New GM CEO: Bankruptcy May Be Best Option for Automaker

[Raptor Witness]

[New GM CEO: Bankruptcy May Be Best Option for Automaker] - CNBC 3-30-09



General Motors's new chief executive told CNBC that filing for Bankruptcy may be the best option for the struggling automaker.

Fritz Henderson
CNBC.com

In a taped interview to be aired tonight on NBC Nightly News, Fritz Henderson said that because of greater demands from the Obama administration to restructure, GM [GM 2.70 -0.92 (-25.41%) ] is considering the bankruptcy option. The auto giant previously had ruled out such a move, saying it would discourage people from buying GM cars.

Henderson's comments came after President Obama bluntly rejected turnaround plans by GM and Chrysler and demanded that both companies make fresh concessions in order to get more federal aid ... cont. at link above.

[EAGLE6]

They dont want to give up all the millions?

[Abyssal_Worm]

Too bad we can't get our hands on a copy of what the rejected proposals from GM and Chrysler entailed. I am rather curious just what the sticking points were.

[Raptor Witness]

Unfortunately, and I suspect due at least in part to the hyper paranoia of Time Warner, you can't even find a copy of Seal's "Crazy" on Youtube anymore. This has only been the case, since my prediction came true, regarding General Motors. However, they are happy to provide a [link to AOL's Media Library,] which is the best copy around, anyway.

This great economic engine, the mighty General Motors has faltered and is now on its back. NOW who is REALLY at the helm? Curiously, an African American President...

WAY better than Nostradamus ...

It would be better to keep Chrysler, and let GM go into oblivion, because any attempt to stand in the way of this prophecy, will fail. The power that is helping me, will not stop until this company completely disappears. It has been marked for desolation. However, repentance is forever an option, and remains on the table, always.

[Posted Oct 2nd, 2007, 8:50 PM]

To the great city, a great plague.
[GVIDEO]8975119070676806833[/GVIDEO]

[Raptor Witness]

Too bad we can't get our hands on a copy of what the rejected proposals from GM and Chrysler entailed. I am rather curious just what the sticking points were.

From what I heard this morning on CNBC, a White House insider said they failed to meet EVERY single criteria that the government put forward.

[Astroboy]

You are Really Whacked. Let all this go down. It's like a company that has gone brain-dead on life support (bail out money is a life support on a technicality.)


To, Mr. ©Rappo Witlessness,

Due to your cryptic bail-out wish, your crazed vision, links and images meant almost nothing on what you write. Your user-name stands out real well.

Love you, Rut Whomp ol'-timer. (nawt)


Astroboy.

You're no better as a Nostradamus-nut.

[Freddy]

GM should have not been bailed out by the US. Bankruptcy was the only real solution then, but it may not be one today.

[lycanox]

Too bad we can't get our hands on a copy of what the rejected proposals from GM and Chrysler entailed. I am rather curious just what the sticking points were.

Most likely a plan to end up with a positive budget in a couple of years.
An economic version of an HACCP analysis for possible future problems.
And demand to stop the bonuses, several CEO's that have to quit. And other of such things one would expect.

Anyway, according to the Obama guru's in Europe. His speech yesterday already insinuated that the government is expecting an chapter eleven bankruptcy of several car companies and an severe shrinking of those that survive.

[lycanox]

Kroymans Went belly op in Holland today because car sales dropped to low for them to survive. The company sold mostly US cars.

I wonder if it is possible that if the actual sellers of the cars go first. The big 3 go anyway as they wont have a place to sell their cars anymore.
Or that the producers of various parts go broke because that big 3 arent buying enough stuff anymore.

The industry could collapse from the bottom to the top. Instead of the other way around.

[Mezurashi]

just remembered something that related to the automakers crashing down thing ...

http://www.autonet.ca/autos/news/200...988521-cp.html

Magna, the company teaming up with Ford, is a Canadian based Supplier to the US Auto Industry. they are not a 'car company' per se, they merely make the parts which go into the cars assembled at the big plants.

thinking about this it occurred to me to wonder - How long will it take for the Parts Suppliers to figure out that if they started tooling up, saved a few million bucks then Bought Out a closed Assembly Facility, gee, they could become the next big auto manufacturer.

the system in place has too many tiers, this is partially why the Apex Beggars (the CEO's of the Big 3) are asking for so much money -- they need to justify their own salaries, the salaries of all their execs and their company Along With the Subsidiary Suppliers who would be 'hit hard' by a trickel down effect.

maybe it's time for the Big 3 to collapse and be replaced by the hungry young rookies ...

there's lots of places where the parts are being made - it would not take a shitload of legislation to remove the Pork Fat (in the forms of GM, Chrysler and Ford) and let the guys who make the parts make the cars as well.

back in the day, Henry Ford's original production facility included smelters so they could make the steel from which they made the cars - they brought in almost Nothing to make their product, they made it all On Site.

wanna cut some fat out of the equation?

[Raptor Witness]

[General Motors Bankruptcy All But Inevitable, Analysts Say] - Sunday, May 10, 2009

DETROIT -- For General Motors Corp., the task at hand is so difficult that experts say a Chapter 11 bankruptcy filing is all but inevitable.

To remake itself outside of court, GM must persuade bondholders to swap $27 billion in debt for 10 percent of its risky stock. On top of that, the automaker must work out deals with its union, announce factory closures, cut or sell brands and force hundreds of dealers out of business -- all in three weeks.

"I just don't see how it's possible, given all of the pieces," said Stephen J. Lubben, a professor at Seton Hall University School of Law who specializes in bankruptcy.

GM, which has received $15.4 billion in federal aid, faces a June 1 government deadline to complete its restructuring plan. If it can't finish in time, the company will follow Detroit competitor Chrysler LLC into bankruptcy protection.

Although company executives said last week they would still prefer to restructure out of court, experts say all GM is doing now is lining up majorities of stakeholders to make its court-supervised reorganization move more quickly.

"If we need to pursue bankruptcy, we will make sure that we do it in an expeditious fashion. The exact strategies I'm not getting into today, but we'll be ready to go if that's required," Chief Executive Fritz Henderson said last week.

The threat of bankruptcy, however, may be just a negotiating ploy to pull reluctant bondholders into the equity swap deal. In Chrysler's case, some secured debtholders resisted taking roughly 30 cents on the dollar for what they were owed, but most gave in after they were identified in court documents.

Henderson, who took over in March when the government ousted Rick Wagoner, said last week there's still time to get everything done by the deadline, although he conceded it will be difficult to meet a government requirement that 90 percent of its thousands of bondholders agree to the stock swap.

The biggest obstacle to GM restructuring out of court appears to be its bondholders, who have been reluctant to sign on to the stock swap when the government and United Auto Workers union would get far more stock in exchange for debts owed by GM.

GM has proposed issuing 62 billion new shares, 100 times more than the 611 million now offered publicly ... cont. at link above.

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How many more billions of taxpayer money must be poured into this failed business model?

Only two entities have been marked for desolation in my writings, specifically. This is one of them. The other one will fall, also, no matter what it takes.

What will the state of confusion tell the people when it can no longer feed them, because they have allowed business to destroy the earth?

The very earth rebels against you, and cannot contain her fury. Her insides pour out onto the land and scorch it. She vomits out her inhabitants.

[olddragon]

How many more billions of taxpayer money must be poured into this failed business model?

Just enough to pay back the UAW,
and give them control over GM, like was done with Chrysler.

[MaximumPain]

Just enough to pay back the UAW,
and give them control over GM, like was done with Chrysler.

Links or it didn't happen. Chrysler was never "given" to the UAW what an idiotic statement, what right wing hack did you hear that from? LINKS!!!

[MaximumPain]

I think hes talking about this?

http://www.npr.org/templates/story/s...ryId=103887256

"The United Auto Workers, who had already made painful concessions, agreed to further cuts in wages and benefits — cuts that will help Chrysler survive, making it possible for so many workers to keep their jobs and about 170,000 retirees and their families to keep their health care," Obama said.

snip~

Under the White House plan to save Chrysler, a major UAW concession has the union accepting company stock instead of cash to fund those retirees' health care benefits. That translates to a 55 percent share of the new Chrysler — once it emerges from bankruptcy.

So is it a bad thing if the workers hold a stake in the company?

[olddragon]

Links or it didn't happen. Chrysler was never "given" to the UAW what an idiotic statement, what right wing hack did you hear that from? LINKS!!!

Chrysler bailout favors the UAW

Secured creditors muscled out by administration

A week ago Friday, the day after Chrysler filed for bankruptcy, I drove past the company's headquarters on I-75 in Auburn Hills. As I glanced at the pentagram logo, I felt myself tearing up a little bit. Anyone who grew up in the Detroit area, as I did, can't help but be sad to see a once great company fail.

But my sadness turned to anger later when I heard what bankruptcy lawyer Tom Lauria said on a WJR talk show that morning. "One of my clients," Lauria told host Frank Beckmann, "was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under threat that the full force of the White House press corps would destroy its reputation if it continued to fight."

Lauria represented one of the bondholder firms, Perella Weinberg, which initially rejected the President Barack Obama deal that would give the bondholders about 33 cents on the dollar for their secured debts while giving the United Auto Workers retirees about 50 cents on the dollar for their unsecured debts.

This, of course, is a violation of one of the basic principles of bankruptcy law, which is that secured creditors -- those who lent money only on the contractual promise that if the debt was unpaid they'd get specific property back -- get paid off in full before unsecured creditors get anything. Perella Weinberg withdrew its objection to the settlement, but other bondholders did not, which triggered the bankruptcy filing.

After that came a denunciation of the objecting bondholders as "speculators" by Obama in his press conference on Chrysler. And then death threats to bondholders from parties unknown.

The White House denied that it strong-armed Perella Weinberg. The firm issued a statement saying it decided to accept the settlement, but it pointedly did not deny that it had been threatened by the White House. Which is to say, the threat worked.

The same goes for big banks that have received billions in government TARP money. Many of them want to give back the money, but the government won't let them. They also voted to accept the Chrysler settlement. Nice little bank ya got there, wouldn't want anything to happen to it.

Left-wing bloggers have been saying the White House's denial of making threats should be taken at face value and that Lauria's statement is not evidence to the contrary. But that's ridiculous. Lauria is a reputable lawyer and a contributor to Democratic candidates. He has no motive to lie. The White House does.

Think carefully about what's happening here. The White House, presumably car czar Steven Rattner and deputy Ron Bloom, sought to transfer the property of one group of people to another group that is politically favored. In the process, it is setting aside basic property rights in favor of rewarding the United Auto Workers for the support the union has given the Democratic Party.

Politicians of both parties joined Obama in denouncing the holdout bondholders, who finally dropped their objections Friday. The politicians pointed to the sad plight of UAW retirees not getting full payment of the health care benefits the union negotiated with Chrysler. But the plight of the beneficiaries of the pension funds represented by the bondholders is sad, too. Ordinarily you would expect these claims to be weighed and determined by the rule of law. But not apparently in this administration.

Obama's attitude toward the rule of law is apparent in the words he used to describe what he is looking for in a nominee to replace Justice David Souter. He wants "someone who understands justice is not just about some abstract legal theory," he said, but someone who has "empathy." In other words, judges should decide cases so the right people win, not according to the rule of law.

The Chrysler negotiations will not be the last occasion for this administration to engage in bailout favoritism and crony capitalism.

There's a May 31 deadline to come up with a settlement for General Motors. And there will be others. In the meantime, who is going to buy bonds from unionized companies if the government is going to take their money away and give it to the union?

We have just seen an episode of "Gangster Government."
It is likely to be part of a continuing series.

http://www.detnews.com/article/20090...favors-the-UAW

[MaximumPain]

But my sadness turned to anger later when I heard what bankruptcy lawyer Tom Lauria said on a WJR talk show that morning. "One of my clients," Lauria told host Frank Beckmann, "was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under threat that the full force of the White House press corps would destroy its reputation if it continued to fight."

Lauria represented one of the bondholder firms, Perella Weinberg, which initially rejected the President Barack Obama deal that would give the bondholders about 33 cents on the dollar for their secured debts while giving the United Auto Workers retirees about 50 cents on the dollar for their unsecured debts.

Looked it up and WJR has Rush Limbullshitter on it so its a right wing propaganda hack site.

"So this person I heard on the Radio said this friend of hers got screwed by Obama".... with no citation as to the real source.... total BULLSHIT OD!


No you made my point you sighted a right wing rag that is full of opinion and unfounded accusations as your source you are the Fucking Idiot. Try finding a source that has... you know... Journalistic integrity.

[olddragon]

Try finding a source that has... you know... Journalistic integrity.

Oh, you mean MSNBC !

The problem here is not the source.
The problem is you are offended by the truth!

The Law is only right when it benefits your side.
Now, breaking the Law in order to benefit the union, that's ok.

Think carefully about what's happening here. The White House, presumably car czar Steven Rattner and deputy Ron Bloom, sought to transfer the property of one group of people to another group that is politically favored. In the process, it is setting aside basic property rights in favor of rewarding the United Auto Workers for the support the union has given the Democratic Party.

The above is a true statement, whether you agree or not.

[MaximumPain]

I sited NPR or has Rush told you they are biased?

I would take MSNBC over a station that has Rush any day of the week.

[Raptor Witness]

It amazes me how the people passively accept the too big to fail argument. Isn't this the same one the state of confusion uses?

The truth is, the state of confusion will fail also, and soon.

You have ignored the earth, and now the earth speaks with the voice of thunder from her mouth, her stomach, her bowels, and her womb.

Let there be no delay.

[olddragon]

The people who loaned Chrysler money, were told to go fish.
The UAW got 55%, true or not?

[MaximumPain]

This is the statement Id like to verify. I looked on the net but just found the article you posted from that right wing rag repeated all over the right wing internet sites. I could not find any reference to that in any "real" news outlets including the wall street journal

Lauria represented one of the bondholder firms, Perella Weinberg, which initially rejected the President Barack Obama deal that would give the bondholders about 33 cents on the dollar for their secured debts while giving the United Auto Workers retirees about 50 cents on the dollar for their unsecured debts.

If someone could find the official word on that it would be appreciated.

Here is a link to the WSJ story unless you consider them a left wing propaganda source OldParrot?

http://online.wsj.com/article/SB124199948894005017.html

No mention of the statement I sited.

So it looks like yet another big right wing lie.... please prove me wrong.

[MaximumPain]

The people who loaned Chrysler money, were told to go fish.
The UAW got 55%, true or not?

Looks like that statement is correct.

Edit ~ Looks like I need to correct myself. Only the second part is true. It looks like the lenders were gonna get screwed either way.
http://online.wsj.com/article/BT-CO-...08-713172.html

According to the Wall Street Journal, the elimination of Stairway and OppenheimerFunds from the group leaves just three firms from the now-defunct group that still oppose the debt deal - Schultze Asset Management, Group G Capital Partners and Foxhill Capital Partners.

Citing unnamed sources, the newspaper said those three remain unwilling to consent to a government plan that would pay Chrysler's secured lenders around 33 cents for each dollar in debt they own.

OppenheimerFunds' announcement is a reversal from last week when it said, in rejecting the Obama proposal, that the government's offer "unfairly asked our fund shareholders to make financial sacrifices greater than those being made by unsecured creditors."

The "Non-TARP lenders" called themselves as such to distinguish themselves from large banks that have received government bailout funds and are also creditors to Chrysler. Those banks agreed to the Chrysler debt restructuring terms. Chrysler was offering $2.25 billion to its secured lenders, on $6.9 billion worth of debt.

So the lenders get more from the government then they would have from Chrysler nice.

There is that 33 cents on the dollar I was asking to have verified as well. Now someone find where the pension fund will get what was it 50 cents on the dollar? Its not the union that gets that its the unions pension fund. Thats also the group that holds the majority share at 55%

[JenaS62]

Oh, you mean MSNBC !

The problem here is not the source.
The problem is you are offended by the truth!

The Law is only right when it benefits your side.
Now, breaking the Law in order to benefit the union, that's ok.


The above is a true statement, whether you agree or not.

The hypocracy is astounding.

[MaximumPain]

No one has proved a law has been broken. The original article is so full of holes that not even Fox is posting it.

[MaximumPain]

Oh, you mean MSNBC !

The problem here is not the source.
The problem is you are offended by the truth!

The Law is only right when it benefits your side.
Now, breaking the Law in order to benefit the union, that's ok.

And here is your post that you imply is from MSNBC

Think carefully about what's happening here. The White House, presumably car czar Steven Rattner and deputy Ron Bloom, sought to transfer the property of one group of people to another group that is politically favored. In the process, it is setting aside basic property rights in favor of rewarding the United Auto Workers for the support the union has given the Democratic Party.

Then you said.

The above is a true statement, whether you agree or not.

I had to look that up to see where it came from. At first I made the mistake of taking you at your word that it came from MSNBC but I tried to do a google search and found only right wing Bloggers again. Hmmmmm we seem to be forming a pattern here OldParrot you seem to like to post right wing hack stuff and pass it off as fact.

Heres one of the sites I found that little blurb on have a look and tell where you think they stand?
http://tammybruce.com/economyeconomics/

heres another one you may need to look a little to find where this one stands.
http://www.amusedcynic.com/wordpress/

So do you ever form your own opinions OldParrot? Or do you just repeat what your told?

Im still waiting for someone to show me where the law was broken.