If just one big mistake had brought General Motors (GM) to its knees, maybe it could have been fixed and averted its march into bankruptcy court Monday.
But what put the huge company — it once sold more than half the cars in the U.S. market and now controls less than 20% — in such a hole was a series of missteps, an inability to change lanes quickly when the market or government veered … and a heaping dose of bad luck.
“If there was one decision that was the lynchpin … it would be easier to fix,” says Laura Marcero, a restructuring expert at Grant Thornton. “But these are systemic problems pervasive in the industry for decades.”
Now, GM is operating on $20 billion in government aid and will need billions more to reorganize. Over the weekend, GM put final pieces in place for a filing: a cost-cutting labor deal got union approval; the U.S. and Germany brokered the sale of its European Opel unit to Canadian parts maker Magna; and more than half its bondholders agreed to a deal to cut its debt.
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