GM Said to Plan for June 1 Bankruptcy, Sale of Assets

[Joanne98]

Source: Bloomberg


May 28 (Bloomberg) -- General Motors Corp., the world’s largest automaker until its 77-year reign ended in 2008, plans to file for bankruptcy protection on June 1 and sell most of its assets to a new company, people familiar with the matter said.

The U.S. Treasury will provide financing for GM while the asset sale is arranged to a company formed by the government, according to a regulatory filing today. June 1 was the deadline set by the U.S. for GM to restructure outside court.

GM, which would follow Chrysler LLC into bankruptcy, plans to build a new business around assets such as the Cadillac and Chevrolet brands. The 100-year-old automaker, a victim of tumbling sales, fell short in a bid to cut debt by $44 billion by June 1.

“By freeing GM of tens of billions of dollars in debt, bankruptcy will give it a new lease on life,” Lynn LoPucki, a law professor at the University of California, Los Angeles, said before the news of Detroit-based GM’s strategy.

The people familiar with GM’s plans didn’t specify where the automaker might make its Chapter 11 filing. They asked not to be identified because the details aren’t public.


Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aREwj3diq12w&refer=home

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There it goes. Three million more jobs!!!!!!!!

[onehandle]

1. I'll give them ten bucks for the defunct Oldsmobile name.

That's the brand we had in my family when I was a kid.

My first car was a 1972 98 Oldsmobile handed down from my mom.

This is all very sad.

[Joanne98]

2. It's the bondholders. Greedy fucks!

[hugo_from_TN]

9. How dare they expect to be repaid as promised. Bastards!

[Purveyor]

3. I have already heard talk on the 'hate-wing' talk shows about boycotting the new GM

because it is "Obama's Company"...

They would like to see nothing more than for the new GM to fail and placing the blame on the White House.

[Amonester]

5. I heard they want President Obama to fail.

That's all they're hoping for, and it seems like he is 'progressively' giving them what they hope for. Why?

[WriteDown]

7. I love GM and I NEVER thought I'd be saying this....

But there is no way I'm buying another at this point. I'd rather buy a Ford now. I'll still buy UAW, but not from a company where my local dealership may close tomorrow. Good luck to GM, its going to be a long, long road though.

[blue_onyx]

12. Ford has been closing dealers too

Maybe not as many as GM but they have closed hundreds over the last few years.

[WriteDown]

14. True...

I still have a ton of more confidence in them at this point.

[lefthandedlefty]

16. About the only vehicles I have on car haulers lately have been Fords

The local Toyota dealer has been laying off workers for months also and haven`t seen a load of new Toyotas delivered in a while.

[Joanne98]

4. AP Source: GM to announce 14 plant closures Monday

DETROIT (AP) — The news no one wants to hear is coming Monday morning to General Motors Corp. factories across the U.S.

The troubled auto giant will identify 14 factories it will close by the end of 2010 as part of its restructuring plan, according to a person briefed on the plans.

The announcement could coincide with GM's all-but-inevitable bankruptcy protection filing, expected to come by Monday.

Factory-level union leaders have not yet been told which plants will be shuttered, but four vehicle assembly plants will be among those to be closed, along with parts stamping, engine and transmission factories, said the person, who asked not to be identified because the plans have not been made public.

GM has said it plans to close 16 more U.S. factories by the end of next year, shedding 21,000 jobs. Two have already have been announced — an engine plant in Massena, N.Y., and a parts stamping plant near Grand Rapids, Mich.
http://www.google.com/hostednews/ap/article/ALeqM5jFew0tEK01jfGqONH-741IA2tiSwD98F9F902

[blue_onyx]

10. MI will get hit the hardest.

We'll probably hit 20% unemployment by the end of the year. At least people will know and be able to plan their future.

[Joanne98]

6. GM bonds rise slightly after new bondholder offer

NEW YORK (Reuters) - Bonds of General Motors Corp (GM.N) rose slightly and the cost of insuring its debt with credit default swaps fell modestly after a bondholder committee accepted a new debt exchange offer.
GM's 8.375 percent bonds due in 2033 rose to 7.5 cents on the dollar from 7.1 cents before the news, according to MarketAxess. Its credit default swaps tightened to 89 percent upfront from 90 percent upfront before the news, according to data from Phoenix Partners Group.

Under the new offer, GM bondholders would be paid 10 percent equity in a "New GM" and given warrants for an additional 15 percent stake, versus just a 10 percent stake under the old offer.

http://www.reuters.com/article/hotStocksNews/idUSTRE54R3VP20090528

[Igel]

19. Good.

Under the law, they have first dibs on the assets.

Of course, it's apparent that the rule of law isn't what's first and foremost on everybody's mind.

[blue_onyx]

8. I hope they file in MI

At least we'll know what will happen soon. The plant and dealer closings will become public. Not going to be a fun summer in MI.

[Joanne98]

11. A finance view of the political nature of the coming GM bankruptcy

Submitted by Edward Harrison of the site Credit Writedowns.

I was on the BBC yesterday talking autos and my commentary was almost entirely political. So, as we await the likely General Motors bankruptcy, I think it bears discussing how political this process has been and will continue to be.

General Motors is a monster company employing a quarter million people worldwide. It sells $150 billion in cars – or at least it used to. It is not just a producer of vehicles. It is also a supplier. It has been through several joint ventures and has owned a number of foreign manufacturers, Isuzu and Opel being but two. In short, the company is a very big player, financially, economically and politically. Yet, somehow you get the impression that many in the financial media think we could just turn the lights out and go home. Witness the video below of CNBC anchors Mark Haines, Erin Burnett and Phil Lebeau and a trio of auto analysts trying to impress upon Haines how important GM is.

The GM bankruptcy is a very big deal and will have wide-ranging implications. Let me review a few of the issues here starting with the politics.

2010 elections

In the U.S., we have just witnessed an historic election that some are comparing to the election of Ronald Reagan in 1980 and Franklin Roosevelt in 1932. Indeed, there has been a sea change in the political climate here in Washington since January, with the Democrats and their agenda taking precedence over the Republicans. But, none of that is going to last if we don’t see a recovery that lasts through the mid-term elections in 2010. And that is already very much on the minds of politicians in Washington. Here is the calculus.

In 2008, the Democrats benefitted greatly from Barack Obama’s election as President, taking large majorities in both houses of Congress. Their mandate was to work with the President to fix America’s economic problem. So, Obama’s and Congressional Democrats’ first priority is to end the recession as quickly as possible. I guarantee you there would be hell to pay if this is not done well before November 2010 when the next general election is held.

Continued>>.
http://www.nakedcapitalism.com/2009/05/guest-post-finance-view-of-political.html

[liberal N proud]

13. Already auctioned off some of their car collection...

GM collection up for bid at Barrett-Jackson -- Fords, too

April 11, 2009


If you're reading this on Saturday, it's only because you peeled yourself away from the Speed Channel for a few minutes where the Barrett-Jackson auction is being broadcast from Palm Beach, Fla.


The notoriety surrounding this particular auction involves down-on-its-luck General Motors, which is putting 100 of the cars from its own historical collection on the block. As the Los Angeles Times noted in a story earlier this week, the collection includes a 1920 Chevrolet Model T truck ; a 1999 Camaro Z/28 used in the movie "Runaway Bride;" and a 1978 Corvette Indy 500 pace car. The Corvette is one of only four made. Don't cry too much for GM. Its collection will still include a lot of its very best.

http://content.usatoday.com/communities/openroad/post/2009/04/65353133/1

[daggahead]

15. Will this give GM the ability to attempt to dump the UAW?

Won't a bankruptcy give GM the ability to void contracts?

[chicago legal pro]

17. In theory, yes, a judge could void any contracts

But GM and the UAW have already reached an agreement for a "new" GM so it is very likely a judge would not tamper with that agreement.

[Dont_Bogart_the_Pretzel]

18. That's three million UNION jobs... and don't forget all the vender involved.

All they ever wanted to do is bust the unions.