GM considering Chapter 11 filing, new company: report Buzz Up Send Email IM Share Delicious Digg Facebook Fark Newsvine Reddit StumbleUpon Technorati Yahoo! Bookmarks Print Sat Feb 14, 12:28 pm ET Reuters – A General Motors vehicle is seen at a car dealership in Toronto December 12, 2008. (Mike Cassese/Reuters) Play Video Auto Industry Video:Hot Cars Draw Crowds At Pittsburgh Auto Show KDKA Pittsburgh Play Video Auto Industry Video:Auto Industry Gets Creative To Lure Buyers WJZ 13 Baltimore Play Video Auto Industry Video:China Watch: Soaring Sohu TheStreet.com 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.
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These guys are jokes. $16 billion more? No way. Bankrupt them, restructure, come out clean. UAW needs to just go away. I can't stand unions. How embarrassing for them. Nice job Rick Wagner.
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$1.3 billion market cap. Temporarily nationalize it, strip it of these bull shi_ unions, sell off Saturn and the ridiculous Hummer, and come out clean. No share holders, UAW, or Bond holders. Bankrupt them!!!!
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They haven't made a profit since the 70's. We have kept restrictions gas prices, thus keeping it low for fuel. This was good for our non-efficient vehicles, but now that oil went to $147 a barrel, that scarred consumers into purchasing smaller more fuel efficient vehicles. We should have taken a page from Brazil the last time there was an embargo of sorts. I just can't stand this guy Wagner. I can't even believe he's still running the company. They need to fire the whole board and bring in a turnaround specialist after bankruptcy.
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