General Motors has filed bankruptcy and is now officially going to cut jobs and lowers it work force to just 10% of what it once was. In the mid 1970’s General Motors housed over 395,000 employees and is now expected to have only 34,000 employees building cars. General Motors has had terrible leadership that has kept it from becoming a powerhouse in Detroit but instead remained neutral when others were leaping ahead with technology and design.

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General Motors bankrupt is the new word on Wall Street.

It seems that despite major efforts to save itself and all the new plans and arrangements, General Motors will be forced into bankruptcy by the end of next month. Word on wall street remains that the giant auto maker will be forced to claim chapter 11 bankruptcy and will be forced to close down over 1000 dealerships in order to potentially survive the dark road ahead.

This is now the 3rd major loss in the American auto industry, and seems to not be the last. Chrysler was first, followed by the Pontiac branch of General Motors and now this; GM should learn a few tricks from its counterpart Ford automotive who has used this recession as an opportunity and has prepared well for the next boom in automotive technology.

General Motors being forced into bankruptcy comes as no surprise as it was clear that production quality, innovation and customer satisfaction had been lacking in years and that no last minute change was going to entirely salvage a lost and useless company that was ran so inefficiently for the past decade.

General Motors can only hope that this chapter 11 loss will be its last as it obviously has yet to fix its union problem, labor costs and production costs in order to turn this ship around and salvage what is left of it.

It is now clear that General Motors going bankrupt and dropping Pontiac is only one of many companies that will have to cut its loose ends during this recession. It seems that despite the auto industry’s sales picking up a bit in the first and second quarters of 2009, the cuts are not yet done.

American car manufacturers like General Motors will continue to suffer due to poor products, management and awful marketing but others are doing fairly well and taking this recession as an opportunity to grow into a better and smarter company.

Lets look at some examples:

Ford has done a great job in adapting to this economy and making changes to its line gradually since 2005, so that it would be ready to attack strong in 2010. It has redesigned it Focus, teamed up with Microsoft for its technology and made more hybrid vehicles available, without mentioning that their designs and levels of quality are increasing.

Following Ford has been Korean auto maker Hyundai who recently introduced its “Genesis” sedan and coupe and has changed its commitment to quality as well. Hyundai was known for making affordable cheap cars but it has taken this recession seriously and decided to re brand itself as the alternative to luxury at a great saving. Their latest is reviewed and compared to the top of the line Lexus or Mercedes but costs a fraction of the competition.

These two companies Ford and Hyundai are some of the big shakers and movers to watch, they offer great products, at attractive prices and continue to remain innovative. they make big leaps while others simply try to catch up.

Times are still tough for the American automaker and despite cuts to its worker line, assembly line, its budget and expenses, the new CEO is still having some tough decisions in front of him.

It is clear that more cuts and reorganization will be necessary in order to survive this economic downturn in full. The new CEO has proposed some interesting moves to help combat the recession and make GM profitable.

We know that one of GM’ s largest issue was focused around the quality of its products and that it’s been hard for them to turn around such a long history of poor quality, and so there have been rumors that despite slight improvements in sales, General Motors might close off the Pontiac branch of its  empire.

Pontiac has been know for making poor quality autos for generations now and continues to behave poorly in term of branding and innovations and despite the recent pump from the G6 and G8 releases, they continue to sink the back bone of GM.

If the rumors are true, GM could close Pontiac down prior to the end of the year and lay off its assembly line workers as well. This plan would save General Motors some great money and help the brand come to life through less channels and a more focused message on quality and reliability.

Fritz Henderson, the new CEO of GM speaks up. He has plans for GM and is doing his best to reinvent the company. He says changes will be made and he will not wait around for Obama to dictate what those changes are. He wants to make the right budget cuts, reorganize the company’s priority and and make people work harder to prevent further cuts down the road. The company was given a June 1st deadline to change its high debt balance sheet to a profitable company.

General Motors had originally planned to cut 47,000 or so jobs by the end of 2009 and has now announced that they might be doing so earlier than expected in order to cut debt and increase profits. It is a fact that General Motors houses over 244,000 employees and that bankruptcy would impact our economy drastically but GM must remain conscious that keeping its Union Workers on payroll will probably mean it will fall.

General Motors has to somehow find a way to negotiate with union workers and their respective unions a plan to help the company remain afloat without having to pay those awfully large wages simply due to people’s seniority. Henderson also made a note that GM must get rid of its $49 billion in bond debt and secured loans, this money also covers almost 400,000 GM employee’s health care that are now retired and collect retirement benefits.

Henderson finally concluded by saying that GM would most likely have to close 5 of its factories by the end of the year and might claim a small bankruptcy to  wipe its debt and try to start fresh. Obama’s administration did said it would help out General Motors with loans and warranty commitments but changes need to be made quickly to ensure GM survives on the long run.

Once again another large company that is willing to claim bankrupcy and dump its debt on tax payers simply due to its poor business model.

9% is the magic number this week.

If you haven’t heard why yet, let me explain. The market saw a 9% jump this week alone, which is phenomenal. This came shortly after the three major events that occurred this week. The first being General Motors saying they will not need another injection by the government. The second being four banks giving back bailout money. The third is because Bernard Maddoff is behind bars.

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First they pulled the plug on the Viper, now all the high performance V- Series line is on the brinks of extinction. GM needs to refocus their plans as they are truly struggling. They have made some terrible choices in the past build some terrible quality cars. Now its all about to change according to them. They are ready for a change and want to survive and so they are changing their priorities quickly. Good move or another disaster?

General Motors, focusing on mainstream products in a battle to survive, has scrapped a unit that produced high-performance vehicles.

GM on Wednesday disbanded High Performance Vehicle Operations, which is based at the company’s suburban Detroit technical center, and redeployed its engineers, spokesman Vince Muniga said.

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Why are we bailing out Detroit? Why is the government getting involved with private sector bailouts?

It seems that the economy of this country is turning into a big mockery. We are bailing out corporations, from banks to car manufacturers, have no oversight of the money, and deal with CEO’s that refuse to give up their pay/bonuses to save their own companies?

That makes no sense.

For years, banks, private organizations and car manufacturers had record profit years, at which point they gave nothing back to the country. I cannot imagine why bailing them is an option and even worst actually going through with it.

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