**GM preparing for bankruptcy**

[barbarian]

Latest News:

http://www.reuters.com/article/busin...5363ZM20090407


NEW YORK/DETROIT (Reuters) - General Motors Corp is in "intense" and "earnest" preparations for a possible bankruptcy filing, a source familiar with the company's plans told Reuters on Tuesday.

A plan to split the corporation into a "new" company made up of the most successful units, and an "old" one of its less-profitable units, is gaining momentum and is seen as the most sensible configuration, said another source familiar with the talks.

The sources requested anonymity because they were not authorized to speak on the record.

Shares of GM fell almost 14 percent on the New York Stock Exchange and its bond prices declined.

If the plan goes through, the new GM would be expected to assume some previous creditor debt from bankruptcy proceedings, such as secured debt, said the second source, adding that GM bondholders were likely to lose substantial value in bankruptcy.

Certain GM dealer and litigation claims would also be hurt if the new company structure is used as part of a company bankruptcy, said the second source.

GM declined to comment.

GM Chief Executive Fritz Henderson has said the company prefers to restructure out of court but that it could go to court if needed.

GM, operating on $13.4 billion of government loans since the start of the year, has until June 1 to complete a reorganization plan. The government has warned that the alternative would be bankruptcy.

The company is under pressure to cut unsecured debt by two-thirds, turn half its remaining payments into a union healthcare trust in the form of equity rather than cash, and reduce hourly wages and benefits to match those paid by foreign automakers.

Chrysler, owned by Cerberus Capital Management LP, is also facing possible bankruptcy. The automaker has until April 30 to complete an alliance with Italian automaker Fiat.

Moody's Investor Service said in a note dated Monday that it maintains its view for a 70 percent risk of bankruptcy for Detroit's three automakers given the difficulty of restructuring out of court.

BANKRUPTCY NOT AN EASY ROUTE

Canadian Industry Minister Tony Clement said on Tuesday that the Canadian government must be prepared for GM or Chrysler to enter bankruptcy protection.

Some bankruptcy experts say a Chapter 11 bankruptcy filing could help GM reorganize by allowing it to restructure its debt and force changes to contracts with dealers, unions, and suppliers. But the process could be disruptive, or derailed, said Patrick Carothers, a partner at Thorp, Reed & Armstrong LLP

For example, if auto-parts makers lose the ability to collect money owed, the industry as a whole could suffer. In addition, GM could lose control over its restructuring as the formation of a new company would be in the hands of a bankruptcy judge, not corporate executives or their advisers.

"The dangers of a bankruptcy are significant," said Carothers, who has parts suppliers and car dealers as clients. "I don't believe a bankruptcy is inevitable. There's still a lot of political pressure to save it."

GM shares were down 13.66 percent, or 31 cents, to $1.95 in midafternoon trading on the New York Stock Exchange, after reaching a session low of $1.95 earlier in the day.

GM's bonds were steady to slightly lower in late morning trading. GM's benchmark 2033 bond slipped, with the 8.375 percent bond trading at 12 cents on dollar, compared with 12.75 cents before the news came out, according to MarketAxess data. The bonds closed at about 11 cents on Monday, according to MarketAxess data.

Last month, GM offered bondholders 8 cents on the dollar in cash, 16 cents on the dollar in new unsecured debt, and a 90 percent stake in the automaker, one person with knowledge of the term sheet told Reuters.

(Reporting by Chelsea Emery in New York and Soyoung Kim in Detroit; Additional reporting by Dena Aubin, Walden Siew in New York; Editing by Derek Caney, Matthew Lewis, Toni Reinhold)

[Wally]

http://uk.reuters.com/article/market...48779820090407

The case, which most professionals expect could run for two years or even longer, would be a windfall to the court where it is filed due to fees, professional travel and other expenses. The case is likely to generate a record-breaking $1.9 billion in legal fees, said Lynn LoPucki, a law professor at University of California at Los Angeles

[3vXT]

Whats the bet that link is posted on a GM forum somewhere with the title 'Media bashing GM again!!!'

[Nikked]

Originally Posted by ken2903

Whats the bet that link is posted on a GM forum somewhere with the title 'Media bashing GM again!!!'

too true!

[Fordman1]

This is going to get VERY serious for Holden......

[Ralliart]

Originally Posted by Barraxr8

This is going to get VERY serious for Holden......

+1
i was about to say that

[LowEL2XR8]

What does it mean for for holdung?

[TUF_302]

Things are very bad indeed for GM, and this is going to affect holden sooner rather than later!

[FPV8U]

Originally Posted by LowEL2XR8

What does it mean for for holdung?

Just means instead of 6.0L Pushrods they would have 1.4L's from Kia New VE SSV Series II 140kw of Korean Muscle :

In all seriousness i think their future will depend on who decides to buy them..

[DJM83]

Originally Posted by FPV8U

Just means instead of 6.0L Pushrods they would have 1.4L's from Kia New VE SSV Series II 140kw of Korean Muscle :

In all seriousness i think their future will depend on who decides to buy them..

Could be a bad thing for Ford if Holden does go under or something happens. Any competition is good competition.

[antoni]

Without Holden to compete with Ford in this country, will Ford even bother to make turbo or V8 powered vehicles?

Their only competition will be Toyota then, which means Ford will be concentrating on making hybrids and other fuel efficient cars.

[asusdragon]

problem is if holden arent there then. the the suppliers that both manufactors use could go under, therefore putting ford in a postion where it cant buy certian parts very bad

ford need holden and vica vesa

[Gobes32]

Originally Posted by asusdragon

ford need holden and vice versa

I wish someone could prove that theory, Ford and Holden do not share as many suppliers as you think, in fact, if Holden were to be closed down I really don't think it would affect Ford as much as we think....HOWEVER, the job losses would be terrible and it is something that really needs to be avoided if possible.

[Windsor220]

Originally Posted by Gobes32

I wish someone could prove that theory, Ford and Holden do not share as many suppliers as you think, in fact, if Holden were to be closed down I really don't think it would affect Ford as much as we think....HOWEVER, the job losses would be terrible and it is something that really needs to be avoided if possible.

Yeah wasnt there a big fuss when the VE was released because they stopped using a lot of Aussie suppliers?

[Gobes32]

Does anyone know what suppliers Holden and Ford share?

Toyota and Ford share a few Victorian suppliers, but not too sure how many Holden share with Ford......

[rocket67]

A member on Aussie stock Forum has just posted that he/she just heard on ABC News that General Motors will file for bankruptcy this morning( USA time.)

Anybody else heard this?

rocket.

[Nikked]

Originally Posted by Gobes32

Does anyone know what suppliers Holden and Ford share?

Toyota and Ford share a few Victorian suppliers, but not too sure how many Holden share with Ford......

I know toyota share plastics, we had problems gettin a BA falcon side skirt, each one we got had a toyota camry skirt in a ford box

I think Ford going down if holden goes down is not as likly as it seems. If the worse does come and holden pack it up, the Government would have to answer to lots of angry workers/voters. The government would then do all it can to keep ford alive.

[Gobes32]

Originally Posted by Nikked

I know toyota share plastics, we had problems gettin a BA falcon side skirt, each one we got had a toyota camry skirt in a ford box

I think Ford going down if holden goes down is not as likly as it seems. If the worse does come and holden pack it up, the Government would have to answer to lots of angry workers/voters. The government would then do all it can to keep ford alive.

Very well pointed out, if Holden was to shut down, it is basically a death sentence for the Rudd government.

[MAV50L]

Originally Posted by rocket67

A member on Aussie stock Forum has just posted that he/she just heard on ABC News that General Motors will file for bankruptcy this morning( USA time.)

Anybody else heard this?

rocket.

Have not heard it yet , but I reckon if it does happen thats all we will hear about tomorrow.
Interesting , yet scary times ahead.

[4Vman]

Originally Posted by Gobes32

Very well pointed out, if Holden was to shut down, it is basically a death sentence for the Rudd government.

Not a chance.. as long as they keep giving handouts they'll never get out...

[DJL351]

Originally Posted by Gobes32

Very well pointed out, if Holden was to shut down, it is basically a death sentence for the Rudd government.

How so? Did the Australian Government bankrupt GM?

IF H*lden was to vanish, it will be because of GM and their policies.

Having said that, 'The Mob' will all winge and complain, that nothing was done etc.....

[gtfpv]

wasn't there rumours about 12 months ago of a possible merger between GM and FORD.

[snappy]

Originally Posted by gtfpv

wasn't there rumours about 12 months ago of a possible merger between GM and FORD.

Pretty sure ford told them to bugger off.

[mad cow]

the australian government has bailed holden out 3 times already, so whats one more time for luck..... i dont see holden being in bad shape due to gm going down. it will be bought by another firm and would continue on. most of the line up is korean now anyway and the commodore has the least local content of any of the large cars. also the holden logo and the tata logo look like they would swap over easily......

and yes ford told gm no to a merger. they said that gm had too much debt to consider it and pointed out that ford had already done extensive restructuring to put themselves in a situation where they didnt need to even consider such a plan.

[Gobes32]

Originally Posted by DJL351

How so? Did the Australian Government bankrupt GM?

IF H*lden was to vanish, it will be because of GM and their policies.

Having said that, 'The Mob' will all winge and complain, that nothing was done etc.....

Exactly, un-educated fools would argue that the government did nothing to help keep jobs in Australia, etc. When really, the government have absolutely no input into how GM / Holden is ran.

[snappy]

If the goverment did hand over more cash it would just be a pass the parcel all the way from our pocket to gm or who ever decides to buy holden .

But if holden is profitable for gm they might be able to keep it when they restructure after filing for chapter 11

[Paxton]

Originally Posted by snappy84

If the goverment did hand over more cash it would just be a pass the parcel all the way from our pocket to gm or who ever decides to buy holden .

But if holden is profitable for gm the might be able to keep the when they restructure after filing for chapter 11

Holden hasn't been profitable since 2004 AFAIK. Ford haven't been profitable for about the same period of time, so it isn't only Holden.

[joolz]

Originally Posted by Gobes32

I wish someone could prove that theory, Ford and Holden do not share as many suppliers as you think, in fact, if Holden were to be closed down I really don't think it would affect Ford as much as we think....HOWEVER, the job losses would be terrible and it is something that really needs to be avoided if possible.

True but there are some suppliers that do manufacture for both and will effect Ford if they close due to Holden closing up and effecting volumes.
But seeing Holden imports alot more components now than before the VE the effect on local suppliers will be alot less

It truly is tough times for the Automotive industry not only in the States but also here. Just today we lost around 10 people through redunancies at my plant and there are more to go by the end of April. This is the same for our other plants in Victoria and NSW. We supply components for Ford and Toyota.

[Phyber]

I'm so glad Ford seem to be helping themselves much better than it's rivals. The idea of Holden going under or being badly shaken up seems good to me on a rivalry level, but of course the cars we drive are this good due to that direct competition, so it would be terrible as has been said.

But indeed, I sigh a sigh of relief that Ford seem 'okay'.

[mik]

could the Holden part of the company be sold off down under? Toyota would have enough dollars to buy it i think, toyota has had dealings with Holden before.