REPORT: General Motors in "intense" bankruptcy preparations
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). If the plan is enacted, the all-new GM would assume some of the debt from the bankruptcy (primarily, unsecured debt) and that GM's bondholders would lose a substantial amount of value if the Chapter 11 filings go through. Naturally, neither source wished to be named, so this is all conjecture at this point, but if GM does declare CH11 within the next month-and-half, expect the Feds to step in to avoid the cataclysmic effect on both suppliers and the economy as a whole.
[Source: Reuters]
Reader Comments (Page 1 of 5)
Coolio 2:01PM (4/07/2009)
What about Buick ?
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Derek 2:07PM (4/07/2009)
Tiger Woods gets it.
Aprime 2:18PM (4/07/2009)
What's "Buick"?
You livin' in Neverland bro?
J Who 3:49PM (4/07/2009)
And oldsmobile? I thought they were GM owned as well...
Jared 4:02PM (4/07/2009)
Oldsmobile was phased out in 2004.
J Who 4:04PM (4/07/2009)
*Crawls out from under rock*
Well then, good! It's about time someone put them out of their misery!
*crawls back under rock*
Jake B 5:25PM (4/07/2009)
OIdsmobile is dead? What! That means I will no longer have a warranty on my new Firenza I just purchased.
Wobbly_ears 2:03PM (4/07/2009)
Beginning of the end. Chrysler's next.
In 5 year's end, the domestic auto market would be a lot different. Chevy, Caddy etc would still live on, but in much much different way & in much smaller way.
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zamafir 2:08PM (4/07/2009)
Great, about time businesses were run like businesses again (see Ford).
Sektor 4:14PM (4/07/2009)
Chrysler will go first. They have less than 30 days till Chapter 7.
Farmboy 4:15PM (4/07/2009)
Next? I thought Chrysler was first in line...as always.
Tool 4:31PM (4/07/2009)
Why is this such a surprise to anyone?
Chapter 11 is the best way forward for GM. Hopefully, they will have just two brands: Chevrolet and Cadillac, jettisoning all other brands. This would allow them to come up with extremely competitive offerings.
As for Chrysler, they were dead years ago. Daimler completely devastated this company and ran it into the ground. It's time to put them out of their misery.
Wobbly_ears 4:37PM (4/07/2009)
Tool,
If you think Ch. 11 is the best way for GM/Chrysler, you need to look at the British experiment with Leyland.
Is there a better way? I don't know. But just by filing Ch. 11 GM would be out of the woods is a fallacy.
Either way, the glory days of GM are over. It might live on, but in a much much smaller way. Add GM/Chrysler to the list of long-dead American Industrial icons such as Bethlehem steel.
Mr.Oak 7:59AM (4/08/2009)
Were you under that rock with J Who? GM is going to be fine. This economic downturn turns out to be good for them. In a normal environment, the government would not have stepped in and helped them through bankruptcy. A GM in bankruptcy with the US Treasury as a safety net, is a hell of a lot better than GM in bankruptcy on their own.
Dave T. 2:06PM (4/07/2009)
Supposedly the whole point of this is that it will be govt. backed from Day 1!
They won't get involved later, they're involved daily.
This is basic stuff in the bailout talks and has been mentioned before.
I think the timing is the only question. I'd guess they'd try to get everything started by the end of April so it can get by almost under the radar compared to what Chrysler has to do. Which could be Chapter 11, not 7.
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Andre 2:09PM (4/07/2009)
slightly off-topic - I say overall, we are in a midst of change here in the state or even globally, The Industrial Age is at it's end more and more people are getting GREEN, perhaps the start of a new age in Alternative fuel sources and way of life overall and business ventures.
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zamafir 2:34PM (4/07/2009)
The current plight of GM has nothing to do with the Green movement, well at least not most of it. The biggest impact on GM's sales has been the inability of those who shouldn't be buying these cars every year or two to get loans. Now that people are being forced to be fiscally responsible, as they tended to be a decade or so ago, GM's lost all those 'well it's the weekend, let's get us a car' sort of sales. What’s left are people who actually have the means to buy the car, which is a much smaller portion than those who ardently took out seconds and thirds on their homes to buy new H2s. That's why you're seeing most, if not all, automakers posting double digit declines every single month. It's not the environment, it's the economy.
Iridium 3:36PM (4/07/2009)
I am really getting sick of the Green nonsense. There is no viable way to convert over to this rosy tinted Green paradise in a few short years. The move must happen slowly over the next 50-100 years. We have more than enough oil to last that long and massive infrastructure changes take a great ammount of time.
Magical windmills, wave generators, and solar panels are decades away from being able to power the global infrastructure. Are cars going to be grown out of the ground? All of a sudden we will not need any industry? Last time I checked we haven't really cracked the whole Star Trek replicator thing.
If you want electric cars and a Green economy the only viable option is nuclear. You can supplement the grid with some solar panels and windmills but you need massive power generation to supply 100 million electric cars. If any Greenie wants to provide a viable solution that doesn't use fossil fuels or nuclear energy then they can try. If it was as simple as they make it out to be we would already be doing it.
hokieman09 2:09PM (4/07/2009)
At least if/when it happens they will be prepared somewhat. As long as GM doesn't go away completely I will be happy. I really like the cars they have been coming out with lately and it would be a shame not to get a chance to get them.
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Tommy 2:46PM (4/07/2009)
Good luck to us!
http://www.sec.gov/investor/pubs/bankrupt.htm