GM bankruptcy plan eyes quick sale to gov't

Discussion in 'Current Events' started by brett636, May 19, 2009.

  1. brett636

    brett636 Well-Known Member

    NEW YORK, May 19 (Reuters) - General Motors Corp's (GM.N) plan for a bankruptcy filing involves a quick sale of the company's healthy assets to a new company initially owned by the U.S. government, a source familiar with the situation said on Tuesday.
    The source, who would not be named because he was not cleared to speak with the media, did not specify a purchase price. The new company is expected to honor the claims of secured lenders, possibly in full, according to the source.
    The remaining assets of GM would stay in bankruptcy protection to satisfy other outstanding claims.
    GM has about $6 billion in secured debt, including a secured revolving credit and bank debt.
    The government's plans include giving stakes in the new company to GM's union and bondholders, although the ownership structure of the company is still being negotiated, said the source who is familiar with the company's plans.
    In addition, the government would extend a credit line to the new company and forgive the bulk of the $15.4 billion in emergency loans that the U.S. has already provided to GM, the source said.
    The government has given GM until June 1 to restructure its operations to lower its debt burden and employee costs.
    If those talks failed, the company has said it would follow rival Chrysler LLC into bankruptcy.
    Setting up a new company to buy the healthy assets is aimed at reassuring consumers who might not be willing to make a major purchase from a bankrupt company, fearing it would not honor warranties or provide service.
    The board of the new company would be established with the tacit approval of the government. Fritz Henderson, who took the helm of GM earlier this year after the government pushed out Rick Wagoner, would likely head the new company, the source said.
    GM could not be immediately reached for comment.
    GM shares were up about 9 percent at $1.29. (Editing by Gerald E. McCormick)

    Does this mean GM will officially be Government motors? No new GM's or Chryslers for me. Its either ford or its going to be foreign. I refuse to own government manufactured junk.
  2. Jones

    Jones fILE A GRIEVE! Staff Member

    I've never bought a car, or pretty much anything for that matter, on the basis who made it, foreign/domestic, etc. I just research and try to get the most value for my money. I've bought Ford, Nissan, Toyota, Volvo and my current ride is a Mercury. If they make a car that I want, at a price I'm willing to pay, I'll buy it. I've never bought GM before but I wouldn't take them off the table just because I disagreed with the bailout.
  3. brett636

    brett636 Well-Known Member

    As time progresses my intuition tells me that GM will not be producing cars that will meet those exact criteria that you mentioned. We are witnessing the creation of another Amtrak. There are quite a few government run car manufacturers in the world, and most if not all produce crap where the company does not turn a profit, but for the sake of "jobs" they keep producing them anyway.
  4. 1989

    1989 Well-Known Member

    Why haven't you bought a GM in the past? The govt. won't make the product better.
  5. Baba gounj

    Baba gounj pensioner

    I'm :censored2: at the part where all those tax dollars loans are forgiven. $15 Billion.
    I want my tax dollars back.
  6. toonertoo

    toonertoo Most Awesome Dog Staff Member

    I will not drive a car that does not protect me, a small car with a deer in my windshield is not what I will drive. I will continue to drive my truck until they pry my hands from the steering wheel. I drive through rural areas, and I would be dead in a small car. Smaller and lighter doesnt make it through snow, ice, or collisions.
  7. tieguy

    tieguy Banned

    any wonder why we want to give the government less to spend. :happy-very:

    If the government is going to buy GM then GM should keep making the Humvee number one. 120,000 dollar vehicles that get six miles to the gallon is exactly what we would expect our government to mass produce.
  8. Baba gounj

    Baba gounj pensioner

    Let say that O builds his eco-cars and they are the great gas savers that he wants.
    Less gas used = less road repair taxes are collected.

    The freight Trucks will still be huge.
    So healthcare costs will rise since more people will be hurt in these tin boxes called cars.
    Snow storms will cripple most urban areas since eco-cars are not user friendly in poor weather.
  9. brett636

    brett636 Well-Known Member

    There is any easy fix for that. They will simply install a GPS tracker in your car which will feed back to the government all the miles you drove and they simply tax you per mile driven. :greedy: Now doesn't that make you feel better that the government will still get its money even though you get less of a car?