GM faces July 10 liquidation if asset sale is denied!
06-30-2009, 06:55 PM
#1
Team Owner
Thread Starter
GM faces July 10 liquidation if asset sale is denied!
Tuesday, June 30, 2009
Henderson: GM faces July 10 liquidation if asset sale is denied
Robert Snell / The Detroit News
New York -- General Motors Corp. will face liquidation July 10 unless a federal bankruptcy judge approves the sale of the automaker's best assets to a new company, President and CEO Fritz Henderson testified today.
The U.S. Treasury Department has told GM it will provide no additional financing if the assets are not sold by July 10, Henderson said during early testimony in U.S. Bankruptcy Court.
If that deadline is missed, "we will liquidate," Henderson testified. Advertisement
After a late court start, Henderson was questioned by attorneys representing GM creditors such as asbestos claimants and their families, and dissident bondholders.
Henderson also said that once a new GM emerges from bankruptcy court, the company will not change its operating name: It will still be called General Motors.
Henderson's testimony could last several days.
Motorists injured in crashes and accidents involving General Motors Corp. vehicles protested outside U.S. Bankruptcy Court this morning ahead of this key hearing in the automaker's bankruptcy case.
The victims and their relatives, who have pending lawsuits against GM, likely will be left with no opportunity to collect damages if a judge, as expected, allows the automaker to sell its best assets to a government-sponsored company. The judge's approval could come this week.
The protestors, along with a parade of union workers chanting "Save our benefits," added drama at the start of a historic day for GM, which is trying to emerge from bankruptcy court as a new, largely debt-free company.
"GM is trying to weasel out of its obligations," said Missouri resident Terry Cole, 53, who sued after a fiery accident involving his Cadillac Escalade two years ago left the wheelchair-bound man with third-degree burns. He sued, but the lawsuit was put on hold after GM filed Chapter 11 bankruptcy June 1.
The start of today's hearing was delayed by more than an hour, as technical issues were worked out to ensure that the proceedings could be broadcast to overflow rooms.
During the delay, Judge Robert Gerber also told participants -- including Henderson -- that the heat and rising temperatures in the courtroom didn't warrant strict adherence to formal protocol. Typically, men are not allowed to remove their suit coats in the courtroom, but that rule was waived today.
"Anything you want to do to be more comfortable," Gerber said.
Henderson then took off his jacket.
GM on Friday agreed to cover future liability claims no matter when the vehicles involved were built, but liability claims pending before GM filed for bankruptcy are still likely to be classified as bad assets and left behind in bankruptcy.
"They want to leave us in the gutter," Cole said. "I can't believe the president would let GM be this immoral."
Minutes later, dozens of retirees from Ohio marched past, carrying yellow signs reading "Save the Middle Class," in a show of protest against GM's attempt to terminate retiree health care benefits. The groups clogged the entrance to the U.S. Bankruptcy Court, where dozens of lawyers, reporters and the curious waited in line to witness GM's court hearing.
Outside the courthouse, it was a sea of sad tales, like Jones, and the surreal.
A busker dressed as a bright yellow ball milled about, advertising tonight's $94 million MegaMillions lottery.
U.S. Homeland Security agents and NYPD officers stood guard outside while subway riders spilled from a station just outside the courthouse entrance.
Nearby, newspaper peddlers rubbed shoulders with a guy hawking bootleg CDs alongside vendors selling farm-fresh green beans and beets, and pound cake.
GM is using Section 363 of the Chapter 11 bankruptcy code that allows for assets to be divided into the good ones that will be assumed by a new automaker and the bad that are deemed of little value and will remain in court to be liquidated.
Come back to www.detnews.com for updates throughout the day.
Henderson: GM faces July 10 liquidation if asset sale is denied
Robert Snell / The Detroit News
New York -- General Motors Corp. will face liquidation July 10 unless a federal bankruptcy judge approves the sale of the automaker's best assets to a new company, President and CEO Fritz Henderson testified today.
The U.S. Treasury Department has told GM it will provide no additional financing if the assets are not sold by July 10, Henderson said during early testimony in U.S. Bankruptcy Court.
If that deadline is missed, "we will liquidate," Henderson testified. Advertisement
After a late court start, Henderson was questioned by attorneys representing GM creditors such as asbestos claimants and their families, and dissident bondholders.
Henderson also said that once a new GM emerges from bankruptcy court, the company will not change its operating name: It will still be called General Motors.
Henderson's testimony could last several days.
Motorists injured in crashes and accidents involving General Motors Corp. vehicles protested outside U.S. Bankruptcy Court this morning ahead of this key hearing in the automaker's bankruptcy case.
The victims and their relatives, who have pending lawsuits against GM, likely will be left with no opportunity to collect damages if a judge, as expected, allows the automaker to sell its best assets to a government-sponsored company. The judge's approval could come this week.
The protestors, along with a parade of union workers chanting "Save our benefits," added drama at the start of a historic day for GM, which is trying to emerge from bankruptcy court as a new, largely debt-free company.
"GM is trying to weasel out of its obligations," said Missouri resident Terry Cole, 53, who sued after a fiery accident involving his Cadillac Escalade two years ago left the wheelchair-bound man with third-degree burns. He sued, but the lawsuit was put on hold after GM filed Chapter 11 bankruptcy June 1.
The start of today's hearing was delayed by more than an hour, as technical issues were worked out to ensure that the proceedings could be broadcast to overflow rooms.
During the delay, Judge Robert Gerber also told participants -- including Henderson -- that the heat and rising temperatures in the courtroom didn't warrant strict adherence to formal protocol. Typically, men are not allowed to remove their suit coats in the courtroom, but that rule was waived today.
"Anything you want to do to be more comfortable," Gerber said.
Henderson then took off his jacket.
GM on Friday agreed to cover future liability claims no matter when the vehicles involved were built, but liability claims pending before GM filed for bankruptcy are still likely to be classified as bad assets and left behind in bankruptcy.
"They want to leave us in the gutter," Cole said. "I can't believe the president would let GM be this immoral."
Minutes later, dozens of retirees from Ohio marched past, carrying yellow signs reading "Save the Middle Class," in a show of protest against GM's attempt to terminate retiree health care benefits. The groups clogged the entrance to the U.S. Bankruptcy Court, where dozens of lawyers, reporters and the curious waited in line to witness GM's court hearing.
Outside the courthouse, it was a sea of sad tales, like Jones, and the surreal.
A busker dressed as a bright yellow ball milled about, advertising tonight's $94 million MegaMillions lottery.
U.S. Homeland Security agents and NYPD officers stood guard outside while subway riders spilled from a station just outside the courthouse entrance.
Nearby, newspaper peddlers rubbed shoulders with a guy hawking bootleg CDs alongside vendors selling farm-fresh green beans and beets, and pound cake.
GM is using Section 363 of the Chapter 11 bankruptcy code that allows for assets to be divided into the good ones that will be assumed by a new automaker and the bad that are deemed of little value and will remain in court to be liquidated.
Come back to www.detnews.com for updates throughout the day.
06-30-2009, 08:50 PM
#2
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This shall be an interesting drama to watch. One that will likely be remembered forever.
06-30-2009, 08:59 PM
#3
Team Owner
Thread Starter
then see it affect all this
http://www.detroitnews.com/apps/pbcs...IAL01/90529004
06-30-2009, 11:30 PM
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The people complaining should be blaming the government not GM for what is happening. If it wasn't for the government forcing this bankruptcy those old claims would be handled by the company. Wagoner didn't want to do this stuff so he was fired.
A couple of years ago GM borrowed billions to pay for the union's health insurance program when they took it over from GM. Now the union has the money and the bond holders are left holding the bag.
Bill
A couple of years ago GM borrowed billions to pay for the union's health insurance program when they took it over from GM. Now the union has the money and the bond holders are left holding the bag.
Bill
They should just give the stuff away.
07-01-2009, 04:05 PM
#8
Safety Car
thanks John,
I sold my GMAC bonds today.
I see GMAC going down the tubes with GM. maybe not at first, but a trickle down effect..........
my next car will NOT be GM.
I sold my GMAC bonds today.
I see GMAC going down the tubes with GM. maybe not at first, but a trickle down effect..........
my next car will NOT be GM.
07-01-2009, 04:45 PM
#9
Drifting
So Larry, do you not bank with any banks that took bailout money?
I don't like any of the bailouts but it happened. So, we have a few different types of people. Those who whine and cry like children and those who just wish to move on and figure out what it takes to make things work.
I pay taxes like anyone else but it's not like your going to change anything now. Fall into whichever category you want, but bitching does little to help the situation. If you're so ill with GM, why own a corvette???
I don't like any of the bailouts but it happened. So, we have a few different types of people. Those who whine and cry like children and those who just wish to move on and figure out what it takes to make things work.
I pay taxes like anyone else but it's not like your going to change anything now. Fall into whichever category you want, but bitching does little to help the situation. If you're so ill with GM, why own a corvette???
07-01-2009, 05:01 PM
#10
Safety Car
the Corvette is up 4 sale....... for other reasons.
You really think obama is going to honor your warrenty if dealers close, as per John's article. some parts are dealer specific.
I was brand loyal until recently. Never owned anything but GM. 10 GM cars is enough in my life time. Now I will expand my horizons.
oh, try to get a new GM alternator for a 2002 ZO6. National backorder. flea bay is the only place that has alternators.
My next SUV will be from a stable company.
You really think obama is going to honor your warrenty if dealers close, as per John's article. some parts are dealer specific.
I was brand loyal until recently. Never owned anything but GM. 10 GM cars is enough in my life time. Now I will expand my horizons.
oh, try to get a new GM alternator for a 2002 ZO6. National backorder. flea bay is the only place that has alternators.
My next SUV will be from a stable company.
07-01-2009, 08:00 PM
#11
Team Owner
Thread Starter
the Corvette is up 4 sale....... for other reasons.
You really think obama is going to honor your warrenty if dealers close, as per John's article. some parts are dealer specific.
I was brand loyal until recently. Never owned anything but GM. 10 GM cars is enough in my life time. Now I will expand my horizons.
oh, try to get a new GM alternator for a 2002 ZO6. National backorder. flea bay is the only place that has alternators.
My next SUV will be from a stable company.
You really think obama is going to honor your warrenty if dealers close, as per John's article. some parts are dealer specific.
I was brand loyal until recently. Never owned anything but GM. 10 GM cars is enough in my life time. Now I will expand my horizons.
oh, try to get a new GM alternator for a 2002 ZO6. National backorder. flea bay is the only place that has alternators.
My next SUV will be from a stable company.
07-01-2009, 08:01 PM
#12
Team Owner
Thread Starter
07-01-2009, 08:03 PM
#13
Team Owner
Thread Starter
07-01-2009, 08:07 PM
#14
Team Owner
Thread Starter
The people complaining should be blaming the government not GM for what is happening. If it wasn't for the government forcing this bankruptcy those old claims would be handled by the company. Wagoner didn't want to do this stuff so he was fired.
A couple of years ago GM borrowed billions to pay for the union's health insurance program when they took it over from GM. Now the union has the money and the bond holders are left holding the bag.
Bill
A couple of years ago GM borrowed billions to pay for the union's health insurance program when they took it over from GM. Now the union has the money and the bond holders are left holding the bag.
Bill
They really had no option in the bankruptcy choice. They had no financing except from the gov. They were doing OK on a come back except they hit the perfect storm, economy, fuel prices, tight credit. That lead to cars sales in this country dropping from 17 million to less than ten, Even the supposed great Toyota lost 4.7 billion last 1/4.
Good news is cars sales may be starting to rebound slightly.
Wednesday, July 1, 2009
Chrysler sales fall 42%; GM drops 33.6%; Ford down 10.9%
Scott Burgess / The Detroit News
Chrysler Group LLC reported vehicle sales fall of 42 percent in June compared to the same month last year.
However, the Auburn Hills-based carmaker attributed the sales drop to a 95 percent reduction in fleet sales and noted a 1 percent market share increase in retail sales compared to last June.
"We are proud our new company starts out its first month with increasing market share and continued strong retail sales," said Peter Fong, Chrysler brand president and lead executive for the company's sales organization.
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Overall, Chrysler sold 68,297 vehicles in June. Out of the 26 vehicles Chrysler's brands offered, none saw an increase in sales in June and for the year, Chrysler sales have fallen 40 percent.
General Motors Corp. offered more positive news, saying more people are coming back into dealerships.
Car and truck sales fell 33.6 percent in June when compared to the same month last year, GM executives said Wednesday afternoon.
Overall, GM sold 176,571 vehicles during the month, which is down year over year, but up 10 percent compared with May sales.
"We're pleased with our retail performance for the month, and it shows consumers' strong attraction to our products ... which all saw retail sales gains compared with May," said Mark LaNeve, vice president, GM North America sales, service and marketing, in a news release.
"Customers are cautiously coming back into the market, although the industry remains very weak," LaNeve added.
News from Ford Motor Co. was slightly more optimistic. The company reported a 10.9 percent sales drop for June in the U.S. compared from a year ago, a far smaller drop than in previous months and a sign that auto sales may be recovering.
Meanwhile, Toyota Motor Corp. reported a sales drop of 34.6 percent in June, compared with the same month last year. The Japanese carmaker said it sold 131,654 vehicles during the month. While the mid-size Toyota Camry remained the company's highest volume vehicle, the company noted that 2010 Prius sales were up 6.1 percent, totaling nearly 13,000 cars, compared to last June.
The Dearborn automaker says it sold 155,195 cars and light trucks last month. Ford's sales were down 24 percent in May and off 32.9 percent this year.
"We're making steady progress and are firmly focused on our plan to build a sustainable and exciting Ford," said Jim Farley, group vice president, marketing and communications. "We remain grounded, however, given challenging industry and economic conditions."
Ford officials said they sold 18,561 Ford Fusions in June, a 26 percent increase over last June.
Ford is the only Detroit-area automaker not relying on government loans to operate. The company has seen its market share grow while rivals Chrysler and General Motors struggle with financial problems.
Honda Motor Co. said its sales fell 32.4 percent in June compared to last year. The company sold 100,420 vehicles this June.
07-01-2009, 09:54 PM
#15
Drifting
the Corvette is up 4 sale....... for other reasons.
You really think obama is going to honor your warrenty if dealers close, as per John's article. some parts are dealer specific.
I was brand loyal until recently. Never owned anything but GM. 10 GM cars is enough in my life time. Now I will expand my horizons.
oh, try to get a new GM alternator for a 2002 ZO6. National backorder. flea bay is the only place that has alternators.
My next SUV will be from a stable company.
You really think obama is going to honor your warrenty if dealers close, as per John's article. some parts are dealer specific.
I was brand loyal until recently. Never owned anything but GM. 10 GM cars is enough in my life time. Now I will expand my horizons.
oh, try to get a new GM alternator for a 2002 ZO6. National backorder. flea bay is the only place that has alternators.
My next SUV will be from a stable company.
Regarding Ford, I'm glad that they have been standing tall. The simple fact of the matter is that they were the first company in trouble. When they hit the panic button, people were still lending money and they were able to capitalize on that. I'm glad they're doing well, but it was little more than luck.
GM and Ford will be fine long run and style and quality has improved dramtically in just a few short years. There are plenty of good things happening, so I'm not worried.
Larry, you've clearly let us know which category you fit into. Good riddence.
07-01-2009, 11:23 PM
#16
Safety Car
I can express my opinion without the personal attacks. you obviously feel the need. best of luck to you.
and ask all the GM stock holder's if there loss is delusional.
and ask all the GM stock holder's if there loss is delusional.
Last edited by larryfs; 07-01-2009 at 11:30 PM.
07-02-2009, 09:08 AM
#17
Drifting
Simply put, all the automakers are in a bind. Some worse than others. Why the govt. put forth these new cafe rules, I'll never know. It'll cash strap a lot of them just based on additional r+d dollars alone.
Being on a Corvette Forum, I would think many would be happy to see the marque live on. Mudslinging gets us nowhere fast. Live for the better GM tomorrow. BTW, GM's SUV's and trucks surpass just about every automaker in quality and reliability. Gas mileage stacks up favorably as well. You'll have a hard time finding a better truck out there. Please don't mention the Tundra as it's had more qualitative issues than all of the other trucks combined.
No personal attacks, just facts. Good day to you.
07-02-2009, 08:43 PM
#18
Team Owner
Thread Starter
Thursday, July 2, 2009
Lawyers wrap up; GM awaits judge's decision on sale of best assets
Robert Snell / The Detroit News
New York-- A judge ended the General Motors Corp. asset sale hearing at about 4 p.m. without signaling when he might decide whether to let the bankrupt automaker emerge as a new, largely debt-free company.
A decision is not expected before Saturday because GM's lawyers need to draft and submit a proposed order approving the sale, which won't be completed until Friday night or Saturday, the federal July 4th holiday.
One point emphasized by GM's lawyers, and debated by attorneys representing some objecting creditors, is that GM needs approval of the asset sale by July 10, or the government will stop funding the automaker's restructuring.
Advertisement
U.S. Bankruptcy Judge Robert Gerber has heard more than 25 hours of testimony spread over three days and pored over approximately 3,000 legal filings and more than 850 objections.
While it is unclear when Gerber will rule, in the Chrysler LLC bankruptcy case, U.S. Bankruptcy Judge Arthur Gonzalez electronically filed his approval of the asset sale around midnight on a Sunday.
Earlier today a lawyer representing GM's small bondholders urged a judge to call the government's bluff that it will stop funding the automaker's restructuring if a sale is not approved by July 10.
The lawyer, Michael Richman, objects to GM using Section 363 of the Chapter 11 bankruptcy code to try to divide its assets and sell the best to form a new GM. The bad assets would remain in court as part of the old GM and be liquidated, leaving many creditors with lawsuits, claims and benefits left behind in bankruptcy court.
"Bankruptcy courts call the bluffs of bullying lenders and purchasers all the time," Richman said. "You go to a Broadway show, you expect an orchestra. For a 363 transaction, you need a deadline. It's part of the scenery, part of the show."
His testimony began the third day of GM's asset sale hearing. Creditors, who have objected to the sale and speedy emergence of GM from bankruptcy court, are delivering closing arguments this morning.
Richman also dismissed arguments from GM President and CEO Fritz Henderson and others that the automaker's best assets are jeopardized by a prolonged stay in bankruptcy court.
"GM's assets are not wasting, not deteriorating, not melting," he said.
He urged Gerber to reject the sale, saying GM could still restructure in an accelerated, traditional Chapter 11 case.
The objectors are endangering thousands of jobs, the welfare of communities that rely on GM and imperiling the automaker's assets by betting the government is lying about its intention to pull its funding, the automaker's lawyer Harvey Miller said.
"This is an awesome gamble," he told the judge in his rebuttal. "It ignores the interests of all the economic stakeholders. They are essentially asking to play Russian roulette."
It is unclear whether Gerber would rule later today or wait until after the July 4 holiday weekend.
Henderson this morning was sitting in the front row of Gerber's courtroom listening to testimony.
GM made more progress resolving certain objections today filed by a creditors committee. The committee has agreed to withdraw its objection after negotiating a deal that will have the new GM assume responsibility for workers compensation claims filed in Michigan. Michigan is believed to have the most workers with claims in the country.
The creditors committee also agreed to withdraw its objection after finalizing the makeup of the old GM's Board of Directors.
If a sale is approved and GM is split into old and new companies, the old GM's Board of Directors will include at least three members, one of whom will be selected by the automaker's consultant, AlixPartners, and one selected by the creditors committee. A third member has been identified, but there were no additional details available today.
Those appointments will be in place until the consummation of a plan of reorganization, said creditors committee lawyer Thomas Moers Mayer.
GM and the U.S. Treasury Department updated estimate on the cost of liquidating and selling the automaker's bad assets and covering environmental issues.
It will cost an estimated $1.175 billion. That's up from an earlier estimate of $950 million, which is needed to close dealerships, cover asbestos and product liability claims, and dispose of shuttered facilities.
The objectors risk seeing lawsuits, claims and benefits left behind in bankruptcy court and want the judge to force GM to give them a better deal. They pose the largest obstacle to a new GM emerging from bankruptcy.
A member of the Obama administration's auto task force, which is overseeing GM's restructuring, testified Wednesday that the U.S. government has no intention of funding GM's restructuring beyond July 10 if the automaker's asset sale is not approved in bankruptcy court.
GM filed for court protection from creditors June 1. There have been more than 850 objections filed to the proposed sale, which would leave many creditors who are owed money or who have pending lawsuits against the automaker with the likelihood of receiving little money, or nothing, if GM is able to dump liabilities and debt in the old GM.
The Treasury Department plans to buy GM's good assets and provide the automaker with an additional $30.1 billion to operate while in bankruptcy.
That will boost the government's total investment in GM to $50.5 billion.
The U.S. government will own 60.8 percent of GM, while the Canadian government will hold 11.7 percent and a United Auto Workers health-care trust will own 17.5 percent. Unsecured creditors will own 10 percent.
Lawyers wrap up; GM awaits judge's decision on sale of best assets
Robert Snell / The Detroit News
New York-- A judge ended the General Motors Corp. asset sale hearing at about 4 p.m. without signaling when he might decide whether to let the bankrupt automaker emerge as a new, largely debt-free company.
A decision is not expected before Saturday because GM's lawyers need to draft and submit a proposed order approving the sale, which won't be completed until Friday night or Saturday, the federal July 4th holiday.
One point emphasized by GM's lawyers, and debated by attorneys representing some objecting creditors, is that GM needs approval of the asset sale by July 10, or the government will stop funding the automaker's restructuring.
Advertisement
U.S. Bankruptcy Judge Robert Gerber has heard more than 25 hours of testimony spread over three days and pored over approximately 3,000 legal filings and more than 850 objections.
While it is unclear when Gerber will rule, in the Chrysler LLC bankruptcy case, U.S. Bankruptcy Judge Arthur Gonzalez electronically filed his approval of the asset sale around midnight on a Sunday.
Earlier today a lawyer representing GM's small bondholders urged a judge to call the government's bluff that it will stop funding the automaker's restructuring if a sale is not approved by July 10.
The lawyer, Michael Richman, objects to GM using Section 363 of the Chapter 11 bankruptcy code to try to divide its assets and sell the best to form a new GM. The bad assets would remain in court as part of the old GM and be liquidated, leaving many creditors with lawsuits, claims and benefits left behind in bankruptcy court.
"Bankruptcy courts call the bluffs of bullying lenders and purchasers all the time," Richman said. "You go to a Broadway show, you expect an orchestra. For a 363 transaction, you need a deadline. It's part of the scenery, part of the show."
His testimony began the third day of GM's asset sale hearing. Creditors, who have objected to the sale and speedy emergence of GM from bankruptcy court, are delivering closing arguments this morning.
Richman also dismissed arguments from GM President and CEO Fritz Henderson and others that the automaker's best assets are jeopardized by a prolonged stay in bankruptcy court.
"GM's assets are not wasting, not deteriorating, not melting," he said.
He urged Gerber to reject the sale, saying GM could still restructure in an accelerated, traditional Chapter 11 case.
The objectors are endangering thousands of jobs, the welfare of communities that rely on GM and imperiling the automaker's assets by betting the government is lying about its intention to pull its funding, the automaker's lawyer Harvey Miller said.
"This is an awesome gamble," he told the judge in his rebuttal. "It ignores the interests of all the economic stakeholders. They are essentially asking to play Russian roulette."
It is unclear whether Gerber would rule later today or wait until after the July 4 holiday weekend.
Henderson this morning was sitting in the front row of Gerber's courtroom listening to testimony.
GM made more progress resolving certain objections today filed by a creditors committee. The committee has agreed to withdraw its objection after negotiating a deal that will have the new GM assume responsibility for workers compensation claims filed in Michigan. Michigan is believed to have the most workers with claims in the country.
The creditors committee also agreed to withdraw its objection after finalizing the makeup of the old GM's Board of Directors.
If a sale is approved and GM is split into old and new companies, the old GM's Board of Directors will include at least three members, one of whom will be selected by the automaker's consultant, AlixPartners, and one selected by the creditors committee. A third member has been identified, but there were no additional details available today.
Those appointments will be in place until the consummation of a plan of reorganization, said creditors committee lawyer Thomas Moers Mayer.
GM and the U.S. Treasury Department updated estimate on the cost of liquidating and selling the automaker's bad assets and covering environmental issues.
It will cost an estimated $1.175 billion. That's up from an earlier estimate of $950 million, which is needed to close dealerships, cover asbestos and product liability claims, and dispose of shuttered facilities.
The objectors risk seeing lawsuits, claims and benefits left behind in bankruptcy court and want the judge to force GM to give them a better deal. They pose the largest obstacle to a new GM emerging from bankruptcy.
A member of the Obama administration's auto task force, which is overseeing GM's restructuring, testified Wednesday that the U.S. government has no intention of funding GM's restructuring beyond July 10 if the automaker's asset sale is not approved in bankruptcy court.
GM filed for court protection from creditors June 1. There have been more than 850 objections filed to the proposed sale, which would leave many creditors who are owed money or who have pending lawsuits against the automaker with the likelihood of receiving little money, or nothing, if GM is able to dump liabilities and debt in the old GM.
The Treasury Department plans to buy GM's good assets and provide the automaker with an additional $30.1 billion to operate while in bankruptcy.
That will boost the government's total investment in GM to $50.5 billion.
The U.S. government will own 60.8 percent of GM, while the Canadian government will hold 11.7 percent and a United Auto Workers health-care trust will own 17.5 percent. Unsecured creditors will own 10 percent.
07-03-2009, 11:45 AM
#20
Team Owner
Thread Starter
no thanks I like keeping people here employed in any purchase I can. I just bought some foam ear plugs for business and I checked them too.
For the first three months of the year, Toyota lost more money than Ford and even GM.
Let's see if they cut back on racing budgets.
Thursday, July 2, 2009
Daniel Howes
Toyota's down, but not out
Could Toyota Motor Corp. be mortal after all?
For the third month in a row, Ford Motor Co. outsold the Japanese juggernaut in the United States, still a crucial and rich market amid this nagging recession. In June alone, the Dearborn automaker reported an 11 percent year-over-year decline in monthly sales to 148,153 cars and trucks, compared to Toyota's 34.6 percent slide to 131,654 vehicles.
And this: General Motors Corp. -- beleaguered and bankrupt, its dealer body jittery and brand image suspect, its only willing lender the Treasury -- so far this year has outsold Toyota 947,518 to 770,449, according to Autodata Corp. Partly evidence of Toyota's strong presence in, and dependence on, the imploding California market?
Yes, but what else?
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For the first three months of the year, Toyota lost more money than Ford and even GM. Since then, the Japanese automaker has replaced its president with a scion of the founding family, 53-year-old Akio Toyoda, who promises a "back to basics" push for the industry's richest automaker even as more troubles emerged in the first weeks of his new assignment.
GM, a longtime partner with Toyota in the New United Motor Manufacturing joint venture, this week confirmed that it would use its Blitzkrieg Chapter 11 bankruptcy to declare the decades-old California tie-up with Toyota a bad asset and leave it to be unwound in bankruptcy court.
The move presents Toyota with a dilemma: Shutter the plant in the Bay Area city of Fremont, which would violate its no-plant-closing pledge and inflame relations with powerful Washington Democrats, including Speaker Nancy Pelosi, D-San Francisco. Or continue to lose money running an underutilized assembly plant, the only auto assembly plant still operating in anti-industrial California.
Should be a comparatively easy call, considering Toyota's assembly options elsewhere in the United States and Canada. Those would include, by the way, the gleaming new plant it opened in San Antonio at just the wrong time to build the full-size pickups ("that nobody wants," a snarky comment of dubious validity). And there's the half-finished plant in Mississippi that was supposed to be the first U.S. source for its game-changing Prius hybrid.
News flash: Detroit's automakers are not the only "arrogant" players in the global auto game to place big product-and-plant bets at the wrong time, even if they clearly have a lot less financial capacity to absorb their bad calls. Nor are GM, Ford and Chrysler Group LLC the only ones to get themselves cross-ways, in theory, with politicians busy reshaping the American economy to their image.
This is ObamaNation in the Great Recession, where many routine business decisions have acute political implications. The stunning collapse of U.S. auto sales and the slow climb back is remaking the auto industry, even pressuring the most rich and powerful to change.
In Toyota's case, that means battling the "big company" disease foreseen by retired CEO Fujio Cho and contending with leaner American rivals, two of them backed by the federal government.
Rich Toyota (very rich, with roughly $33 billion in cash on hand) will be forced to consider the political ramifications -- particularly among the powerful California delegation -- of its decisions and Washington's tactics to "save" Detroit and the United Auto Workers.
None of which is to suggest that Toyota is going anywhere because it's not. It's rich. It's smart. It's proven itself to be far more adept than its Detroit rivals at delivering solid products with mass appeal, working the corridors of power in today's Washington and making strategic manufacturing investments in non-auto states to turn them into Toyota states.
And the fact that it's the acknowledged leader in the politically required greening of the U.S. auto industry probably trumps the fact that it runs no union shops in its assembly and parts plants in the United States -- with the exception of the NUMMI plant in Fremont.
When this recession ends, if slowly, a likely three-way battle will be under way for automotive leadership in the rich U.S. market. Not yet sure if GM will emerge from bankruptcy as planned and be one of the three. But Ford will be there, and so will Toyota -- guaranteed.
dchowes@detnews.com (313) 222-2106 Daniel Howes' column runs Tuesdays, Thursdays and Fridays.
For the first three months of the year, Toyota lost more money than Ford and even GM.
Let's see if they cut back on racing budgets.Thursday, July 2, 2009
Daniel Howes
Toyota's down, but not out
Could Toyota Motor Corp. be mortal after all?
For the third month in a row, Ford Motor Co. outsold the Japanese juggernaut in the United States, still a crucial and rich market amid this nagging recession. In June alone, the Dearborn automaker reported an 11 percent year-over-year decline in monthly sales to 148,153 cars and trucks, compared to Toyota's 34.6 percent slide to 131,654 vehicles.
And this: General Motors Corp. -- beleaguered and bankrupt, its dealer body jittery and brand image suspect, its only willing lender the Treasury -- so far this year has outsold Toyota 947,518 to 770,449, according to Autodata Corp. Partly evidence of Toyota's strong presence in, and dependence on, the imploding California market?
Yes, but what else?
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For the first three months of the year, Toyota lost more money than Ford and even GM. Since then, the Japanese automaker has replaced its president with a scion of the founding family, 53-year-old Akio Toyoda, who promises a "back to basics" push for the industry's richest automaker even as more troubles emerged in the first weeks of his new assignment.
GM, a longtime partner with Toyota in the New United Motor Manufacturing joint venture, this week confirmed that it would use its Blitzkrieg Chapter 11 bankruptcy to declare the decades-old California tie-up with Toyota a bad asset and leave it to be unwound in bankruptcy court.
The move presents Toyota with a dilemma: Shutter the plant in the Bay Area city of Fremont, which would violate its no-plant-closing pledge and inflame relations with powerful Washington Democrats, including Speaker Nancy Pelosi, D-San Francisco. Or continue to lose money running an underutilized assembly plant, the only auto assembly plant still operating in anti-industrial California.
Should be a comparatively easy call, considering Toyota's assembly options elsewhere in the United States and Canada. Those would include, by the way, the gleaming new plant it opened in San Antonio at just the wrong time to build the full-size pickups ("that nobody wants," a snarky comment of dubious validity). And there's the half-finished plant in Mississippi that was supposed to be the first U.S. source for its game-changing Prius hybrid.
News flash: Detroit's automakers are not the only "arrogant" players in the global auto game to place big product-and-plant bets at the wrong time, even if they clearly have a lot less financial capacity to absorb their bad calls. Nor are GM, Ford and Chrysler Group LLC the only ones to get themselves cross-ways, in theory, with politicians busy reshaping the American economy to their image.
This is ObamaNation in the Great Recession, where many routine business decisions have acute political implications. The stunning collapse of U.S. auto sales and the slow climb back is remaking the auto industry, even pressuring the most rich and powerful to change.
In Toyota's case, that means battling the "big company" disease foreseen by retired CEO Fujio Cho and contending with leaner American rivals, two of them backed by the federal government.
Rich Toyota (very rich, with roughly $33 billion in cash on hand) will be forced to consider the political ramifications -- particularly among the powerful California delegation -- of its decisions and Washington's tactics to "save" Detroit and the United Auto Workers.
None of which is to suggest that Toyota is going anywhere because it's not. It's rich. It's smart. It's proven itself to be far more adept than its Detroit rivals at delivering solid products with mass appeal, working the corridors of power in today's Washington and making strategic manufacturing investments in non-auto states to turn them into Toyota states.
And the fact that it's the acknowledged leader in the politically required greening of the U.S. auto industry probably trumps the fact that it runs no union shops in its assembly and parts plants in the United States -- with the exception of the NUMMI plant in Fremont.
When this recession ends, if slowly, a likely three-way battle will be under way for automotive leadership in the rich U.S. market. Not yet sure if GM will emerge from bankruptcy as planned and be one of the three. But Ford will be there, and so will Toyota -- guaranteed.
dchowes@detnews.com (313) 222-2106 Daniel Howes' column runs Tuesdays, Thursdays and Fridays.
Last edited by John Shiels; 07-03-2009 at 11:48 AM.
