RedlightG20 Posted June 1, 2009 Share Posted June 1, 2009 General Motors files for bankruptcy protection NEW YORK – General Motors filed for Chapter 11 bankruptcy protection Monday as part of the Obama administration's plan to shrink the automaker to a sustainable size and give a majority ownership stake to the federal government. GM's bankruptcy filing is the fourth-largest in U.S. history and the largest for an industrial company. The company said it has $172.81 billion in debt and $82.29 billion in assets. The fallen icon of American industrial might will rely on $30 billion of additional financial assistance from the Treasury Department as it reorganizes. That's on top of about $20 billion in taxpayer money GM already has received in the form of low-interest loans. GM will follow a similar course taken by Chrysler LLC, which filed for Chapter 11 protection in April and hopes to emerge from its government-sponsored bankruptcy this week. The plan is for the federal government to take a 60 percent ownership stake in the new GM. The Canadian government would take a 12.5 percent stake, with the United Auto Workers getting a 17.5 percent stake and unsecured bondholders receiving 10 percent. Existing GM shareholders are expected to be wiped out. President Barack Obama is scheduled to address the nation about GM's future at midday from Washington, and GM CEO Fritz Henderson is to follow him with a news conference in New York. Beyond the bankruptcy announcement Monday, GM is expected to reveal 14 plants it intends to close. One of those plants, however, will be retooled to build a small car. GM's filing comes 32 days after a Chapter 11 filing by Chrysler, which also was hobbled by plunging sales of cars and trucks as the worst recession since the Great Depression intensified. The third of the one-time Big Three, Ford Motor Co., has also been stung hard by the sales slump, but it avoided bankruptcy by mortgaging all of its assets in 2006 to borrow roughly $25 billion, giving it a financial cushion GM and Chrysler lacked. The downsized GM's brands will be limited to Chevrolet, Cadillac, GMC and Buick. Its Pontiac, Saturn, Hummer and Saab operations will be either sold or closed. GM said it was finalizing a deal to sell Hummer, and plans for Saturn are expected to be announced within weeks. GM, whose headquarters tower over downtown Detroit, said it believed the filing was not an acknowledgment of failure, but a necessary way to cleanse itself in an orderly fashion of problems and costs that have dogged it for decades. Trading of GM shares was halted early Monday after they plunged Friday as low as 74 cents, the lowest price in the company's 100-year history. GM will be kicked out of the Dow Jones industrial average because rules established by the News Corp. unit that oversees the index prohibit it from including companies that have filed for bankruptcy. Link to comment Share on other sites More sharing options...
NavyDave Posted June 1, 2009 Share Posted June 1, 2009 Obama / UAW Motors I don't see them convincing Mrs ND to give up her BMW/ Mercedez mindset. Link to comment Share on other sites More sharing options...
BurntToast Posted June 1, 2009 Share Posted June 1, 2009 They should have done this four months ago and saved the taxpayers 20+ billion dollars. Link to comment Share on other sites More sharing options...
SkinInsite Posted June 1, 2009 Share Posted June 1, 2009 GM should have just outsourced to cheaper labor. Link to comment Share on other sites More sharing options...
IbleedBnG83 Posted June 1, 2009 Share Posted June 1, 2009 This will get interesting :munchout: Link to comment Share on other sites More sharing options...
Chachie Posted June 1, 2009 Share Posted June 1, 2009 USA! USA! USA! :doh: Link to comment Share on other sites More sharing options...
JohnLockesGhost Posted June 1, 2009 Share Posted June 1, 2009 A GM worker's job is no more important than my job. The government would never save my small business. They should be liquidated. Link to comment Share on other sites More sharing options...
Chachie Posted June 1, 2009 Share Posted June 1, 2009 I'm watching CNN discuss how the "cash back" deals will be amazing for GM cars now. I don't know how all this works but IMO americans should resist buying these cars. They already took $20 billion from us. Make them crawl away, not walk away counting more cash. (And to all those who said I was an idiot for not supporting their bailout... I TOLD YOU SO.) Link to comment Share on other sites More sharing options...
da#1skinsfan Posted June 1, 2009 Share Posted June 1, 2009 They should have done this four months ago and saved the taxpayers 20+ billion dollars. Totally. Link to comment Share on other sites More sharing options...
Oldskool Posted June 1, 2009 Share Posted June 1, 2009 They should have done this four years ago and saved the taxpayers 20+ billion dollars. Fixed for you. This is a Bush/Obama problem. The previous administration propped up the failing company with TARP funds. Obama socialized it, gave sweetheart deals to the UAW and has screwed debt holders out their rightful take. The nightmare that will rise from the ashes will be forever known as Government Motors. Link to comment Share on other sites More sharing options...
SolidSnake84 Posted June 1, 2009 Share Posted June 1, 2009 I guess this ushers in the era of ObamaMotors..... Link to comment Share on other sites More sharing options...
The Mayor of Fed Ex Field Posted June 1, 2009 Share Posted June 1, 2009 The dealerships and the customers will feel no ill effects from this. This wasnt done because they failed, it was done to streamline the company and in the end, put them back in the position to be profitable again. Link to comment Share on other sites More sharing options...
BurntToast Posted June 1, 2009 Share Posted June 1, 2009 I'm watching CNN discuss how the "cash back" deals will be amazing for GM cars now. I don't know how all this works but IMO americans should resist buying these cars. They already took $20 billion from us. Make them crawl away, not walk away counting more cash.(And to all those who said I was an idiot for not supporting their bailout... I TOLD YOU SO.) Nobody outside of Detroit and Washington supported the their bailout. You, Me and 98% of Americans didn't want to see them get free money. Link to comment Share on other sites More sharing options...
IbleedBnG83 Posted June 1, 2009 Share Posted June 1, 2009 A GM worker's job is no more important than my job. The government would never save my small business.They should be liquidated. Do you realize the impact that would have on the economy...? Link to comment Share on other sites More sharing options...
ACW Posted June 1, 2009 Share Posted June 1, 2009 They should have done this four months ago and saved the taxpayers 20+ billion dollars.:yes: Link to comment Share on other sites More sharing options...
JohnLockesGhost Posted June 1, 2009 Share Posted June 1, 2009 Do you realize the impact that would have on the economy...? The same impact as letting Pan-Am go away. It will lead to the reorganization the poorly-managed labor and capital. It will help the auto industry specifically and the economy in general if GM is liquidated. Link to comment Share on other sites More sharing options...
PokerPacker Posted June 1, 2009 Share Posted June 1, 2009 I noticed part of this chapter 11 was for the purpose of giving the government majority stake. Link to comment Share on other sites More sharing options...
SkinsHokieFan Posted June 1, 2009 Share Posted June 1, 2009 Ted Leonsis on Chapter 11 and GM http://www.tedstake.com/2009/05/31/a-perfect-11-ugh/#more-3974 A Perfect 11 - Ugh!The media throws around the term Chapter 11 a lot to discuss bankruptcy and what General Motors will go through starting today. See the Wiki for a good snapshot of Chapter 11 filings. Click here. True bankruptcy is usually in Chapter 7 where a company is liquidated. Boom. Done. It is over. Chapter 11 is now being positioned as a big mulligan in the sky - a big reboot - a big whoops, sorry - let us start over - for big companies. This is very troubling to me. Chapter 11 is usually a bad thing for a company but now it is starting to be looked at as a good thing and that is a terrible thing. Guess who gets the worst in Chapter 11 filings? Employees. Vendors. Creditors. True believers. I once started and ran a company that spent a lot of money on behalf of a big client - under contract - who then surprised us all by filing Chapter 11. I got stuck with the bills which I paid. I never got paid by the offending party. They just went their own way in reorganization and the newly organized company a few years later hired one of our competitors on the go forward. They got paid up front. I went to court to try and get 30 cents on the dollar. I remembered thinking “Let no good deed go unpunished” and “I can’t believe Chapter 11 was established for big companies to screw little companies.” I paid my bills to stay in business. Many times management and customers come out unscathed in this process. They get a second chance to screw it all up again. I am concerned that the US Government is using Chapter 11 as a positive tool for change for a company. The US Government will ultimately be a partner with General Motors. They are making Chapter 11 filing fashionable and telling consumers not to worry. This isn’t about liquidation. This is about undoing mistakes of the past; fixing cost structures; erasing bad decisions; and letting us all start over. ”No blood, no foul.” The Government won’t let GM fail but it doesn’t matter if there is a bunch of collateral damage along the way. Employees in the Union; creditors; vendors - you may have to take one for the team but don’t worry. GM will come out of the process stronger and better for it with Government help and aid. Customers should keep buying their cars. Don’t worry. They will be in business to service you and our warranties are good. I have never liked selected memory. This is where you can trust us - our contracts, like warranties, are sacred - and this is where our contracts aren’t worth the paper they are written upon. We will decide based on what is in our best interest not yours Mr. Partner or employee. This use of Chapter 11 is dangerous. It shouldn’t be a positive and easy thing to consider. It shouldn’t be encouraged and looked at as a good thing. I own one GM built car. I will now have to reconsider whether I would ever buy another one again. The way this filing is being handled is offensive to me. And I bet to you, too Link to comment Share on other sites More sharing options...
PokerPacker Posted June 1, 2009 Share Posted June 1, 2009 Hell yeah, Teddy! You tell them! Link to comment Share on other sites More sharing options...
Kosher Ham Posted June 1, 2009 Share Posted June 1, 2009 Perhaps the Union killed GM ? Link to comment Share on other sites More sharing options...
NavyDave Posted June 1, 2009 Share Posted June 1, 2009 Hmm just a little over a 100 days in the White House and now owns two major car companies with no experience in the private sector or any stock in either business prior to that? Impressive Link to comment Share on other sites More sharing options...
SkinInsite Posted June 1, 2009 Share Posted June 1, 2009 Should have sold it to China, they love GM cars. Link to comment Share on other sites More sharing options...
Oldskool Posted June 1, 2009 Share Posted June 1, 2009 Hmm just a little over a 100 days in the White House and now owns two major car companies with no experience in the private sector or any stock in either business prior to that?Impressive Don't forget all the banks. There is even talk that Citi Group may get taken over as well. Link to comment Share on other sites More sharing options...
Ax Posted June 1, 2009 Share Posted June 1, 2009 Then, after the Obamament takes over the gas/oil industries, things will be GREAT!!! How long before Ford's are outlawed? Link to comment Share on other sites More sharing options...
NavyDave Posted June 1, 2009 Share Posted June 1, 2009 Then, after the Obamament takes over the gas/oil industries, things will be GREAT!!!How long before Ford's are outlawed? Don't go there Link to comment Share on other sites More sharing options...
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