GM Gets Its Loan; No Bankruptcy for Now
When it was announced Sunday that President Obama had decided against appointing an "Auto Czar", instead opting for a panel of Administration financial experts including, but not limited to, Treasury Secretary Timothy Geithner, National Economic Council Director Lawrence Summers and Ron Bloom, it pretty much signaled that the Administration was going to continue to work with GM as an existing, functioning entity instead of forcing them into bankruptcy.
Monday night, that was borne out. From Reuters:
The U.S. government will release $4 billion in additional aid to General Motors Corp (GM.N) on Tuesday as planned, a White House aide said on Monday, ahead of the deadline for the automaker to submit a new survival plan.
The aide said GM’s smaller rival Chrysler LLC’s request for additional aid would be treated as a new request and dealt with separately.
GM is seeking concessions from the United Auto Workers union and creditors under the terms of its $13.4 billion federal bailout. It must submit a restructuring plan to U.S. officials on Tuesday showing how it can cut costs and pay back the loans.
Now that does not mean that the moment is over for GM, far from it. The company still has ongoing crucial negotiations with the auto workers union (UAW) that must be completed, and must formally submit its grand restructuring plan. The plan will not be fully known until officially submitted and made public, which is likely not to occur until the markets close tomorrow, but early details reveal a framework for a radically different General Motors in the future:
G.M. will file what is expected to be the largest restructuring plan of its 100-year history on Tuesday, a step it must take to justify its use of a $13.4 billion loan package from the federal government.
The plan will outline in considerable detail, over as many as 900 pages, how G.M. will further cut its work force, shutter more factories in North America and reduce its lineup of brands to just four, from eight, according to executives knowledgeable about its contents. The remaining core brands will be Chevrolet, Cadillac, GMC and Buick.
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The plan will also probably include revisions in executive compensation and targets for cutting dealers and brands like Saturn and Pontiac.
Similar discussions are underway with Chrysler, which also has a deadline tomorrow to submit its restructuring plan; details of the plan or government commitment are not yet forthcoming.
I’d understood that Sec of Energy (or his appointees) were also involved, but don’t see that in your synopsis. I thought having SofE involved was the most encouraging sign of all. Was I mistook?
OT, but at this our, I presume any topic maybe welcome.
Bmaz, I look forward to your take on the replacement of the Stevens Prosecution team and an explanation for the previous team’s willful nonconforming with the Judge’s request, leading to the citation for contempt and their ousting.
The argument has been made in TPC comments that the incompetence can be retraced to the low quality of DOJ’s hires. As far as Brenda Morris is concerned, this argument fails.
http://www.law.georgetown.edu/…..38;ID=1997
William Welch is an AGAG appointment, made 3/07 in the midst of the USA attorney scandal. Can’t find a bio. Know he’s from Western Ma. Apparently the son of a judge, but whether any relation to ex-gov. Welch, I do not know.
This is up there in my “what were they thinking” permanent puzzlement. Might you give it some thought.
Thanks.
our is hour.
the good news about this is that the repuglitards ain’t gonna read a 900 page plan
so we don’t have to read it before we try to get what kind of batshit insane objections the repuglitards are gonna whine about
that should be:
before we try to guess what kind of batshit insane objections the repuglitards are gonna whine about
stop editing my work, ya stupid fingers …
Cheney’s hair on fire (what hair)?
http://www.nydailynews.com/new….._bush.html
who’s going to buy their cars and how?
here’s a funny thought
the repuglitards got themselves a little victory video featuring the song “Back in the Saddle Again” by Aerosmith
it fails on at least two levels
first off, using Aerosmith might remind us of another classic by Steve an Joe. Ever heard “Same old song an dance, my friend”
and about the song “Back In The Saddle”, it’s an ode to a hooker
fail, DOUBLE FAIL
AND THE KILLIN’ GOEZ ON AND ON AND…
Citizen bmaz and the Firepup Freedom Fighters:
Thanx for the post, it looks like Obama and his minions are stayin on task…maybe we are seein’ the end of the era of the iron and oil plutocracy and they are jest negotiating the severence to pay off “the families” and get ‘em the hell out of our lives forever.
KEEP THE FAITH AND PASS THE AMMUNITION, THE STRUGGLE GOEZ ON AND ON!!!
please don’t use this term; as noted before, people like my brother who has mental retardation find this very, very hurtful. And yes, they do understand the connection.
As long as the feds stay away from the Corvette, Camaro and GM’s motorsports program, it’s all good.
Citizen ferrariman:
Yeah boy, but the new “muscle cars” are gunna be powered by batteries…goodbye turbo boosters!
It’s not the same without that V8 rumble. Oh wait, the Corvette can get 30 MPG on the highway- owners say it can be done- but because it has a V8 under the hood, it’s bad for teh environment because Greenpeace sez so.
GTFO and let GM build a supercharged Camaro. I don’t want to compromise on the muscle car tradition.
how G.M. will further cut its work force, shutter more factories in North America
Shutter MORE factories in NA? Exactly why are we giving them money to do this? They aren’t going to have much of a North American presence by the time they’re done anyway.
All manufacturers have either just done the same thing, or are in the process thereof. GM will, when is all said and done, have a fine NA presence (although they will not be as big as they were in previous decades). This will be because they make good cars at competitive prices. People tend to buy such things.
I’m hearing that they’re holding a press conference at 6 PM…
Excellent, this seems like a reasonable/realistic way to go.
The Republican hissy fit starts in 4.. 3.. 2.. 1..
I don’t know about you, but I would not buy a car from a company that either is or is about to or has already declared bankruptcy, there are lots of companies that make cars, why buy from a company that might not be around in 5 years.
Dispite the fact that I own an all wheel drive Buick Rendezvous-I got it in 2003 for a little more than $18,000 off the MSRP due to the fact that my wife worked for GM plus other discounts, and got another $1,000 off because Tiger Woods was playing in the Buick Open that week- and the fact that while in HS I was the parts manager for my local chevy dealer-I don’t really like GM cars, I did buy a Corvette in 1971 when I returned from Vietnam, but traded it in on a Jenson-Healy in 73.(a great car,DOHC 4 cyl engine that topped out at 160 mph) Bought only Chrysler products for over 25 years until this deal came up. Paid $15K for a $34K car. Could not pass up that deal now could I?
bmaz – why did you leave out that GM is having to negotiate harder with the bondholders than the UAW? The union has taken cut after cut after cut – the latest is that they have now accepted total responsibility for the legacy pension and health care costs, and GM is giving them less than 1/4 of the money they were supposed to in order to fund this.
The bondholders want 50 cents on the dollar or they will walk away and goodbye GM.
So please remember there are more problems than the union here – in fact, labor costs are about 10% of the total cost of any car. So even if the workers built the cars for free – GM is still dealing with a lot of debt that the union has nothing to do with. Oh except for taking over a huge chunk of it. Total screw job IMHO.
I reported the facts that were new and that were in the breaking article. GM is fighting to survive, and they are fighting along the grounds that have been laid down, fairly specifically, by Congress. If they perish your concers will not be better served.
So let me get this straight. They fuck it up, we pay. They fuck it up, we lose our jobs. We pay so that we don’t lose our jobs and we lose our jobs anyway. Capitalism rawks!