You may be wondering, "What is happening with General Motors?" I had to do some reading to understand this myself, but the basics are:
1. Not a lot of people are buying new cars these days, and the car industry is in deep trouble.
2. Both Chrysler and GM had to beg the government for money over the last several months to keep them from going out of business.
3. After giving them time to prove to the government that they would be able to make it through the tough times, the government analyzed the companies and decided they are not going to make it without a lot more help from the government.
4. If the companies went out of business, the U.S. would throw in the towel to foreign car makers, and we would lose a vital industry.
5. Thousands of U.S. workers - engineers, factory workers, dealers, etc. would lose their jobs. Those losses would hurt those people and the overall economy in a big way.
6. So, the Obama administration decided the best thing to do was to allow the government (American taxpayers) to buy up about 60% of General Motors stock to keep the company in business as it goes through the legal process of bankruptcy.
7. Chapter 11 bankruptcy basically means that under the guidance of a federal judge, the company will be forced to sell off parts of the company, close plants and dealerships, and find other ways to pay off debts and save money. The government will then guide the company toward developing a new business plan for the future that will hopefully make the company profitable once more.
There are no guarantees however, and if GM can't put a winning plan together for the future, the government will be stuck with the bill.
Read some more about this plan, give me your reactions and think about what constitutional issues, and governmental powers are involved with this story. Some articles that you may find helpful:
G.M. to Seek Bankruptcy and a New Start
News Analysis: Obama’s Test: Restoring G.M. at Arm’s Length
GM: How an American giant rolled off course
G.M.’s New Owners,
The 31-Year-Old in Charge of Dismantling G.M.
11 comments:
i dont really know what this has to do with the constitution but bankruptcy is a part of our country's history. For example, when FDR was in office during the great depression he developed the three r's one of them being reform which was designed to help prevent national bankruptcy in the United States. May i point out one of the companies that went bankrupt in the great depression was GM so i think they'll come back again!
Honestly i think the gov't should drop the General Motors cause because if they keep helping out it even says their gonna be stuck with a fat bill that could be use towards something more useful. People today are more interested in more fuel efficeint cars and GM should have seen this from the start when gas prcies rose and built a better model for the people of today to avoid bankruptcy.
Junior Jack
per.5
I think that the government should help bail out GM in any way that they can, if GM fails thousands of jobs will be lost. That will lead to people having less money meaning that people wont be able to consume products and will have a very bad effect on Americas economy.
-Conner Spani
I Believe that the government should not help out GM. Let the bad companies fail. If we keep bailing out every company that goes out of business we will never get out of this recession. The fact is that if we keep bailing everyone out there is absolutely no way they are going to thrive again in 10 years they will file for bankruptcy again!-Jacob Goss
I agree with junior, but not conner. the gov't shouldnt really bail them out, it sucks they are out but they shouldnt make such un fuel-efficient cars. All of their models arent very good on gas mileage. And yeah alot of people would be out of jobs, but they can just get new ones, its cool. And also itd be easier and less expensive the other way.
Dylan Evans.
per.5
Great point Alexis Jones! GM was one of the companies that went bankrupt in the great depression so there might be a good chance that they bounce back again. I have two different opinions about this subject. Part of me thinks the government should bail out GM but part of me doesn’t. Why should we spend more money on a company that isn’t that important? It isn’t our fault that they only make such UN fuel-efficient cars. We have more important things to be worrying about then bailing out GM. At the same time what happens if the government doesn’t bail them out? Thousands of jobs will be lost and that will just lead into more problems.
Mr Joyner
Well first of all, Dylan, Conner is right because GM is likely to bounce back like it did after the Depresion and the thousands of people who work at GM could keep their jobs and support their familys. It is not as easy as "just getting another job". If all of those people lost their jobs it would also affect the economy because they would have less money to spend on goods.
-Megan Amacker
Josh Potter
Its ridiculous that the government keeps dumping money into GM, but as long as they can stay alive during this economy downfall we're in, it would be great for the future. I know that they can get through it because like Alexis said, they've gone through tougher times than this.
(Current event #2 make up)
The government really doesn’t have any other choice but to bail out GM. If they let them sell out, thousands of jobs will be lost leaving all those jobless people with no money to spend on goods which will hurt the economy as a whole and will cause the recession to become more even more serious. Also as many other people have said, GM has made it through worse times than these and I think that with a little help they will be back on their feet again in no time.
Keegan Malmanger
Current Event #10 make up
I think that the government should bail out GM. I think that the economy could be worse because a lot of people work for GM and they would all lose there job if GM goes bankrupt. I think since GM has gone through bad times and came back from it they can do it again in this these tough econmic times. if all of the GM employees did not have a job than the economy could be worse since they wouldn;t have money to buy things.
Spencer Truong
period 5
EXTRA CREDIT
i believe that they should not bail out GM because it will cost us way to much money. i think the economy would end up worse because if we bail them out it will use to much of the governments money and the banks money. also because even if they bailed them out they wouldnt do good because there cars do not have gas mileage and people like cars with good fuel economy since the prices of gas is raising.
Scott Watters
Period 3
EXTRA CREDIT
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