Email List Sign Up

GM studies bankruptcy options

Friday, May 15, 2009

GM studies bankruptcy options

Carmaker may use good/bad assets approach if labor and debt deals aren’t made by June 1

Robert Snell andDavid Shepardson / The Detroit News

If General Motors Corp. cannot secure labor and debt concessions before a June 1 deadline, the automaker thinks the most likely bankruptcy option involves splitting off its good assets and leaving the bad assets in federal court.

The disclosure was included in a revised offer to bondholders filed late Thursday with the U.S. Securities and Exchange Commission. GM is trying to get unsecured bondholders to agree to swap $27 billion in debt for a 10 percent equity stake in the company, though bondholders countered and are seeking a 58 percent stake.

Until Thursday, GM had not identified which bankruptcy option was the likely option though the automaker said it could pursue other paths, including a pre-packaged bankruptcy that would allow a so-called "cram-down" to force holdout creditors to capitulate.

The updated exchange offer comes as Gov. Jennifer Granholm prepares to meet today with Gary Cowger, GM’s vice president of global manufacturing and labor relations, over concerns about GM’s decision to import vehicles from China starting in 2011.

"They can build those vehicles in the United States. They can build small vehicles (here)," said U.S. Rep. Gary Peters, D-Bloomfield Township, noting Ford Motor Co. and the Chrysler LLC-Fiat SpA alliance plan to build small cars in the United States.

"The priority has to be to keep domestic American jobs. The reason the taxpayers have made substantial investments in these companies … is to keep American workers working in American plants."

GM has said the percentage of imported vehicles will remain about the same from 2009-14 — roughly one-third of vehicles sold here.

GM president and CEO Fritz Henderson told Bloomberg Television that the company was open to changing its import strategy and could drop plans to import vehicles from China.

In a confidential 12-page presentation to members of Congress last week, GM disclosed it will start importing vehicles made in China in 2011 and expects to import 51,546 in 2014.

Seniority Lists
Recent Posts!
Bargaining Committee

Mike Herron
Tim Stannard
Zone at Large – 1st
Danny Taylor
Zone at Large – 2nd
Mark Wilkerson
Joe McClure
Chad Poynor
Steve Roberts
Derek Lewis
Bill Cundiff
Kirk Zebbs
Don Numinen
Jay Minella
Danny Bragg
Chris Hill
Rashad Thomas
Keith Oswald
Chris Brown

1853 Officers

Tim Stannard
Mike Herron
Vice President
Darrell DeJean
Financial Secretary
Mark Wunderlin
Recording Secretary
Peggy Mullins
Trustee (3)
Jay Lowe
Dave Clements
Dave Spare
Sgt. at Arms
David C Spare
Ashley Holloway
E-Board at Large (2)
David Ryder
Steve Roberts
GM Unit Chair
Mike Herron
Leadec Unit Chair
Larry Poole
Ryder Unit Chair
Patrick Linck
AFV Unit Chair
Neil Osborne
Retiree Chair
Mike Martinez

Get Text Alerts


*Standard text messaging rates may apply from your carrier