mitigate the impact)?

I truly don't know the answer...that's why I'm asking...I'm thinking that if they liquidate that their creditors could force a total liquidation until their debts are satisfied but I really don't know how that works in terms of international law.

If anyone else knows; please elaborate.

 

Delphi gave us a model for how this might go down:

http://www.businessweek.com/magazine...7/b3981068.htm

 

There is some rumor that if the German government starts passing out money to domestic automakers - like Opel - they may want Opel, in fact GME itself, to break away from from GM, in order to have any future profits flow back to Fatherland.

 

That's a very interesting approach. I don't like the sound of it. Using Chapter 11 to allow a significant withdrawal from the U.S. doesn't feel right.

 

I don't like the thought of Americans being out of work, either, but I don't believe a company should be forced to keep its doors open, paying workers a wage higher than the average for that type of work. In the end, it just leads to higher prices for everyone. And the consumer will end up buying foriegn goods, and people will complain about how buying foriegn goods is driving US companies out of business, while the shirt on their back says "Made in India of Mexican components".

 

Something like this would be the "nuclear option". They would re-organize GM into a loose holding company and then sink the North American arm into bankruptcy while allowing the overseas operations, which are generally profitable, to continue.

I suspect we will see a lot more Korean-made Chevrolets in the future either way.

 

I don't like the sound of it either. However, it is the nature of capitalism in the world economy. From that standpoint it is a very good plan. Miller is very good at making bankruptcy work.

One drawback and possible risk is that China may one day announce that they are grateful for all the money, all the technology, and all the world class facilities which many companies have built to compete and control labor costs and avoid regulations which make doing business more difficult in the
1st world.

I can hear China say "Thanks for all the fun... now GET OUT!" "We'll take it from here!"

 

That has been and remains a great fear of mine regardless of what happens to the Detroit Three.

I've brought up the issue of GM being so heavily involved with China in many different threads and GM is always defended as simply taking the smart business direction...I know it makes sense from a business standpoint but that doesn't help me worry less about the future.

 

while this model works great for delphi and parts such as radios and keyfobs, the shipping impact is alot larger when trying to ship superduty F-150s

You cannot manufacture all cars overseas and ship them as itd be cheaper to make them here. What we do need however is a competitive labor contract...ideally getting rid of the jobs bank. We dont need to pay every employee when were making half the cars

 

They make those now?

 

What's to stop a surviving "foreign" GM from coming to the U.S. and either buying some existing and/or building a couple of new, highly efficient, non-unionized plants and building some of their great cars right here again?

It seems to me that would put them instantly on a the level playing field they've desired for so long.