GM Chapter 11 decision reportedly final
Filed under: Company News, Economy
The market has been laying odds for weeks that General Motors (GM) would enter Chapter 11. Over the last few days, the filing looked like a sure thing. According to Bloomberg, the final decision has been made and GM will go to court on June 1. The news service writes, "General Motors Corp., which celebrated its 100th anniversary last year, plans to file for Chapter 11 bankruptcy protection June 1 and seek a sale of most of its assets to a newly formed company."
While the move will lower GM's labor costs and cut obligations to it creditors, it may not do much more than that. The company's bondholders have decided to trade their obligations for 10 percent of GM with a warrant option to buy five percent more.
GM's long-term problem is still sales. The domestic vehicle market was over 16 million units four years ago. This year that number may drop to 10 million. GM is still losing market share and that figure dropped below 20 percent in the company's last reported quarter, the first time in memory that it has been that low.
If the Japanese and Korean imports and a relatively healthy Ford (F) push GM's market share toward 15 percent in the US, the Chapter 11 will not have meant much.
Douglas A. McIntyre is an editor at 24/7 Wall St.
D-Day for Harry Reid: Can he wrangle 60 votes for Senate health reform bill?
Fed stalls on Chinese bank deal, costs taxpayers $1.7 billion
Dell in a handbasket: Should founder Michael Dell resign?
Reader Comments (Page 1 of 6)
5-28-2009 @ 1:35PM
Mike Sanders said...
Ross Perot, told them so... He even warned the US about the "large whoshing sound," which has taken 2/3 of my inheritance! If I could go back, I'd have voted for Perot.
Reply
5-28-2009 @ 2:11PM
gd said...
Ross for Boss
5-28-2009 @ 10:43PM
cmorse1052 said...
I'll make a promise now to all Americans, I'm voting a straight independent ticket in 2010 and from now on. I'm tired of both major parties.
6-11-2009 @ 1:57PM
Bill said...
I did vote for H Ross, However the rank and file of this country was lead by the sheep herdsman. Food for thought. Whatever happened to GM's aircraft?
5-28-2009 @ 2:24PM
sandy said...
GOOD! LET THEM GO ALREADY! TIRED OF PAYING FOR BAD BUSINESSES WITH LARGE HANDOUTS! GET YOUR HAND OUT OF MY WALLET THIS IS THE USA NOT BAILOUT NATION!
Reply
5-28-2009 @ 2:26PM
sixkillerforhire said...
just wait the airlines are next on the bailout bankruptcy list. oil just crept up to 65$ a barrel.
Reply
5-28-2009 @ 2:37PM
Iridium said...
The old GM is dead. The new GM will emerge. A new corporation owned by the US government and the UAW. All debts are forgiven and the new corporation will start with a clean balance sheet.
Government Motors will make terrible cars with shoddy quality. Nobody will want to buy them but it doesn't matter. The US government is behind the company. With one law a huge tax can be placed on any car not built by Government Motors.
This corporation is a last ditch effort to save government entitlement programs. All profits from GM will be siphoned off into government spending programs.
Why else would the US government take over the automobile industry? You'll have to buy a GM car to fund your social security. It'll be great.
Reply
5-28-2009 @ 2:58PM
Geordi said...
Are you obtuse, or merely stupid?
5-28-2009 @ 3:31PM
Nan said...
You are absolutely right about government motors. They will try and drive out all competition so you have to buy their cars. Well, I for one, won't buy one. Before we go compact I will be sure to buy a larger (and much safer) foreign car. I wouldn't spend a penny to support the UAW or government motors.
5-28-2009 @ 4:04PM
B.O stinks said...
And they will all be the same size and color so we are all equal in obama land !
5-28-2009 @ 10:36PM
Jeff said...
Newsflash dude, the US autos have sucked for years, that's why they're in the present situation that they are in. I think it's funny, they've reserected just about every classic vehicle, ie Camaro, Mustang, cuz the engineers they have haven't came up with a new idea in years. Thank goodness the Japs and Germans had some imagination or we'd still be driving Tauruses!!
5-28-2009 @ 2:42PM
hemipwr54 said...
Recession to end soon , depression to take its place .
Higher oil prices spell doom for the economy again , but seems those in charge don't care , so run it up again and down the market will go .
Funny every time banks need money fuel cost rise !
Reply
5-28-2009 @ 2:57PM
Geordi said...
Funny how people whine about Obama sticking his hands into things too far yet those same people cry when the government doesn't "do anything" about high gas prices.
5-28-2009 @ 3:12PM
pablo suarez said...
A top heavy company cannot succeed United Auto Workers have taken this company to ruin. They are not going anywhere. All successful companies must be lean and mean and mostly robotics. Ross Perot was right. I voted for him. We dont need a "tramp" like the Kenyan Odumbas
Reply
5-28-2009 @ 3:32PM
frnd said...
Top Heavy?? I'm not UAW - I'm just a regular salaried employee. "Top Heavy" describes the outrageous salaries and bonuses American CEO's are paid. If the American Big 3 really want to be competitive, they would set their CEO's salaries in line with foreign competitors. Obviously they do not wish to continue producing cars in the U.S.
Reply
5-28-2009 @ 3:35PM
jmjmosley said...
I've owned one new G.M. product in my life . A 1975 Chevrolet Impala. It was so-so. I've owned 2 new Plymouths and ! new Dodge .They were all garbage. Ford is one of the best cars on the road,bar none. I have been driving Fords since the late 70's and they have all been damn good vehicles. I will stick with Ford. Piss on Chrysler and G.M.
Reply
5-28-2009 @ 3:37PM
B.O stinks said...
Socialism is when the PEOPLE own the companies. Communism is when the GOVERMENT owns the BANKS and COMPANIES .You idiots voted to be Communist !
Reply
5-28-2009 @ 3:55PM
steven ruza said...
i do not know how this happened. they finally make a great looking car. i have a newer g-6 and it's great. crapo durand would really be shocked
Reply
5-28-2009 @ 3:56PM
steven ruza said...
they should give gm 50 billion to help michigan out. this is rediculous. the michigan economy sucks
Reply
5-28-2009 @ 3:58PM
gerald said...
If the government continues to allow all the imports into the country all the of the big 3 will be belly up. They keep hollering about protectionism, but that is what we need if we want to keep any jobs in the U.S.
Reply