Henderson says GM bankruptcy decision still in doubt; Hummer decision expected before month's end
We were on General Motors CEO Fritz Henderson's teleconference with reporters this morning, and while the proceedings were light on revelatory news (okay, there really wasn't any), some important things were clarified:
Namely, Henderson denied that the company has reached a decision on whether to pursue bankruptcy, and officials are still hard at work on a two-track strategy (one with, and one without), with the company's preference still being to keep matters out of the courts. When it comes time to make a decision (June 1), Henderson admitted that "The Treasury would be a key player in that decision," though he didn't rule out his company's own role as being part of the process.
Additionally, Henderson said that the company is still pursuing a "four-core brand strategy," meaning that it plans to keep Chevrolet, Cadillac, Buick, and GMC, with Pontiac still in the mix as a niche brand. Henderson called both GMC and Buick "very profitable," and added that some of the products that GM has in its pipeline that it is most excited about are slated to carry the Buick badge. When asked point blank as to the security of the two brands, however, he declined to guarantee survival of any particular marque in the company's portfolio.
Henderson all but confirmed that the company plans to keep the likewise "highly profitable A.C. Delco parts business, but he acknowledged that a decision looms for Hummer, with final bids from three purchasers expected by next week. The company expects to make a sale decision on the SUV brand by month's end.
In regards to Saab, the GM CEO reiterated that a number of parties are interested in the Swedish brand, and that their "books are open" to serious bidders. Unsurprisingly, Henderson also acknowledged that it is pursuing buyers for Saturn, but he denied that there was only one serious bidder in the mix.
On its European front, Henderson says that "well more than six" parties have expressed interest in Opel, which he characterized as financial and industry players. Henderson said GM expects work to get done within the next two-to-three weeks, and he acknowledged that Germany's cash-for-clunkers and the early success for the new Insignia have helped liquidity issues. As such, Opel can now evidently sustain itself through late in the second quarter, if not further.
[Image: Bill Pugliano/Getty]
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Reader Comments (Page 1 of 2)
UCJR 1:13PM (4/17/2009)
If we didn't have the automaker drama to fixate upon... what ever would we watch on the news???
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asng15 7:03PM (4/17/2009)
They are the real boss , the country cant live without them.......the virtuously entrepreneur
If you don't give me the money I will.............and lay off........and your public opinion will......and you will......... what a unique system
Fritz 1:17PM (4/17/2009)
This guy is a cartoon character. I hope they don't show too many photos of him.
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Max 1:15PM (4/17/2009)
Bankruptcy will always be "in doubt" so long as the gov't keeps feeding them billions of dollars every month.
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jpm100 1:25PM (4/17/2009)
You say that as if bankruptcy will end the government giving them billions. Good luck with that.
Throwback 1:51PM (4/17/2009)
We (tax payers) will be paying the debtor financing for GM when they enter chapter 11. If not GM will be in chapter 7.
Judy Zik 2:30PM (4/17/2009)
I don't see how there is any doubt about bankruptcy. It is also a insult to our intellengence for him to say he has any choice in the matter. He will present his plan and the government will tell him whether he is filing for bankruptcy or not.
The only way GM will survive is to cut deep and become a more nimble company.
Saturn will be sold. Hopefully they can talk the buyer into paying something for it and continuing to sell a few rebadges for a few years.
If anyone is willing to take Hummer and Saab they need to go.
Dealerships need to disappear. This is where bankruptcy comes in. Give the strong ones the chance to rebadge themselves as "new GM stores" and close the rest under court protection. The new combined GM stores should sell Chevy, Buick and Caddy. Buick will be a niche player but they will insist on hanging onto it for the sake of China. Pontiac should go but they will hang onto it since nobody wants to buy it. It will likely become a performance trim line on limited edition models. Daewoo will stay in the fold and likely continue to be their role as the source for cheap small cars.
Opel and Holden could be spun off to raise cash. GM could keep a stake in them and a strategic alliance a la Ford and Mazda. As seperate homegrown and owned companies they would have an easier time drumming up support from their local governments.
asng15 7:01PM (4/17/2009)
They are the real boss , the country cant live without them.......the virtuously entrepreneur
If you don't give me the money I will.............and lay off........and your public opinion will......and you will......... what a unique system
MoonRover 1:46PM (4/18/2009)
Actually setting GM on solid ground would cost less money than a bankruptcy. A bankruptcy would cost the government 100 billion, placing GM on firm footing by funding what remains of VEBA and paying off GM's bondholder debt would cost 60 billion. GM and the UAW have reached a satisfactory level of cuts to make GM profitable starting in 2010, it's GM's funding of VEBA and debt to bondholders that are the problem. In 2010 VEBA would fund heathcare for the retirees and that would be taken off the books. Future workers will start at 14.00 an hour, long time employees will make 28.00 an hour, both will pay part of there insurance and likely pay into a 401 plan. Long time employees gave been cut in half in the last couple of years. The government might save money by giving the bondholders 10 to 20 cents on the dollar but the cost of bankruptcy will still cost 70 billion, and cost of restructuring what is left of GM 30 billion. Sounds like a no brainer to me.
A&W 1:16PM (4/17/2009)
Some news outlets are reporting that Henderson said bankruptcy is "probable"
http://news.google.com/news?um=1&ned=us&hl=en&q=GM+CEO+says+bankruptcy+probable+but+not+preferred&cf=all&scoring=n
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IK 1:21PM (4/17/2009)
Borat: A man yesterday, tell me if I buy a car I must buy one with a pussy magnet.
Car Dealership owner: He means a car that women like.
Borat: Yes, but where do you keep this magnet?
Car Dealership owner: [interrupts] No. There's no magnet he just means the vehicle. Women love the Hummers.
Borat: Do this have a pussy magnet?
Car Dealership owner: No. The vehicle itself would be a magnet.
Borat: If I give you good price, will you please put in pussy magnet?
Car Dealership owner: Yeah but there's no-there's no such thing in this country as a-as a magnet.
Borat: If this car drive into a group of gypsies, will there be any damage to the car?
Car Dealership owner: It depends on how hard you hit them and all that.
Borat: *Hard*
Car Dealership owner: You might-if somebody rolls on the windshield, they could crack your windshield.
Borat: How fast do I need to go to guarantee I kill them?
Car Dealership owner: Uh-let me tell you something with this vehicle here probably doing 35-45 miles per hour will do it.
Borat: Great! When I uh, buy my wife, at the start she was uh, cook good, her vazhïn work well, and she strong on plow. But after three years when she was fifteen, then she become weak, her voice become deep: BORAT BORAT, eh, she receive hair on chest, and vazhïn hang like sleeve of wizard.
Car Dealership owner: Huh-Jesus...
Borat: How do I know that this will not happen with the car?
Car Dealership owner: Chevrolette guarantees you that with a warranty.
Borat: I like-a very much buy this Hummers, how much is it?
Car Dealership owner: Fifty-two thousand.
Borat: I am looking for something between um, six-hundred to uh... six-hundred and fifty dollars.
Car Dealership owner: We don't have any cars for six-fifty that you can buy. I might be able to sell you a wholesale car, a car with a lot of miles for seven-hundred with no warranty.
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Kyle Swift 1:21PM (4/17/2009)
I'm still having issues with them deciding to keep GMC.
Yes, I know there are some more loyal to GMC than Chevy, but it seems like there's no reason to keep them. Everything that is a GMC can be a Chevy.
If there are any options (not sure if there are or not) that one can get on a GMC, roll them into the Chevy line-up.
Just my opinion though. Guess we will see what happens.
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bakka 1:37PM (4/17/2009)
I am having issues with this whole thing. This is a very bad soap opera that just keeps going on. There is something else at work here.
Alex Hobbs 3:35PM (4/17/2009)
I completely agree, it seems very short sighted to me to keep GMC. They claim its profitable because it costs them almost nothing to slap a new grille on a chevy truck and call it a GMC but they don't see the larger picture. GMC only takes away from Chevy sales and badge engineering the hell out of their products has diluted all their brands into the worthless pile they now have and can't unload. They should dump everything here in the states besides Chevy and Cadillac and hold the rights to Buick (which would be sold still in China), Pontiac & GMC so if they ever want to introduce a specialty niche model they can sell it under the appropriately fitting name at a Chevy or Caddilac dealer. i don't agree with government intervention but I do agree with the government that more drastic changes are needed if this company is ever going to make it.
jjojojoojo 1:24PM (4/17/2009)
I don't understand what is going on at GM. Dump pontiac, but keep GMC and buick? I promise you GM, I will NEVER buy a buick or a GMC. I'd rather have the chevy if I need a truck or SUV, and buick is for OLD PEOPLE. I remember when you tried to save Olds - wow, looks like the same strategy! You will never turn their image around. Pontiac just needs REAL performance cars - NOT rebadged aveos. And dumping Opel? The ONE brand for the past 20 years I had hoped would come to America!
GM you will find yourself continuing to decline for the next 20 years, every 5 years or so having another crisis. Until there is nothing left and the chinese own the names of several, once prestigious, American nameplates.
Bravo!
Google: Cloward Piven Strategy
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Santosh Tiwari 1:37PM (4/17/2009)
Buick is not just for old people.
Check out the new Buick Lacrosse (Autoblog has a photo gallery).
Also check out the Buick Enclave.
GM should not be pursuing the sale of Opel. They will loose their European Business.
GMC could be assimilated into Chevy.
GM needs Buick since it is profitable in China. Buick Lacrosse is based on the Invicta concept which was designed and developed in China. Selling Buicks in US though is questionable. Although it does not require additional engineering dollars, it requires additional marketing dollars.
GM lacks in Marketing because of the number of brands and models they sell.
Just my two cents.
zamafir 1:40PM (4/17/2009)
psst, genius, GM looses billion in America. They make billions in profit in china, where Buick sells like hotcakes. GM's would be completely done if they abandoned the Buick brand, as their most profitable market would disappear. Their crucial issue, as you've noted, is going from money making to money loosing in their domestic market, which is possibly the worst blunder any manager could make (note VW looses hundreds of millions in north America and makes billions in their home market and to some extent china), but let's be real. axing their most profitable overseas brand would be beyond stupid. North America isn't the center of anyone's world, except Hyundai.
UltimoDragon 10:56PM (4/17/2009)
What reason is there to keep Pontiac? It's the new Plymouth, pretty much being the nameplate for cars that you can't make Buicks.
BigWill 11:41PM (4/17/2009)
If you look at new product Buick trumps Pontiac as of now:
1) Of the Lambda crossovers, the Buick Enclave was by far the best - distinctively styled and a personality removed from the generic box vibe of the Arcadia/Traverse/Outlook.
2) I saw the new Buick Lacrosse at an auto show and it's a great looking car, inside and out. IMHO nicer than the Ford Taurus and an absolute no-brainer choice over the more expensive Lincoln MKZ.
Tim 1:23PM (4/17/2009)
"Profitable AC Delco"?, "Profitable Buick, GMC"? So are we to assume that Cadillac, Chevy and Pontiac must lose billions to negate those profits for GM to lose billions every month ?
After you puff you must pass...
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