The Russian joint venture factory of General Motors has ground to a
halt after new management imposed by the state on its partner Avtovaz,
the maker of Lada, halted component supplies.

Rosoboronexport, a state arms agency which controls the board of
AvtoVaz, is understood to be arguing that the project, set up four
years ago, makes money only because Avtovaz sells components to it at a
loss. Production of Chevrolets at the plant stopped on Monday when
vital parts, including engines, were withheld.

----------------------------

York estimates that at its current loss rate, GM will run out of cash
in about three years, even counting the $11 billion he expects GM to
raise by selling part of GMAC. Unlike many analysts who seem to be
treating possible GM or Ford bankruptcies as parlor games, York
realizes there would be serious consequences should either company go
under.

Workers and communities associated with the airline and steel
industries have all found out in recent years that bankruptcy is really
nasty. Jobs disappear, property values plummet, tax collections
shrivel, employee benefits shrink, pensions are vaporized. For example,
a GM worker retiring at age 50 after 30 years on the job is entitled to
a pension of $2,950 a month. But should GM go broke and the worker have
to depend on the U.S. Pension Benefit Guaranty Corp., his pension could
fall to less than $1,400. "In southeastern Michigan, the consequences
of the failure of a big piece of an entire industry would be
draconian," York said.