I wrote the other day about the GM stamping plant in Indianapolis which is scheduled for shutdown in September of next year unless a buyer can be found. That plant is part of the liquidation company, which was created during GM's bankruptcy process to contain the less productive assets that the company doesn't want. Today's New York Times has a look at what's happening to the plants in that company: very little. Indianapolis apparently can't be sold, and most of the rest of the sites aren't useful until they've been cleaned up--and maybe not even then.
Among the issues raised by the new corporate structure: who's responsible for carting debris away from plants that were demolished before the bankruptcy? What happens to plants that no one wants at all? (There are industrial sites all over the rust belt which are essentially abandoned eyesores; some of them have been in this condition, blighting the local communities, for decades). Is it even worth paying for security guards to keep thieves from stealing what little is left?
One way to think about our current economic woes is that we have a lot of "fake assets" like this--things that we invested money in expecting a good return, but which in many cases are now more trouble than they are worth. Working through that asset base is going to be slow and painful.
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is a columnist at Bloomberg View
and a former senior editor at The Atlantic.
Her new book is The Up Side of Down