It's OFFICIAL: GM it BANKRUPT and off of DJI.

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[h1]General Motors Files for Bankruptcy Protection in New York[/h1] [h2]GM's reorganization plan will rely on up to $30 billion of additional financial assistance from the Treasury Department.[/h2]
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Monday, June 01, 2009

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General Motors CEO Fritz Henderson addresses the company's viability plan in Detroit on April 27. (AP Photo)

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General Motors filed for Chapter 11 bankruptcy protection Monday as part of a plan under which the government will pump another $30 billion into the company with the aim of re-creating the troubled automaker.

GM's bankruptcy filing is the fourth-largest in U.S. history and the largest for an industrial company. The company said it has $172.81 billion in debt and $82.29 billion in assets.

Under the plan, GM would eventually have 50 percent fewer liabilities and far fewer product lines. The $30 billion government infusion is on top of about $20 billion in taxpayer money GM already has received in the form of low-interest loans.

Senior administration officials, who declined to speak for attribution, said the U.S. government will be a "passive" investor but will oversee operations at the new GM because "the taxpayer will want us to."

Not one of President Obama's senior economic advisers could or would venture a guess as to when taxpayers would see a return on the massive, White House-engineered investment.

"We're not here to predict," a senior official said when asked about any timeline for taxpayer payback.

Advisers were more certain about GM's future access to the taxpayer till -- it's over.

"One never says never, but this is it in terms of support for GM," a senior official said.

GM will follow a similar course taken by Chrysler LLC, which filed for Chapter 11 protection in April and hopes to emerge this week from its government-sponsored bankruptcy as Chrysler Group LLC.

The plan is for the federal government to take a 60 percent ownership stake in the new GM. The Canadian government would take a 12.5 percent stake, with the United Auto Workers getting a 17.5 percent stake and unsecured bondholders receiving 10 percent. Existing GM shareholders are expected to be wiped out.

The downsized GM brands will be limited to Chevrolet, Cadillac, GMC and Buick. Its Pontiac, Saturn, Hummer and Saab operations will be either sold or closed. GM said it was finalizing a deal to sell Hummer, and plans for Saturn are expected to be announced within weeks.

The reduction in product lines means the closure of 11 factories and the idling of three other facilities.

Trading of GM shares was halted early Monday after they plunged Friday as low as 74 cents. GM will be kicked out of the Dow Jones Industrial Average because rules of the index prohibit it from including companies that have filed for bankruptcy.

Obama is scheduled to speak about GM's future at midday from Washington, and GM CEO Fritz Henderson is to follow him with a news conference in New York.

The outlines of the restructured GM are as follows:

-- -- Cut GM's production break-even point from 16 million annual unit sales to 10 million.

-- UAW concessions include allowing GM to shed its $20 billion obligation to its pensions and health care fund, otherwise known as the VEBA. The White House said the UAW concessions were more substantial than those sought by the Bush administration when it was considering throwing the company a taxpayer lifeline.

-- Bondholders representing at least 54 percent of the company's unsecured bonds have agreed to trade their portion of GM's $27.1 billion in unsecured debt for a pro-rated share of 10 percent of the equity in the so-called new GM. In addition, the bondholders will receive warrants for an additional 15 percent of the company. The bankruptcy process, which the White House said should take between 60 and 90 days, will enforce this distribution as well as adjudicate proceeds for bondholders who do not participate in the White House deal.

-- The reorganized GM will buy most of the old GM assets needed to carry out its business plan. The purchase will happen in the Chapter 11 process. In exchange, the U.S. government will relinquish a majority of its loans to GM.

-- The new GM will create an independent trust (VEBA) that will finance health care benefits for GM's retirees. The VEBA will be funded by a note of $2.5 billion payable in three installments that end in 2017. There will be an additional $6.5 billion purchase that will create 9 percent perpetual preferred stock. The VEBA will also receive 17.5 percent of the equity of New GM and warrants to purchase an additional 2.5 percent of the company. The VEBA will be able to chose one independent director for the new board. It will have no right to vote its shares or other exercise other governance rights.

-- The GM-qualified pensions for current hourly and salaried employees will be transferred to the new GM.

-- Treasury will provide $30.1 billion of debtor-in-possession financing to support GM through an accelerated Chapter 11 process. Officials anticipate no additional funding for GM. "There is no plan of any kind for future support beyond this point," an official said.

The government will receive $8.8 billion in debt and preferred stock and 60 percent of the company's equity. Treasury will appoint all new board of directors members not appointed by the VEBA and the Canadian government.

-- Governments in Canada and Ontario will lend $9.5 billion to GM and the new GM. The Canadian and Ontario governments will receive approximately $1.7 billion in debt and preferred stock, and approximately 12 percent of the equity of the new GM. The Canadian government will select one director to the new GM board.

-- The new GM will, as part of the government-supervised restructuring, build a new small car in an idled UAW factory. The goal is to increase the share of U.S. production for U.S. sale from 66 percent currently to 70 percent.

These are the White House "principles" for managing the ownership stake:

-- The government will sell equity stakes as "soon as practicable." The goal is a profitable company without government involvement.

-- The government will reserve the right to set up-front conditions to protect taxpayers, promote financial stability and encourage growth.

-- The government will manage its ownership stake in a hands-off, commercial manner. It will not interfere with day-to-day company operations. No government employees will serve on the boards or be employed by these companies.

-- The government will only vote on core governance issues, including the selection of a company's board of directors and major corporate events or transactions.

Under the White House policy on new GM warranties, GM will honor consumer warranties. Last week, the Treasury Department provided $361 million in financing to the Warranty Support Program as a backstop so GM can pay warranties on vehicles sold during the restructuring.

Also, employees will continue to receive ordinary salary, wages and benefits. The pension plan and VEBA will be transferred to the new GM. GM will seek authority at its "first day" bankruptcy hearing to continue to pay suppliers. In addition, the U.S. Treasury's Supplier Support Program will continue to operate, and GM suppliers benefiting from the program will continue to receive that support.

GM will also seek authority at its "first day" bankruptcy hearing to honor dealer warranties and maintain sales incentives for dealers the new GM intends to retain. Terminated dealerships will be given an 18-month wind-down window to close their operations.

FOX News' Major Garrett and The Associated Press contributed to this report.


-- The government will manage its ownership stake in a hands-off, commercial manner. It will not interfere with day-to-day company operations. No government employees will serve on the boards or be employed by these companies.

Of course it wont, Obama doesnt want this whole thing to look Dictatorial. That's why he APPOINTED a "Car Czar".



-- The government will only vote on core governance issues, including the selection of a company's board of directors and major corporate events or transactions.




This had to be the most disgusting thing in the article. The Unions are in bed wit the Administration, the Administration is going to hand-pick the entireboard.
Also, employees will continue to receive ordinary salary, wages and benefits. The pension plan and VEBA will be transferred to the new GM. GM will seek authority at its "first day" bankruptcy hearing to continue to pay suppliers. In addition, the U.S. Treasury's Supplier Support Program will continue to operate, and GM suppliers benefiting from the program will continue to receive that support.


This is skewed. Reason being since the UAW has a majority hold on the company, if you weren't in a Union you are assed out.



So the "tax-payer" is a majority stock holder are we all gonna get company cars? Obama stated he doesnt want to be in the "car industry",if so what is his Exit Strategy? Maybe there isnt one...Maybe because he wants to dictate the cars YOU drive with GPS chips in the car to track your gas andgas mileage.
 
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So when the dealerships start to close down, will they sale cars at dirt cheap prices? I heard some dude say that when Chrysler went down the dealers aroundthe house were selling cars at 50% off MSRP to help cut losses. Can anyone confirm? Would GM do the same?
 
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I've been agreeing with some of the things you've been saying lately, I'm scared of the future. I have absolutely no faith in this administration.
 
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Originally Posted by ninjahood

blame free trade and the massive leverage of da unions.....

Free Trade wasnt the problem. Government regulations on mileage and forcing the companies to make cars nobody wants was the problem, that isnt free trade.

The Unions deserve alot of the blame as well. There is NO REASON why these people are being paid $55 an hour, also with their outlandish benefits. It is aproblem that more people are receiving retirement benefits and pensions than actually work for the company.


To this day, the Escalade and Denali's were the biggest money makers.
 

tmukg21

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Detroit keeps making ugly/regular looking whips in a egotistical world

Time to sell all the "new" 2008,2007, 2006 models just sitting up somewhere for the low. Won't happen though
 
70,132
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dirty, people like trucks...American car companies sell those very well.

and US car companies been on par with imports as far as technology and quality for a few years now..da 80's stigma has stuck around da air like some cutmustard though...
 
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Originally Posted by Chicagos Finest 23

Should have done this from the start
Americans wanted to be prideful.
I know the American auto industry employs a lot of people... but maybe they should be doing something more helpful than making gas guzzling cars
 
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Originally Posted by ninjahood

dirty, people like trucks...American car companies sell those very well.

and US car companies been on par with imports as far as technology and quality for a few years now..da 80's stigma has stuck around da air like some cut mustard though...
 
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Originally Posted by Emmanuel Goldstein

obama FTL! ... i cant wait till the majority of people start to realize this FACT ... its a damn shame ... smh
Son shut the hell up.... GM was gonna go bankrupt under Bush the only reason the process was delayed was because the economic conditions plus GMfailing would have caused panic by the public. Everyone knew GM would file for bankruptcy its just when was the most convenient time to do so, when the economyis collapsing or when the economy is still bad but showing signs of stability.

Sad to see a prestigious company like GM become what it is today, the automotive industry helped to build America's middle class, but hopefully its for thebest. I'm proud to say I own American.
 

tmukg21

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Originally Posted by Emmanuel Goldstein

obama FTL! ... i cant wait till the majority of people start to realize this FACT ... its a damn shame ... smh
He was the CEO of GM or Chrysler before running for President?
 
20,529
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The inevitable for GM.
Originally Posted by sn00pee

Originally Posted by ninjahood

dirty, people like trucks...American car companies sell those very well.

and US car companies been on par with imports as far as technology and quality for a few years now..da 80's stigma has stuck around da air like some cut mustard though...
Ninja plz...

 
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Originally Posted by IncredibleEv

how the hell is this the obama administration's fault? this all happened under Bush.

You're right, but Bush didn't spend Billions and Billions of dollars on something that was going to happen anyway.

I'm not defending Bush because he was a scumbag in his own sense.




I would really like to see these companies audited. I want to see where the money went...
 
31,482
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Joined Sep 16, 2003
Originally Posted by Dirtylicious

nothing will help GM until they start making better cars that are on par or better than the imports.

http://www.jdpower.com/au...nding/page-1#page-anchor


why buy GM?

I agree


To this day, the Escalade and Denali's were the biggest money makers.


This would make sense, SUV in general are a LOT more profitable than cars.



and US car companies been on par with imports as far as technology and quality for a few years now..da 80's stigma has stuck around da air like some cut mustard though...

This is simply not true.
 
70,132
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Joined Aug 1, 2004
Originally Posted by IHeartBoost

The inevitable for GM.
Originally Posted by sn00pee

Originally Posted by ninjahood

dirty, people like trucks...American car companies sell those very well.

and US car companies been on par with imports as far as technology and quality for a few years now..da 80's stigma has stuck around da air like some cut mustard though...
Ninja plz...

they have, none of ya actually pay attention...ya snobs when it comes to domestic cars...
 

tmukg21

Banned
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Joined Apr 23, 2008
Originally Posted by Fede DPT

Originally Posted by IncredibleEv

how the hell is this the obama administration's fault? this all happened under Bush.

You're right, but Bush didn't spend Billions and Billions of dollars on something that was going to happen anyway.

I'm not defending Bush because he was a scumbag in his own sense.




I would really like to see these companies audited. I want to see where the money went...
not gonna happen, i was wondering how you burn $20B in one month(basically), MC Hammer is impressed
 
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