I grew up in an era when most folks believed that what was good for General Motors was good for the country. And vice versa. It’s a lot harder to make either argument these days, as the automaker skids deeper and deeper into trouble.
Once GM controlled half the U.S. auto market, and the federal government was determined to break the company up. Now, the unthinkable seems all too possible, with analysts trying to imagine the impact of a General Motors bankruptcy. Until recently, investors seemed willing to ride things out. They were buoyed by union healthcare concessions, and the promise of new products to come.
But last week’s announcement that GM would have to restate its earnings for 2001 seems to have been the proverbial straw that broke the back of the investment community. GM’s share price has plunged and the mood is growing increasingly pessimistic, both inside and outside the automaker’s gleaming headquarters in Detroit’s Renaissance Center. Few would argue that a GM bankruptcy would be bad for the country. But at this point, one has to wonder if anything would be good enough to turn things around for the struggling giant.