GM Bankruptcy
05-27-2009, 09:02 AM
#11
Senior Member
Join Date: 07-05-2008
Location: Akron Ohio
Posts: 5,464
This will all work out in the end but it will not be swift and painless.
The July 1st will come and go. They already said it would be a two week deal and now they are to a month. I expect it will be 6 months,
The problem is much of GM will come to a stop till the new GM can go online. Little will be done till they get this sorted out.
One thing is there is such a back log of cars that the shut down over summer is not going to hurt unless you have a Camaro ordered.
GM will be smaller and more reactive. Less internal compitition will also help. The goal here is to get GM to work as one company vs the many it has been like for years.
My fear is how long will it take to get free of the US goverment. They will be the biggest problem GM will have after this deal goes down. The goverment is now looking at having over sight groups for the over sight group. When will this end?
The July 1st will come and go. They already said it would be a two week deal and now they are to a month. I expect it will be 6 months,
The problem is much of GM will come to a stop till the new GM can go online. Little will be done till they get this sorted out.
One thing is there is such a back log of cars that the shut down over summer is not going to hurt unless you have a Camaro ordered.
GM will be smaller and more reactive. Less internal compitition will also help. The goal here is to get GM to work as one company vs the many it has been like for years.
My fear is how long will it take to get free of the US goverment. They will be the biggest problem GM will have after this deal goes down. The goverment is now looking at having over sight groups for the over sight group. When will this end?
05-27-2009, 09:56 AM
#12
Senior Member
Join Date: 06-29-2008
Location: Crystal Lake
Posts: 839
GM sets stage for bankruptcy filing
May 27, 2009 7:03 AM | No Comments
DETROIT -- General Motors Corp. today withdrew its offer to swap bond debt for company stock, saying that too few bondholders agreed to the deal. The move sets the stage for what almost certainly will be a bankruptcy filing.
GM has until Monday to finish restructuring or file for reorganization under Chapter 11. But the company said Wednesday that its offer to exchange $27 billion in unsecured debt for 10 percent of the company's stock had failed.
GM has received $19.4 billion in federal loans. The Monday deadline was set by the government and includes debt reduction, labor cost cuts and plant closures.
The automaker said its board will meet to decide its next step.
"The principal amount of notes tendered was substantially less than the amount required by GM to satisfy the debt reduction requirement under its loan agreements with the U.S. Department of the Treasury," GM said in a statement issued Wednesday.
The Obama administration has said it would only provide more funds if 90 percent of the bondholders, as well as unionized workers, agreed to concessions that substantially reduced GM's costs.
There was a small hope Tuesday that GM could avoid a bankruptcy filing when the United Auto Workers union disclosed that it would take a 20 percent stake in GM -- down from the original plan of 39 percent. That seemingly freed 19 percent of the Detroit-based company's shares to sweeten the pot for its recalcitrant bondholders.
But because the bondholder deal did not go through, the equity freed by the UAW deal now apparently will go to the U.S. government, which may have to commit billions more for GM's restructuring in court.
The government's stake in the company originally was to be 50 percent, according to GM's regulatory filings. But it now could be as high as 69 percent. The Canadian government also could get equity for up to $8 billion in aid for the automaker.
Such an arrangement would leave bondholders back where they started -- and a Chapter 11 filing all but certain. The deadline for GM's bondholders to tender their debt was midnight Tuesday.
--Associated Press
May 27, 2009 7:03 AM | No Comments
DETROIT -- General Motors Corp. today withdrew its offer to swap bond debt for company stock, saying that too few bondholders agreed to the deal. The move sets the stage for what almost certainly will be a bankruptcy filing.
GM has until Monday to finish restructuring or file for reorganization under Chapter 11. But the company said Wednesday that its offer to exchange $27 billion in unsecured debt for 10 percent of the company's stock had failed.
GM has received $19.4 billion in federal loans. The Monday deadline was set by the government and includes debt reduction, labor cost cuts and plant closures.
The automaker said its board will meet to decide its next step.
"The principal amount of notes tendered was substantially less than the amount required by GM to satisfy the debt reduction requirement under its loan agreements with the U.S. Department of the Treasury," GM said in a statement issued Wednesday.
The Obama administration has said it would only provide more funds if 90 percent of the bondholders, as well as unionized workers, agreed to concessions that substantially reduced GM's costs.
There was a small hope Tuesday that GM could avoid a bankruptcy filing when the United Auto Workers union disclosed that it would take a 20 percent stake in GM -- down from the original plan of 39 percent. That seemingly freed 19 percent of the Detroit-based company's shares to sweeten the pot for its recalcitrant bondholders.
But because the bondholder deal did not go through, the equity freed by the UAW deal now apparently will go to the U.S. government, which may have to commit billions more for GM's restructuring in court.
The government's stake in the company originally was to be 50 percent, according to GM's regulatory filings. But it now could be as high as 69 percent. The Canadian government also could get equity for up to $8 billion in aid for the automaker.
Such an arrangement would leave bondholders back where they started -- and a Chapter 11 filing all but certain. The deadline for GM's bondholders to tender their debt was midnight Tuesday.
--Associated Press
05-27-2009, 09:58 AM
#13
Senior Member
Join Date: 06-29-2008
Location: Crystal Lake
Posts: 839
This will all work out in the end but it will not be swift and painless.
The July 1st will come and go. They already said it would be a two week deal and now they are to a month. I expect it will be 6 months,
The problem is much of GM will come to a stop till the new GM can go online. Little will be done till they get this sorted out.
One thing is there is such a back log of cars that the shut down over summer is not going to hurt unless you have a Camaro ordered.
GM will be smaller and more reactive. Less internal compitition will also help. The goal here is to get GM to work as one company vs the many it has been like for years.
My fear is how long will it take to get free of the US goverment. They will be the biggest problem GM will have after this deal goes down. The goverment is now looking at having over sight groups for the over sight group. When will this end?
The July 1st will come and go. They already said it would be a two week deal and now they are to a month. I expect it will be 6 months,
The problem is much of GM will come to a stop till the new GM can go online. Little will be done till they get this sorted out.
One thing is there is such a back log of cars that the shut down over summer is not going to hurt unless you have a Camaro ordered.
GM will be smaller and more reactive. Less internal compitition will also help. The goal here is to get GM to work as one company vs the many it has been like for years.
My fear is how long will it take to get free of the US goverment. They will be the biggest problem GM will have after this deal goes down. The goverment is now looking at having over sight groups for the over sight group. When will this end?
05-27-2009, 10:09 AM
#15
Senior Member
Join Date: 03-28-2008
Location: Oshawa
Posts: 1,115
05-27-2009, 03:59 PM
#17
Senior Member
Join Date: 05-26-2008
Location: Westerville, Ohio
Posts: 618
I hope this Bankruptcy goes smoothly for both GM and the country. I read in USA Today that it will much more complicated than Chrysler's bankruptcy has been. Also if GM runs into any real problems than the fall out could easily put the US in a DEPRESSION.
It is not GM who is at stake but almost every Automobile part supplier. Many of them make parts for every other company making cars in the US. So the fall out will be far reaching.
Sure hope Obama knows what he is doing!
It is not GM who is at stake but almost every Automobile part supplier. Many of them make parts for every other company making cars in the US. So the fall out will be far reaching.
Sure hope Obama knows what he is doing!
05-27-2009, 04:50 PM
#19
Senior Member
Join Date: 02-20-2009
Location: Charleston, S.C.
Posts: 596
I'm not a conspiracy guy but start reading about who and where the dealers that Chrysler closed are located and owned by. The word is that more than a far number of them are from places that lean right and owned by people affiliated with the RNC or contribute to Republicans. One of the Republican Congressmen from Florida is losing his dealership.
05-27-2009, 04:52 PM
#20
I'm not a conspiracy guy but start reading about who and where the dealers that Chrysler closed are located and owned by. The word is that more than a far number of them are from places that lean right and owned by people affiliated with the RNC or contribute to Republicans. One of the Republican Congressmen from Florida is losing his dealership.
But if that WAS the case, I think the whole town of Frankenmuth would lose all of it's dealers...and every other business too!
