GM moves step closer to bankruptcy

[Bob Hubbard]

CNN

NEW YORK (CNNMoney.com) -- General Motors said Wednesday it has fallen far short of the bondholder support it needed for its proposed debt-for-stock offer, virtually guaranteeing that the nation's largest automaker will be forced to file for bankruptcy court protection within the next five days.

http://money.cnn.com/2009/05/27/news/companies/gm_bond_offer/index.htm?postversion=2009052707

Detroit Three's survival report card

GM, Ford, and Chrysler, the former Big 3 now dwindled to the Detroit 3, have gone in such different directions they don't seem to be on the same planet - let alone the same city. Will they make it? Fortune grades each on its performance and prospects.


General Motors: "Size counts" used to be GM's mantra, but now it has to learn how to think small. Dumping Saturn, Saab, and Hummer, closing down Pontiac and continuing to slash white-collar jobs are causing internal turmoil. As customers worry about a seemingly imminent bankruptcy, GM is having trouble selling cars. It had 736,000 unsold vehicles on the ground at the end of April and more in transit, enough for 111 days.
Grade: D

http://money.cnn.com/galleries/2009/fortune/0905/gallery.detroit_report_card.fortune/index.html


In the mean time, Chrysler is cutting it's dealerships almost in half, stopped making new cars and is trying to unload inventory, while Ford has refused gov. bailout so far, and is kinda still in the game, for now.

 

[Twin Fist]

let them declare bankruptcy, that voids thier UAW contracts, and they can restructure.

 

[Bob Hubbard]

Right now, Ford is the one in the lead, with the best chance of survival. The Fed owns around 40% of GM, and I think 55% of Chrysler, but 0% of Ford.

 

[geezer]

let them declare bankruptcy, that voids thier UAW contracts, and they can restructure.

HA! I knew if I kept reading your posts that sooner or later I would find something we agree on. And I'm what you cal a "dimocrat". And a liberal. But a libertarian liberal (kinda schizo, huh).

Anyway, what really steams me are the reports that GM wants to move its plants to China to reduce production costs. I'd rather see 'em do like Twin suggested. Restructure under bankruptcy, re-negotiate their labor contracts and keep the jobs here. If Toyota can build their products here and sell them at a profit, why the hell should GM have to move their plants offshore????

 

[Big Don]

HA! I knew if I kept reading your posts that sooner or later I would find something we agree on. And I'm what you cal a "dimocrat". And a liberal. But a libertarian liberal (kinda schizo, huh).

Anyway, what really steams me are the reports that GM wants to move its plants to China to reduce production costs. I'd rather see 'em do like Twin suggested. Restructure under bankruptcy, re-negotiate their labor contracts and keep the jobs here. If Toyota can build their products here and sell them at a profit, why the hell should GM have to move their plants offshore????

Toyota isn't beholden to the UAW...

 

[Carol]

HA! I knew if I kept reading your posts that sooner or later I would find something we agree on. And I'm what you cal a "dimocrat". And a liberal. But a libertarian liberal (kinda schizo, huh).

Anyway, what really steams me are the reports that GM wants to move its plants to China to reduce production costs. I'd rather see 'em do like Twin suggested. Restructure under bankruptcy, re-negotiate their labor contracts and keep the jobs here. If Toyota can build their products here and sell them at a profit, why the hell should GM have to move their plants offshore????

No unions + No OSHA = bigger profit for the senior execs. And billions in bailout dollars to boot.

Nice work if you can get it.

 

[geezer]

Toyota isn't beholden to the UAW...

That's where renegotiating contracts under bankruptcy could be helpful, Don. A good US job with more modest compensation at a domestic plant (like what Toyota offers) is way better than no job 'cause GM moves their plants offshore!

And Carol, my view is that laissez faire capitalism with no unions, no OSHA, and no regulation is a certain recipe for worker abuse a la the sweatshops of the 19th century. On the other hand, the way the UAW contracts are squeezing GM, there won't be any automotive jobs left in a couple of years. Is a little bit of balance too much to ask for?

 

[CoryKS]

They need to pull the plug and do it already. Nobody is going to buy a car from the government. Nobody.

Well, unless they name it the Obama. Then people will buy it and love it even when the wheels fall off.

 

[Makalakumu]

It's not current contracts so much as the old contracts. Retirees drawing huge benefits are the ones taking huge chunks out of GMs profit margin. Thus, cutting contracts in this case, means sticking it to grandpa and grandma when they were assured by everyone that the deal was good and at a time when they can't support themselves. There is a human face to all of this, it's not just faceless factory workers.