Q&A: GM's 'Going Concern' Letter

My gut reaction when I saw the news this morning was, "Is this news?"

This is just an accounting-related filing that General Motors (GM Quote) is forced to file with the SEC. Every single person reading this article, and for that matter any random person on the street that you talk to, knew that GM had issues as a "going concern" (put in quotes because the only time you ever use that phrase is in an 8-K filing that your accounting firm forces you to file with the SEC).

Is it real or is it just to put a gun at the head of the government?

Of course the answer is the latter. The faster GM approaches bankruptcy, the faster the government has to react.

Is GM too big to fail?

We all know the argument: millions of jobs will get lost, etc. I don't quite believe this. Whether or not GM goes bankrupt, the same number of people will end up buying cars next year as would have bought them.

The question is really more on the demand side rather than the supply side where GM sits. Will business move overseas? Of course not -- many of the car manufacturers already build their cars here.

Will there be pain? Of course, particularly in Michigan, which is already technically bankrupt because of dependence on the auto industry, an aging workforce and current reliance on federal money to pay bills. If anything, I'd worry more about bailing out Michigan than GM. Don't forget that the largest Toyota (TM Quote) plant in the world is in Kentucky.