Ponying up more than $100,000 of their own money, three dozen General Motors Corp. dealers nationwide this month bought full-page newspaper ads imploring the public to give GM a chance.
"For the good of everyone, they must succeed and they need our help," the ad read. "We pledge ours. We hope you will do the same."
For most of GM's 98-year history, that kind of plea would have been unimaginable. But now, the company long synonymous with U.S. industrial might is scrambling to avoid something else once unimaginable: bankruptcy.
GM executives, including Chief Executive Rick Wagoner, say they have no intention of filing for bankruptcy protection, and no need to do so.
On Thursday, the company reported a $323 million first quarter loss, a sharp improvement from recent quarters and an "important milestone" in the automaker's turnaround plan, Wagoner said.
But some veteran industry analysts say GM's fundamental problems of high labor costs and falling market share are so severe that there is a serious risk that the auto giant will enter Bankruptcy Court in the next few years. Any number of events could be the tipping point -- another surge in oil and gasoline prices, a recession brought on by rising interest rates or a strike by GM's main parts supplier, which already is operating under Chapter 11 of the U.S. Bankruptcy Code.
For the world's largest automaker and its vast constituencies, the prospect of a bankruptcy filing is so daunting that even many of Wagoner's critics hope his revival program works.
A GM bankruptcy filing would be the largest in history, challenging Wall Street, organized labor, politicians and the legal system to deal with the fallout.
GM's 147,000 workers in the U.S. and 460,000 retirees would face the prospect of their pension plans' being dumped on the federal government and of seeing their future benefits reduced.
Stock and bond markets could be upended, at least temporarily. GM shareholders, including billionaire Kirk Kerkorian, who owns 9.9% of GM, could lose every penny of their investments in the carmaker. Meanwhile, the company's bondholders, banks and other creditors would face unknown losses on $33 billion of debt.
Almost certainly, a GM bankruptcy filing would have enormous repercussions for the entire U.S. auto industry, which still directly employs about 1 million Americans, many of them in the Midwest.
