Autoblog http://www.autoblog.com Autoblog http://www.blogsmithmedia.com/www.autoblog.com/media/feedlogo.gif Autoblog http://www.autoblog.com en-us Copyright 2013 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/<![CDATA[REPORT: GM hedges bets, plans to miss $1B debt payment deadline]]>http://www.autoblog.com/2009/04/22/report-gm-hedges-bets-plans-to-miss-1b-debt-payment-deadline/http://www.autoblog.com/2009/04/22/report-gm-hedges-bets-plans-to-miss-1b-debt-payment-deadline/http://www.autoblog.com/2009/04/22/report-gm-hedges-bets-plans-to-miss-1b-debt-payment-deadline/#commentsFiled under: , ,



The familiar expression goes "Better the devil you know," meaning it's preferable to deal with the nasty things you don't like but are at least familiar with. General Motors, however, doesn't seem to think so. The troubled automaker appears more ready to take its chances with bankruptcy than continue to fight the weight of monumental debt and the demands of restructuring it.

GM has a $1 billion payment due on June 1, the same day as the government-imposed deadline for having its financial house cleaned up. The company's chief financial officer has just gone on record as saying that GM does not intend to make that payment. The General will attempt another round of debt-for-equity swaps (DFE) with its bondholders, and if it succeeds - and also succeeds in restructuring $20 billion in UAW healthcare obligations - it will get money from the government to continue without bankruptcy. If the DFE doesn't meets its goals, then GM is set to go into government-backed Chapter 11, court protection and what will likely be a nearly clean slate to restart its debt negotiations.

Last week, bondholders said they were preparing a response to GM's most recent offer. The automaker says that it will do what needs to be done "in court or out of court," which means that unless the bondholders' response is "Yes," bankruptcy is a fait accompli.

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

REPORT: GM hedges bets, plans to miss $1B debt payment deadline originally appeared on Autoblog on Wed, 22 Apr 2009 15:57:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>bankruptcybondholdersearningsfinancialsgmgm bailoutgm bankruptcygm bondholdersgm bridge loanGmBailoutGmBankruptcyGmBondholdersGmBridgeLoangovernmentWed, 22 Apr 2009 15:57:00 EST http://www.autoblog.com/feed/1524929/article-comments.xml http://www.autoblog.com/feed/2009/04/22/report-gm-hedges-bets-plans-to-miss-1b-debt-payment-deadline/1524929/article-detail.xml 1524929 http://www.blogcdn.com/www.autoblog.com/media/2009/04/gm-cloudy-rencen-getty-pugliano_thumbnail.jpg http://www.blogcdn.com/www.autoblog.com/media/2009/04/gm-cloudy-rencen-getty-pugliano.jpg <![CDATA[REPORT: Pontiac and GMC may get axe... you knew this was coming]]>http://www.autoblog.com/2009/04/16/pontiac-and-gmc-may-get-ax-you-knew-this-was-coming/http://www.autoblog.com/2009/04/16/pontiac-and-gmc-may-get-ax-you-knew-this-was-coming/http://www.autoblog.com/2009/04/16/pontiac-and-gmc-may-get-ax-you-knew-this-was-coming/#commentsFiled under: , , , , ,


When the president tells you to sharpen your pencil and improve your last-ditch survival effort, it's time to grab the big eraser. According to reports, General Motors may ditch its GMC and Pontiac brands to demonstrate just how serious it is. If the auto lines go, GM would be pared back to Chevrolet, Buick and Cadillac, a mere shadow of its former self, but the nameplates might become more clearly defined with the added breathing room. Ford's got its trifecta of Ford, Mercury and Lincoln, so GM would match that setup should it unload Pontiac and GMC in some way, as well as carry through with its ongoing process of shedding Saturn, Saab and Hummer.

While Pontiac actually has some unique offerings, GMC is rumored to stand a better chance of sticking around. It still wouldn't be cheap to do away with the brands. There are dealers who will not go quietly into the night, meaning GM will be looking at the possibility of finding a buyer for yet another piece of its puzzle. Of course, everyone's keeping mum about the possibility of life without Pontiac or GMC.

UPDATE: According to General Motors' sales chief Mark LaNeve, the automaker has no intentions of killing off Pontiac or GMC. LaNeve admits that GM is continuing to tweak its strategy, but reports that "GMC is going away are just unfounded, unsubstantiated and untrue."

[Source: Bloomberg]

REPORT: Pontiac and GMC may get axe... you knew this was coming originally appeared on Autoblog on Thu, 16 Apr 2009 09:27:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>gm bailoutgm bankruptcygm brandsgm bridge loangm gmcgm pontiacGmBailoutGmBankruptcyGmBrandsGmBridgeLoangmc pontiacgmc saleGmcPontiacGmcSaleGmGmcGmPontiacpontiac gmcpontiac salePontiacGmcPontiacSaleThu, 16 Apr 2009 09:27:00 EST http://www.autoblog.com/feed/1518564/article-comments.xml http://www.autoblog.com/feed/2009/04/16/pontiac-and-gmc-may-get-ax-you-knew-this-was-coming/1518564/article-detail.xml 1518564 http://www.blogcdn.com/www.autoblog.com/media/2009/04/pontiac_gmc_thumbnail.jpg http://www.blogcdn.com/www.autoblog.com/media/2009/04/pontiac_gmc.jpg <![CDATA[STUDY: 76% of Americans believe economy can survive without GM]]>http://www.autoblog.com/2009/04/02/study-76-of-americans-believe-economy-can-survive-without-gm/http://www.autoblog.com/2009/04/02/study-76-of-americans-believe-economy-can-survive-without-gm/http://www.autoblog.com/2009/04/02/study-76-of-americans-believe-economy-can-survive-without-gm/#commentsFiled under: , ,



According to The Detroit Free Press, Rasmussen Reports called 1,000 people and asked them if they believed "the economy could recover without General Motors in business." The results were clear: 76% of respondents said "Yes, it can." The sentiment against any more taxpayer money being used to assist automakers was clear as well: 62% said neither GM nor Chrysler should receive any more loans.

Just as interestingly, the public appears to expect failure from one of the two companies: Fully 59% said that it was "very likely" or "somewhat likely" that GM or Chrysler will go out of business in the next few years.

Yet while the results of this survey are clear, it could be that the first question itself is slightly misleading: The economy could recover without a lot of companies, including AIG and Citibank. After all, you can't really kill an economy as long as there are people left to exchange goods and services, right? The real issue is whether people are prepared and willing to deal with the fallout from such companies going out of business.

[Source: Detroit Free Press]

STUDY: 76% of Americans believe economy can survive without GM originally appeared on Autoblog on Thu, 02 Apr 2009 12:59:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>earningsfinancialsgmgm bailoutgm bankruptcygm bridge loanGmBailoutGmBankruptcyGmBridgeLoanpollsurveyThu, 02 Apr 2009 12:59:00 EST http://www.autoblog.com/feed/1505413/article-comments.xml http://www.autoblog.com/feed/2009/04/02/study-76-of-americans-believe-economy-can-survive-without-gm/1505413/article-detail.xml 1505413 http://www.blogcdn.com/www.autoblog.com/media/2009/04/gm_bk_ok_thumbnail.jpg http://www.blogcdn.com/www.autoblog.com/media/2009/04/gm_bk_ok.jpg <![CDATA[REPORT: GM lobbying Congress for $7B in tax relief]]>http://www.autoblog.com/2009/02/02/report-gm-lobbying-congress-for-7b-in-tax-relief/http://www.autoblog.com/2009/02/02/report-gm-lobbying-congress-for-7b-in-tax-relief/http://www.autoblog.com/2009/02/02/report-gm-lobbying-congress-for-7b-in-tax-relief/#commentsFiled under: , , ,

Ask for a little help from the government, and the next thing you know you're asking for the government to protect you from the very help it's giving you. General Motors is restructuring its debt load by offering equity shares instead of cash to debt holders, namely the government and the UAW. The UAW transaction concerns the VEBA health care fund in that GM wants to pay its obligation to the fund with shares.

The issue is that this transaction is a debt-asset swap and comes with a distressed asset tax (DAT) of $7 billion. The DAT was codified in 1986 to prevent companies from buying money-losing companies just to avoid paying taxes. In GM's case, the debt-asset swap counts as corporate income, but GM can claim it's 2008 losses against that income, greatly reducing its tax bill.

If the tax isn't waived, GM will need to immediately return $7 billion of the money it was just given. It is talking to the Treasury Department, but so far it's been no dice. GM has been lobbying to have a waiver provision put in the economic stimulus bill currently being wrangled over in the Senate, yet there's also been no movement there, either. It's almost inconceivable that the government will demand GM pay the tax. It's equally hard to believe that this is even taking place.

[Source: Detroit News via Market Watch]

REPORT: GM lobbying Congress for $7B in tax relief originally appeared on Autoblog on Mon, 02 Feb 2009 10:59:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>bridge loanBridgeLoanearningsfinancialsgmgm bailoutgm bridge loanGmBailoutGmBridgeLoangovernmenttaxuawMon, 02 Feb 2009 10:59:00 EST http://www.autoblog.com/feed/1447123/article-comments.xml http://www.autoblog.com/feed/2009/02/02/report-gm-lobbying-congress-for-7b-in-tax-relief/1447123/article-detail.xml 1447123 http://www.blogcdn.com/www.autoblog.com/media/2009/02/gm_taxbill2_thumbnail.jpg http://www.blogcdn.com/www.autoblog.com/media/2009/02/gm_taxbill2.jpg <![CDATA[Saab not long for the U.S. market, GM unsure of other brands' futures]]>http://www.autoblog.com/2009/02/02/saab-not-long-for-the-u-s-market-gm-unsure-of-other-brands-fut/http://www.autoblog.com/2009/02/02/saab-not-long-for-the-u-s-market-gm-unsure-of-other-brands-fut/http://www.autoblog.com/2009/02/02/saab-not-long-for-the-u-s-market-gm-unsure-of-other-brands-fut/#commentsFiled under: , , , , ,



Let's go ahead and get it out there: General Motors doesn't have a plan for Saab, Saturn, or HUMMER - it has a bunch of hopes, ideas and proposals. The best that GM can do with Saab is try to extricate the brand from its entangled web, which might make it more attractive to a buyer. That includes moving 9-3 and 9-5 production to Sweden and being "engaged with the Swedish government" on a plan for Saab's future. But GM has admitted that "Saab is not a U.S. strategy," and the code behind that statement is probably, "We get rid of or kill it."

GM's focus is on Chevrolet, Cadillac, Buick and GMC, and Pontiac "will shrink substantially." The other brands appear to be waiting out their death row sentences on appeal. Saturn, like Saab, is so entrenched in GM that an outside buyer is a remarkably dim prospect. Saturn production is funded until 2012 (for now), but unless GM finds a partner or folds it into the mothership, it would appear to have no future beyond then. HUMMER is living like a medieval leper, locked up in a shed outside the castle walls.

But let's also get this out there: there are two ways out of this impasse. One of them is to spend a lot of money assisting GM. The other is to let GM fail and spend a lot of money cleaning up after GM. (Remember our perspective on "a lot of money:" Citibank got $45 billion after a couple of phone calls and recently had to be asked by the Obama administration not to spend $50 million on a French corporate jet.)

In two weeks GM is supposed to "show that it is likely to achieve long-term profitability and has a positive net present value." Let's be honest: there is no way GM (nor Chrysler) can prove long term viability in the next 15 days. (Neither could many companies if they had to.) If GM's viability plan is rejected, the government could ask for its $13.4 billion dollars back, which would be the equivalent of taking GM out back and shooting it. And that would be the equivalent of emptying another ammo clip into the economy's slowly-beating heart. All of which is to say that we have no idea how this will play out, but we're pretty sure that this is only the beginning of the beginning.

[Source: Automotive News, sub req'd]

Saab not long for the U.S. market, GM unsure of other brands' futures originally appeared on Autoblog on Mon, 02 Feb 2009 10:29:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>auto industry bailoutAutoIndustryBailoutbridge loanBridgeLoanbuickchevroletearningsgmgm bailoutgm bridge loanGmBailoutGmBridgeLoangmcgovernmenthummerpontiacsaabsaturnMon, 02 Feb 2009 10:29:00 EST http://www.autoblog.com/feed/1447275/article-comments.xml http://www.autoblog.com/feed/2009/02/02/saab-not-long-for-the-u-s-market-gm-unsure-of-other-brands-fut/1447275/article-detail.xml 1447275 http://www.blogcdn.com/www.autoblog.com/media/2009/02/gm_brands_plan2_thumbnail.jpg http://www.blogcdn.com/www.autoblog.com/media/2009/02/gm_brands_plan2.jpg <![CDATA[Followup: GM receives second gov't loan installment of $5.4 billion ]]>http://www.autoblog.com/2009/01/22/followup-gm-receives-second-govt-loan-installment-of-5-4-bill/http://www.autoblog.com/2009/01/22/followup-gm-receives-second-govt-loan-installment-of-5-4-bill/http://www.autoblog.com/2009/01/22/followup-gm-receives-second-govt-loan-installment-of-5-4-bill/#commentsFiled under: , ,

Cue the angels! General Motors reports that it has received the second installment of the $13.4 billion government loan that it was promised by former President Bush late last month. Sure, it may have arrived a few days late, leading GM's coffer-keepers to anxiously check their mailboxes every few minutes, but it showed up with time to spare before The General ran out of funds to pay the bills on March 31st.

For those keeping track, GM's total draw from the bridge loan so far rings the taxpayers' registers to the tune of $9.4 billion, leaving $4B still to come at a later date. In order to keep the money, GM must go back to Congress by February 17th with a full progress report detailing how it is fairing in reducing its current $28 billion in debt.

[Source: Automotive News - sub. req'd]

Followup: GM receives second gov't loan installment of $5.4 billion originally appeared on Autoblog on Thu, 22 Jan 2009 15:28:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>auto bailoutAutoBailoutbailoutbridge loanBridgeLoangm bailoutgm bridge loanGmBailoutGmBridgeLoanThu, 22 Jan 2009 15:28:00 EST http://www.autoblog.com/feed/1436790/article-comments.xml http://www.autoblog.com/feed/2009/01/22/followup-gm-receives-second-govt-loan-installment-of-5-4-bill/1436790/article-detail.xml 1436790 http://www.blogcdn.com/www.autoblog.com/media/2009/01/fritz_bubble_250_thumbnail.jpg http://www.blogcdn.com/www.autoblog.com/media/2009/01/fritz_bubble_250.jpg -1 2