I was talking with mr. emptywheel about what one of the bad–but by no means worst–case scenarios in a GM bankruptcy would be. This scenario is just one of several that might happen–by no means guaranteed, and Congress would fight the scenario at every stage, though with increasingly less leverage. But it is a scenario that follows a great deal of logic about possible outcomes. It is this scenario, though, that explains why both Toyota (I’ve seen reported–looking for the link) and many in Congress want to bailout GM before it gets to bankruptcy.
Here’s the short version: more details below.
- GM files for Chapter 7 bankruptcy
- GM’s Chinese partner, SAIC, buys much of GM (Buick, Chevy, Cadillac)
- GM/SAIC starts importing Chinese-made Buicks and Chevys, undercutting Toyota’s cost advantages
- GM/SAIC owns the Volt technology, requiring US firms to lease it if they wanted to use it
All the Shock Doctrine fanatics cheering to drive the the Big 3 into bankruptcy “restructuring” (like Mitt Romney, who can kiss future hopes of electoral victory in Michigan goodbye) might want to think about the implications of this.