Cox to carmakers: File bankruptcy here
http://www.freep.com/article/20090422/BUSINESS01/90422047/1014/Cox+to+carmakers++File+bankruptcy+here
Michigan Attorney General Mike Cox has urged chief executives of General Motors Corp. and Chrysler LLC to consider filing for bankruptcy in Michigan rather than Delaware or New York because it would be more convenient for creditors in Michigan.
"I am gravely concerned about the impact of any bankruptcy filing in a jurisdiction outside Michigan," Cox wrote in separate letters to GM CEO Fritz Henderson and Chrysler CEO Bob Nardelli.
Cox goes on to say that the financial health of both companies and Michigan have been intertwined for decades.
• PDF: Cox's letter to GM
• PDF: Cox's letter to Chrylser
The state is a significant creditor for each of the troubled automakers through the Michigan Business and Single Business Tax obligations, workers' compensation claims, unemployment insurance and environmental regulations.
"The costs for many of these creditors (in Michigan) to participate in a New York or Delaware bankruptcy is overwhelming and would undoubtedly lead to unjust bills," Cox said.
"It's easier for those people to get in line, if it's here," said John Selek, a spokesman for the attorney general.
While Cox does not say that either company should file for bankruptcy, neither does he acknowledge that they might not need to if they meet certain criteria set by the U.S. Treasury Department.
"If you ultimately decide to choose bankruptcy as the vehicle to a stronger (company), I respectfully ask that you and your representatives meet with me before any filing is made," the letter concludes. "Please feel free to contact me at any time, day or night, to discuss this matter."
Contact GREG GARDNER at 313-222-8762 or at ggardner@freepress.com.
REPORT: GM hedges bets, plans to miss $1B debt payment deadline
by Jonathon Ramsey Apr 22nd, 2009 at 3:57PM
The familiar expression goes "Better the devil you know," meaning it's preferable to deal with the nasty things you don't like but are at least familiar with. General Motors, however, doesn't seem to think so. The troubled automaker appears more ready to take its chances with bankruptcy than continue to fight the weight of monumental debt and the demands of restructuring it.
GM has a $1 billion payment due on June 1, the same day as the government-imposed deadline for having its financial house cleaned up. The company's chief financial officer has just gone on record as saying that GM does not intend to make that payment. The General will attempt another round of debt-for-equity swaps (DFE) with its bondholders, and if it succeeds - and also succeeds in restructuring $20 billion in UAW healthcare obligations - it will get money from the government to continue without bankruptcy. If the DFE doesn't meets its goals, then GM is set to go into government-backed Chapter 11, court protection and what will likely be a nearly clean slate to restart its debt negotiations.
Last week, bondholders said they were preparing a response to GM's most recent offer. The automaker says that it will do what needs to be done "in court or out of court," which means that unless the bondholders' response is "Yes," bankruptcy is a fait accompli.
Bankruptcy and the "trickle down" effect it will have
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 sailfish |
Bankruptcy and the "trickle down" effect it will have |
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Posts: 309 04/25/09 16:56:03 |
If General Motors is forced into bankruptcy and has to liquidate then EVERYBODY loses. If General Motors is permitted to work out some payment plan to their
creditors then there will be hope. As Joe and I have been discussing there will be an "impartial" person/persons who will over see and determine
what is best. So far the pensions should be safe but the health benefits could be drastically cut. Only time will tell and that is IF and it is a REALLY BIG
IF General Motors rolls down that road to bankruptcy.
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sailfish |
GM Fund Manager Sells All Employee Shares on Bankruptcy Risk | #1 | ||
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Posts: 309 04/25/09 17:06:58 |
Sorry but when I read about a "fund manager" selling off shares of a company they were so invested in I tend to take a
LARGE STEP backwards and ponder their decision. Or rather ponder their decision to try and salvage and secure the funds of the employees of GM, was it a
correct move or will it create more "credibility" issues concerning the viability of General Motors.
GM Fund Manager Sells All Employee Shares on Bankruptcy Risk |
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instantKARMA |
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Posts: 54 04/29/09 07:30:45 |
i don't begrudge retirees their pensions or their benefits, however,
when i look at the amount of retirement these people are receiving, it's difficult to see how g.m. could survive with the kind of payouts retirees are receiving. a friend of mine, before taxes, receives around $36,000 a year just in pension. multiply that by the number of g.m. retirees, combined with the cost of health care and, i believe, one finds a retirement program that is simply unsustainable. in my opinion, management is more at fault than the union membership for the demise of generous motors. they agreed to fat union contracts, in many cases paying workers big bucks for sitting around and doing absolutely nothing. i worked at g.m. for awhile back in the 70's and 80's on production and then, skilled trades. i don't know how many nights i was told, "get lost and we'll page you if we need you," and then they'd come around and ask me to work four hours overtime doing nothing! when you have a large number of skilled trades people sitting on their butts doing nothing day after day, and then add the production workers that were able to build banks and only put in half a day or so and receive a full day's pay for it, it's bound to eventually come back and bite ya' on the butt! then, there was managements short-sightedness. they fell behind the japanese manufacturers in the 70's and 80's in quality and consequently lost market share. then they fell behind in the '90's and '00's because all they wanted to build and sell were high margin SUV's instead of high mpg vehicles. for example, how long did it take american manufacturers to come up with their own version of the hybrid? it seems to me that "short-term" thinking and market strategy is the biggest reason g.m. is in their present situation. at one time they were on top of the world, now look at them, and where management has put them. (by the way, if you check out the "big three's" commercials, you'll find these idiots are still pushing SUV's and big pickup trucks. i don't believe they've learned one thing from their present dilemma!) |
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Buford |
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Posts: 69 04/29/09 17:30:24 |
I would likely agree your (Instant Karma's) analysis of reasons for demise of GM (and potentially Chrysler) is pretty much on the mark. I would mention
that the "Big Three" allowed themselves to become threatened by the UAW and the strike factor. Don't know how many times over the past roughly
fifty years I have read of and noticed the UAW either actually going on strike against one or more of the auto companies - or threatening to do so. After the
UAW demonstrated how they could bring a company essentially to its knees through the strike process, the other auto companies usually learned not to push the
test and give the union negotiators much more than should have been given at the time. No future sight in a lot of the decisions made - no consideration or
belief that the Japanese (for instance) would get a better handle on what the American public wanted (and then provide it with excellent quality and a
lower-than-expected price). Yes, there is enough blame to go around and individual, corporate, and union greed figured into the equation.
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