GM Not Declaring Bankruptcy Tomorrow

Robert Farago
by Robert Farago
gm not declaring bankruptcy tomorrow

GM's given the media a heads-up that CEO Rick Wagoner is about to outline "actions to better align the business to the current market conditions" (i.e. reveal their new new new new new turnaround plan). It's a bit of a bitch, as I have a General Motors Death Watch queued-up for your dining and dancing pleasure. Rest assured I'll have TTAC's take on Wagoner's latest pre-apocalypse prevarications minutes after the other shoe hangs in the air. Meanwhile, it's worth noting that Automotive News [sub] scribe Jamie Lareau felt obliged to preview the forthcoming cut and shunt by stating "The message is not likely to be an announcement of management changes or that GM is filing for Chapter 11 bankruptcy protection, a source familiar with GM told Automotive News today. The news will be 'fairly upbeat,' the source said." That's a mind-boggling bit of writing on two levels. First, you know it's bad when a generally supportive member of the automotive press feels obliged to tell people you're not choosing the nuclear option. And second, what the Hell could Wagoner say that could possibly be "upbeat?" The only good news on any GM front is that sales overseas are up– foreign ops without which GM would have a negative market capitalization.

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  • Droen11 Droen11 on Jul 15, 2008

    In the next 24 months GM will have a reduction of in structual costs of over $7 billion dollars a year from the new labor contract putting GM on par with the imports in the U.S. If any company in any industry had a $7 billion disadvantage compared to it's competition it would be in trouble. Some say GM did it to themselves, try again it was not that simple, could you imagine the outcry if GM had cut pay to the levels of the imports in it's factories 10 years ago, they would have been the villian to every American. We will see if GM can survive the next 2 years and if so it then can compete with the rest of the world much better. roar

  • Threeer Threeer on Jul 15, 2008

    Interesting quote from the Rabid one... Wagoner said the company believes the trend away from trucks and SUVs in the U.S. market is permanent and that the company is responding, with 18 cars or crossovers in development. But he said GM never could have predicted how quickly the change would come as oil prices doubled in the last year. "We missed that, but I think us and 99.999 percent of the rest of the people in the world did too," he said. Really?? 99.99%? Did Honda miss this? Did Toyota (well, discount the Tundra perhaps)? Hyundai? Maybe 99.99% of the people in DETROIT missed this, but that's it.

  • Menno Menno on Jul 15, 2008

    Just realized the wording. OK so Chapter 11 is not going to be declared. Doesn't say Chapter 7 is not going to be declared. Check out this nightmare scenario: "Assets sold" = GM selling out "other than North American" operations to SAIC in China (you know, the people with tons of dollars rapidly evaporating in value that they want to unload for something tangible). Then GMNA goes Chapter 7 and GM-SAIC (with wholly owned Holden of Australia, Opel, GMDaewoo/Chevrolet and Vauxhall badge for the UK) continues on to be a reasonably successful and profitable company. Of course, the money GMNA obtains for GM-other-than-NA is simply enough to keep the higher ups out of prison once Chapter 7 is declared. And they go off to live in the sunshine in Bermuda with their golden parachutes. Meanwhile thousands of GM dealers, millions of GM owners and thousands of GM workers in the US, Canada and Mexico are royally screwed. Sound like it's plausible (perhaps not for this particular chapter, but for the next one or the one after)? As for this chapter, yeah, I think Saab is finito, at least in the United States, and perhaps GM has lined up a buyer to take Saab off their hands for a few shekels. Maybe FIAT? TATA? M&M? Chery? That's about all the "assets" that GM can spare. They've sold off all of the family silver, not to mention the family jewels (51% of GMAC). Of course, the family jewels had cancer, but hey, wadayagonado?

  • Truthbetold37 Truthbetold37 on Jul 15, 2008

    Announcement was nebulous. No defined changes other than salary retiree health benefit cuts and no dividend.