GM could be forced into bankruptcy.

[Sanouk]

The government-imposed March 31st deadline for restructuring is now just five days away for General Motors, but several sources have indicated that the Michigan-based automaker may not make that deadline. If GM doesn’t meet the government’s requirements, it could be forced into bankruptcy.

[Sanouk]

Is this bad for production of the camaro?

[fdjizm]

Originally Posted by Sanouk

Is this bad for production of the camaro?

is the car company that makes the camaro going bankrupt bad for the camaro?

yes, yes it is.

[Mr. Wyndham]

Nope. Even if they don't make the deadline, it's been established that they don't need to 'worry'. Congress is currently reviewing their stragety submitted earlier this month, and will come up with a 'verdict' within weeks (presumably).

And the 'forced' bit in the news is misrepresented. If Congress does not believe GM can be viable -- which has nothing to do with the deadline -- they will demand repayment of the first round of loans immediatedly instead of two years from now. That's what will force them into bankruptcy...thankfully...our gov't doesn't have the direct power to just point and say "bankrupt".

[dbotsfordtat]

Their not going anywhere.

[fdjizm]

latest news i cant find on the subject:

http://ca.news.yahoo.com/s/afp/09032..._public_aid_gm

DETROIT, Michigan (AFP) - Struggling US automaker General Motors appears unlikely to reach key agreements ahead of a March 31 deadline after its union and bondholders went public with a spat over concessions.

"We don't think GM will be able to meet certain objectives by the deadline," Standard & Poor's Equity Research Services analyst Effraim Levy wrote in a research note Tuesday.

The United Auto Workers union and bondholders are "playing cat and mouse about accepting equity in lieu of cash until they see what the other stakeholders get," Levy said.

GM is under pressure to hammer out a deal with its union and bondholders to reduce operating costs and trim benefits as part of its bid to restructure under the government's multi-billion-dollar bailout package.

Levy said he expects the union to reach an agreement by the deadline but noted "resistance from GM bondholders with nearly 30 billion dollars in debt (principle amount) to swapping that debt for GM shares worth about one-third that amount."

But a union source close to the talks told AFP that negotiations with GM are being held up by a lack of sufficient sacrifices on the part of bondholders.

The source also warned that "time is an issue" and noted it takes about seven to 10 days to get an agreement ratified by members.

The disagreement went public last week when the UAW's legislative director, Alan Reuther, complained in a letter to legislators that bondholders were demanding additional sacrifices from retirees that go "beyond those called for by the terms of the loan agreements."

The ad hoc committee of GM bondholders responded with a statement suggesting the pensioners were at the root of GM's problems.

They stepped up their offensive Sunday with a letter warning the presidential task force on the automotive industry that the government's proposal would not be accepted by a sufficient number of bondholders.

"The result of such a failed exchange would likely be a bankruptcy that would have dire consequences for the company, the tens of thousands of hard-working Americans that GM employs and the economy as a whole," the committee wrote.

GM is currently funding its operations with a 13.4-billion-dollar loan and has asked the US Treasury for another 16.4 billion dollars to weather a collapse in auto sales amid a deepening economic crisis.

GM spokesman Tom Wilkinson declined to comment on the letter or the status of negotiations "except to say that GM remains committed to concluding its balance sheet restructuring on an expedited basis."

While the Treasury has used the specter of a GM bankruptcy to try to pressure bondholders to reach a deal, industry observes said it was unlikely that the government will let the largest US automaker fail.

Steve Rattner, the lead advisor to the auto task force, appeared to back off the March 31 deadline in a series of recent interviews in which he criticized bondholders for being "difficult" and warned that GM and Chrysler could need "considerably more" aid than they have already asked for.

Ford, the third automaker in Detroit's "Big Three," said it will attempt to weather the economic storm without government bailout funds.

On Thursday the Treasury released five billion dollars to prop up auto suppliers in a move that was interpreted as a sign that the administration was not prepared to force GM into bankruptcy.

"It wouldn't make any sense to help the suppliers and not help the automakers," said US congressman Thaddeus McCotter of Michigan.

But government support and a thoughtful restructuring plan may not be enough to save GM if auto sales do not improve soon, warned Rebecca Lindland, an analyst with IHS Global Insight.

"The threat of GM going bankrupt still is very real," she said in a telephone interview.

"We can continue to throw billions of dollars at those companies, but until the American consumer starts spending again it's not going to help."


(yea i didnt read it all either dont blame you lol)

[nester7929]

They are basically in a bankruptcy program already, it's just not called bankruptcy outright due to the public's possible reaction.

[Mr. Wyndham]

"The threat of GM going bankrupt still is very real," she said in a telephone interview.

It's an option...but it's an absolute last-ditch scenario option. The administration's automotive committee recognises a stubborness amongst the bondholders, specifically, that needs to be worked out (the brunt of the Union concessions has been done already)....and they've been on record as stating that they don't believe bankruptcy is the proper way to do this. I'm not too worried. By the end of this year, early next...I personally think we'll be breathing sighs of relief....

Originally Posted by nester7929

They are basically in a bankruptcy program already, it's just not called bankruptcy outright due to the public's possible reaction.

Pretty much. They are working to do everything that would be done in bankruptcy on their own. Bypassing the risk and the perceptions.

[Suskam]

Remember, they are talking about chapter 11 bankruptcy - all they do is get rid of debt and start over. That helps production, the only problem is it hurts the public's perception of the company and they could lose future sales. That's what GM is worried about. Now if it was chapter 13 bankruptcy, they get rid of debt and liquidate everything - that would be BAD.

[Mr. Wyndham]

Originally Posted by Suskam

Remember, they are talking about chapter 11 bankruptcy - all they do is get rid of debt and start over. That helps production, the only problem is it hurts the public's perception of the company and they could lose future sales. That's what GM is worried about. Now if it was chapter 13 bankruptcy, they get rid of debt and liquidate everything - that would be BAD.

Well, that's the major worry. They've outlined a few potential bankruptcy scenarios in their most recent viability plan. All are extremely risky, and a couple result in outright liquidation because there's no way to finance a bankruptcy of this size. hundreds of billions of $$....now compund the potential for an 80% drop in current sales....Chapter 11 isn't as easy as some (not all) people seem to think.

[PQ]

Originally Posted by Suskam

Remember, they are talking about chapter 11 bankruptcy - all they do is get rid of debt and start over. That helps production, the only problem is it hurts the public's perception of the company and they could lose future sales. That's what GM is worried about. Now if it was chapter 13 bankruptcy, they get rid of debt and liquidate everything - that would be BAD.

Problem is that their suppliers are the ones who would be screwed out of the money for the debt they wiped off. And how would the suppliers stay in business?

Which is the difference in Chapter 11 and what they currently are doing.

[Black5thgen]

You guys know GM stock is up over $3.00 now, things are looking a little better. I don't see them going anywhere.

[Z/28orSs]

the mustang fanboys are praying for the camaro not to be made !!! lol

[Xmicro_SS]

Originally Posted by fdjizm

is the car company that makes the camaro going bankrupt bad for the camaro?

yes, yes it is.

Keep dreamin, they are not going anywhere.........And yes, you will be getting spanked at Englishtown soon enough!