GM to File Bankruptcy Monday Morning

By Jeralyn, Section Economy
Posted on Sun May 31, 2009 at 05:50:58 PM EST
Tags: General Motors (all tags)

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General Motors is expected to file for bankruptcy protection tomorrow morning.

Under the restructuring, U.S. taxpayers will own 70% of the new company.

GM is racing to meet the government's Monday deadline to qualify for more aid. It already has received about $20 billion in government loans and could get $30 billion more to make it through what is expected to be a 60- to 90-day reorganization in bankruptcy court.

How it is expected to work: [More...]

it appears the company will sell some or all of its assets to a new entity that would become the new GM, rather than submit a plan to reorganize the old company.

Under a so-called Section 363 sale, the prospective buyer and seller present a fully negotiated asset purchase agreement for approval by the court.

GM's stock sank to $.75 a share on Friday.

In a Chapter 11 bankruptcy reorganization, the shares would become virtually worthless.

There will be job cuts:

It is expected that GM will detail some 20,000 job cuts and the closure of about a dozen plants by the end of 2010. The company has already said it will slash 40% of its network of 6,000 retail dealerships by next year and drop four of its brands -- Hummer, Saab, Saturn and Pontiac.

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GM to File Bankruptcy Monday Morning | 11 comments (11 topical)

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Why is Obama doing this? (none / 0) (#1)
by Slado on Sun May 31, 2009 at 06:02:53 PM EST

Job cuts, dealers cut, so who wins other then the UAW big wigs?

Forget the little guy union worker he is apparently expendable.

GM should have gone bankrupt months ago. Instead we have a slow burn with taxpayer money providing the fuel.

Terrible.

: I'm guessing the "New GM" will not have (none / 0) (#4)
by ding7777 on Sun May 31, 2009 at 08:06:44 PM EST

legacy costs.
If GM would have accepted Walter Reuther's proposal of "collectivization" of health and pension costs 60 years ago they would still be in business today.

So I'm now 70% owner of a wreck (none / 0) (#2)
by SOS on Sun May 31, 2009 at 06:18:39 PM EST

Thrilling

IMO nobody's fault but GM (none / 0) (#3)
by Saul on Sun May 31, 2009 at 07:25:39 PM EST

Exactly but because (none / 0) (#5)
by Slado on Sun May 31, 2009 at 08:09:07 PM EST

the UAW wants payback Obama's decided that it's our problem.

Bush was no better but Obama's had months to figure out this was a loser but instead we'll have a government run debacle.

All this will do is cost decent companies money, Ford, Toyota, Honda etc... because GM will be proped up by the market.

Who's going to cry for the workers at those companies when they loose their job because the market corrects for the overpaid GM worker who should have been out of a job years ago?


Did I say market? (none / 0) (#6)
by Slado on Sun May 31, 2009 at 08:09:44 PM EST

I meant government


Isn't Ford UAW? (none / 0) (#9)
by Rojas on Mon Jun 01, 2009 at 01:56:55 AM EST

And is it Obama's fault pensions are underfunded?
Who's been minding the ship for the last couple decades?


: It's Obama's fault (5.00 / 1) (#10)
by Slado on Mon Jun 01, 2009 at 07:24:18 AM EST

that he isn't letting GM go bankrupt without taxpayer money.
GM's problems are not Obama's fault. So I ask again. Why is Obama and the federal gov't involved at all?
Because the UAW wants them to be. That can be the only reason.

Good luck with that (none / 0) (#8)
by Abdul Abulbul Amir on Sun May 31, 2009 at 10:02:49 PM EST

This is just the first installment.

: I think narius is being (none / 0) (#11)
by Slado on Mon Jun 01, 2009 at 07:24:57 AM EST

ironic.
At least I hope he is.

And look who is in charge (none / 0) (#12)
by jbindc on Mon Jun 01, 2009 at 11:49:22 AM EST

a 31 one year old with no economic or business training and certainly no background in the auto industry.