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BizChina Special - Bankrupt GM: What is ahead?

2009-06-02 18:22 BJT


Special Report: GM Reshuffles amid Auto Crisis |

Host: Annie Fu

Guest: Raymond Tsang, partner and vice president of Bain & Company in China

On the other side of the world, news that General Motors has filed for bankruptcy has been making headlines.

The effects of this filing by the hundred-year-old company are currently rippling through the auto industry, as well as the world economy.

Is it a new beginning or a tragedy? Joining us on the topic will be Raymond Tsang, partner and vice president of Bain & Company in China.

He is an auto industry specialist. In the next thirty minutes, we're going to tell you what's going on with GM and where it's going, as well as what the impact will be on the US and global auto industry.

Video: Studio Discussion I >>

Q1. Before Monday, many media had described the day in foreboding tones. But once the day came, the anticipated filing seems to have been taken in stride by both the media and the markets. Before we get too deep into the issue, can you first explain for our audience what this bankruptcy will mean for GM?

Q2. Another question that our audience wants to know is: What has been the real problem with GM?

Q3. A look at the numbers as we know them now: The US government will hold a 60 percent stake. United Auto Workers Union holds 17.5 percent. The Canadian government has 12.5 percent. The new GM hopes to turn a profit in 5 years. What do you think of the plan? What are some potential difficulties that lay ahead?

Q4. GM made various efforts before it filed for bankruptcy. It inked a labor deal with the United Auto Workers union and bondholders. It also decided to idle more US plants and focus on small cars. In what way will these measures help the new GM?