In 2008-2009 GM “General Motors” danced with bankruptcy creating a near catastrophe for the company. GM fell for various reason but with perseverance from different economists and politicians GM was able to get government loans to save them from bankruptcy. There multiple reasons why the GM failed: poor business planning, oil, banks etc... The summer of 2008 wreaked havoc on GM because of unimaginable gas prices. A barrel of oil at this peaked at $145 a barrel in turn this caused gas prices at its peaked to go to $4 (auto crisis). The initial gas hike caused the crisis because GM and the rest of the Big Three rely heavily on their most profitable product, the big o'l American SUV. SUV's were and still are a american statement but they were complete gas guzzlers at the time getting 15 mpg (miles per gallon) which many …show more content…
with this people started to buy less and less SUVs which lead to GMs 21 billion dollar loss in the first three quarters in 2008 (auto crisis). Before 2008 Gm reported a net loss of 39 billion dollars in 2007 if that wasnt enough to GMs dwindling money supply. Secondly another factor that made the GM fail was the lack of car sales a acrossed the board. The sales were so low because banks didn't trust anyone with loans even small loans and this is why GM failed. There were many different bailout policies regarding the bailout of GM. Firstly GM tried to to obtain money from the Troubled Asset Relief Program (TARP) which held $700 billion dollars to rescue failing banks… ( auto crisis) The bill to use money from TARP to bailout the GM was objected by the Bush Administration because that wasn't what the money initial intention was for. Secondly, with low car sales GM was running very low on cash so in a last ditch effort GM requested just enough money to keep above the water so they didn’t have to file for bankruptcy. Out of the Big Three GM