• May 31st 2009 at 11:29PM
  • 62
General Motors' bankruptcy endgame appears to be at hand, with word coming out that the automaker will indeed file for Chapter 11 protection early on Monday morning, which in turn is expected to trigger $30.1 billion in U.S. government loans. That funding will arrive on the heels of the $19.4 billion GM has already received since late last year, and Canada is expected to chip in an additional $9.5 billion. In exchange for that $30.1 billion in financing, Capitol Hill will receive a 60% share of GM, while Canada's investment will reportedly net it a 12% stake.

In related news, Automotive News is reporting that GM will appoint Al Koch to a newly created chief restructuring officer post. Koch, a corporate turnaround expert, has already been working with GM since January through his advisory firm, AlixPartners LLP. According to AN, Koch will oversee "bad" GM – that is, the liquidation of assets deemed to be dead weight in the drive to a leaner, more competitive GM (think: Hummer, Saturn, Saab, etc.). Recently minted GM CEO, Fritz Henderson, will continue to lead the corporation and, of course, all warranties will continue to be honored.

As part of the Chapter 11 bankruptcy proceedings, GM will see its stock-trading ticker removed from the Dow and S&P 500 on Monday, with those who have still been stubbornly holding on to stocks effectively losing everything.

President Obama will address the nation on GM's historic bankruptcy beginning at 11:55 a.m. EDT, with Fritz Henderson slated to address media members at around 12:15 p.m. in New York.

[Source: Automotive News - subs. req. | Image: Bill Pugliano/Getty]


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    • 1 Second Ago
  • 62 Comments
      • 6 Years Ago
      Isn't Canada losing tons of production? Why are we chipping in so much?
        • 6 Years Ago
        Like the previous guy stated the purpose of chipping in is jobs. Some of you guys are moaning completely unaware of what a favor the government is doing by bailing out GM. Tax money is being put to good use here because the cost of letting GM fall is greater than what we can image. I've ones worked for a car manufacturer two years ago and gained some considerable knowledge of how the industry is structured and operates.

        Assembly line workers are only the tip of the iceberg. Multiply the number of GM employees by 3-4 and you'll get an idea of how many people are involved in making a GMC truck become a reality. GM falling would lead to a domino effect that would trickle the fall of hundreds of other suppliers, consultants, co-ventures and partnerships. Panic and several millions of people loosing their jobs will be the result if the government would have stood by and let one of the backbones of US economy collapse. Obama is just doing what has to be done and he's not to be held responsible for this. GM has been a sinking ship long before Obama even thought about running for president.
        • 6 Years Ago
        jobs.
      • 6 Years Ago
      Mr. Oak

      So because you were not running your company properly, you put yourself in a vulnerable position by relying on credit cards. It was your fault for maintaining a large balance on your credit card. You were not prepared, you did not have your affairs in order. If you did, you would have operating capital and not need credit cards to run your business.

      BTW Obama did not fix anything with the credit card companies. All he did was make them change their practice from charging the losers high interest to charging the responsible people a fee. Yeah that isn’t Marxist is it, those who pay on time will now also pay for those who cannot afford to pay.

      You say thank you to that? Don't you pay your bill on time? Well guess what bud your rates will increase as you are now paying for all the losers with high balances & defaults. So as more losers default on their cards, the more you will continue to pay. Back to square one for you and your credit card run business. :)
      • 6 Years Ago
      This is real change.

      Unfortunately the unions had Obama's help to steal 100 billion + of tax payer's money.
        • 6 Years Ago
        Change..what change are you talking about?

        Bush or Obama...Dems or GOP (Neo-Con faction) in power makes no difference really when it comes to bailouts going left or right, banks or automakers...

        The taxpayers....We The People gets screwed either way.
      • 6 Years Ago
      how would execs sleep with a 50Bn debt? even if the brand spanking GM starts making profits within the year, of 2 billion a year, it will take 25 years to pay up and that is not considering interest. I'm not showing my math skills here, I'm just saying that how in the hell are they going to pay up that much debt with the line-up they have. Cutting dealers and limiting production will not a golden egg laying goose maketh of GM.

      My main question would be who will pay for this in the end? if regular taxpayers are ones paying, how long will it take to close the debt? how will you pay them back?

      I wouldn't mind a crystal ball where i can see how GM's future looks like, but i doubt it would be any good.
      • 6 Years Ago
      The government will not be able to run a successful GM, so its 70% ownership should be privatized as soon as possible. Trouble is, why would anybody buy the government's shares until GM makes a profit which is very unlikely if the company builds cars that Obama and Al Gore like, but most Americans don't?

      The truth is that Obama's GM bankruptcy is a sop to the UAW. In a normal, court bankruptcy, the union would have received what it deserved: bupkis!

      Obama was elected by his union buddies and this is payback time at the taxpayers' expense.

      Obama doesn't care about taxpayers who are mostly "the rich" who didn't vote for him--except for the brainless rich in Hollywood, of course.

      Expect the new Government Motors to fail.
      • 6 Years Ago
      Guess this finally makes my 1000 shares absolutely useless.
        • 6 Years Ago
        What can I say. I was trying to keep the faith! (Even though I own a Toyota, I also have a Chevy Blazer and a Cadillac DTS.)
        • 6 Years Ago
        You still have some? OMG.
      • 6 Years Ago
      It hasn't even been a decent corporation since the 1960s.
        • 6 Years Ago
        Mike, I'd think twice about the argument that Obama & Co. are keeping GM from building "what the consumer wants" and running it into the ground. GM has been shedding money at the rate of billions of dollars annually *since 2005,* with nobody's help but its own. In fact, it was in 2005 that Wagoner issued a press release talking about "the toughest year in GM's history" and how new "game-changing" products were coming down the pipeline to change all that.

        Those ended up to be the Cobalt, G6, LaCrosse, Colorado/Canyon, and H3, BTW.

        The last year GM made money--*any* money--was 2004. And there's a reason that, since then, full-size SUV sales are down and hybrid/subcompact/diesel/CUV sales are *way* up--and it has nothing to do with the government. It's a free market saying what it wants, and GM, sadly, hasn't delivered.
        • 6 Years Ago
        @ Mike

        Funny how "privately-held" Ford is trying to do pretty much the same thing as GM - concentrating more on their non-truck/SUV lineup and place an emphasis on fuel economy.

        For that matter, foreign auto companies such as BMW, Mercedes, Porsche, etc. are all focusing on fuel economy.
      • 6 Years Ago
      LITTLE BAILOUT CORVETTE
      (Little Red Corvette, Prince)
      The Artist Formerly Known as WilliamBanzai7

      I guess I should've known by the way U designed your cars with tanks tilted sideways
      That it wouldn't last
      See, U're the kinda company that believes in makin' out once
      Love 'em, but not made to last
      I guess I must be dumb cuz U had a pocket full of SUV horses
      Some of them new and some of them used
      But it was Bailout Saturday night, I guess that makes it all right
      And U say - "What have I got 2 lose?"

      And honey, I say Little Bailout Corvette
      Baby, Toyota will kick your ass
      Little Bailout Corvette
      U need consumer love that's gonna last

      I guess I should've closed my eyes when U drove me 2 the place
      Where your high octane horses run free
      Cuz I felt a little ill when I saw all the bills
      From those camel jockeys, damn it oil ain't for free
      Believe it or not, I started 2 worry
      I wondered if I had enough gas
      But it was Bailout Saturday night, I guess that makes it all right
      And U say - "Baby, have U got enough gas?"
      Oh yeah!

      Little Bailout Corvette
      Baby, U're capitalist iconoclast(Yes U are)
      Little Bailout Corvette
      U need 2 find consumer love that's gonna last (Oh, oh)

      A Board of Directors yours oughta be in jail
      Cuz it's dumbness on the verge of bein' obscene
      Move over, dummies, Uncle Sammy got the bailout keys
      He's gonna try 2 tame your money burning machine

      Little Bailout Corvette
      Baby, Toyota really kicked your ass
      Little Bailout Corvette
      Need 2 find consumer love that's gonna last, hey hey

      Little Bailout Corvette
      Honey, U got 2 slow down (Got 2 slow down)
      Little Bailout Corvette
      Cuz if U don't, U're gonna run your little bailout Corvette right in the ground
      (Little Bailout Corvette)
      • 6 Years Ago
      hmmm maybe it's just my B.S in economics talking, but I could have saved the United States tax payes a few billion by telling GM to stuff it and declare bankruptcy 6+ months ago.


      too big to fail? the only thing bigger than GM is the American people's stupidity for voting in the washington assholes who dole out our money like it was candy.
        • 6 Years Ago
        Uhh, if we are talking Ch.11 reorganization bankruptcy, the govt. would still have had to put in billions to keep the "slimmed down" GM functioning as a going concern even if bankruptcy proceedings had started months ago.

        The past few months was used to renegotiate terms w/ the UAW, creditors, etc., as well as to see how things panned out w/ Chrysler (there's a reason why Chrysler's bankruptcy was scheduled a month earlier).

        If GM had gone into liquidation, we would have seen our economy go from a deep recession to a depression.

        I certainly don't like seeing my taxdollars used to bailout all these mismanaged companies (esp. the greedy banks/insurance companies), but not doing so would have resulted in an even worse economic meltdown.
      • 6 Years Ago
      WHO KILLED BIG AUTO
      (Who Killed Davey Moore?, Bob Dylan)
      WilliamBanzai7 Blog

      Sing along link: http://www.youtube.com/watch?v=62daicHQ9as

      Who killed the BIG AUTO?,
      Why an' what's the reason for?

      "Not I," says the FECKLESS MOTOWN CEO ,
      "Don't point your finger at me.
      I could've retooled it to much better CAFE rate
      An' maybe kept it from this fate,
      But the customers and dealers would've booed, I'm sure,
      At not gettin' their money's worth.
      It's too bad it had to go,
      But there was a pressure on me too, you know.
      It wasn't me that made it fall.
      No, you can't blame me at all."

      Who killed BIG AUTO ,
      Why an' what's the reason for?

      "Not us," says the URBAN SUV WARRIOR CROWD,
      Whose off road dreams created one big greenhouse gas cloud.
      "It's too bad it died alright
      But we just love that high line of sight.
      We didn't mean for it to meet this death,
      We just wanted a safe ride instead,
      There ain't nothing wrong in that.
      It wasn't us that made it fall.
      No, you can't blame us at all."

      Who killed BIG AUTO,
      Why an' what's the reason for?

      "Not we," says the politician,
      Puffing on a BIG OIL private label cigar.
      "It's hard to say, it's hard to tell,
      I always thought that BIG AUTO was well.
      It's too bad for Detroit City its dead,
      But if it was sick, they should've said.
      It wasn't me that made it fall.
      No, you can't blame me at all."

      Who killed BIG AUTO,
      Why an' what's the reason for?

      "Not we," say the GAMBLING SHAREHOLDERS and BONDHOLDERS,
      With their proxies and coupons still in their hands.
      "It wasn't us that knocked it down,
      We always thought the Directors would do what needed to be done.
      We didn't commit no ugly sin,
      Anyway, we put money on it to win.
      It wasn't us that made it fall.
      No, you can't blame us at all."

      Who killed the BIG AUTO,
      Why an' what's the reason for?

      "Not me," says the UAW NEGOTIATOR,
      Surfing for member benefits like a used lemon trader,
      Sayin', "Unions ain't to blame,
      There's always legacy costs built in the automotive game."
      Sayin', "Big labor is here to stay,
      It's just the good old American way.
      It wasn't me that made him fall.
      No, you can't blame me at all."

      Who killed BIG AUTO,
      Why an' what's the reason for?

      "Not we," say the JAPANESE whose well managed fists
      Laid it low in a cloud of hybrids and "kaizen" mist,
      Who came here after the Second World War
      Where efficient design was shown Motown's back door.
      "We hit em, we hit em, yes, it's true,
      But that's what global competition is meant to do.
      Don't say 'murder,' don't say 'kill.'
      It was engineering destiny, it was divine will."

      Who killed the BIG AUTO,
      Why an' what's the reason for?
      • 6 Years Ago

      BYE BYE HIGH OCTANE AMERICAN GUY
      (Bye Bye Miss American Pie, Don Maclean)
      WilliamBanzai7

      A long, long time ago...
      I can still remember
      How Detroit's muscle cars used to make me smile.
      And I knew if I had a chance
      That I would fall for good old horse powered romance
      And, maybe, I'd be happy for a while.

      But gas prices made me shiver
      With every 4 1/2 dollar gallon I would quiver.
      More bad news at the pump;
      I couldn't take no more gas guzzling junk.

      I can't remember if I cried
      When I read about it's last good bye,
      But something touched me deep inside
      The day General Motors laid down and died.

      So bye-bye, high octane American guy.
      Drove my Chevy to the bailout levee,
      But the levee was dry.
      And them good old gas guzzling boys were drinkin premium unleaded and rye
      Singin, "this'll be the day that I die.
      "this'll be the day that I die."

      Did you write the book of inconvenient petrol love,
      And are you afraid of CO2 above,
      If Al Gore tells you so?
      Do you believe in global warming rock 'n roll,
      Can OPEC's music save our immortal souls,
      And can you teach us how to consume real slow?

      Well, I know that you're in love with him
      `cause I saw you dancin in the inconvenient gym.
      You both kicked off your high heeled political shoes.
      Man, I dig those high octane rhythm and blues.

      I was a lonely teenage broncing buck
      With a pink Corvette and a GMC Jimmy pickup truck,
      But I knew I was out of luck
      The day the cheap oil music died.

      I started singin,
      bye-bye, high octane American guy.
      Drove my Chevy to the bailout levee,
      But the levee was dry.
      And them good old gas guzzling boys were drinkin premium unleaded and rye
      Singin, "this'll be the day that I die.
      "this'll be the day that I die."
      • 6 Years Ago
      since I havent seen it mentioned yet I will go ahead and say it.



      Somehow "I told you so"- seems to capture the essence that is this total failure. Now that the US gov. has control of GM everything is going to just magically get better right? Since THEY have a track record of always doing the right thing.

      This whole thing is like a drunk driver being forced to hand over his keys.... to someone that's high on cocaine.
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