By on May 28, 2009

Bloomberg reports that GM’s scheduled its Chapter 11 filing for Monday, June 1, 2009. And we were wrong about GM’s bankruptcy becoming the world’s largest. Thanks to Ex-CEO’s Rick Wagoner’s decision to throw all of GM’s “non core” assets into the fiery pit of the company’s endless cash burn, the American automaker’s C11 will only rank as number three. “GM’s bankruptcy will be the third-biggest in U.S. history after Lehman Brothers Holdings Inc. and WorldCom Inc., based on GM’s reported global assets of $91 billion and total liabilities of $176.4 billion as of Dec. 31.” Meanwhile, the company has pulled ahead its US white collar workers’ payroll. Apparently (unconfirmed), they’ve already sent out the checks for the week of May 25, 2009. “Other than the date change, all other payroll processes will remain the same in terms of paying employees at work or if they are on layoff,” a leaked memo from Marketing Maven Mark LaNeve reveals. According to the document, “This action is not an indication that GM plans to file for bankruptcy on or about June 1 . . . GM has determined this simple action — moving up the payroll pay date for this month — is the least the company can do to reduce any potential for disruption regardless of what happens.”

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44 Comments on “GM to File for C11 on Monday (June 1)...”


  • avatar
    Zammy

    Despite, or perhaps because of, all of GM’s mistakes and misteps, this is a sad day in the history of US manufacturing.

  • avatar

    something to believe in? NOT!

    until the rat finks in the Ren Cen are displaced, the future is nothing more than a path to dissolution.

  • avatar
    brettc

    Finally. A great present on my 32nd birthday. Too bad they’ll continue on as Government Motors. I do feel bad for the workers that will be affected. It’s not their fault that GM’s executives suck. Had they filed when SUVs were still king and before Katrina hit and gas prices spiked, things might be a lot better. But I guess we’ll never know the results of that scenario.

  • avatar

    Is that the Brooklyn Bridge? The one that’s on sale?

  • avatar
    Rastus

    Burn that trash heap down!!! :+)

  • avatar
    menno

    Why not do the typical job and just declare late on Friday the 29th? It’ll roil the markets less, isn’t that the theory?

    Maybe GM is beyond caring what it does to the market. Or is it that the market no longer gives a flying **** about GM?

    Besides, with a potential nuke war on the Korean Peninsula; with Iran sabre rattling and putting 6 military naval ships into international waters (and continuing to build nuke bombs while threatening massive genocide of Israel), and with the global economy continuing to collapse all around us, GM is small beans.

    Who’da thunk?

    Not forgetting; General Motors was once the envy of the industrial world and provided the US with massive amounts of income from around the world; it was the largest, most profitable corporation ever seen at one point; it had as much as 51-52% of the U.S. vehicle market in 1962; Chevrolet alone held 26-27% of the U.S. market in 1962; it also did huge amounts to shore up the US military for World War II. It was one of the first automotive companies which diversified in so many ways, paving the way for the modern conglomerate corporation.

    What a legacy, now evaporated.

  • avatar
    Cicero

    “GM will invest $2.9 billion in alternative techologies through 2012”

    Frankly, I would have preferred to invest some of that $2.9 billion (and about $70 billion of its friends) in my kid’s college fund, but I have a feeling that I’m not going to get the chance.

    Parasitic bastards.

  • avatar
    jkross22

    Same old, same old with GM. “We’re doing great! We’ve got 8 hybrids for sale”. The Titanic is taking on water and their marketing guys are ordering filet mignon off the menu.

    I bet most people couldn’t name one hybrid they sell.

  • avatar
    Corvair

    Very sad. But the government will keep the Potemkin Village illusion alive for another decade or so.

  • avatar
    menno

    A colleague of mine and I were talking about a super rare Apollo car (1963) seen for sale on “Bring a Trailer” and he knew it had a Buick alloy V8, but wondered if it was backed with a Powerglide 2 speed automatic? I grabbed a 1966 Motors manual and showed him the Buick manufactured, highly advanced, partial mechanical lock-up/partial hydraulic torque convertor two speed automatic which was specific to and only used in 1961-1963 Buick Specials and Skylarks (as well as Apollo exotic cars, of course) and he was amazed – I then showed him the Oldsmobile F-85 (Roto-Hydramatic) unit and then the transaxle for the Pontiac LeMans from the same era. He is a GM fan and commented that – GM could afford to have each division make their own engines and drivelines, while sharing some body panels (Fisher Body being wholly owned by GM), and that it meant that GM could innovate far more than Ford.

    Ford’s version of “innovate” was – the Edsel. Ouch.

  • avatar
    JMII

    Bookmark it: gmrestructuring.com

    GM already has: http://www.autoblog.com/2009/05/18/general-motors-takes-cue-from-chrysler-registers-gmrestructurin/

  • avatar
    superbadd75

    Now all that remains to be seen is whether or not GM’s C11 is too little too late. I’d be much more optimistic about GM’s future is several things were different, but the way it is right now doesn’t really spell success for me.

    The Rick Wagoner clone, AKA Fritz Henderson, isn’t bringing any new ideas to the table.

    Their current mix of cars clearly isn’t “doing it” for consumers. What’s in the pipeline is a mixed bag of maybes.

    Buick and GMC are not core brands. Really, Cadillac isn’t either, but could be if done right.

    C11 is a golden opportunity to shove the UAW out the door, and it doesn’t appear to be in the cards.

    GM is going to have to come out of bankruptcy different free of the debts and albatrosses that have sunk them. It appears, at this point, that they’re going to be free from some of the debt, but the UAW and the management’s old way of thinking will still be in the picture. This does not give me warm fuzzies at all.

  • avatar
    Gotta Chime In

    Can someone outside of this site please throw the BS flag already?

    Wouldn’t it be sweet if President Hope ‘n Change ripped Old GM a new one at his press conference after they file? The clip would become an internet classic that we could all download and finally have something to show for our investment.

  • avatar
    vento97

    The dawn of “Government Motors” is truly upon us…

  • avatar
    menno

    (tongue in cheek alert)

    I just got a scoop on the post ch. 11 GM lineup for North Amerika.

    “Chevrolet Matiz”. (GMDaewoo, South Korea, assembled from CKD kits in Mexico). 800cc’s of triple cylinder fun and CVT.

    “Chevrolet Matiz SS”. 1100cc four cylinder and 5 speeds. And you thought Pelosi & Obama would forget us gear-heads!

    “Chevrolet Aveo.” (GMDaewoo, South Korea, assembled from CKD kids in Mexico). This is the mid-sized offering. 1.6 litres.

    “Chevrolet Epica.” (GMDaewoo, South Korea). This is the large car. 2.5 litres of inline six crossways under the hood. Bonus: the engine was designed by Porsche for Daewoo! Four speed automatic, only.

    “Buick Chinatown.” (GM-SAIC, Communist China). At last; truth in advertising! 2.8 litre V6 with a modern equivalent of throttle plate limiter (it’s electronic) – top speed is 85 mph. 6 cog automatic, though! Plus, bonus: they glue the left turn signal “permanently on” right at the port to save the buyers the trouble! “Let me tell you about my grandchildren” bumper stickers are installed at the 12 dealers still left in biz. For a small nominal fee of $125.

    For Cadillac dealers, there is a badge-engineered version with 3.6 litre V6 and $5000 gas guzzler tax. The price is only 60% higher than the Buick version. It does, however, have a standard egg-crate grill; Cadillac crests; padded vinyl top; and “Let me tell you about my grandchildren” bumper sticker, standard!

    “GMC Pickup.” (Isuzu-Malaysia). Yep, it’s an ex-partner of GM, but the updated sheetmetal for the Colorado/Canyon now comes straight off the boat, and it’s assembled in Shreveport, Loisiana. The Colorado/Canyon is nothing but a rebadged Isuzu anyways…. Nothing like an ‘mercun pickemup, eh? It has a Chinese built 3.4 V6, though, dammit. (It’s cheap for GM to buy, eh?)

  • avatar
    MikeyDee

    Forclosures just went way up in Bloomfield Hills. I wonder if I could get a membership at Oakland Hills Country Club now?

  • avatar
    Paul Niedermeyer

    @menno,

    Those Special/F85/Tempest jobs were notorious for not being profitable, or profitable enough. Classic GM overkill. That’s why the ’64 and on midsizers were much more the same, and conventional.

    Those were the Estes (engineer) years, soon followed by the Gerstener (bean counter) years.

  • avatar
    windswords

    I take it the salaried employees are paid on the 1st and 15th of the month? That’s the only reason I can think of the pay date being moved up to May 25th. At least they know it’s coming. At my company some of us noticed one day that we were paid a week early by checking their bank accounts online. The company never told us. Of course as the news spread and everyone strated looking up their own accounts or called their banks, work came to a standstill. Our managers finally called us together to tell us no, it wasn’t a mistake and no, they couldn’t give us anymore information. Most of us correctly deducted they were about to file for bankruptcy.

  • avatar
    menno

    Paul, my Uncle (rest in peace), an Air Force officer and pilot, had a new 1961 Tempest with cut-in-half Pontiac V8, rope drive and weirded out Corvair automatic transaxle, swing axles.

    Nothing but trouble.

    He bought a new 1963 Kaiser Jeep Wagoneer with the Sammy Sampietro designed overhead camshaft six and Borg-Warner automatic. The thing had a single joint in the middle of the front axle (being all wheel drive) and front torison bars. At least it looked good (Brooks Stevens’ best effort save the 1962-1964 Studebaker Gran Turismo Hawk facelift).

    Talk about going from the frying fan into the fire….

    Nothing but trouble.

    Don’t remember what he had after that, but likewise I didn’t get the chance to learn so many new and useful words around him any more. And with my memory for cars, it’s astounding that I cannot actually recall what he got. It must have been so excruciatingly boring that I can’t recall it. I hope the boring-mobile was at least reliable for him.

    Yes, the 1964 cars were much more cookie-cutter. There were, however, engines for each divisional cars (V6’s for Oldsmobile being provided by Buick being the exception). The 1964 Buick Special and Skylark V8 was a one-year wonder with new thinwall casting iron block, alloy heads (only loosely related to the earlier 215 engine). It was 300 cubes. By 1965, the beancounters at Buick substituted iron for the V8 heads on this engine.

    Pontiac even set-up their own transfer line for 215 cubic inch inline six engines which were all but identical to the 230 cubic inch Chevy six, save for a fractionally smaller bore.

    Thems was the days when GM had so much money to waste, it simply – wasted it!

  • avatar
    geeber

    Paul Niedermeyer: Those Special/F85/Tempest jobs were notorious for not being profitable, or profitable enough. Classic GM overkill. That’s why the ‘64 and on midsizers were much more the same, and conventional.

    They also represented another GM problem that would come back to haunt the company. After coming out with a promising car or feature that had some bugs, instead of working out the bugs, GM would take the easy path and abandon it for more conventional (read – cheaper) vehicles or technology.

  • avatar
    menno

    Yes; GM used the buyers as test-subjects on all new technology.

    Once the buying public figured out that more responsible (read: Japanese) auto manufacturers actually attempted to make the cars bug-free BEFORE releasing them for sale, they started to gain market share.

    Once galvanized steel came in for auto bodies, along with electro-dip, it was game-over for Detroit. It was only a matter of time. (Earlier Japanese sourced cars did rust due to thinner steel).

    Admittedly, some US products started to get somewhat rust resistant by the mid-1960’s – 1965 on through 1968 full sized Chryslers being a major player in that regard – they lasted 20-30 years even in Michigan).

    I think that was the result of the abysmal record of 1957 Chrysler products which didn’t even stay in one piece over the span of the 2 year payments, in Michigan, but rotted right off their frames.

  • avatar
    hltguy

    menno: your discussion regarding the 1961-1963 Buicks remind me of the courtroom scene from the movie “My Cousin Vinnie”, when Vinnie’s girlfriend in describing the Buick Skylarks and Pontiac Tempests, absolutely classic!

    GM: What a pathetic shame, the numerous missed opportunities and massive screwups, the wasted billions on stupid acquisitions, the “suicide pact” contract with the UAW and the shoddy products. And finally the parting gift is the feds taking over the carcass and all of us smuck taxpayers left holding the bag. I am only one, but I am a totally disgusted taxpayer.

  • avatar
    hltguy

    I think props are deserved for TTAC and Mr. Farago who has been saying this day is coming, and has documented why GM will go BK, for sometime. He has been absolutely correct. While most in the media has ignored this growing story for a long time and only recently got on board and I am thinking of the CNBC in particular, TTAC was on it early, often and correctly.

  • avatar
    mikey

    @menno so Japanese cars don’t rust?You got to be kidding right?

  • avatar
    mfgreen40

    menno — You are right about the Buick 2 speed trans. I have one in my shed, also have the alum 215 V8. This engine has been stuffed into the Pont. Fiero sweet.

  • avatar
    menno

    Hi Mikey. I’m sorry about GM-Canada, we all are. We’re mostly also very sorry that our ass-clown government (and yours, too) is throwing money into an inferno (and it’s our money, not the politicians, to boot!)

    Of course all cars rust.

    You being in Ontario must remember the Datsuns from the early 1970’s which rusted worse than the Vegas. Or Pintos. But I known damn well you’re not going to make any statements about how great Vega engines were, because everyone alive back then knew otherwise. Pinto motors were actually not a lot better – at least the new 1975 pos that I got which was built on July 4th in St Thomas, sure wasn’t. Cam lobe #1 wore completely round before 15,000 miles and Ford would not fix it. We spent money on it, then later the engine was recalled and they refused to refund any monies. Took me almost 20 years before I’d even consider a used Ford… but that’s another story.

    Ford also particularly was bad about only properly rustproofing cars depending solely upon whether they beancounters had bothered to put E-coat facilities into any given factory.

    Talk about spotty manufacturing….

    The Japanese were early with galvanized steel and yeah, there were exceptions; Honda was still building rustbuckets even through the early 1980’s – shame on them.

    Body shells are all pretty good no matter the manufacturers, now. But yeah, I’m going to stick to my assertion that the Japanese by and large, started working with galvanized steel first.

    American Motors tried very hard, too; they were the only manufacturer as early as 1963, to E-coat every single new car they built.

  • avatar
    oboylepr

    So, we have finally arrived at at the C11 courthouse (well we are in the parking lot parking). What are the prospects for GM now?
    Is it likely to ever be a publically traded, efficient, profitable manufacturer of good reliable cars that people want?
    Will it languish in BK with little prospect of being reshaped into something useful?
    Will the powers-that-be, do some window dressing on it, call it good, eject it from C11 for it to just turn turtle and sink?
    Will it end up like British Leyland?
    Will it even be called GM?
    Somehow I fear that this momentous step is not the cure, but that there is yet drastic surgery needed to to heal this patient.

  • avatar
    unleashed

    C11 is a golden opportunity to shove the UAW out the door, and it doesn’t appear to be in the cards.

    GM’s C11 is a farce.
    It’s all about preserving special interests at the taxpayer’s expense.

  • avatar
    unleashed

    So, we have finally arrived at at the C11 courthouse (well we are in the parking lot parking). What are the prospects for GM now?

    C7 after 4 years and 100 Billion of wasted taxpayers dollars.
    If Obama is re-elected, then make it 8 years and 200 Billion.

  • avatar
    mikey

    What about Huyandai menno? They sent us garbage,and to thier credit confessed to it.

    The Vega was a piece of crap, without a doubt.If you think about it,of that era what small car wasn’t a piece of crap?The Civic had a great little motor.Five years in Ontario and the Honda shock towers rotted.

    Its was the arogance of GM management not the quality of the vehicle that set the ball rolling.

    GM refused to see what Honda and Toyota was doing.
    Something about playing a fiddle while the city burned.
    Not that anyone gives a rats ass,but I do have a complete back up plan in place,even if GM Canada was to liquidate.
    Anyway the beers are going down nice today.I don’t want to end up in RFs dog house.So I’m logging out.

  • avatar
    educatordan

    menno :
    May 28th, 2009 at 1:43 pm

    He is a GM fan and commented that – GM could afford to have each division make their own engines and drivelines, while sharing some body panels (Fisher Body being wholly owned by GM), and that it meant that GM could innovate far more than Ford.

    I’d almost believe that.

  • avatar
    tauronmaikar

    What a beautiful day Monday will be.

  • avatar
    ZoomZoom

    jkross22 :

    Same old, same old with GM. “We’re doing great! We’ve got 8 hybrids for sale”. The Titanic is taking on water and their marketing guys are ordering filet mignon off the menu.

    I bet most people couldn’t name one hybrid they sell.

    Me me me! I know the answer!

    It’s the Chevro.. er.. SaturnBuiac.. uh.. HumSaabCaddie… eh…

    Okay, you got me.

    No wait, I got it!

    It’s a mixture between marketing dogsqueeze and bureaucratic bullshit. There’s your hybrid; canine and bovine. Hey, at least it has the chance to give off methane, which we could burn…

  • avatar
    jpcavanaugh

    menno:

    Funny that today is the day I saw a 61-62 Tempest convertible. Maybe the first one I’ve seen since the 60s. My parents had a 61 Olds F-85 station wagon with the aluminum 215 V8. Must have had a casting problem or something, because as a car-crazy little kid, I remember my mom having to periodically pull over to the side of the road and raise the hood to let the engine cool off. The dealer’s solution was to run antifreeze in it year round, which was not common at that time. My parents took a trip to Florida in 62 or 63 with the F-85. They stopped for gas in Florida and before they could stop him, the attendant (remember those?) popped off the radiator cap, spewing antifreeze everywhere. Mom remembers waiting 3 hours for someone to find antifreeze in Florida.

    The folks went back in 64 and bought an F85 Cutlass hardtop. This one had the 330 4 barrel and was one of the best cars we ever had in our family. Quick, too. Also, the 64-65 Cutlass was one of the most rust resistant cars made in the 60s. We lived in northern Indiana with lots of salt, but that body was still pristine 8 yrs later when we sold it to the cousins.

    I am 2 years younger then you and remember that almost EVERYONE we knew drove GM cars in the 60s. Before the crap started to appear in the early 70s, GM built cars that were beautiful, had great interiors, the best bodies in the business and were generally quite well built and trouble-free. It is sad to have watched the entire decline and fall of a once-great company.

  • avatar
    geeber

    menno: Pinto motors were actually not a lot better – at least the new 1975 pos that I got which was built on July 4th in St Thomas, sure wasn’t. Cam lobe #1 wore completely round before 15,000 miles and Ford would not fix it. We spent money on it, then later the engine was recalled and they refused to refund any monies. Took me almost 20 years before I’d even consider a used Ford… but that’s another story.

    The original engines sourced from Ford of Great Britain were actually quite good. It was the American-made fours that had the problems.

    menno: Body shells are all pretty good no matter the manufacturers, now. But yeah, I’m going to stick to my assertion that the Japanese by and large, started working with galvanized steel first.

    Japanese cars were inferior to the Americans in rust resistance. As you noted, there were problems with the Fords, Chryslers and the Vega. But the other GM cars – particularly the full-size and intermediate ones – were far superior to any Japanese car for rust resistance in the 1970s and early 1980s. They were better than the Ford and Chrysler products, too.

  • avatar
    jpcavanaugh

    menno:

    One more point, I recall that after about 15 years of rocker panel rustouts, the entire US auto industry was using galvanized on their rocker panels by 60-62 or so (but not Studebaker). I do not recall a single rust hole in a rocker panel of a US built car until the early Ford Explorer.

  • avatar
    DweezilSFV

    Suddenly it’s 1980.Or 1990. Or 2000. They’ve just updated their text with a green angle. “We really get the message this time.”

    I felt bad for that little car on the bridge to nowhere.

    2 minutes and 45 seconds I’ll never get back.How much did that cost em ? Err us ?

    BTW: AMC was using galvanized metal and Ziebart in the early 80s

  • avatar
    educatordan

    I remember the Ziebarted from the factory AMCs, and my dad’s 82 Celebrity, Ziebart at purchase by the original owner still rusted out at 90,000 miles, in NW Ohio.

    My 2nd car was a 1987 Oldsmobile Cutlass Supreme Brougham. (It was stolen in 2000 while I was living in Detroit.) I found a picture of one online a few days ago and put it on my laptop as the wallpaper. (This thing is the same as mine down to the factory wire wheel covers.) I’m a teacher and some of my students saw it. They declared it to be “PIMP” high praise in their vocabulary.

  • avatar
    lw

    GM amazes me…

    They haven’t had a viable business plan or business model for decades and yet it hasn’t mattered.

    I bet a few guys from this site could sit down for a week and come up with a rockin’ product plan. GM hasn’t, but apparently they never needed to.

    Anyone got a family member or neighbor on welfare that always seems to do just fine? You know they chuckle when they see you going to work everyday.. you just know it…

  • avatar
    GS650G

    If GM is this great and everything is so rosy why won’t enough people buy their cars or invest in the company?

    Is it because we are not being fed the correct bullshit about them or do we know what the real deal is?

    Reminds me of an old street bum that promises to turn his life around if I give him 20 dollars, not to buy a bottle of MD 20/20 but to get back on his feet.

    Bridge loan my ass.

  • avatar

    Farago, I’m going to have to call you Cassandra from now on. You nailed it.

    June 1 is going to be busy for me, between keeping up on the GM bankruptcy and Microsoft’s E3 press conference, even though most of it was leaked (expect announcements for a motion-sensing camera doohickey, Forza Motorsport 3, Alan Wake, etc.). I’ve got my bingo cards ready…

  • avatar
    reclusive_in_nature

    All Obama has to do is give his supporters the order to buy GM products and the lemmings would claw over each other to buy them.

  • avatar
    supremebrougham

    educatordan:

    I too had an ’87 Cutlass Supreme Brougham (hence my screen name), what a great car! Feel free to drop me a line (add an at yahoo to my screen name) and I’d be glad to provide you with a link to my old car’s personal web page, and even some pics!

  • avatar
    taymere

    I’ve got 3 scenarios for you:

    Scenario 1. Less than 55% of bondholders agree to the 17 cents/$ haircut by June 1st. Right now about 35% have agreed already. Result? The deadline is extended for at least a few weeks while the PTFOA keeps trying to get it’s ducks in a row. Entering Chapter 11 with that low a level of support especially if Gonzales hasn’t ruled on Chrysler by June 1st would be too politically risky. Chapter 7 would mean one term Obama and Dems lose congress in 2010 and they lose 2010 Governor reelection race race for Ohio and Michigan. They wouldn’t risk that, they will stall and try to line up more ducks.

    Scenario 2. Between 55% and 65% of bondholders agree to a settlement haircut by June 1st. In that case I think the PTFOA will take the concessions that they got from the bondholders and UAW and restructure outside BK provided no ruling yet on Chrysler’s 363 sale. This way they are absolutely sure that Chapter 7 is avoided and they avoid having Grannie Bondholder cry on the news.

    Scenario 3. More than 65% of bondholders agree to the 17% haircut settlement. (unlikely to happen in 2 short days in my view). In this scenario, especially if Gonzalez has already ruled favorably on Chrysler’s 363, PTFOA would be confident enough that a cramdown/363 will fly and GM will declare Chapter 11 BK Monday June 1st in NY. If they are right in their calculations Obama wins a 2nd term and Dems retain Congressional control in 2010.

    Why have I thought about this so much? Under both scenarios 1 and 2 my bonds maturing June 1st will get paid in full and I can accelerate my goal of becoming a millionaire by 2020 by at least 5 years. I have been reading the TTAC luxury car reviews and dreaming lately.

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