Automaker Bankruptcies, Turbocharged

The New York Times’ Micheline Maynard takes a look today at how fast both Chrysler and General Motors (GMGMQ) moved through their respective Chapter 11 proceedings. Summary: It was pretty dang fast.

Yet there was this questionable point in the analysis:

"The speed is even more remarkable given that as recently as mid-March, when the Treasury’s auto task force retained bankruptcy counsel, it was not clear the cases would wind up in bankruptcy court, a senior administration official said Monday.”

Actually, it seemed pretty clear as far back as last year that Chrysler and GM were in serious danger of bankruptcy. In fact, you could argue, as "Shifting Gears" did, that the government bailouts that kept both companies in business long enough to make it to largely orderly bankruptcies were pre-bankruptcies—slo-mo, bespoke efforts at easing Chrysler and GM into the inevitable.

What is intriguing about the way both (former) Big Three carmakers were aggressively restructured in such a short period of time is how different the end results were. Chrysler created a new global manufacturing celebrity in Fiat (and now Chrysler) CEO Sergio Marchionne. No one really saw that one coming. The New GM, on the other hand, has come out of Chapter 11 looking like what many observers thought the Old GM should have tried to become: a carmaker with fewer brands and at least one highly innovative vehicle, the Chevy Volt extended-range electric vehicle,* leading the company into the future. Chrysler-Fiat: big surprise, could work out brilliantly. New GM: no shocker, could be a disaster with GM eliminated from the North American market.

*The days of referring to the Volt as a mere hybrid seem to be over.