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General Motors General Motors at the time was a 101 year old company that was the largest carmaker in the world making over 10 million cars and trucks in a year in 34 countries. The bankruptcy of General motors was one of the fourth largest U.S. bankruptcy ever. This bankruptcy was followed just shortly to Chrysler who had similar problems and was bought by Fiat. Some of the factors that contributed to the bankruptcy of general motors included current economic levels of the country but also issues with internal company product mission. In 2007 was the bottom of Americas housing market crash and as a result the sales decreased and oil prices doubled during the year costing more than $4 a gallon which as a result decreased individuals income. But also the bankruptcy can be traced back many years ago from 1908 and 1920 when the founder of General motors bought 39 companies and ran the as separate entities causing many issues. One of the largest issues that General motors had was as stated by The Economist Every year the cost of retired workers health care diverted billions of dollars from developing new models and added $1,400 to the cost of each car compared with those made in Asian and European transplants. (edition, 2009) After much deliberation and work to try to keep the company a float general motors declared chapter 11 bankruptcy stating that the company has assets of $82.3 billion, and liabilities of $172.8 billion. The government even offered 19.4 billion in federal aid to keep them a float but this still could not save the as addressed by the previous number. The government decided that general motors was to important to have them go under and invested 40 billion to keep them going and

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so now taxpayers will have a 60% stake in GM and provincial governments in Canada owning the remainder of the company. After General motors bankruptcy and bailout along with Lehman brothers and Washington mutual that have occurred in the same year I hope to see results such as GM did and eventually pay back government investment.

Reference

Isodore, C. (2009, June 02). http://money.cnn.com. Retrieved from http://money.cnn.com/2009/06/01/news/companies/gm_bankruptcy/ Edition, P. (2009, June 04). A giant falls. Retrieved from http://www.economist.com/node/13782942 (Isidore, C). Retrieved from http://money.cnn.com/2012/02/16/news/companies/gm_earnings/index.htm