GM Considering Bankruptcy Filing

General Motors Corp, nearing a Tuesday deadline to present a viability plan to the U.S. government, is considering as one option a Chapter 11 bankruptcy filing that would create a new company, the Wall Street Journal said in its Saturday edition.

"One plan includes a Chapter 11 filing that would assemble all of GM's viable assets, including some U.S. brands and international operations, into a new company," the newspaper said. "The undesirable assets would be liquidated or sold under protection of a bankruptcy court. Contracts with bondholders, unions, dealers and suppliers would also be reworked."

Read the whole story here.

Comments

[BobinPgh]

If GM goes bankrupt, will the cars and trucks on the lot be bargains? I am interested in a compact pickup truck but will consider the Colorado only if I can get it new for 10000 or less. So I am hoping they go to chapter 11 or even 7 and watch the price on all the new cars go down.

[marijam]

Our government should force them to retool for buses and mass transit transports, and also make them start producing more fuel efficient vehicles.

[ferrarimanf355]

Two words: British Leyland.

[NWBrunette]

Bye bye.

[wonketteRAWKS]

Follow the money trail prior to the filing if need be.

[JakeMontero]

Bankruptcy is the only option. That will allow them to shed the bad contracts and rebuild into a great US car company

[awckid3]

Yeah right! GM's ship has sailed.

[Havnagudtim]

I just have one question: what happened to the EV-1? Why was it removed from the market, and why were all traces of it eradicated from the Smithsonian Museum? Why is GM suppressing new technology that will HELP THE NATION and denying culpability? Isn't malfeasance prosecutable? Isn't GM now begging for taxpayer money? WHAT HAPPENED TO THE EV-1?

[awckid3]

The EV-1, I believe, could have revolutionized the industry. But it cost too much to build and the profits weren't there instantly, so they scrapped it. Karma.

[Dystopic]

because they are I N C O M P E T E N T

[Ozarks]

They used the money saved from EV to buy and build the Hummer. They should go into the toilet.

[pharm]

The EV-1 had a price tag of $34,000, and that would be selling them at a loss. It was also an electrical danger for anyone who really didn`t know how to work on one. Also, the batteries had a tendency to explode. If GM had marketed it ,as it was, they would have lost more money, and been exposed to another Ralph Nader type marketing blitz for an unsafe vehicle. One other thing, when Bush came into office he pulled the funding to help the auto makers develop the battery technology that Clinton authorized.

[ferrarimanf355]

Build a bridge and get over it.

[CAP6]

A Common Sense Rescue Model was offered last November to a select number of senators and representatives that would have salvaged the Big 3 Automakers. Only a single representative expressed any interest in the model, electing instead to provide GM and Chrysler an intial loan of $17.4B in an effort to preclude bankruptcy and massive lay-offs for this very vital industry. Now we are faced with a struggle to recover the taxpayer monies by petitioning the courts to permit our interests to move to the front of the line with respect tp suppliers and other creditors. Good luck with that.
The taxpayers could have purchased (nationalized) the Big Three for an estimated $7B early into the bailout debate. We could have set about restructuring, re-tooling, and consolidating this industry, partly from the remaining $10B provided in the loan agreement. The new manufacturing entity would have initiated a Manhattan-style research and design program allowing it to build the affordable, quality, grren automobiles America wants and needs. The rescue model called for targeting future earnings toward helping provide healthcare to the millions without insurance or to servicing our massive foreign debt. Who would you buy your next car from, yourself or an import? Market share would immediately improve resulting in increased production demand and obviously increased employment within the industry. We could have begun to EARN our way out of this crisis.

[drymartini1]

GM has been losing money for years, way before credit crisis started. but those who deny it would know that if you knew how to read a damn balance sheet and an income statement. maybe that should be the recommended course instead of basket weaving you studied in school. or was it comparative literature.

GM has a negative equity of 38 billlion (and change). and a negative retained earnings of similar amount.

The company doesnt belong to shareholders any more (aka owners). It belongs to creditors. Let it be stripped off of its assets and sold piece by piece before the bondholders lose more too !!

[ObjectiveRealist]

Best wishes to the UAW, but GM helped try to kill the electric car. I only support auto companies that manufacture *electric* vehicles. All passenger vehicles ought to be rechargeable plug-in electrics and if the collapse of GM (& / or Chrysler & / or Ford) and a government re-training program of workers are necessary, so be it. The petroleum-driven infernal combustion engine is a relic from the 19th century, harmful to our national military and economic security, a humiliation in the face of the scientific proof of global warming (demonstrably within the parameters "disastrous" and "mass extinction" at present rates of petroleum combustion), and a real threat to our democracy from within via AIPAC, Exxon/Mobil, Texaco, Chevron and other corrupt lobbyists "considered" by the bribed to be "vital" to the nation's legitimate interests. No corporation or Senator is too big, too American, or too powerful to go down.

[Troubledwawa]

"but GM helped try to kill the electric car"...

Exactly. And in the face of many American consumers that were clamoring for it. GM was way ahead of the game with the their future golden goose known as the EV1. But, the management chose destroy it, and the UAW had nothing to do with that.

[GingerB]

You must be thrilled about the Chevy Volt, right?

http://www.chevrolet.com/electriccar/

[Dystopic]

the Volt will never happen.

[ferrarimanf355]

http://blogs.edmunds.com/karl/2006/06/gms-ev1----who-killed-common-sense.html

The facts must be too hard to take for you eco-fascists.

[mountainweb]

Time to get real here, the UAW negotiators are the ones that have walked away from the talks. Time to pull the plug on the black hole that the union has put this company into, the union is living in a fantasy land where they think taxpayers will give them endless money.

[catbite]

this was easy to see coming. GM does not know how to run the company. shut it down and re-organize it without the same CEO's and without the union power. since they got the cash, we have heard nothing promising from them. Their way of dealing with problems is to lay people off and they can't even do that because the union has them in such a grip.

Time to let them fail. Time to fire their management, too.

[Dystopic]

nope, it is management plain and simple. the UAW is the only thing that is keeping GM afloat.

The workers are not the problem, management and engineering are.

Maybe the UAW is tired of giving concessions to management who are clueless

[bigogre]

Two thumbs way down

[timberdoodle]

Conservatives will be applauding the approach of destroying the unions along with many other short sighted ordinary people who don't understand it was the unions who created the middle class and if there aren't any all those higher paying non union jobs will also restructure and these wages will plummet as well.

Anti union people can't seem to equate their higher wages are generally paid to keep them on the jobs they have as well as making them think they don't need a union. When the union jobs go and their wages along with them watch the incomes on other jobs drop drastically.

[stunsitfel]

Then I suggest you start a business and make it a union shop. Then you compete against all the non union shops. If you win you will change the world.

However I live very close to a Honda plant. The employees are all called "associates". They are very happy and motivated. The floors are clean enough to eat off of. Every person I have talked to that works there says they never want a union. They make a great living.

I bought a new Honda this week. One of the reasons was because the Big Three did not face up to reality and begged for money a couple of months ago. Here we are again. No doubt they will ask for more without fixing their problems.

[Sepulchre]

Toyota employees would not have the wages they have if the UAW was not around. The wages they are payed it to be competative and discourage them from forming a union. UAW goes down, I guarentee that Toyota will start cuttting wages, because they no longer have to remain competative, and as a company the less they pay their employees the more profit they make.

[Troubledwawa]

Then I suggest you start a business and try to compete against all of the dollar a day labor, overseas. If you win you will change the world.

Fixed it for you...

[Ping]

Who is going to be the Debtor in Possesion? Another stupid idea floated from the Republican side.

Somehow these retards think that the Feds will arrange for a debtor in possession by providing guarantees then provide loans and funds to GM so they can SCREW the UAW.......­NOT.

[jdfast]

Go for it! We will all be better off. I'm tired of supporting a worthless company that can't make up its mind to sell or close the Buick and Pontiac line. They need to get leaner and meaner to compete and they refuse to do that. Oh by the way, they might want to start at the top instead of the bottom and get rid of most of the deadwood that runs and manages the company and continues to think that GM is the best company in the world. Those days are long gone. When they finally realize that they are competing with the world, then that is when the change should be made, but until that happens, then its the same old sh-- from the company. Give me more, give me more. Its time to stop the hog trough.

[Beamreach]

Did you bother to read the story? They ARE getting leaner and meaner and are making the necessary changes. That loan they got a while back - it was a BRIDGE loan to see them through until Obama got in office and they could plan for recovery. No auto company is going to do well until the economy picks up. Toyota and the other foreign automakers are losing money as well. They are subsidized by their countries and we should be willing to do the same at this time for our auto industry. If you were Japanese, you would be griping about the same issue.

And they do realize they are competing in the world, but other countries have more trade barriers to imports of our autos than we have to theirs.

[tamsam07]

Hello, they have BEEN making fuel efficient cars in Europe for years. The lightbulb didn't just go off yesterday. They have repeatedly ignored what American consumers have been asking for and now they are dealing with the consequences. I say too little, too late. Good ridance GM!

[drymartini1]

GM HAVE BEEN LOSING MONEY FOR YEARS, not just due to credit crisis. Of course you would know that if you knew how to read an income statement and a balance sheet.

[fillou]

Trade barriers ?? If GM made cars with 50 or 60 mpg as we have in Europe more people would buy them. Who makes the Hummer, Avalanche and those useless road mammoths ??
Research & Development; Innovation, that's what GM should have done instead of producing Counrty Redneck advertisments to sell some gas guzzling SUV to American people.

[Lupin77]

Good idea - the bankruptcy. Another alternative would be a merger, but they can't expect more money from the government. It's all going down the drain.