GM files for bankruptcy
Tuesday, 2 June 2009
From Fazle Rashid
NEW YORK, June 01: General Motors, commonly known by its acronym GM, a symbol of America's industrial might filed for bankruptcy today, media reported.
The government would provide an additional $30.1 billion atop $20 billion already paid to the sick carmakers and own a 60 per cent ownership of the company.
The filing of bankruptcy is a moment of reckoning for an industry that was once at the heart of the American economy. It has also placed the government in an uncharted territory as a business owner, the New York Times (NYT) in a report said today.
GM will shed 21,000 workers and close 12 to 20 factories. Forty per cent of the company's 6000 dealers will close. Workers will have to chip in $10 billion to meet half the cost of the health insurance. GM employs 230,000 people globally and manufacturing more 20,000 vehicles a day. The concept that what is good for America is good for GM and vice versa has received a big jolt.
Meanwhile, Tim Geithner, US Treasury Secretary begins his visit to China today underlining the need for joint Am-Chi coordination to forge a exit strategy from the financial crisis. Two countries are getting locked into an increasingly tight embrace, an analyst said.
The majority of the world's leading investors do not believe the recent strong performance of stocks and risky assets is sustainable. A study
revealed that respondents believe the trajectory of the global economy over the next year will be "V shaped," indicating weakness. The other views expressed are growth will remain weak for sometime before a gradual recovery begins and a recovery will temporary and renewed weakness will set in.
In the US government and companies who have taken tax-payers money are standing face to face over regulation. The government wants to rein in financial institutions who were lured into risky business thus squandering money but the companies are fighting to resist the government move. Nine major US banks that were put to stress test have jointly hired a lobbying farm to fend off regulation.
In Saudi Arabia, its central bank in a directive to commercial banks to freeze the accounts of Maan al-Sanea, a leading businessman who also has shares in HSBC bank. Maan was one of the richest 100 individuals of the world. Action has given rise to fear about the health of the Gulf's family owned business in the downturn.
On the political front, US president Barack Hossain Obama will make a speech in Cairo on Thursday that he hopes will begin transforming America's relations with the Muslim world. Barack Obama will meet with Saudi king Abdullah ahead of his much vaunted speech in Cairo. The US president will send his Middle East envoy to Syria in a most concrete sign of rapprochement between Damascus and Washington. The US representative had earlier met with Iranian leaders. Both Iran and Syria were in President Bush's axis of evils.
The United States in order to put pressure on North Korea which had recently detonated atomic bombs is talking to South Korea, China and Russia to warn Pyongyang. Washington is also pushing the UN security council to impose stringent sanctions.
In a separate development, Prime Minister Manmohon Singh of India talked to Australian Prime Minister Kevin Rudd to express New Delhi's concern over the killing of Indian students in Melbourne.
NEW YORK, June 01: General Motors, commonly known by its acronym GM, a symbol of America's industrial might filed for bankruptcy today, media reported.
The government would provide an additional $30.1 billion atop $20 billion already paid to the sick carmakers and own a 60 per cent ownership of the company.
The filing of bankruptcy is a moment of reckoning for an industry that was once at the heart of the American economy. It has also placed the government in an uncharted territory as a business owner, the New York Times (NYT) in a report said today.
GM will shed 21,000 workers and close 12 to 20 factories. Forty per cent of the company's 6000 dealers will close. Workers will have to chip in $10 billion to meet half the cost of the health insurance. GM employs 230,000 people globally and manufacturing more 20,000 vehicles a day. The concept that what is good for America is good for GM and vice versa has received a big jolt.
Meanwhile, Tim Geithner, US Treasury Secretary begins his visit to China today underlining the need for joint Am-Chi coordination to forge a exit strategy from the financial crisis. Two countries are getting locked into an increasingly tight embrace, an analyst said.
The majority of the world's leading investors do not believe the recent strong performance of stocks and risky assets is sustainable. A study
revealed that respondents believe the trajectory of the global economy over the next year will be "V shaped," indicating weakness. The other views expressed are growth will remain weak for sometime before a gradual recovery begins and a recovery will temporary and renewed weakness will set in.
In the US government and companies who have taken tax-payers money are standing face to face over regulation. The government wants to rein in financial institutions who were lured into risky business thus squandering money but the companies are fighting to resist the government move. Nine major US banks that were put to stress test have jointly hired a lobbying farm to fend off regulation.
In Saudi Arabia, its central bank in a directive to commercial banks to freeze the accounts of Maan al-Sanea, a leading businessman who also has shares in HSBC bank. Maan was one of the richest 100 individuals of the world. Action has given rise to fear about the health of the Gulf's family owned business in the downturn.
On the political front, US president Barack Hossain Obama will make a speech in Cairo on Thursday that he hopes will begin transforming America's relations with the Muslim world. Barack Obama will meet with Saudi king Abdullah ahead of his much vaunted speech in Cairo. The US president will send his Middle East envoy to Syria in a most concrete sign of rapprochement between Damascus and Washington. The US representative had earlier met with Iranian leaders. Both Iran and Syria were in President Bush's axis of evils.
The United States in order to put pressure on North Korea which had recently detonated atomic bombs is talking to South Korea, China and Russia to warn Pyongyang. Washington is also pushing the UN security council to impose stringent sanctions.
In a separate development, Prime Minister Manmohon Singh of India talked to Australian Prime Minister Kevin Rudd to express New Delhi's concern over the killing of Indian students in Melbourne.