GM preparing for possible bankruptcy: report

[cal04]

Source: MarketWatch

The U.S. Treasury is directing General Motors Corp. to lay the groundwork for a bankruptcy filing by a June 1 deadline, despite GM's public contention that it could still reorganize outside court, the New York Times reported Sunday, citing unnamed people with knowledge of the plans.

Members of President Obama's automotive task force are holding ongoing meetings and conference calls with GM officials and their advisers in Detroit and Washington, the report said, with the goal to prepare for a fast "surgical" bankruptcy.

The preparations are aimed at assuring a GM bankruptcy filing is ready if the company is unable to reach agreement with bondholders to exchange roughly $28 billion in debt into equity in GM and to get needed concessions from the United Automobile Workers union, the report said.

One plan under consideration would create a new company that would buy the "good" assets of GM almost immediately after the carmaker files for bankruptcy, the newspaper reported. Less desirable assets, including unwanted brands, factories and health-care obligations, would be left in the old company, which could be liquidated over several years, it said.

Read more: http://www.marketwatch.com/news/story/GM-preparing-possible-bankruptcy-report/story.aspx?guid=%7B9BE2FACB%2DAE20%2D4915%2DACC0%2D382664116BBC%7D&dist=hplatest

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‘Surgical’ Bankruptcy Possible for G.M.
http://www.nytimes.com/2009/04/13/business/13gm.html?_r=1&hp

[LynnTheDem]

1. Still??? Sounds like cheney the dick's "last throes" already. nt

[kirby]

2. Disgusting...

"One plan under consideration would create a new company that would buy the "good" assets of GM almost immediately after the carmaker files for bankruptcy, the newspaper reported. Less desirable assets, including unwanted brands, factories and health-care obligations, would be left in the old company, which could be liquidated over several years, it said."

[DonCoquixote]

3. I know I will get flamed for this

But this is exactly why I was NOT in favor of giving GM the loans some demanded. We all knew that they were going to either pull bankruptcy, and/or sell off to the Chinese. The only way to stop GM from gutting itself is to follow Michael Moore's plan, and directly BUY THE STOCK. If we just nationalize without buying them out, they will cry foul, but if they get cut by the same stock market sword they lived by, they will have less to complain about.

[Romulox]

17. Er, the Obama admin is forcing GM into bankruptcy. GM fought this tooth and nail..

:hi:

[AndyTiedye]

21. The UAW Should Buy Them Out

At GM's current market cap, the UAW could buy a controlling interest.
With the likely impact of bankruptcy on UAW members and pensioners,
they should seriously consider this.

[sasquatch]

4. Thank you Boomers and Republicans

:eyes:

[fasttense]

5. Not all of us Boomers were responsible for this crap.

Would you blame All Americans for voting in the Raygun and bush? If so, then you are as much to blame for our current situation as the rest of us.

I never voted for a Repulicon, ever. I went to a lot of protests in order to prevent the bush from destroying this country but of course no one was listening. I tried my best to keep the Republicons from doing what they did.

[SammyWinstonJack]

14. .

:eyes: yourself.

[boomerbust]

15. Thank you

Gen. exers.( a generation of slackers ), and your Republican family for the destuction of the middle class. Job well done.

[DonCoquixote]

25. Oh please

If you really want to get nasty about it, one thing has not changed for 30 years, the boomers were, are and will continue to be, the dominant demographic, which means they had the actual power. The reason we get called Gen X is because our numbers were too small to make much of a dent. As for as slackers go, we were too busy working, because unlike the boomers, we were NOT given a good economy by our parents. Now, do I blame all Boomers, no. I do realize there were some who really did fight the good fight, and still do, but we get really tired of the way that some former "hippies" still demand offering at their altar, while hiding the fact they became mercenaries of the worst order, doing things even their parents would have thought to be too greedy (such as blowing their savings on the stock market without being able to decipher CNBC.)

Oh, and the Obama admin did NOT force GM, if so, why the hell were they talking bankruptcy a year ago, back when one of the GOp talking points was that they should be allowed to do so. You think GM has not been greasing these wheels for a while? Did you forget how Mitt Romney would get on Fox news and make the case that only by allowing bankruptcy would GM be able to kill the unions? But no, some of the Union types here are falling right into the GOP trap, by offering to help their CEO masters stay warm in their chairs provided the unions get their cut, instead of putting pressure on to take OVER detroit, as Moore ( a guy who knows a thing or two about GM) has advocated.

[steven johnson]

6. Treasury Is Said to Warn G.M. of Bankruptcy Risk

Source: New York Times

By MICHELINE MAYNARD and MICHAEL J. de la MERCED
Published: April 13, 2009
DETROIT - The Treasury Department is directing General Motors to lay the groundwork for a bankruptcy filing by a June 1 deadline, despite G.M.'s public contention that it could still reorganize outside court, people with knowledge of the plans said during the weekend.
Members of President Obama's automotive task force spent last week in meetings and on conference calls with G.M. officials and its advisers in Detroit and Washington.

Those talks are expected to continue this week.

The goal is to prepare for a fast "surgical" bankruptcy, the people who had been briefed on the plans said. G.M., which has been granted $13.4 billion in federal aid, insists that a quick restructuring is necessary so its image and sales are not damaged permanently.


The preparations are aimed at assuring a G.M. bankruptcy filing is ready should the company be unable to reach agreement with bondholders to exchange roughly $28 billion in debt into equity in G.M. and with the United Automobile Workers union, which has balked at granting concessions without sacrifices from bondholders.


Read more: http://mobile.nytimes.com/article;jsessionid=B52AFFE6F21C2083413072071449C006.w5?a=354711&f=19

[AndyTiedye]

7. Who Invests in GM Bonds?

Hope not the GM pension fund.

[awoke_in_2003]

8. Once the bankruptcy occurs...

they will break the union :(

[excess_3]

9. not necessarily

the 'follow on' GM will have to hire somebody

[Sen. Walter Sobchak]

10. so "Full pay to the last day" is a better outcome?

the last day being some time in September...

[sarcasmo]

13. Bingo and don't forget about destroying the legacy Health Care and Pensions.

[pam4water]

11. Article not found :(

[sarcasmo]

12. My problem with this whole deal is why is the Treasury directing them?

Why isn't the treasury directing AIG into Bankruptcy?

[blue_onyx]

19. I want to know why too

I guess the Wall Street double standard continues.

[sarcasmo]

28. Ready to get screwed again here in Michigan. No one will tell us why.

[IsItJustMe]

16. So Obama gives out millions of dollars to greedy bankers who turn around and squander it by giving

themselves huge fat bonuses, and by-the-way, are the same damn people who caused this mess in the first place, and yet, let one of the few industries that actually still produces something of value in this country fall to the way side, this is a recipe for insanity and failure.

[antimatter98]

18. As long as GM is forced to honor pensions (remember that banks had 'contracts' to keep?) then fine.

The reason GM is considering bankruptcy is to walk away from pensions. Of course, they would deny this. So, let any bankruptcy agreement stipulate that GM honor all pensions in the future and see what they do then.

GM has invested billions overseas, in Brazil, in China, in Europe, and has let their North American plants and development
labs fall by the wayside. GM is just acting like a corporation---maximizing shareholder return no matter what.

In the future, especially if GM goes bankrupt, we will still see the GM marque in the US, but the cars will be built
in countries where it has invested its billions. GM US will be an importer, not a domestic manufacturer of large
scale (other than military vehicles and systems).

Right now, ask yourself: what is America's business plan? The answer is, NAFTA, outsourcing, etc. No plans
to make America viable again, only to dismantle it. And to allow the financial industry to continue as it
has been---with our backing. "Financial health care" from us, but no health care for us.

eom

[blue_onyx]

20. I hate that GM is being directed into bankruptcy

but we all know it's coming and I wish they would get it over with already.

[Romulox]

22. Rahm et al. are trying to figure out how Obama can win in '12 without Michigan.

[blue_onyx]

23. Well, I guess it depends on how this works out

If by 2012, the auto industry and MI are doing better, it may not be a big deal for Obama. If MI faces the kind of misery I think it might, Obama could be in trouble. Not only could Michigan be lost but so could IN and OH, which have the second and third most US auto jobs. I hope Obama knows what he's doing because I would be angry if my state votes for Palin in 2012.

[PassingFair]

24. Not to mention the upcoming Governor's race.

Michigan is over-run with DLCers.

[Romulox]

27. If Obama breaks the UAW, he has no chance at Michigan, regardless of the state of the economy. nt

[IrishBuckeye]

29. I see Obama losing Ohio as well.

Obama told union workers he would work for them, now he's asking the middle class to make more painful concessions while he treats those in charge of the banks with kid gloves.

[DainBramaged]

31. You bet, and Michigan will never trust the Dems again.

They'd rather have the GOP LIE to their face than play the game this Administration has with their lives.

[Ilsa]

26. It makes me ill, all the way down here in south Texas.

I love GM products. My GM vehicles have been great.

[DainBramaged]

30. Wall Street and the bankers get HUNDREDS of BILLIONS of dollars

and the Domestic auto industry and the UAW get a sharp stick in the eye.


Something tells me Obama won't be getting very much Union support in 2010 for local candidates who support this, or in 2012. And this Union member may just sit the elections out too. I am disgusted.

[IrishBuckeye]

32. I'm giving Obama more time to see exactly what a 'BK by scalpel' would do to the union

We should have more details in the next couple of weeks, I'm holding my fire for the most part until then.