Wednesday, June 3, 2009

Chrysler and GM Chapter 11 - important to economic recovery

Fairness of the treatment of secured bond holders in case of Chrysler and unsecured bond holders in case of GM is questionable. However, the threat of bankruptcy has enabled these companies to close competitive gap in labor contract. The speed at which Chrysler is emerging from bankruptcy is remarkable. I hope GM speeds through Chapter 11 the same way.

1 comment:

  1. Can you please elaborate about competitive gap on labour market?

    I am sure these iconic companies like GM filing bankruptcy will change their theory of business. I think there will be a period of jobless growth for at least a year.

    In India, we have already started seeing reports of companies doing well. However, they are going to exercise immense caution in hiring. I expect the same all over the world.