The announcement Monday that General Motors Corp. had filed for Chapter 11 bankruptcy protection will be a turning point – perhaps for the U.S. auto industry, but certainly for capitalism. American taxpayers will own 60 percent of the 101-year-old company when it emerges from bankruptcy.
The company hopes that will take no more than 90 days.
Though GM’s bankruptcy was expected, the world reacted with shock. That wasn’t a surprise. When the Giant fell from Jack’s beanstalk, the crash was felt across the English countryside.
The GM announcement hit Michigan hardest. The company said it would close or idle 15 plants. Six are located in GM’s home state and affect 7,216 employees.
Despite the alarming headlines in newspapers and on broadcasts Monday and into Tuesday, reaction in Kokomo was subdued. In fact, most here likely believed the news out of Detroit, New York and Washington Monday gave Howard County hope.
• Bankruptcy Court Judge Arthur Gonzalez approved the sale of most of Chrysler’s assets to Fiat Group SpA. Rep. Joe Donnelly, D-Ind., said, “All the Chrysler transmission operations will remain in Kokomo. All transmission-related work will remain.”
• Delphi announced its sale to Parnassus Holdings II LLC, an affiliate of the private equity firm Platinum Equity. A Platinum official said Delphi Electronics & Safety in Kokomo is not a part of the sale.
• And GM still plans to buy back Delphi Electronics & Safety, hinting if not announcing that research and development in Kokomo is vital to the General’s viability.
Since Delphi’s bankruptcy filing in October 2005, Kokomo’s economy has experienced a steady slide. Jobs have been lost. Tax collections have shrunk. Business has contracted.
But as Donnelly told us Monday, “The future is much better today than it has been in the past.”
