James Hamilton at Econbrowser looks at appalling November car sales and tells readers just how bad things are for General Motors:
Remember that this volume decline is hitting an industry with huge fixed costs, and that these are decreases relative to 2007. GM, for example, reported a loss of $38.7 billion for 2007. That’s billion, with a “b”. Back when things were good.
Evan Newmark on The Wall Street Journal’s Deal Journal is equally bleak:
If you’re a U.S. taxpayer you ought to read GM’s “Restructuring Plan for Long-Term Viability.” By the end of next year, you’ll own a good chunk of this company, so you might as well familiarize yourself with what’s going on there.
On first read, you’ll think that’s too rash a judgment. The document is well-reasoned and thoughtfully crafted. There are lots of numbers “proving” GM’s commitment to restructuring.
But at its core, it’s propaganda aimed directly at warming the hearts of Congress.
It is not a viable business plan.