GM Will File Chapter 11 Bankruptcy at 8 am Monday

Discussion in 'Politics, Religion, Social Issues' started by stevento, May 31, 2009.

  1. stevento macrumors 6502

    stevento

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    #1
    So says ABC.
    General Motors is expected to dispose of more brands in the coming months.
    GM has already closed the book on Pontiac, which will be gone by the end of 2010. The future of three other brands remains in the air. Most who closely follow the auto industry expect Hummer will be walking the plank. Saab is expected to become an independent company. Saturn will only survive if the dealership network can work out a plan to buy Saturn such that GM isn't still supplying dealers after the end of 2009. So clearly the clock is ticking on that.
    Other news, the US government is expected to take a 70% stake in General Motors and is backing GM warranties. GM's creditors are taking equity in exchange for forgiving debt. 14 plants and 20,000 jobs will be lost in the process. Metaldyne, GM's top transmission supplier will follow GM to bankruptcy.
    Obama will address nation at 11 am.
    That's the update.
     
  2. luminosity macrumors 65816

    luminosity

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    #2
    I'm not sure anything so expected has ever been so unbelievable, or at least not for a long time.

    My dad is one of probably hundreds of thousands of people (if not more) who worked for GM at some point in their lives, not to mention their current workforce. To think that one of the biggest companies in the history of the United States is filing for bankruptcy is remarkable, but it will also be one of the lasting images of our current financial crisis.
     
  3. SactoGuy18 macrumors 68020

    SactoGuy18

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    #3
    So they've finally decided to do this--about four months late! :mad:

    The Obama Administration should have during the transition process worked closely with GM folks and put the Chapter 11 reorganization filing in place so it was implemented on February 1, 2009. That way, GM would have been properly reorganized son on June 1, 2009 they would be out of Chapter 11 reorganization with a smaller, leaner company that would be ready to take on the likes of the Japanese and South Korean auto companies.

    Hopefully, GM will look like this by January 2010:

    North American operations

    Chevrolet for family cars plus Corvette
    Cadillac for luxury cars
    GMC for light trucks and SUVs

    European operations

    35% interest in Opel/Vauxhall (rest owned by Canada's Magna International)

    Asian/Australian operations

    GM Daewoo (50% GM owned/50% SAIC owned)
    Holden (50% GM owned/50% SAIC owned)
     
  4. Sun Baked macrumors G5

    Sun Baked

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    #4
    Well when GM released info on Friday that Fritz Wagoner will be in New York City on Monday for a press conference, sort of have to expect a BK announcement.

    Now the death watch is on Ford, they are giving doom and gloom on them because they say they cannot compete against leaner GM and Chrysler.

    Even though Ford is likely benefiting from every UAW concession that will be made for the other two, along with the restructured parts companies that'll be falling like dominoes next if something isn't done there.
     
  5. obeygiant macrumors 68040

    obeygiant

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    #5
    So what happens to all the money we bailed them out with?
     
  6. rdowns macrumors Penryn

    rdowns

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    #6
    The hope is that the govt. sells their interest in GM on the open market when things turn around.
     
  7. skunk macrumors G4

    skunk

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    #7
    You'll just have to print some more.
     
  8. quagmire macrumors 603

    quagmire

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    #8
    So you would have given the Obama admin and GM 10 days to talk with the bondholders, UAW, etc and get everything ready for a prepackaged Chapter 11 bankruptcy..... I would love to see that happening.......
     
  9. mactastic macrumors 68040

    mactastic

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    #9
    And the bondholders who had CDS protection on their bonds now stand to make a healthy $2 billion profit off of forcing GM into bankruptcy. Good thing thefreemarket cures all...
     
  10. SactoGuy18 macrumors 68020

    SactoGuy18

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    #10
    Ford--unlike GM and Chrysler--already have in the pipeline two new vehicles that will be perfect for the Obama Administration fuel economy mandates: the 2011 Fiesta (North American model coming early 2010) and 2011 Ford Focus (new model coming fall 2010). Given that Ford has gotten a lot of positive reaction to the Fiesta Movement marketing campaign, I expect sales of the Fiesta when the new model finally arrives in the USA market to be VERY strong indeed.

    Ford already has done one styling preview of the new Focus with the Iosis MAX concept vehicle shown a few months ago; I expect a near-production concept to be shown at the Frankfurt Auto Show this coming September.
     
  11. quagmire macrumors 603

    quagmire

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    #11
    How about the upcoming Buick Astra( not the actual name, but Buick is getting the new Opel Astra)? How about the Spark or the Cruze? GM is aiming for 40 MPG HWY out of the Cruze with the new turbo 1.4 4 cylinder engine. How could you forget the Volt? There is also the upcoming Aveo replacement, although we haven't heard much about it.

    I agree with the Chrysler aspect. Chrysler has nothing appealing in their pipeline.
     
  12. luminosity macrumors 65816

    luminosity

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    #12
    The Volt could really do well if they figure out the battery and make it affordable to mainstream consumers.
     
  13. Mike Teezie macrumors 68020

    Mike Teezie

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    #13
    Indeed. It's something I'm very interested in, which is shocking as I'd never have dreamed I'd be interested in any American made sedan.
     
  14. Agathon macrumors 6502a

    Agathon

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    #14
    More like 50 years too late.

    The origins of this debacle lie in the ridiculous decision to forgo a national pensions scheme in favour of these companies providing their own pensions. Now a downturn has left them up to their eyeballs in pension commitments that an auto company should never have been asked to make.

    Basic pension and healthcare commitments should be taken care of by the state, because companies come and go and have to expand and contract, whereas we can't do that with pension and healthcare commitments. At least not in a society where the government isn't going to meddle in industry.

    Now you all have the worst of both worlds.

    It's a shambles.
     
  15. leekohler macrumors G5

    leekohler

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    #15
    Thank you. Also, where is the link?


    You're talking about socialism! For shame!:rolleyes:

    Hello! The reason we have trouble competing around the world is because we put the burden of health care and retirement on our corporations. Everyone else figured this out a long time ago.
     
  16. luminosity macrumors 65816

    luminosity

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    #16
    Did you read the article on it in The Atlantic last year?
     
  17. Sun Baked macrumors G5

    Sun Baked

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    #17
    I know all that, but watch the news, some reporters are looking at Ford with stink eye.

    Bad press will not help Ford, especially when the reports now are slanted towards Fords inability to compete with their debt laden structure vs. the clean sheet GM and Chrysler.

    They are making it sound like Fords only way to compete is to go bankrupt...

    ---

    The reporters were really pounding Ford for spending money on new models, can't wait to see what they will do with debt.
     
  18. Full of Win macrumors 68030

    Full of Win

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    #18
    A lot of things contributed to this, including the unions and their money grubbing ways.

    I hope this somehow breaks the backs of the UAW... I have my fingers crossed.
     
  19. obeygiant macrumors 68040

    obeygiant

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    #19
    A link? There is about 10 per page here
     
  20. fivepoint macrumors 65816

    fivepoint

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    #20
    Perhaps you could prove that your link is a real link by posting another link to verify the first link? Even then, I'm not sure some would be convinced. :)
     
  21. Mike Teezie macrumors 68020

    Mike Teezie

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    #21
    I've just read it. Interesting article, for sure.
     
  22. takao macrumors 68040

    takao

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    #22
    gonna be interesting if customers in the US will buy from a bankrupt car company or not

    on the other side everybody who said last year that the bailout will only delay this was right i guess
     
  23. kavika411 macrumors 6502a

    kavika411

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    #23
    It's interesting - perhaps only to me - that the market (Dow Jones) is up over two hundred points at the moment. Yes, the market may have already built in a GM bankruptcy into values, and yes, the market may be reacting to other fiscal news, and no, the stock market is not a perfect identifier of values. That said, just on general principle I'd have thought that the final announcement of the bankruptcy of GM would at least cause some sort of selloff; I guess I was way off.
     
  24. rdowns macrumors Penryn

    rdowns

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    #24

    GM bankruptcy has been built into market for quite some time.

    GM and Citbank were dropped from the Dow 30 today and replaced with Cisco and Travelers.
     
  25. maflynn Moderator

    maflynn

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    #25
    How many billions is too much?

    Really, since when has the government been successful at managing/running anything. We the taxpayers are now going to be 60% owners in a company that was unable to turn things around using typical business approaches now we have the government telling them how to build a successful car we the consumers would want to buy :rolleyes:

    Finally what happened to capitalism? They failed and they should be allowed to fail. While the consequences are going to be severe in the short term, its better then pouring billions upon billions of taxpayer money on the long term.
     

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