Why the US car industry is stuffed!

[Temjin]

GM failed for a ton of reasons. Massive pension liability, uncompetitive cars (in comparison to the Japanese), incompetent management who doesn't want to see things to change until its too late, etc, etc. A classic corporate failure.

There is no question whether GM will go into bankrupcy or not. It's a certainly.

The only discussion going on right now is how to structure it and decide "who gets what's left of the mess".

The bondholders were pissed because, as a legal SECURED creditors (usually on top of the chain), they were getting less than the union who are demanding more money for the health care trust. The bondholders were prepared to risk a chapter 11 filing to get a better deal than just 10% of the cut.

Now it seem they are getting double of that and the union will be getting less.

Regardless, a lot of US taxpayers money were already spent in propping up this money-draining company and it's about time it should be buried.

I would be eager to see the fallout effect when the company has finally go bankrupted and restructured, and when thousand of workers layed off and dealers and other component manufacturing businesses go bankrupt/fail.

 

[Aussiejeff]

GM failed for a ton of reasons. Massive pension liability, uncompetitive cars (in comparison to the Japanese), incompetent management who doesn't want to see things to change until its too late, etc, etc. A classic corporate failure.

There is no question whether GM will go into bankrupcy or not. It's a certainly.

The only discussion going on right now is how to structure it and decide "who gets what's left of the mess".

The GObama gummint gets to play with more than 70%.

AFAIC 70% of crap still = 70% crap.

The bondholders were pissed because, as a legal SECURED creditors (usually on top of the chain), they were getting less than the union who are demanding more money for the health care trust. The bondholders were prepared to risk a chapter 11 filing to get a better deal than just 10% of the cut.

Now it seem they are getting double of that and the union will be getting less.

Regardless, a lot of US taxpayers money were already spent in propping up this money-draining company and it's about time it should be buried.

But it's not buried at all. Far from it. IT LIVES, IGOR, IT LIVES!! After this "faux quickie bankruptcy" which really just absolves the "new improved" nationalised, gummint owned company of any existing or outstanding debts, US taxpayers will continue to fund this monster to hell in a hand basket as it racks up huge new debts down the same old protectionist track.

I would be eager to see the fallout effect when the company has finally go bankrupted and restructured, and when thousand of workers layed off and dealers and other component manufacturing businesses go bankrupt/fail.

Yeah. Apart from the certainty that the "New, Improved GM" will continue to struggle against cheaper imports, you gotta wonder how many 1,000's of allied creditors, contractors, suppliers etc, etc will go to the wall once the $Billions they were collectively owed is wiped out on 1 June? Maybe an avalanche or tsunami of allied Chapter 11's?

The lawyers are gonna be tramping a well worn path to their banks for many years to come with the fallout fees for this load of shyte.

 

[Aussiejeff]

More grist for the lawyers to salivate over...

GM Bankruptcy Seen as Tale of Best, Worst of Assets (Update4)
By Linda Sandler, Jeff Green and Mike Ramsey

May 29 (Bloomberg) -- When General Motors Corp. files for bankruptcy protection next week, a Dickensian tale of two legal processes will unfold.

In one, a judge will be told that a new entity will emerge within three months with prized assets and a plan to revisit the best of times when GM was the world’s largest carmaker. In the other, Bleak House comes to bankruptcy court as creditors shut out of the new entity will be told to argue for perhaps years about who gets company properties the new GM doesn’t want.

In the rosy scenario, the new company, armed with vehicles from GM’s Cadillac, Chevrolet, Buick and GMC divisions, plans to begin making money again within 60 to 90 days, while a bankruptcy court sells or liquidates unprofitable brands such as Saturn and Hummer. Saab already is in bankruptcy.

Chrysler LLC, GM’s smaller rival, is on schedule to create a similar new company even faster, stripped of billions in debt and stocked with viable vehicle models, with the approval of a bankruptcy judge in charge of its reorganization.

“They are clearly trying to clear a path for a very quick Chrysler-style case,” said Stephen Lubben, a bankruptcy-law professor at Seton Hall University School of Law in Newark, New Jersey. “They will use the bankruptcy code to separate ‘good GM’ from ‘bad GM.’”

Stock Below $1

GM today fell below $1, the minimum price normally needed to trade on the New York Stock Exchange, and closed at the lowest level in 76 years. The stock dropped 37 cents, or 33 percent, to 75 cents, at 4:02 p.m. in NYSE composite trading.

In creating the good company, the U.S. plans to speed GM’s progress by turning more than $50 billion of loans into a 72.5 percent equity stake for the government, slashing company debt to about $17 billion, excluding financing obligations to suppliers and warranty programs, according to a regulatory filing yesterday.

http://www.bloomberg.com/apps/news?pid=20601087&sid=av48.BJYaJbU&refer=home

 

[jet328]

funny and spot on
http://www.minyanville.com/audiovideo/703/1/23