As the on, off, on again fiasco continues in the US it is disturbing that few are looking at the facts of the matter relative to GM.  First of all, this is from their web site.  They have 16 separate brands, each with their own web site – and each with their own business unit, in effect competing with each other.  This is not a good sign but lets dissect the financials.

The financial results of this company follow and lead to only one responsible conclusion.  They are bankrupt.  Their liabilities exceed assets by $60 bn as of Sept 2008.  Even in 2006 their liabilities exceeded assets by $6bn.

Sourrce:  google finance & GM site

If we look at this table, it is clear the issue with GM is unrelated to the current economic crisis.  Their issue is that even in the supposed boom times of 2004 and 2005 their business was in trouble and sales were dropping between 2005 and 2004.  They have lost an astonishing $51 bn since 2005.

Providing them aid now will simply fund their losses and postpone the inevitable.  Nothing else will change.

I predict that the money which it appears is going to be paid to GM will simply defer their Chapter 11 filing by a few months.  Chapter 11 with a complete business breakup, and restructuring with all new management is the only solution here.  Chapter 11 would allow this to occur in a methodical and managed way.