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GM considering bankruptcy, new company
Topic Started: Feb 14 2009, 03:35 PM (666 Views)
Ram Jam
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From Yahoo:

CHICAGO (Reuters) – General Motors Corp, nearing a Tuesday deadline to present a viability plan to the U.S. government, is considering as one option a Chapter 11 bankruptcy filing that would create a new company, the Wall Street Journal said in its Saturday edition.

"One plan includes a Chapter 11 filing that would assemble all of GM's viable assets, including some U.S. brands and international operations, into a new company," the newspaper said. "The undesirable assets would be liquidated or sold under protection of a bankruptcy court. Contracts with bondholders, unions, dealers and suppliers would also be reworked."

Citing "people familiar with the matter," the story said that GM could also ask for additional government funds to stave off a bankruptcy filing.

GM declined to comment, the story said.

General Motors and Chrysler LLC face a Tuesday deadline to file restructuring plans to the government in exchange for receiving $17.4 billion in federal loans.

Automakers have struggled as U.S. auto sales have tumbled amid a recessionary economy. U.S. auto sales in January tumbled to a 27-year low.

GM has been in talks with bondholders and the United Auto Workers union to get an agreement on a restructuring that would wipe out about $28 billion in debt for the auto maker, sources have told Reuters. However, it appears unlikely a deal could be reached by the Tuesday deadline, they said.

GM has already announced plans to cut 10,000 salaried workers worldwide, or 14 percent of its staff, impose pay cuts for most remaining white-collar U.S. workers and has offered buyouts to its 62,000 U.S. workers represented by the UAW.

In addition, it is trying to sell its Hummer SUV and Swedish Saab brands and is reviewing the status of its Saturn brand.

(Editing by Eric Walsh)
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JetBlack3
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So basically lets remask our shit under a fancy new title....awesome
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ElDonkey
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fuck the big 3 and their big bailout.

This just proves all these bailouts are a load of shit
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JetBlack3
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Yea they aint helpin anything. Yay Alfa Romeo comin to the US soon :woot:
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Ram Jam
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You know for them to take that 13 billion (or whatever it was) and then file bankruptcy to not pay it back is pretty messed up. I bet Rick Wagoner's house got decorated with it.
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Ram Jam
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More from Yahoo:

DETROIT – Negotiators for the United Auto Workers walked out of concession talks with General Motors Corp. Friday night in a dispute over payments to a union-administered retiree health care fund, a person briefed on the talks said Saturday.

The breakdown comes at a critical time as GM races against a Tuesday deadline to submit a plan to the government showing how it can become viable.

The Detroit-based auto giant is living on $9.4 billion in government loans, and the Treasury Department must approve its viability plan for GM to get $4 billion more. Chrysler LLC, which has received $4 billion in government loans and wants an additional $3 billion, faces the same deadline.

At GM, UAW negotiators walked away because the company made demands that were "detrimental to retirees and the ability to provide health care," according to the person, who asked not to be identified because the talks are private.

GM spokesman Tony Sapienza would say only that GM is working on its viability plan.

"We're committing to meeting the goal of providing a plan as required by terms of the restructuring plan," he said Saturday.

A spokesman for the UAW did not immediately respond to a request for comment.

Under terms of the loans to GM and Chrysler laid down by the Bush Administration, both companies must gain concessions from unions and debtholders. Among targets for concessions is GM's cash contribution to a trust fund that will take over the obligation for retiree health care starting next year.

GM says it owes $20.4 billion to the fund, and the loan terms set a target of giving the union half of the value in cash and half in GM stock. The trust fund would take over health care payments for GM's roughly 500,000 blue-collar retirees and spouses starting Jan. 1, 2010.

The trust, called a voluntary employees beneficiary association, would let GM move about $46.7 billion in retiree health care costs off its books, making it more cost-competitive with Asian automakers. It is the key feature of a new four-year contract signed in 2007 with the UAW.

The union has said that if fully funded, the trust would provide health care to retirees for 80 years.

GM also must reduce its public unsecured debt by two-thirds and has been negotiating with bondholders to swap the debt for equity. The company said in a Jan. 15 presentation to analysts that it has $41.6 billion in debt.

GM, Chrysler and their unions must also agree to reduce the companies' labor costs so they are competitive with Japanese automakers that have plants in the U.S.

GM has said its total per-employee labor costs, including wages, pensions, benefits and retiree costs, are now $69 per hour. Toyota Motor Corp., GM's biggest competitor, says its hourly costs are $53. GM's costs will drop to $62 once the retiree health care trust takes effect, the company has said.
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JetBlack3
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2_Brew_Crew
Feb 14 2009, 05:59 PM
You know for them to take that 13 billion (or whatever it was) and then file bankruptcy to not pay it back is pretty messed up. I bet Rick Wagoner's house got decorated with it.
More then likely.

You know what Rick Wagoner says, "Its just like wallpaper"
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Orangesmoke20
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instead of sending money directly to th auto makers a government rebate for people buying new cars would be the way to go.. i think it would help jump start the economy in more then just the auto industry
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Ram Jam
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The government needs to dig into why a Dakota costs as much as a Ram with no benefit other than manuverability.
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JetBlack3
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I have said that from the beginning. Should of been a sign up for people to get a check to buy a new GM or Chrysler product. That would of kicked so much ass. They would of got their money, put people to work, gave people cars, more insurance money, tags woulda had to been bought, plus aftermarket items woulda gotten a boost...i mean its fuckin brilliant...ohhh thats why it didnt happen
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Orangesmoke20
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bingo lol
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Ram Jam
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But then the rich guys wouldn't of gotten so much money. They would of only gotten a little bit, the rest would of actually gone to work. See that is the flaw in your plan.
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JetBlack3
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Yea helpin the middle class and poor...wtf are we thinkin
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KK3869
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Hey, heres an idea, how about making a car thats worth my time :lol:
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JetBlack3
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Thats just stupid lol
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MartinMan
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gm should just sell all the assets they have left to the Japanese so we can have the best car everr made come to life

Posted Image

:drool: :shifty:

Edited by MartinMan, Feb 15 2009, 03:10 PM.
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KK3869
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lol, thats just wrong
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JetBlack3
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Thats sacreligious
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Ram Jam
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DETROIT – When American consumers start buying new cars again, they'll likely find fewer combinations of moon roofs, seat upholstery and stereo systems to choose from. As with better fuel economy, it's a case of U.S. automakers taking a cue from their Japanese counterparts.

A buyer of the 2008 Ford Fusion could choose from the various models and extra features available and come up with 2,600 combinations. For the 2010 version due in showrooms this summer, the number drops to 104.

The Toyota Camry and the Honda Accord were the two best-selling cars in the U.S. in 2008. The people who purchased more than 800,000 of them combined last year picked from a total of just 15 versions. For the Accord, the models or trim levels were limited to just four, each level complete with a variety of extra bells and whistles.

The American car makers need to cut costs. Sales are at a 26-year low. General Motors Corp. and Chrysler are surviving on government loans. A reduction in options not only streamlines the manufacturing process, but also cuts engineering, design and marketing costs, said Laurie Harbour-Felax, an industry consultant. Those costs often total more than the manufacturing costs.

"The industry has way too many brands, too many models, too much choice, to be efficient," said Mike Maroone, president and chief operating officer of AutoNation Inc., the largest automobile retailer in the country. The Japanese companies' approach "may not serve every niche but it's a much more efficient business model."

Domestic automakers and dealers have tried to guess which combinations will resonate with consumers, and build more cars of that configuration. Still, if only 1,000 people buy a particular combination the company will keep offering it, even if it's not cost effective, said Harbour-Felax.

"It's driven hugely by the sales and marketing guys, that's 1,000 people they don't want to lose," she said. "The Japanese will not create complexity at really low volume to keep one customer."

Harbour-Felax said Honda Motor Co. is a leader when it comes to simplicity and eliminating customer confusion. The car buyer spends less time in the dealership.

And customers save money because adding options individually often costs more than upgrading to the next trim-level. For example, a Chevrolet Impala LS sells for about $23,000 while the Impala LT costs $800 more. It would cost $2,000 to add the LT's additional options to the LS model, said Michael Carr, sales manager for Bobby Layman Chevrolet in Columbus, Ohio.

Honda's CRV crossover, for example, comes in three versions or trim lines: The LX or base level, the EX, a midlevel option, or the EX-L, a high-end option that comes with leather seats. Consumers can choose to install a navigation system in the EX-L model only.

"The reason we do that is to keep manufacturing simple, but we work within that theory to make sure customers still have that choice," said American Honda spokesman Chuck Schifsky.

The most complex choice Michelene St. Amand had to make when purchasing a new 2006 Honda Accord — her third — was whether or not to get a spoiler on the vehicle.

"I didn't have to dicker about getting a model with a moon roof, but without seat heaters. It made the whole process relatively pain free. That would seem like an example Ford and the others should emulate," said the Watertown, Mass. resident.

The Detroit Three, meanwhile, continue to streamline features to keep up with Honda and Toyota Motor Corp., Harbour-Felax said.

General Motors Corp. streamlined options for many of its models over the last two years, offering three to four main trim levels for its popular Chevrolet Malibus and Cobalts.

It was common for Chrysler LLC to offer 10,000. different vehicle combinations, accounting for different variations of transmissions, safety, and interior features.

Now they're trying to get the number of combinations down to 1,000 for some of their major models, such as the Sebring.

"People don't have the money to spec out a $50,000 car anyway," Harbour-Felax said.
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Ram Jam
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Here's an idea Chrysler drop the 4.7 motor. It offers no benefit over the 5.7 except price and if you drop production of one you can up it on the other to recover cost. That will cut a large section of options. A 5.7 in a Dakota would be awesome, I also imagine it would cost twice as much as the Ram. :uhoh:
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JetBlack3
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Also read where Chrysler says this years marker will be around 10 million cars, so far the lowest prediction. Also told their dealers that they may look back at Jan 09 as the "good ol days" in a few years
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Ram Jam
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Awesome.
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JetBlack3
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Yea gotta love that sunny outlook they got over there
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Ram Jam
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Pretty soon Chrysler will be 10 guys working out of a warehouse building 4 SUVs a day. :lol:
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McLarenCrazy
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JetBlack3
Feb 15 2009, 11:30 AM
I have said that from the beginning. Should of been a sign up for people to get a check to buy a new GM or Chrysler product. That would of kicked so much ass. They would of got their money, put people to work, gave people cars, more insurance money, tags woulda had to been bought, plus aftermarket items woulda gotten a boost...i mean its fuckin brilliant...ohhh thats why it didnt happen
One question with this if they gave a car buy up to 10,000 dollars, doubt it would be that much, what if some people still can't afford the car along with their house or mortagage, taxes, gas, etc?

I mean sure if everyone where just waiting around to get cheap cars that's one thing, but some people can't afford a new car even if there were more discounts. Now, some would but would it be enough to save GM, Chrysler, and Ford?
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