[Martin:] Now, Johnnie Taylor Johnnie Taylor had a song called "Last Two Dollars." That probably could describe Chrysler and
[Gm. Bloom:] Oh, dear.
[Martin:] All right, Chrysler is fighting for their life tonight. The automaker is in a marathon session in bankruptcy court making a last-ditch attempt to avoid shutting its doors forever. Meanwhile, GM looks like it's headed for Chapter 11 in the next four days. So far, $19.4 billion of your tax dollars have gone to bail out GM and $7.8 billion for Chrysler. So, what are we getting for our money? Erica, Jessica, Lisa, and Steve are back, but joining us from D- Town, Detroit, chief business correspondent Ali Velshi in Motown. All right, Ali, explain to us this looming bankruptcy. How did it come to this point? And why did the government decide to let they can't let GM fail?
[Velshi:] Well, listen, it came to this point over many, many years of of U.S. companies being less competitive with their non- American counterparts and the fact that this used to be the biggest employer in the nation. The auto industry was the biggest employer in the nation. We pay for retired autoworkers' health care. And as a result, you have got a small pool of workers paying for a lot more people, fewer cars being made, more technology, fewer workers. So, the result is, these companies having been struggling for a while. General Motors as a result of all of these what they call these legacy costs made less on a small car than it made on a truck and an SUV. So, they were pushing the trucks and the SUVs. But then gas prices started to started to go up. People stopped buying those cars. And then we had this credit crisis, which meant that people who wanted to buy the cars that they do make couldn't afford to buy them. So, now we're stuck with a problem where General Motors owes a great deal of money. It was renegotiating contracts with its workers. It was renegotiating with its some of its dealers, and it was renegotiating with the people who it owed money to, the bondholders. The bondholders have now said they don't want a share of the company in exchange for the money that they are owed. They want the money, and if GM can't pay it, they will take their chances in bankruptcy court. That was GM's last attempt to avoid bankruptcy protection. The White House will probably announce some time between now and Monday that they are forcing General Motors into bankruptcy protection, and this company will have to reorganize itself into a much smaller, much more efficient company Roland.
[Hill:] But part of the other fallout, Ali, too and just to go back on why this actually matters to so many people across this country, is the fallout that could be felt, not just in Detroit, but across the country.
[Velshi:] Yes. Sure. Well, first of all, even if you're not connected to the auto industry, you're connected to a dealership. There are factories all over the all over country. But the issue is this. It's jobs. If we were not in a tough economy with 8.9 percent unemployment and five million or six million being people put out of work in this recession, this would be less than of an issue. They would say, work it out yourself. But what the government is concerned about is that many more people, perhaps millions of people, being put out of work if a company like this were to actually go out of business Erica.
[Yellin:] And can you put it in context compared to other bankruptcies? I mean, for example, Chrysler, how does this one compare? How big a deal is it?
[Velshi:] Well, Chrysler is a much smaller company and of course not a public company or wasn't a public company. It was taken over by Daimler. But let's look at some of the big bankruptcies. The biggest bankruptcy of all in the United States actually triggered the financial crisis we're in, Lehman Brothers. After that, Washington Mutual was the second biggest. The third one was WorldCom, a telecom that was partially riddled by scandal and partially by the burst of the tele the the the tech bubble. so, look at all those three, this comes in fourth. It's bigger than Enron and it is the biggest industrial corporation in the United States to face bankruptcy. Now, I should be clear, GM is not in bankruptcy protection yet. It just looks very, very likely this will happen in the next few days.
[Martin:] Are they so broke, Ali, you forgot your tie and vest? What happened?
[Velshi:] Yes. And I was trying to find a pocket square for...
[Martin:] No. Pocket square and golf short shirts don't go together. Ali, thanks a bunch. We appreciate it. And, of course, Ali will be back Friday night with a special hour on Americans' auto industry in crisis, "How the Wheels Came Off." That's Friday night at 8:00 Eastern. A U.S. warship sank off the coast of Florida today. But it was no accident. And, believe it or not, a lot of people are pretty happy about it. We will explain when we come right back.