GM Going Going ...

Maintaining a position of implausible deniability as has become common, President-elect Barack Obama declined to say if he supported an appeal by Senator Harry Reid and Representative Nancy Pelosi to rescue General Motors and the U.S. auto industry. Instead of taking a position, Mr. Obama permitted his newly appointed chief of staff, Rahm Emanuel to urge swift action to rescue the auto industry commenting to ABC:

"As president-elect Obama has said throughout the campaign and as I think as recently as Friday ... the auto industry is an essential part of our economy and an essential part of our industrial base,"

General Motors stock fell to just $3.36 per share on Monday, giving the company a total market value of just under $3 billion. Monday's evaluation of the company by Deutsche Bank concluded: "We are lowering our target on GM equity to zero dollars"

The company reports having cash reserves of 16.2 billion. It would seem that the best deal would be to buy the company outright and close it immediately netting a profit of 13 billion. Unlike the financial industry, it does not appear that there is anything left to rescue at GM. There is no way for it to become profitable given its current agreements with organized labor, and its pension and health care liabilities. If it is allowed to enter bankruptcy, it may be able to reemerge as a viable enterprise, but short of that it is unlikely to survive no matter how large a bailout it receives.