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GM in intense bankruptcy preperations

Autoblog -- According to an unnamed source speaking with Reuters, General Motors "is in 'intense' and 'earnest' preparations for a possible bankruptcy filing." The report states that GM could be split into two separate entities; one "new" unit consisting of the General's successful brands (read: Chevrolet and Cadillac) and an "old" unit made up of its less-profitable endeavors (Hummer, Saab, Pontiac and Saturn).

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Submitted Apr 07, 2009 By: jrtak

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geminijax Champion Author Jacksonville Posts:11,517 Points:1,757,320 Joined:Aug 2005	Message Posted: Apr 9, 2009 1:04:53 AM Ignore geminijax Report Abuse bluebird1, GM will most likely go through a section 363, "structured" bankruptcy. The units GM wants to keep will become part of a "new" GM and all the others will remain in the "old" GM. The divisions of the latter will either be sold off or shut down. As of this evening, there are three bidders remaining in the Hummer auction, none of them being an automaker. There's an interesting game being played out right now. The union contracts will become history, one way or another. However, given that the UAW helped elect a ton of politicians to office, including our esteemed President, Obama & Co. will not leave them high and dry. After all, they have plenty of our money to spend. Current GM debtholders will get equity in the "new" GM. That includes the Feds and the UAW (some for the VEBA). The existing GM equity will be part of the "old" (bad) GM. Existing GM stockholders will get a royal bath. The same applies to non-senior debt holders. BTW, considering the fact that the Feds and UAW will have significant ownership in the "new" GM, I would NOT be a buyer of "new" GM stock in a hurry.
Sneakers55 Champion Author Houston Posts:31,924 Points:1,292,320 Joined:Nov 2005	Message Posted: Apr 8, 2009 11:10:53 PM Ignore Sneakers55 Report Abuse Egor wrote: >And what was the Bailout for!?!? Just to avoid bankruptcy for a couple >of months!?!? That's what it was for: enough free cash to keep them going until the end of 1Q 2009. They must be husbanding it pretty darn well as we're in 2Q 2009 and Chrysler and GM haven't locked the doors.
Sneakers55 Champion Author Houston Posts:31,924 Points:1,292,320 Joined:Nov 2005	Message Posted: Apr 8, 2009 11:07:48 PM Ignore Sneakers55 Report Abuse HailstormCA wrote: >If you can, go buy one of those giant SUVs now. They won't be making them >long and they'll become investment vehicles. Only a classic grows in value, and an old SUV is merely a relic. >Grow in value over time instead of losing. Orphan nameplates and brands generally lose value over time. OK, we can make exceptions for Edsel and Studebaker.
Sneakers55 Champion Author Houston Posts:31,924 Points:1,292,320 Joined:Nov 2005	Message Posted: Apr 8, 2009 11:02:32 PM Ignore Sneakers55 Report Abuse Spetsnaz wrote: >All I can say is GOOD BYE TO LUXURY Cars! Are we saying here that the only luxury car is Cadillac? The CEO of the Ford Motor Company had his own opinion when he worked for his last employer. He drove a Lexus. >Buy AMERICAN! I assume by that you mean Honda or Toyota? Had a co-worker who told me "Throw my brother out of work... buy something else other than a Honda!" On the other hand, Detroit Three heaps? Most of them come from Canada or Mexico from "globally sourced" (read China) parts. [Edited by: Sneakers55 at 4/8/2009 11:04:08 PM EST]
xBOOMx Champion Author Wisconsin Posts:1,234 Points:593,390 Joined:Aug 2007	Message Posted: Apr 8, 2009 7:20:12 PM Ignore xBOOMx Report Abuse GM this and GM that.... wow... get out already... not to be mean... WOW..
jedintheshed All-Star Author Colorado Springs Posts:943 Points:351,380 Joined:Nov 2008	Message Posted: Apr 8, 2009 1:18:26 PM Ignore jedintheshed Report Abuse Then they would be in the position to re-do all the union contracts!! [Edited by: jedintheshed at 4/8/2009 1:18:41 PM EST]
Spetsnaz Champion Author Dayton Posts:1,515 Points:537,315 Joined:May 2006	Message Posted: Apr 8, 2009 11:19:43 AM Ignore Spetsnaz Report Abuse All I can say is GOOD BYE TO LUXURY Cars! Buy AMERICAN!
LwWolf Sophomore Author Denver Posts:173 Points:130,720 Joined:Aug 2005	Message Posted: Apr 8, 2009 11:10:06 AM Ignore LwWolf Report Abuse The old units will be sold off to the highest bidder. The Saturn network is one of the best dealerships in the country so it's likely someone will want that one. Pontiac and Saab will probably just disappear and Hummer... don't know. Seems like someone would still want a gas guzzling tank to be able to destroy the environment on the weekend.
Michaelsz06 Champion Author Phoenix Posts:3,233 Points:667,215 Joined:Jul 2008	Message Posted: Apr 8, 2009 11:08:20 AM Ignore Michaelsz06 Report Abuse Good, because that is what it will take to keep them around for the future.
bluebird1 Champion Author Toronto Posts:10,697 Points:2,141,320 Joined:May 2004	Message Posted: Apr 8, 2009 11:05:17 AM Ignore bluebird1 Report Abuse I hope Chrysler is doing the same, as they are in even bigger trouble & seem to be stuck behind GM's weak attempts to become solvent ie. if GM does that then I only need to do that. However, this article reflects nothing more than what's known now about issues of GM bankruptcy...hence likely all conjecture. However, how does GM get rid of losing divisions, bad labor contracts & high benefits overhead without bankruptcy??? any takers on this question.
ricker8 Champion Author Ontario Posts:2,321 Points:470,840 Joined:Oct 2008	Message Posted: Apr 8, 2009 10:57:02 AM Ignore ricker8 Report Abuse Good luck to them. I just feel sorry for the workers who are and will be out of a job because of poor management and CEO at GM. They need to take some lessons from Ford. Yes, the same Ford company that casted all the V8 engine blocks for GM when they first started producing cars with V8 engines (in Ford plants for about 18 months) until GM was able to get their engine plants operational. Maybe Ford can help them out again.
TFowler513 Champion Author Memphis Posts:2,357 Points:584,660 Joined:Mar 2008	Message Posted: Apr 8, 2009 10:56:32 AM Ignore TFowler513 Report Abuse Let them go under and liquidate the whole lot!!!
hblee Champion Author Ontario Posts:1,796 Points:602,035 Joined:May 2004	Message Posted: Apr 8, 2009 10:54:32 AM Ignore hblee Report Abuse Trash the redundant brands and get rid of the UAW.
TopGunn Champion Author Baltimore Posts:4,224 Points:1,636,735 Joined:Aug 2004	Message Posted: Apr 8, 2009 10:53:20 AM Ignore TopGunn Report Abuse The easy way out for quitters who don't know how to come up with a legitimate business plan. Thank you UAW etal.
daw49 Champion Author Chicago Posts:3,220 Points:650,040 Joined:Aug 2008	Message Posted: Apr 8, 2009 10:52:04 AM Ignore daw49 Report Abuse Then what will happen to the "old" unit made up of its less-profitable endeavors (Hummer, Saab, Pontiac and Saturn).
HailstormCA Champion Author San Diego Posts:3,472 Points:607,125 Joined:Nov 2008	Message Posted: Apr 8, 2009 10:44:16 AM Ignore HailstormCA Report Abuse If you can, go buy one of those giant SUVs now. They won't be making them long and they'll become investment vehicles. Grow in value over time instead of losing.
dougrusty All-Star Author Illinois Posts:711 Points:313,275 Joined:Mar 2008	Message Posted: Apr 8, 2009 10:41:11 AM Ignore dougrusty Report Abuse Ya gotta do what ya gotta do.
Egor Champion Author Regina Posts:2,270 Points:772,405 Joined:Aug 2005	Message Posted: Apr 8, 2009 10:41:02 AM Ignore Egor Report Abuse And what was the Bailout for!?!? Just to avoid bankruptcy for a couple of months!?!? Everyone scream that we have to save the big automakers. Well, looks like there was nothing to save. So, no one is going to see the Bailout money again. Good work people, I quess you didn't see that one coming. Even a blind man could have seen that coming.
jimgraham Champion Author Akron Posts:5,301 Points:1,002,225 Joined:Oct 2007	Message Posted: Apr 8, 2009 10:38:04 AM Ignore jimgraham Report Abuse Bankruptcy in the auto sector is a DC ploy to get rid of the huge burden of the retirees retirement and health expense. The Illuminati in DC can not directly shaft all those people. They will use the courts to do it for them while they cry crocodile tears and bemoan the terrible wrongs being done - claiming they have absolutely no control over these despicable things that are happening. Their claims will be so true - they are the devils handmaidens - and will all be judged in the end times.
spudly03 Champion Author Boise Posts:1,140 Points:276,740 Joined:Sep 2007	Message Posted: Apr 8, 2009 10:37:10 AM Ignore spudly03 Report Abuse Wait and see. Those unnamed sources are always so acurate.
marthawrites Sophomore Author Atlanta Posts:133 Points:26,065 Joined:Mar 2009	Message Posted: Apr 8, 2009 10:36:55 AM Ignore marthawrites Report Abuse Saturn turned its back on its original model of the product and the procedure. Classic case of innovation turned stagnant once the suits got hold of it.
abcdMA Champion Author Worcester Posts:3,118 Points:617,060 Joined:Nov 2008	Message Posted: Apr 8, 2009 10:36:16 AM Ignore abcdMA Report Abuse In GM's case, the pieces may be worth a lot more than the whole operation
Countersound Veteran Author Raleigh Posts:450 Points:751,925 Joined:Nov 2005	Message Posted: Apr 8, 2009 10:34:41 AM Ignore Countersound Report Abuse I don't know if spinning off brands will help them much.
PokerAce Champion Author Baton Rouge Posts:4,847 Points:940,080 Joined:Jan 2008	Message Posted: Apr 8, 2009 10:33:16 AM Ignore PokerAce Report Abuse and at one time Saturn was touted as the wave of the future in the way its cars were built ....
Retowered Champion Author Colorado Posts:4,142 Points:1,720,325 Joined:May 2004	Message Posted: Apr 8, 2009 10:33:03 AM Ignore Retowered Report Abuse Hope it works out for them.
lowerpetroprice Champion Author New Hampshire Posts:3,690 Points:747,030 Joined:Jul 2008	Message Posted: Apr 8, 2009 10:31:23 AM Ignore lowerpetroprice Report Abuse Oh well!
RochBear Champion Author Minnesota Posts:5,527 Points:1,047,215 Joined:May 2006	Message Posted: Apr 8, 2009 10:29:36 AM Ignore RochBear Report Abuse bankruptcy would get GM out of the Union contracts. Everything would get re-done. All the airlines have gone through it.
korklenut All-Star Author Tacoma Posts:755 Points:153,655 Joined:Mar 2009	Message Posted: Apr 8, 2009 10:29:10 AM Ignore korklenut Report Abuse It looks like they have given up. THey can make Obama the CEO. OH, I gues he already is!
Yonkers111 Champion Author Scranton Posts:6,328 Points:536,820 Joined:Apr 2007	Message Posted: Apr 8, 2009 10:27:06 AM Ignore Yonkers111 Report Abuse Bankruptcy is where they should have gone in the first place. Then they should move to a right to work state.
swartzrora Champion Author South Carolina Posts:3,465 Points:422,285 Joined:Jul 2008	Message Posted: Apr 8, 2009 10:26:23 AM Ignore swartzrora Report Abuse do it already
beanDE Champion Author Delaware Posts:1,609 Points:433,295 Joined:Jun 2008	Message Posted: Apr 8, 2009 10:26:09 AM Ignore beanDE Report Abuse Well that will get rid of the unions!
gagal31525 Veteran Author Georgia Posts:423 Points:368,645 Joined:Feb 2008	Message Posted: Apr 8, 2009 10:24:32 AM Ignore gagal31525 Report Abuse Bankruptcy in not the end of the world. Business and people can come back from it. Not easy but it can be done.
HEBster Champion Author Kentucky Posts:3,913 Points:1,405,210 Joined:May 2006	Message Posted: Apr 8, 2009 10:24:30 AM Ignore HEBster Report Abuse Are they smart enough to know WHAT to do for the best??? Don't think so!
la90042 Champion Author Los Angeles Posts:2,402 Points:505,405 Joined:Nov 2008	Message Posted: Apr 8, 2009 10:23:01 AM Ignore la90042 Report Abuse too little too late, plus since taking the bail out - customers are leaving ASAP.....
WyrelessMike All-Star Author Little Rock Posts:966 Points:283,770 Joined:Aug 2008	Message Posted: Apr 8, 2009 10:22:28 AM Ignore WyrelessMike Report Abuse I wonder where Buick falls in that?
1madashell Sophomore Author Wisconsin Posts:153 Points:834,435 Joined:Aug 2005	Message Posted: Apr 8, 2009 10:21:41 AM Ignore 1madashell Report Abuse I hope they hurry up and make up their minds
LanguageMan1 Champion Author Tampa Posts:5,936 Points:686,445 Joined:Apr 2008	Message Posted: Apr 8, 2009 10:21:33 AM Ignore LanguageMan1 Report Abuse GM needs to get it's act toether! The first thing to do is to cut salaries at the top by another 10% across the board! Then build vehicles that get 50 to 150 mpg!
MacGyver_1701 Champion Author Indiana Posts:6,834 Points:1,571,875 Joined:Feb 2005	Message Posted: Apr 8, 2009 10:21:06 AM Ignore MacGyver_1701 Report Abuse Time for GM to drop all but some core models and hope for the best in the wash.
Pozole Champion Author Portland Posts:3,169 Points:615,730 Joined:Mar 2005	Message Posted: Apr 8, 2009 10:20:49 AM Ignore Pozole Report Abuse ...split smells fishy...get rid of non profitable crap...and in a world with spell-check, why does someone release a press article with "preperation" in the title?....PREPARATION....[comes from PREPARE]....
LetemEatCake Champion Author Oklahoma City Posts:2,800 Points:436,370 Joined:Mar 2008	Message Posted: Apr 8, 2009 10:19:06 AM Ignore LetemEatCake Report Abuse SJS from LA...you will enjoy the following. I wish I could claim authorship, but another Gas Buddy must take the honors: "Good thing Ford doesn't have the UAW to deal with, since that is the cause of all the auto industry's problems. Oh, yeah, they do. Must be something else then..... Hmmm.... What's the difference???? Could it be.........MANAGEMENT?!?!?!?!?!?"
guarddog Sophomore Author Illinois Posts:241 Points:1,501,665 Joined:Jul 2005	Message Posted: Apr 8, 2009 10:17:54 AM Ignore guarddog Report Abuse If they can't run one company, how can they run two.
stevencr All-Star Author Ohio Posts:732 Points:458,305 Joined:Mar 2009	Message Posted: Apr 8, 2009 10:17:04 AM Ignore stevencr Report Abuse I am not pleased with the prospect of bankruptcy, but being controlled by the Government is totally unacceptable. They should cut their losses (that includes all parties involved), restructure and start fresh.
bikechuck Champion Author Indianapolis Posts:2,011 Points:1,082,170 Joined:Apr 2006	Message Posted: Apr 8, 2009 10:16:45 AM Ignore bikechuck Report Abuse Do what they have to do. Scrap the lines that are not profitable and develop ones that are. Basic economics.
runinoutagas Champion Author San Bernardino Posts:3,274 Points:640,400 Joined:Oct 2008	Message Posted: Apr 8, 2009 10:16:04 AM Ignore runinoutagas Report Abuse With Ø for CEO, what do You expect?
tomok Champion Author Portland Posts:18,263 Points:1,363,135 Joined:Aug 2006	Message Posted: Apr 8, 2009 10:16:00 AM Ignore tomok Report Abuse Do whatever it takes to cut costs and make a profit. Less wages, less benefits, less union involvement…
PoloGod All-Star Author Orange County Posts:540 Points:129,110 Joined:Nov 2008	Message Posted: Apr 8, 2009 10:15:46 AM Ignore PoloGod Report Abuse Good! About time.
FILLER2008 Veteran Author Florida Posts:474 Points:152,170 Joined:Oct 2008	Message Posted: Apr 8, 2009 10:15:04 AM Ignore FILLER2008 Report Abuse stick to basics!!
nozzle46 Champion Author Little Rock Posts:2,463 Points:623,230 Joined:Jul 2006	Message Posted: Apr 8, 2009 10:12:01 AM Ignore nozzle46 Report Abuse a split? that's ridiculous. They should keep the first and scrap the second group
JadeKY Champion Author Louisville Posts:3,761 Points:748,730 Joined:May 2008	Message Posted: Apr 8, 2009 10:11:55 AM Ignore JadeKY Report Abuse Oh well, should have gotten their A@#ss out of the sand years ago.
TTI2000 All-Star Author Colorado Springs Posts:642 Points:474,870 Joined:Aug 2004	Message Posted: Apr 8, 2009 10:11:15 AM Ignore TTI2000 Report Abuse Seems like bankruptcy is inevitable. It's silly to see all their advertising dollars being spent when they are severely broke.