WILL GENERAL MOTORS COMPANY FILE FOR BANKRUPTCY?

General Motors Company might go bankrupt. The $ 60 million debt to the authorities of the North American state of Ohio that the company has previously received in the form of subsidies and tax benefits is to blame.

The funds were received by an automobile concern in order to provide jobs for the population of the city of Lordstown, where the GM factory for the production of Chevrolet Cruze cars was located. However, on 6 March of last year, the production was ceased, and the closed plant was sold to the Lordstown Motors - a start-up, specially created for this transaction.

We should recall that we are talking about a legendary enterprise, which experienced a strike of workers against the management of the corporation back in 1972. The action, undertaken by the workers, cost GM $ 150 million and lasted 22 days, after which it was included in many textbooks on business administration, radically changing the management methods and quality control in the enterprise. The leading American publications began to call the factory workers “industrial Woodstock” because of their appearance (fashionable clothes and long hair).

The gradual reduction in staff and the model lines in the 2000s led to the fact that since 2011, only cars of one model line has been produced at the plant.

It is already known that the authorities of the Ohio state have not made a final decision on GM yet. The provisions in the GM's tax agreements allow the government regulators to take the market conditions and whether the company continues to conduct “other operations on staff” into account until the final decision is made. Complex negotiations of the company’s management with the authorities are scheduled for the second half of July.     

The concern asks the authorities not to demand a return on the investments, as this puts the company at the risk of undermining the economic strategy and potential ruin. “If the state returns $ 60 million, that would be one of the biggest events in the history of US,” said Greg Leroy, executive director of Good Jobs First, a national non-profit organization that advocates for accountability in the economic development.