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GM CEO Rick Wagoner to resign
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LTC8K6
Lifer
Money down the drain looks like...
http://online.wsj.com/article/SB123841609048669495.html
WASHINGTON? The Obama's administration's leading plan to fix General Motors Corp. and Chrysler LLC would use bankruptcy filings to purge the ailing companies of their biggest problems, including bondholder debt and retiree health-care costs, according to people familiar with the matter.
The move would in essence split both companies into their "good" and "bad" components. The government would like to see the "good" GM to be a standalone company, according to an administration official. The "good" Chrysler would be sold to Fiat SpA, assuming that deal is completed, this person said.
GM and Chrysler have had bankruptcy attorneys devising plans for such a
move in recent months.
President Barack Obama's task force has told both companies that the administration prefers this route as a way to reorganize the two auto makers, rather than the prolonged out-of-court process that has thus far frustrated administration officials.
GM looks increasingly like it will be forced into filing for bankruptcy protection, sometime in mid-to-late May, in a plan where the automaker breaks into two companies, the surviving entity a "new GM" that maintains key brands such as Chevy and Cadillac and some international units, say several people familiar with the situation.
Stakes in this new GM could be given to creditors and UAW members. It is also possible the new company could be sold whole or in parts to investors.
The auto makers could avoid bankruptcy in the next two months. And there is some brinksmanship still going on in GM's high-level talks with bondholders, union members and creditors.
A key ingredient is getting the UAW to agree to an entirely new labor contract, including major reductions in health-care benefits, according to several people involved in the matter. "That's the No.1 wildcard here," one of these people said Monday.
Under this plan, the "good" GM would not be expected to hold the tens of billions of dollars in retiree and health care obligations that hurt the auto maker in recent decades. Instead, those obligations would be transferred to an "old GM," made up of less-desirable brands like Hummer and Saturn, and underperforming plants and other assets. This part of GM would likely sit in bankruptcy much longer while a buyer is sought for the parts or it is wound down. Proceeds from the sale of old GM would go to pay claims to various creditors, including GM retirees.
"That is the plan, to the extent it comports with the bankruptcy laws," said one person familiar with the matter.
Some of the New GM-Old GM is laid out in the GM viability plan the company sent to the federal government last month. In it, GM estimates that it would shrink from 22% of the U.S. market to about 19%.
At Chrysler, bankruptcy would be used to force new labor contracts and rework debt deals with secured creditors. People working on Chrysler's behalf say the deal is risky, because the company is still not convinced that it could survive even a short-term bankruptcy. It could be done in order to meet the Obama administration's demand that Chrysler's creditors agree to huge reductions in their expected recoveries on Chrysler debt.
Also Monday, new GM Chief Executive Frederick "Fritz" Henderson told employees and dealers that the company will end up in bankruptcy court if it does not significantly accelerate its restructuring efforts in the next 60 days, according to a dealer who watched a broadcast of a meeting with Mr. Henderson.
Mr. Henderson said "we'll be in bankruptcy" if the company cannot meet the U.S. government's demands for faster progress on its turnaround plan, this dealer said.
...
http://online.wsj.com/article/SB123841609048669495.html
WASHINGTON? The Obama's administration's leading plan to fix General Motors Corp. and Chrysler LLC would use bankruptcy filings to purge the ailing companies of their biggest problems, including bondholder debt and retiree health-care costs, according to people familiar with the matter.
The move would in essence split both companies into their "good" and "bad" components. The government would like to see the "good" GM to be a standalone company, according to an administration official. The "good" Chrysler would be sold to Fiat SpA, assuming that deal is completed, this person said.
GM and Chrysler have had bankruptcy attorneys devising plans for such a
move in recent months.
President Barack Obama's task force has told both companies that the administration prefers this route as a way to reorganize the two auto makers, rather than the prolonged out-of-court process that has thus far frustrated administration officials.
GM looks increasingly like it will be forced into filing for bankruptcy protection, sometime in mid-to-late May, in a plan where the automaker breaks into two companies, the surviving entity a "new GM" that maintains key brands such as Chevy and Cadillac and some international units, say several people familiar with the situation.
Stakes in this new GM could be given to creditors and UAW members. It is also possible the new company could be sold whole or in parts to investors.
The auto makers could avoid bankruptcy in the next two months. And there is some brinksmanship still going on in GM's high-level talks with bondholders, union members and creditors.
A key ingredient is getting the UAW to agree to an entirely new labor contract, including major reductions in health-care benefits, according to several people involved in the matter. "That's the No.1 wildcard here," one of these people said Monday.
Under this plan, the "good" GM would not be expected to hold the tens of billions of dollars in retiree and health care obligations that hurt the auto maker in recent decades. Instead, those obligations would be transferred to an "old GM," made up of less-desirable brands like Hummer and Saturn, and underperforming plants and other assets. This part of GM would likely sit in bankruptcy much longer while a buyer is sought for the parts or it is wound down. Proceeds from the sale of old GM would go to pay claims to various creditors, including GM retirees.
"That is the plan, to the extent it comports with the bankruptcy laws," said one person familiar with the matter.
Some of the New GM-Old GM is laid out in the GM viability plan the company sent to the federal government last month. In it, GM estimates that it would shrink from 22% of the U.S. market to about 19%.
At Chrysler, bankruptcy would be used to force new labor contracts and rework debt deals with secured creditors. People working on Chrysler's behalf say the deal is risky, because the company is still not convinced that it could survive even a short-term bankruptcy. It could be done in order to meet the Obama administration's demand that Chrysler's creditors agree to huge reductions in their expected recoveries on Chrysler debt.
Also Monday, new GM Chief Executive Frederick "Fritz" Henderson told employees and dealers that the company will end up in bankruptcy court if it does not significantly accelerate its restructuring efforts in the next 60 days, according to a dealer who watched a broadcast of a meeting with Mr. Henderson.
Mr. Henderson said "we'll be in bankruptcy" if the company cannot meet the U.S. government's demands for faster progress on its turnaround plan, this dealer said.
...
Pliablemoose
Lifer
Now if we can just get the rest of the assholes that greenlighted the Aztek lined up against a wall & shot, I'll feel some closure.
GM has done very little right in the last few decades, IMHO.
Asking for his resignation is one of the few things I think Obama has done I strongly agree with.
GM has done very little right in the last few decades, IMHO.
Asking for his resignation is one of the few things I think Obama has done I strongly agree with.
punjabiplaya
Diamond Member
Some part of this needs to be concessions by the UAW. They get paid way too much.
boomerang
Lifer
So in essence, the bankruptcy has been delayed for 60 days. During which time more money will be thrown at GM.
They'd be smarter to file right now and get it over with. I've predicted a Chapter 7 liquidation here before.
I posted the following in a thread in P&N.
A little tidbit to chew on. This comes from a long time good friend in a relatively high place within GM. They're on the brink of not being able to pull out of this regardless of what happens. So many suppliers have shut down, closed down and filed for bankruptcy, that there are car lines that cannot be built any longer. They're desperately trying to re-source components but the suppliers that could take on the work are reluctant to make the capital expenditures to take on work for what they feel is a company that cannot survive.
The suppliers that do want to take on the work cannot get the financing to do so. Many inside feel it is too late to turn things around.
In addition, I've been told by someone who knows with certainty that there are six key parts that Delphi makes that are must haves for GM to produce cars. They've been able to source everything Delphi used to manufacture except these key parts that Delphi has a patent on. This is why you've read in the news that GM was attempting to purchase part of Delphi back. It's all tied up in the courts right now. IMO, the intense interest regarding these parts means, at least to me, that Delphi is not going to emerge from bankruptcy. They may very well take these parts with them, although I know nothing about bankruptcy as it applies to patents.
It's as good as over. Their only hope for survival is that the team from Washington gets their eyes opened real wide, real quick and acts at the speed of light.
They'd be smarter to file right now and get it over with. I've predicted a Chapter 7 liquidation here before.
I posted the following in a thread in P&N.
A little tidbit to chew on. This comes from a long time good friend in a relatively high place within GM. They're on the brink of not being able to pull out of this regardless of what happens. So many suppliers have shut down, closed down and filed for bankruptcy, that there are car lines that cannot be built any longer. They're desperately trying to re-source components but the suppliers that could take on the work are reluctant to make the capital expenditures to take on work for what they feel is a company that cannot survive.
The suppliers that do want to take on the work cannot get the financing to do so. Many inside feel it is too late to turn things around.
In addition, I've been told by someone who knows with certainty that there are six key parts that Delphi makes that are must haves for GM to produce cars. They've been able to source everything Delphi used to manufacture except these key parts that Delphi has a patent on. This is why you've read in the news that GM was attempting to purchase part of Delphi back. It's all tied up in the courts right now. IMO, the intense interest regarding these parts means, at least to me, that Delphi is not going to emerge from bankruptcy. They may very well take these parts with them, although I know nothing about bankruptcy as it applies to patents.
It's as good as over. Their only hope for survival is that the team from Washington gets their eyes opened real wide, real quick and acts at the speed of light.
should've just let supply and demand take care of everything. Import vehicles didn't get any help when trying to take that first step into American shores. They had a HELL of a time without all this bailout money crap. And they were the visiting team too.
If a automotive superpower just like GM can't even build some cars or cut enough workers to make a profit, they should just die off. Survival of the fittest people... if they're weak, just let them die off, you wouldn't want any weak automotive companies making our cars anyway.
so any word on a replacement for rick yet? any word on how much longer GM can survive?
If a automotive superpower just like GM can't even build some cars or cut enough workers to make a profit, they should just die off. Survival of the fittest people... if they're weak, just let them die off, you wouldn't want any weak automotive companies making our cars anyway.
so any word on a replacement for rick yet? any word on how much longer GM can survive?
Good riddance, I've watched GM drive way too many suppliers into the ground with their horrible business practices.
DJ jazzy Rick was not a genius, or even a reasonable CEO.
I've had way too many morons screaming at me about how they're "loosing $8000 per minute" because they didn't do ANY basic maintenance, or hire someone with basic troubleshooting skills. Every single GM plant has the same speech down, nearly word for word. Their standard business model has been to order equipment from a 3rd party supplier, not pay their bills, then scream at the primary suppliers for free support to finish the engineering they never payed for. If the direction for this action did not come from the CEO, it was done either with his blessing, or he had no clue it was happening, either way, his incompetence has bankrupted far too many 3rd party suppliers.
I am very torn, GM going under will tear this country, and Canada inside out, but their just horrible business model has done nearly as much damage as the bank's
DJ jazzy Rick was not a genius, or even a reasonable CEO.
I've had way too many morons screaming at me about how they're "loosing $8000 per minute" because they didn't do ANY basic maintenance, or hire someone with basic troubleshooting skills. Every single GM plant has the same speech down, nearly word for word. Their standard business model has been to order equipment from a 3rd party supplier, not pay their bills, then scream at the primary suppliers for free support to finish the engineering they never payed for. If the direction for this action did not come from the CEO, it was done either with his blessing, or he had no clue it was happening, either way, his incompetence has bankrupted far too many 3rd party suppliers.
I am very torn, GM going under will tear this country, and Canada inside out, but their just horrible business model has done nearly as much damage as the bank's
LTC8K6
Lifer
"Fiat is particularly implicated, since the US government has said Chrysler would only receive its required $6 billion in aid if it struck a partnership with the Italian carmaker within 30 days."
so Chrysler will ONLY get its $6B aid IF it is merged with an Italian carmaker?
LTC8K6
Lifer
And that's why we'll give Chrysler and Fiat 30 days to overcome these hurdles and reach a final agreement -- and we will provide Chrysler with adequate capital to continue operating during that time. If they are able to come to a sound agreement that protects American taxpayers, we will consider lending up to $6 billion to help their plan succeed. But if they and their stakeholders are unable to reach such an agreement, and in the absence of any other viable partnership, we will not be able to justify investing additional tax dollars to keep Chrysler in business.
boomerang
Lifer
LOL! With you, not at you. I can tell you've been inside. You've summed up their business practices to a "T". The majority of their lower tier supervisors got hired in from outside the company because nobody inside wanted the jobs. When you refer to your boss as 'happy meal' you could probably guess her background.
StageLeft
No Lifer
Not their ability/right to do so. I think Chrysler/fiat is only being pushed because it was already mentioned. And so I think Obama is now telling chrysler to do what they need to do to merge, despite having no reign at all over fiat.
I think the last time Chrysler merged with a German car maker things didn't work out so well. I don't know how fiat will be any better.
GTaudiophile
Lifer
If I were Fiat, I would not want America's problems dumped on me.
Stay away I say. If Fiat enters the US market on their own, I think they would be great as a competitor to MINI.
Stay away I say. If Fiat enters the US market on their own, I think they would be great as a competitor to MINI.
Actually the Chrystly deal looks pretty good for both companies. Basically Fiat will get a 30% stake of Chrysler and Chrysler will start manufacturing some good small cars, exactly the opposite of what the damn germans did (stole the cash Chrysler had on hand for their own development and left them with nothing). If it goes thru we should see some nice US made small cars. This new deal of course pissed Nissan off, but it didn't do much for our economy as far as I saw, Mexican trucks swapped for Japanese small cars does nothing really for US jobs.
Arkaign
Lifer
I hear ya, I have some genuine respect for what GM has accomplished by bringing the Camaro back to the table. It just seems that it could have been sooo much better by dropping some weight.
I would actually expect the 370Z to hold its own against the Camaro SS in most situations, and they should be similarly priced.
If the Camaro had started even at ~3200lbs, it would be a world of improvement. At that point though, perhaps they're concerned about cannibalizing the historically consistent Vette sales. With the ongoing bloat of most new vehicles (370z being a notable exception), I would actually be more excited to see a mass-production vehicle with weight-saving and safety-enhancing composite materials and manufacturing techniques than extra HP.
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