GM on life support

Most of us will find it incredulous when GM goes into bankruptcy. I remember when all their new cars came out in September each year and everyone raced to the dealership to see that years models. The company,however, will go the way of the steel companies. Over the years both agreed to labor demands for larger and larger benefits and wages which were tenable when there was no global competition. That is no longer true--especially in cars and steel. Here is the data. If you take all the company's shares and multiply them by the market value of a share you get the equity value of the entire company. That is what you could buy the company for. In the case of GM that comes to 14 billion dollars. As George Will pointed out, that is less than the value of Harley Davidson. More pertinent to the GM case, they have health care liablities of 20 billion and a 90 billion pension fund. The situation at Ford is no better since they agreed to much the same labor demands. I am really glad I am not depending on either company for a pension check each month. On the other hand, the effect of these bankruptcy declarations on the economy and stock market could be traumatic.