GM CEO: Pre-Pack C11 Could Work
Yes, you read it right. Over a nice little breakfast with the good folks at The Christian Science Monitor [reported by The Detroit News], Rick “Bankruptcy Equals Death” Wagoner said a GM pre-packaged Chapter 11 might work. Apparently, GM has “carefully studied” the idea of a 30- or 60-day, pre-packaged bankruptcy and “pointedly didn’t rule it out.” The bottom line: “It could work. It might not work.” Yup, those are the two possibilities all right. Wagoner also “revealed” that “There is no (debtor-in-possession) financing other than the U.S. government because my administration has systematically destroyed or sold off all of General Motors’ assets.” Just kidding, although Wagoner did admit Uncle Sam was the only DIP-shit in town. Oh, and Wagoner also added that a bankruptcy would “likely cost the government far more money than the Detroit automaker has sought.” Likely? How likely? Numbers? And they say a Harvard MBA isn’t worth the paper it’s printed on. Speaking of collegiate carousing, “Wagoner said the company would pare back its dealers by 25 percent in a ‘measured thoughtful aggressive way’ to ensure it didn’t hurt sales. ‘This isn’t a meat cleaver deal.'”
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Easy problem solved... 1) Liquidate Chrysler 2) Liquidate Saturn & Saab 3) Tell the Buick/Pontiac/GMC dealerships that the strong ones can make a sizable investment in Chevrolet AND Cadillac. Thus becoming an all GM dealership. The weak ones will simply have failed businesses. 4) Hummer? Sell it to the Arabs.... or perhaps donate it to an environmental organization that needs to construct a barrier reef near the Antarctic. Finally... 5) Liquidate GM's upper management. Make sure you snip the golden parachutes before they leave.
The real issue is the cram down. How much leverage will the feds have over debt for equity swaps, and what kind of deal will they cut to get it done for the DIP?