GM bankruptcy has pros and cons

DETROIT, Nov. 13 (UPI) -- Allowing a U.S. automaker to file for bankruptcy may be a better play for the federal government than reaching in with financial help, some analysts said.

"Just let market forces play out," Matthew Slaughter, an associate dean at the Tuck School of Business at Dartmouth, told The New York Times.

"I'd rather the government's money be used to train people for other jobs," said investor William Ackman.

GM's Chief Executive Officer Rick Wagoner, however, said bankruptcy "would be dire."

The company will "take every action we possibly can to avoid it," Wagoner said.

Advocates for bankruptcy say it would force companies to make drastic changes sooner rather than later. And GM shareholders, the Times reported, wouldn't be affected drastically, as they have already been devastated by the company's plummeting stock value, which is down 90.5 percent from a year ago.

Union workers and tax revenues would be affected, however.

"Even if they go bankrupt in a year, it is better than going bankrupt now," Professor Susan Helper of Case Western Reserve told the Times.

"From a social point of view, even if GM is not providing a return on investment, it

is still providing a lot of good jobs," she said.