GM Bankruptcy the Largest Industrial Bankruptcy in U.S. History
21,000 of General Motor’s US workforce and 2,600 of the car dealerships have ended as the industrial giant officially went under bankruptcy protection on Monday, June 1, 2009. This is the largest company to have ever entered into bankruptcy in the history of United States. The 100 year old company is now temporarily nationalized in what President Barack Obama calls, giving the symbolic American company a chance to cleanse itself from unprofitable old buildings, overblown labor costs, and overwhelming debt and start fresh in the ‘new economy’. With a debt load reduced from $67 billion to $9 billion, a new pact with United Auto Works that brings labor costs to those comparable to Japanese auto workers wages, and reduction of the brands produced cut in half (four of the eight previous brands are now history), President Obama feels the company has a viable and achievable plan to return to profitability. In the meantime America owns 60% of General Motors Corporation.
Foreclosures at 12% in Home Mortgages
The Mortgage Bankers Association has released its viewpoint on the numbers for the first quarter of 2009 this past week. The rate is the highest seen since the recession in early 1985 in Oregon in what is now the longest lasting recession experienced by the United States since the years of World War II. What was originally the problem of those individuals that received mortgage loans that could not really afford them, is now the problem of millions of Americans who up until now had excellent credit risks. The domino effect of the unbridled ingenuity and greed of one branch of financial services industry is now being felt through the loss of jobs and inability to get new jobs of solid bill paying citizens. When businesses could not get short-term loans to cover operating expenses due to the credit industry collapse they had to cut production and payrolls. The people falling behind on their mortgages today are devastated at finding themselves in a situation they never dreamed they would be in. News that the economy is expected to pick back up in the fourth quarter does nothing to lighten their dilemma.
Just Don’t Do It – Consumer Saving Tip
The way to save money in this economy is diametrically opposite of the Nike slogan America adopted years ago. Do not go on the vacation, buy the designer summer wear or trade in your car for the latest model. Of course this does not help the failing businesses but the individual who thinks going further into debt or not having a minimum of three months operating expenses saved up is living in a bubble that has burst for millions of Americans. Living paycheck to paycheck, even when the paycheck is three figured, is a reality for more people than anyone realized before the banks and corporations began tumbling down. Put the money in your pocket and just don’t do whatever you used to do, think you were going to do or planned to do previously. Read books, write letters, play checkers and you may make it through to the eventual upswing without joining the millions going down the financial drain.
Coastal Credit Solutions, Inc. operates a financial market place that matches Consumers and Businesses with debt eliminating and/or alternative financing service providers. If you have over $5,000 personal or business credit card debt or are seeking small business financing, please call us 866-205-8370 for a FREE no obligation consultation.
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