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If General Motors' saga were a play by Aeschylus, today marks the day when Kent Kresa, GM's interim chairman, returns from a visit to the Oracle at Delphi and informs everyone that the signs are not auspicious. There's been much talk of the bondholder issues that GM faces, and the news today is that the deadline for the debt-for-equity transaction isn't June 1 -- it's this Friday. That's when a bondholder agreement would need to be in place so GM would have everything sorted before its upcoming bond payment is due.

That time-line caused Kresa to say "We have some deadlines rapidly approaching and the probabilities are decreasing we can do outside of bankruptcy." We were fairly sure GM couldn't get a deal done when they had until June 1 merely to get signatures on agreements. If GM has to have everything in place by Friday, and the bondholders as of Tuesday hadn't issued a response to the General's latest offer, then it looks like the Auto Task Force will instruct everyone to, "Please open your books to Chapter 11."

[Source: Wall Street Journal | Image: Bill Pugliano/Getty]


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  • 33 Comments
      • 6 Years Ago
      damn i love that picture, does anybody know where i can get that in desktop size? :O
      • 6 Years Ago
      GM is dead.
      Damn UAW bloodsuckers caused a slow death of a great American company
        • 6 Years Ago
        but not Ford. hmm... ford did hire a man who turned another major corp around and now sells fantastic products across the board, even a fusion which greatly bests the hybrid camry in fuel economy. Yes. This is zero percent management, zero percent products, and 100% the unions. You sir, are a genius.
        • 6 Years Ago
        @Sean

        Yes, "great" as I wrote it is 100% appropriate in this case. The original post did not specify in which time period GM was great. Sure, GM might have been a great company at one time, but GM is far from being great these days. It`s just too bad that GM seems to have lost all of its "great" a loooooooooong time ago. So no, GM is not great, it is "great".
        • 6 Years Ago
        @ jpm100

        Ford took out loans against itself because their new appointed CEO had a good enough idea to do it at the time, if you dont think GM and Chrysler where in a crap situation before the banks crashed your an idiot...

        They were all going down hill fast, the banks just made it impossible to get a loan, so i give a thumbs up to Ford for being able to swallow its pride... Then theres the GM CEO who ran his company into the ground for YEARS... GM never appointed anyone new or fresh, they just kept the same crap around, and then it got to late

        Believe me, i love GM and Chrysler, i like any american brand, but to say ford got lucky? i would say GM got the shaft, before i would say ford got lucky...
        • 6 Years Ago
        "great"
        • 6 Years Ago
        Ugh, I've been wanting that idiot Wagoner to be gone for years and years (well before the market meltdown) and for some bizarre reason the GM board kept him around instead of finding some fresh blood.

        It's really all but inevitable now that GM goes bankrupt but it's truly a sad day to see an American icon run into the ground like this. Truth be told, the meltdown probably just accelerated what would have ended up being a slow and painful death. If anything good comes from this it's probably the fact that the unions are pretty much going to have to renegotiate much more affordable contracts now.

        And I think it really is the time for some new American automakers to show up-even if it's only electric sports car makers for now this kind of cataclysm might be the beginning of a new American auto revolution. I really wouldn't mind a world filled with Fiskar Karma's and Tesla roadsters everywhere.
        • 6 Years Ago
        "but not Ford. hmm..."

        Here is Ford in a nutshell. Ford is the guy who took out a second mortgage to stave off the collection agencies. Then the local cannery closes and everyone in town is laid off for 6 months and can't pay their mortgages (and can't get a 2nd mortgage) so they lose their houses. Meanwhile Ford uses the left over cash from the 2nd mortgage to keep from losing his house. If the town recovers, and home prices come back, Ford will make out. If it doesn't Ford will eventually run out of the cash from the 2nd mortgage.

        Ford took drastic steps because it was in that much more trouble at the time. When the others got in similar trouble, those options weren't available anymore. Ford spindoctors like to call it foresight. I call it luck.
        • 6 Years Ago
        anyone whos been to detroit/big three in the past 10-15 years should have known this was coming. I would dare to call in blatently obvious within the last 4-5.
      • 6 Years Ago
      may force be with you
        • 6 Years Ago
        If General Motors' saga were a play by Aeschylus,


        someone, Autoblog, has been watching too much 'Castle'. that's the second reference to Aeschylus in a week, when I havent heard a reference in a year.

        :-)
      • 6 Years Ago
      @Sean

      Yes, "great" as I wrote it is 100% appropriate in this case. The original post did not specify in which time period GM was great. Sure, GM might have been a great , surely not the best, company at one time, but GM is far from being great these days. It`s just too bad that GM seems to have lost all of its "great" a loooooooooong time ago. So no, GM is not great, it is "great".
      • 6 Years Ago
      andy, you're denial of Ford's situation makes you sound like someone who works at General Motors. Ford is not in better shape than GM, they are right there with their neighbors in the same situation.

      I think Blogging Stocks put it best.

      http://www.bloggingstocks.com/2009/03/15/hold-portfolio-killer-8-ford/

      Real shareholder value: ZERO

        • 6 Years Ago
        TriShield stands for triple-shielded against informations, right?
      • 6 Years Ago
      they just realized that....
        • 6 Years Ago
        This is ripe. Did someone at GM forget to check Quicken Calendar?
        • 6 Years Ago
        @Brent
        Financially speaking they really are bankrupt already, since the only reason they're still operating is with government money. If you can't pay your obligations and debts you're bankrupt, and GM definitely can't even come close to paying it's existing bonds and pension and healthcare obligations.
        • 6 Years Ago
        All of my business professors are calling GM bankrupt already... so most of my classmates think they are already in Chap 11.

        (I am not the one who thinks professors are special in any way.)
      • 6 Years Ago
      ...wow this is really gonna happen...
      • 6 Years Ago
      If this is the "change" that President Obama and cronies have been talking about for months on end, then I'm not looking forward to seeing what they're going to do with the rest of the economy. The US is supposedly a free market, if a company cannot survive on its own or find a way to survive using some help, it should be allowed to close shop and pave way for new companies to thrive. GM has proven that it cannot find a viable way to survive without hurting the economy, it should be allowed to fail. Yes People will be laid off, and the economy will hurt for a little, but in the long run new companies will emerge and an entirely new automotive industry will thrive, they will create new jobs and bring in fresh new talent and create a stronger overall industrial and economic base. America can recover without GM because it has the systems, laws, knowledge and talent that allow for change and recovery.
        • 6 Years Ago
        I agree that America can survive without GM; and Rich, that is going to happen in China regardless of what happens with GM.
        • 6 Years Ago
        Yes, genius. That is exactly what will happen. Unfortunately for us, those new companies that emerge will be Chinese, the new jobs will be Chinese, fresh new talent will be Chinese, and the stronger overall industrial and economic base will be Chinese.

        America will not recover. The Chinese manufacturers are looking for a break in the global economy. They don't need Americans to buy cars from them -- they'll just create their own America in China.

        This is why the current administration is desperately trying to keep GM afloat. GM took the help, but the bad eggs that are set on failure just carried on in their own sweet way.

        So now comes the ordered bankruptcy. Let's hope *this* works. It should, but we might have a few bad eggs in there that cause it to fail. Get sniffing...
        • 6 Years Ago
        I don't see that as a necessarily bad thing. England has so far preserved its image as a developed nation. And the US won't lose its manufacturing base just because GM and/or Chrysler goes under. Hell, it isn't happening even if all the Big Three go under.
      • 6 Years Ago
      The real question is, will the Obama administration allow them to go into a normal bankruptcy or will they interfere and do their best to protect the unionized workforce?

      Frankly I expect the O.A. to do.
      1. Punt the bond holders to the curb
      2. Punt the dealer network to the curb
      3. Dump federal funds into the union coffers (read: pension funds) or through some overly generous government jobs training program (as in the unionites haven't had enough warning to try and learn something new)

      I am really curious how the O.A. plans to interfere in a legal reorganization.
      • 6 Years Ago
      So I guess at this point bankruptcy is inevitable.
        • 6 Years Ago
        @Avinesh Machado

        First, are you related to Rob Machado?

        Second, I dont know what made people think that bankruptcy wasnt inevitable for GM four months ago? HOW!! HOW! HOW did anyone think they were going to turn things around in a few months. Seriously! Think about it!
      • 6 Years Ago
      A swift bankruptcy is what needs to happen.

      Coming from a huge GM fan.
        • 6 Years Ago
        "Swift" bankruptcy is a dream.

        Heck, I'm not even sure GM can come out of bankruptcy.
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