Commentary: GM needs complete overhaul

This editorial appeared in The Kansas City Star.

General Motors chief executive Rick Wagoner insists that if the troubled carmaker filed for bankruptcy, the result would be a disaster for the industry and a drop in revenue so steep that GM could not recover.

But as the company's difficulties mount, a certain type of bankruptcy – one financed by the federal government – could be the least-bad option for GM's long-term viability.

Restructuring via bankruptcy would likely result in a company more thoroughly transformed and better able to survive than the out-of-court, government-supervised process GM is now undergoing.

General Motors, which employs 2,400 workers at the Fairfax plant in Kansas City, Kan., has received $13.4 billion in federal loans.

Last month, the company said it would require up to $16.6 billion more, although GM said last week that it would not need a $2 billion loan scheduled for March.

It has submitted a restructuring plan to the Obama administration, and has until March 31 to complete negotiations with its union and its bondholders.

In a recent filing with the Securities and Exchange Commission, the company said that because of continuing losses, its ability to continue as a "going concern" was at risk.

To read the complete editorial, visit The Kansas City Star.

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