Tuesday, June 16, 2009

Would you invest in a company that filed for bankruptcy?

Do you really want Your name Heregm_biz_card3600579259_8924344758_oBusiness card Generator

Since General Motors has filed for bankruptcy protection and our government keeps saying, that the taxpayers are now all owners. I have seen blogs, websites and people on flickr pick up on that idea - and create their own GM business cards. At first I thought that was funny idea - but thinking about it some more, I wondered - Would you really take your hard earned cash and invest it in a company that has filed for bankruptcy?

Look at GM, they now have to restructure their company. Which means selling off parts of the company (like Saturn, Buick, Pontiac, Hummer, Saab, Cadillac, Chevrolet), stop producing GM cars and trucks. Lay-off a bunch of people, close dealerships and end all contracts with suppliers.

Then they have to borrow money (from the government) to make new cars. Prove to their investors (again the government) why these cars make a sense to produce. Then they have to find suppliers (again) that haven’t gone under because of GM filing for bankruptcy. Have them start producing parts for their new car. Hire, back some laid-off workers to help produce these cars. Then start to advertise these “new and improved cars. “

If GM goes through all that and still fails - they will have to file for Chapter 7. Which means they liquidate whatever’s left of the business. Whatever is left of the company is pretty much worthless by that time. You will never see any of the investment money you just put into it.

Now tell me - Who in their right mind would want to be part owner in that?

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