Cause and Effect in European Politics and Law

GM owes $ 172 bn after the bancruptcy

Adelina Marini, June 1, 2009

The auto giant GM has $ 82.3 bn in assets and almost $ 173 bn in debts. Earlier today GM filed a bankruptcy bid by announcing also that it closes 14 factories. It is expected the president Barack Obama to address the issue today. The American government gave $ 20 bn in loan a few months ago which couldn't help the company to survive. According to the Internet site of the "New York Times" it is expected the president to present a strategy which will give GM the chance to continue making money even if new car sales remain at a sluggish 10 million a year in the United States and even if G.M., once the giant of the industry, drops below its current 20 percent market share in this country.

But to make this happen the American taxpayers will have to invest additionally $ 30 bn in the company beside the $ 20 bn the government already gave the company. The newspaper commented that this will make taxpayers more vulnerable because the government will thus become the owner of 60 % share of the company and if the efforts to save GM fail, all this money will go for nothing.