GM bankruptcy plan would split company

GM bankruptcy plan would split company

www.reuters.com

NEW YORK (Reuters) - A possible bankruptcy plan being discussed for General Motors includes quickly forming a new company of the automaker's most profitable parts, while a group of other units would remain under bankruptcy protection for a longer period, a source familiar with the plans told Reuters on Tuesday.

GM also would seek to have a new deal in place with the United Auto Workers union prior to any bankruptcy filing, the source said.

GM warned earlier on Tuesday that there is a rising chance it could file for bankruptcy by June, as the company has 60 days to reach deeper concessions with bondholders and unions after its previous restructuring plan was rejected by the U.S. government as insufficient.

While the automakers would still prefer to avoid bankruptcy, advisers to both GM and Chrysler LLC have been working to prepare for potential bankruptcy filings that would aim to preserve, or sell off, the best parts of the companies.

Under the plans being considered, GM would seek to quickly move its most profitable units into a new company separate from its other units in the early days of the bankruptcy filing, said the source who asked to remain anonymous because the person was not authorized to speak to the media.

The aim would be to show consumers, taxpayers, and the government that the new GM can survive and compete in the autos sector as a viable company, the source said.

(visit the link for the full news article)

So after giving billions of tax dollars to GM, they are going to go belly up after all. Big surprize.

Are they going to pay back the billions of tax dollars by selling off parts of the company? Somehow I doubt it.

I find it unlikely no one in the government saw this coming, but still gave them tax dollars anyway. Criminal I say.


www.reuters.com
(visit the link for the full news article)

Is it possible that GM wouldn't have to pay back their bailout loans to the government if they file for bankruptcy?

If so then I think the US should forgive every current student loan because student loans can't be exempt in bankruptcy proceedings.

Originally posted by jam321
Is it possible that GM wouldn't have to pay back their bailout loans to the government if they file for bankruptcy?

That thought has been rolling around in my mind since I read the article. For some reason, maybe my complete belief that gov is corrupt and retardedly inept at doing their jobs, I don't think they will be paying it back.

Of coarse the polititians will puff out their chests with their false concern for the waste of taxpayer dollars, and then moap and whine about the need to help these poor beleaguered american institutions that we can't live without because the world will end without them.

The overall retail automotive market is down 60% in volume. Toyota and Honda are posting similar retail sales decreases as are the domestic Big 3. The starker reality is that every segment of the economy is down 40% to 60% and there is not one thing in any of the bailouts so far being passed in Congress that are going to effectively change that.

Until America gets productive manufacturing and producing real tangible and exportable goods again, we are increasingly living on borrowed money and borrowed time.

The most ominous thing regarding the current situation with General Motors is how they, the government, media, and the general public influenced by reports from those quarters all believe the Auto Worker’s Unions need to take big pay cuts to keep the manufacturer’s open, and by extension part of what has made the auto manufacturer’s unviable is the Auto Worker’s Unions.

The sad truth is nothing could be further from the truth. Had the relentless pressure over the last half a dozen decades brought against the unions never happened, and American citizen’s supported Union concepts and Union practices, our lucrative manufacturing base would have never been exportable to where it now resides overseas, only hurting and not helping our economy.

What made America strong economically was a living wage for all workers, and the Unions that fought against the corrupt corporate elites to ensure that the average person, doing an honest day’s labor, got an honest day’s pay, and a decent life out of it.

Politically wealth does equal freedom, you live in a free society, but all you are free to do is to stick your thumb out to hitch for a ride, or your cup out for a handout, because without money you are pretty much just free to starve. Movements geographically and intellectually as well as spiritually take hard cash or at least enough to not have to focus on and concentrate the majority of your waking hours how you are going to pay for your next meal and keep a roof over your head.

Simply put without some money in your pocket you aren’t going anywhere no matter how free in theory you are.

Unions kept money in the pockets of union workers, unions kept citizens focused on the values of supporting unions to keep money in the pockets of union workers, and pretty much most other workers, whose employers when Union’s were at their height felt a competing need to offer living wages also to attract workers.

Now no employer pays a living wage except in performance fields revolving around sales and investments.

That’s why the economy is in such brutal shape. We make nothing to sell, what little we do make, or do, that can earn hard cash, the lion’s share is kept at the top and the very least amount possible is handed out in compensation at the bottom.

This really is about destroying the last powerful Union standing and ensuring in the future all labor will be virtual slave labor, cheap pay, no rights, just lucky to have a job, and that’s the surest way to ensure one economic crisis after another.

Americans need real jobs, Americans need real pay. That’s the thing that no bailout has yet to directly address, because they are in fact all about denying real jobs and real pay to Americans and rewarding the people who know how to keep America poor and weak.

Originally posted by ProtoplasmicTraveler
This really is about destroying the last powerful Union standing and ensuring in the future all labor will be virtual slave labor, cheap pay, no rights, just lucky to have a job, and that’s the surest way to ensure one economic crisis after another.

Americans need real jobs, Americans need real pay. That’s the thing that no bailout has yet to directly address, because they are in fact all about denying real jobs and real pay to Americans and rewarding the people who know how to keep America poor and weak.

I have to slightly disagree about the union not being to blame. The union has soaked gm for unreasonable amounts of pay, not any more unreasonable than the bonuses piad to the GM President or all the VP's over the years, but the union still has it share of blame in this matter.

Here's a awsome thread that was on here a while ago. It's a gm suppliers letter to the president of Gm.


GM Supplier answers GM Pres. Troy Carke Plea.. his response.

You're right Mr. Clarke, it's not JUST management . . . . . how about the electricians who walk around the plants like lords in feudal times, making people wait on them for countless hours while they drag ass so they can come in on the weekend and make double and triple time for a job they easily could have done within their normal 40-hour work week. How about the line workers who threaten newbies with all kinds of scare tactics for putting out too many parts on a shift and for being too productive. (We certainly must not expose those lazy bums who have been getting overpaid for decades for their horrific underproduction, must we?!?)

How is that the most retarded, ill-advised, semi-literate social commentators realized this was what was required right from the outset.

Now all those billions of dollars we could have used to fund better healthcare have been wasted on production lines churning out huge gas guzzling piles of crap euphemistically known as SUVs.

KD has some thoughts on this matter...

tickerforum.org...


[edit on 1-4-2009 by pluckynoonez]

reply to post by FreeSpeaker
I worked for Toyota here in the UK making Avensis and Corolla. The place was well run, wait let's call it super efficient, to the point where it gets silly, but the point is it works. Those Japanese plants pay good wages and they can make it work here in the UK where domestic producers couldn't, so hats off to them. To reply to your post there was no unions, I mean your job was gone if there was a mention of the word union, but at the same time why would you need one when the company really looked after you and gave you a future in a superb company going forward and making a pretty good product that people actually desired?

Originally posted by Retseh
How is that the most retarded, ill-advised, semi-literate social commentators realized this was what was required right from the outset.

Now all those billions of dollars we could have used to fund better healthcare have been wasted on production lines churning out huge gas guzzling piles of crap euphemistically known as SUVs.

GM cut production of gas guzzling trucks and SUVs and closed plants. What they did with all that money was offered buyout packages to their employees including vouchers for a new car in accordance with their Union demands - indicating that they had no intention of breaking away from the old ways of doing business! And after receiving those government loans, they had the nerve to post record losses, despite the infusion of cash! It's no wonder their restructuring plan was rejected. GM is still kow-towing to the UAW even at death's doorstep. It's utterly amazing!

I don't like how the fed is taking control of companies like this, but something did need to be done about Wagoner. He was running GM into the ground and didn't give a damn who it hurt.

[edit on 1-4-2009 by sos37]

I have to slightly disagree about the union not being to blame. The union has soaked gm for unreasonable amounts of pay, not any more unreasonable than the bonuses piad to the GM President or all the VP's over the years, but the union still has it share of blame in this matter.

I appreciate your sentiments, however I would suggest the following. The atmosphere regarding the last truly powerful and viable union is politically charged.

That not only could mean the veracity of some claims regarding the union could be highly embellished, but it also means that they union itself could be doing such things for a political end as they fight for their survival.

Being the first and last of something is a lot harder than catching and leaving the wave somewhere in the middle.

A lot of people died at the turn of the last century to create the first unions and give workers the wages, rights and protection unscrupulous corporate owners and managers often denied them.

The last union will not die quite as violent a death as the first union was born in, but that doesn't mean there won't be a fight in the process and don't expect it not to include hitting the big boys where it hurts most...in the wallet.

Is that how all unions were born, run and died, no...but the point is big corporations and big government were out to squelch the unions from day one. To the corporate moguls it meant having to give away profits they wanted to retain for themselves. For big government it meant a group of organized citizens with a hierachy and leadership structure and chain of command, and a community war chest to fight political battles more effectively as a group than any one individual could.

Unions might not be any more honest than the Big Corporations or the Big Government...so think of them as the crook looking out for the little guy because they could stand up to and play the big guy's games.

If you are working for a company that pays you around minimum wage and someone else working for that company is taking home 10, 20, 40, 80 million dollars a year in compensation?...

You do probably need at least on crook looking out for you too, because the above mentioned crook sure isn't going too!

Both Ford and Chrysler in the past have had major financial difficulties where they got the UAW to make major concessions.

General Motors has been the only manufacture that never fell on hard enough times to warrant it.

One of the reasons why the UAW never felt they warranted it is because of the OP's opening article. General Motors will spin off a profitible division in a second into it's own company to reap that company's profit in the most exclusively beneficial way.

General Motors is a power house, and in fact they will just dump their dead weight designed simply to ensure maximum market penetration for their products by cross selling them under multiple brandings, now that there is not enough of a market anymore to make the additional numbers they can produce cost effective. They will do it in a way that dumps the last viable union with strong contracts, and come out on the other side more profitible than ever, with lower paid workers than ever.

Originally posted by ProtoplasmicTraveler
Unions might not be any more honest than the Big Corporations or the Big Government...so think of them as the crook looking out for the little guy because they could stand up to and play the big guy's games.

I'm so glad we both agree on that point.

The problem is, if the big guy's are playing dirty and you jump into the game and play just as dirty, what happens to the system? And what is the eventual outcome of these circumstances? I believe we are discussing it right now.

Originally posted by ProtoplasmicTraveler
If you are working for a company that pays you around minimum wage and someone else working for that company is taking home 10, 20, 40, 80 million dollars a year in compensation?...

Obviously this business practice was just a gravey train for the elites friends and families. We can be thankful in the least that this train has at last come off the tracks, despite wounding many innocent workers on the way.

Originally posted by ProtoplasmicTraveler
General Motors is a power house, and in fact they will just dump their dead weight designed simply to ensure maximum market penetration for their products by cross selling them under multiple brandings, now that there is not enough of a market anymore to make the additional numbers they can produce cost effective. They will do it in a way that dumps the last viable union with strong contracts, and come out on the other side more profitible than ever, with lower paid workers than ever.

If this happens, it just speaks further of the complete corruption of the government and the big business they represent.

However, if we are ever to go back to a system resembling the one going through it's deaths throws right now, we have to be sure the pay scales from the bottom of the ladder to the top, are proportional and represenitive of the current income of the company and economy. Neither side can be allowed the level of corruption they have achieved until this point.

GM CEO says bankruptcy will be fast if needed: report

LONDON (Reuters) - U.S. automaker General Motors Corp (GM.N) will move quickly into bankruptcy if necessary, chief executive Fritz Henderson said in an interview with the Financial Times newspaper published on Friday.
The company warned this week there is a growing risk it could file for bankruptcy by June as it has 60 days to reach deeper concessions with bondholders and unions after its previous restructuring plan was rejected by the U.S. government.

Source

As I thought, lots of talk of bankruptcy but no talk about paying back the tax dollars they were given. GM will sell off all its worthless divisions and pay off their debt owed to banks and suppliers, but the tax payer's can go to hell apparently.