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GM wants to dump leases on equipment at Parma stamping plant

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GM wants to dump leases on equipment at Parma stamping plant

By Robert Schoenberger, The Plain Dealer

November 05, 2009, 3:44PM

General Motors wants to dump another $131 million in equipment leases for stamping presses in Parma and other plants.

In filings last week in the U.S. Bankruptcy Court for the Southern District of New York, GM said it would cost more money to disassemble three presses in Parma, one in Mansfield and four others in Missouri and Michigan than it could make selling the equipment.

GM said it owes more on the old, unused presses than they are worth, so it is effectively trying to make disposal of the equipment an issue for its creditors rather than itself.

Objections from creditors are due Friday. The court has scheduled a hearing next week to discuss the rejections.

When the bulk of GM exited bankruptcy in July, the company left behind several plants and assets to partially pay off creditors. All of GM’s Mansfield plant and a small portion of the Parma plant are part of that estate, which continues to be divided up among creditors.

This is the second time this year that GM has asked the court to let it walk away from leases on stamping equipment. In July, it asked the court to allow it to abandon $293 million worth of presses, including some in Parma.

The language of the July and October filings is almost identical, with both claiming that GM "believe[s] that the cost to remove the equipment may exceed the value of the equipment."

After the July filing, creditors General Electric Capital and Wells Fargo both objected to GM’s plans. A hearing to handle the rejections was scheduled for July, but it has been delayed several times as the creditors and GM sought buyers for the stamping presses.

Tim Yost, spokesman for the group dealing with the bankrupt portion of GM, said GM and its creditors continue to work together to find buyers for the equipment.

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