As if Tim Geithner did not have enough headaches! I cannot say that I have done more than skim the restructuring plan presented by General Motors to the Treasury Department late Tuesday afternoon, but the executive summary doesn't make for fun reading:
Give us an additional $16.6 billion right now, so that we can close another 14 manufacturing plants and lay off 47,000 more workers.
Now that's what I call a deal!
You thought things were bad in December, when we said the collapsing economy was destroying our business model? Well, since then, everything has just gotten worse.
Since December 2, economic conditions have continued to deteriorate globally. This, combined with public speculation about GM's future, has further reduced the Company's volumes, revenues, and cash flows. In addition, the weakening financial markets have significantly reduced the value of GM's large pension fund assets.
It's pathetic. One of the greatest manufacturing companies ever to stride the earth has been reduced to whining that "public speculation about GM's future" (translate: all those bloggers wondering if we're going to have to declare bankruptcy) has made it even more difficult for us to sell the cars that American consumers already didn't want to buy before the economy collapsed.
As with so much that is going on in the global economy today -- California's fiscal disaster, the insolvent banking system, the foreclosure plague, the first global decline in net GDP since World War II -- there are no good solutions to G.M.'s pickle. Every possible outcome, from bankruptcy to bailout, seems sure to deliver another sledgehammer blow to the U.S. economy. But if we needed any further evidence of how full the Obama administration's plate is right now, mull on this: General Motors says it needs another $16.6 billion so as to remake itself into a shadow of its former self. And that's hardly the toughest nut the White House needs to crack.