Tuesday, June 30, 2009 Henderson: GM faces July 10 liquidation if asset sale is denied Robert Snell / The Detroit News New York -- General Motors Corp. will face liquidation July 10 unless a federal bankruptcy judge approves the sale of the automaker's best assets to a new company, President and CEO Fritz Henderson testified today. The U.S. Treasury Department has told GM it will provide no additional financing if the assets are not sold by July 10, Henderson said during early testimony in U.S. Bankruptcy Court. If that deadline is missed, "we will liquidate," Henderson testified. Advertisement After a late court start, Henderson was questioned by attorneys representing GM creditors such as asbestos claimants and their families, and dissident bondholders. Henderson also said that once a new GM emerges from bankruptcy court, the company will not change its operating name: It will still be called General Motors. Henderson's testimony could last several days. Motorists injured in crashes and accidents involving General Motors Corp. vehicles protested outside U.S. Bankruptcy Court this morning ahead of this key hearing in the automaker's bankruptcy case. The victims and their relatives, who have pending lawsuits against GM, likely will be left with no opportunity to collect damages if a judge, as expected, allows the automaker to sell its best assets to a government-sponsored company. The judge's approval could come this week. The protestors, along with a parade of union workers chanting "Save our benefits," added drama at the start of a historic day for GM, which is trying to emerge from bankruptcy court as a new, largely debt-free company. "GM is trying to weasel out of its obligations," said Missouri resident Terry Cole, 53, who sued after a fiery accident involving his Cadillac Escalade two years ago left the wheelchair-bound man with third-degree burns. He sued, but the lawsuit was put on hold after GM filed Chapter 11 bankruptcy June 1. The start of today's hearing was delayed by more than an hour, as technical issues were worked out to ensure that the proceedings could be broadcast to overflow rooms. During the delay, Judge Robert Gerber also told participants -- including Henderson -- that the heat and rising temperatures in the courtroom didn't warrant strict adherence to formal protocol. Typically, men are not allowed to remove their suit coats in the courtroom, but that rule was waived today. "Anything you want to do to be more comfortable," Gerber said. Henderson then took off his jacket. GM on Friday agreed to cover future liability claims no matter when the vehicles involved were built, but liability claims pending before GM filed for bankruptcy are still likely to be classified as bad assets and left behind in bankruptcy. "They want to leave us in the gutter," Cole said. "I can't believe the president would let GM be this immoral." Minutes later, dozens of retirees from Ohio marched past, carrying yellow signs reading "Save the Middle Class," in a show of protest against GM's attempt to terminate retiree health care benefits. The groups clogged the entrance to the U.S. Bankruptcy Court, where dozens of lawyers, reporters and the curious waited in line to witness GM's court hearing. Outside the courthouse, it was a sea of sad tales, like Jones, and the surreal. A busker dressed as a bright yellow ball milled about, advertising tonight's $94 million MegaMillions lottery. U.S. Homeland Security agents and NYPD officers stood guard outside while subway riders spilled from a station just outside the courthouse entrance. Nearby, newspaper peddlers rubbed shoulders with a guy hawking bootleg CDs alongside vendors selling farm-fresh green beans and beets, and pound cake. GM is using Section 363 of the Chapter 11 bankruptcy code that allows for assets to be divided into the good ones that will be assumed by a new automaker and the bad that are deemed of little value and will remain in court to be liquidated. Come back to www.detnews.com for updates throughout the day.
This is all propaganda...dont get fooled ...dispite the protest and such ...GM has to file bankrupcy...its the only way they can get more credit ... check it out ...nobody is gonna want to pay the money to buy a money making corp like GM ...but if they file and then offer's flow in either to buy or take holdings in ...these offer's can be taken to the bank and used as coladeral to get more money .. because the banks see an active interest and dont want to take a chance that these loans may get taken out else where... think the banks shareholders want to see the competetion get a leg up ...NAUGHT ...see ...its a money making thing ...the banks are just as stupid and greedy as the auto manufacturer's and the shareholder's ..And iff it all goes bad ... our interest rates go up a point or two... not their money ...what difference does it make ... best case ...somebody burns GM to the ground..its really the only way to stop the banks from leanding money that the consumer wont have to pay for ...and if they do ...burn the banks and enslave the banker's ....for we already are ....enslaved .. Think about it ...
GM already filed bankruptcy as did Chrysler. Chrysler is back if GM liquidates that means it's GONE! Check out their footprint below. Supplier base in teetering now and if GM goes it would be millions more with no job. Doubt it will happen but strange things have happen in court. http://www.detroitnews.com/apps/pbcs.dll/article?AID=/20090531/SPECIAL01/90529004
Speedpup That is a very interest map, thanks for sharing. It is scary to think of the impact of GM, and the suppliers, while have on the US and the World.
i don't care,let GM liquidate. why should we who are struggling to find work, pay our own bills, pay for our own machinery....HOPE to have enough money to retire on.....worry about shoring up retirement accts of the UAW? let em fall
I couldnt agree more-Its hard to feel sorry for those guys.
Too many greedy people over the years have drove this to this point. Some of the poorest most broke people in the area have come out of the Janesville WI plant. Demanding too much and they wonder why the public won't buy the product they build. Cost too much to pay for their outrageous benny's. Trbo
I don't think that letting any of the big 3 go under will be good for our economy. It's not really about the auto workers union, it's about the auto companies do millions of dollars of business with suppliers and contractors, which keeps the economy going, and keeps people employed.
The cost if they failed would be staggering in the short term and the long term. The USA would be totally out of another industry. We can't even make a LCD screen for our US fighter planes due to predatory and illegal practices by other countries. Funny I never hear many complain the other countries basically close their markets to our products while having a field day here. They fail and liquidate how many vehicles have no parts and how many businesses are shut down? From mom and pop businesses to municipalities stopped ead in their tracks with no vehicles.. Granted they have not be perfect at the union by far but either has many other things beyond their control. New hires get 14+ per hour and little in benefits. All the parts supplier are interwoven and if GM goes most would be belly up as they are near it now anyway with cars sales dropping from 17 million per year to less than 10 now. Toyota lost more than GM in the last quarter like 4.7 billion. Boating industry is ner non existant at this point. I heard JLG makers of rough terrain forklifts and siccor lifts went from 2000 to bit more than 200 at their factory. with all the equipment being given away that I see who could sell new? Even municipalities are not buying equipment or vehicles. Many here like myself can shrink back quickly if their is no work. To have millions of square feet of factories, equipment, employees and contracts on parts supplies which cannot be shut off like a faucet is rough. The average number of man hours in a car is about 28-32 for most vehicles now so labor is not the end all of their problems. Labor is about 8-12% of the cost of a vehicle. Things are just rougher than they have been since the big D for many industries.
Wednesday, July 1, 2009 GM asset sale key to further government funding Robert Snell / The Detroit News New York -- The U.S. government has no intention of funding General Motors Corp.'s restructuring beyond July 10 if the automaker's asset sale is not approved in bankruptcy court, a senior auto task force member testified today. "We were effectively the lender of last resort," said Harry Wilson, a member of the U.S. Treasury Department's auto task force. He went on to say that government encouraged GM to find private alternative financing last December, before the automaker received the first of more than approximately $27 billion in government loans, but none was available then, or now, Wilson testified today. Wilson is one of two key people testifying today on the second day of GM's hearing to get approval to have its good assets sold to a government controlled entity and help it emerge from bankruptcy largely debt free. William Repko, senior managing director of Evercore Group LLC, an investment banking firm, is also testifying today. Advertisement Repko said the new GM could have had a comparable value if GM had filed a Chapter 11 plan of reorganization instead of a 363 sale. That assumes the new GM would emerge from bankruptcy court within 60 to 90 days, the same timeline GM is pursuing in the 363 sale. But GM's Board of Directors never asked him to value a new GM under a Chapter 11 plan, Repko testified. The U.S. Justice Department's bankruptcy court monitor said Evercore's fees are unreasonable and has asked U.S. Bankruptcy Judge Robert Gerber to reject GM's request to pay the firm. New York-based Evercore wants to charge $400,000 for the first month's work plus a $17.9 million fee if GM, as expected later this month, sells most of its assets to a U.S. Treasury Department-sponsored company. The investment banking and financial advisory firm already has been paid $46 million by GM. GM's unsecured bondholders filed an objection to Evercore's fee structure last month. A lawyer representing consumer victims tried to show the U.S. Treasury Department did not meet with consumer victims before GM filed bankruptcy June 1. The task force met with many groups, from dealers to bondholders, but Wilson said they were never approached by representatives of consumer victims. GM agreed to assume responsibility for all product liability claims filed after the automaker emerges from Chapter 11 bankruptcy, a reversal of course designed to speed the ailing company's restructuring. But liability claims pending before GM filed for bankruptcy are still likely to be classified as bad assets and left behind in bankruptcy. Under questioning from the consumer victims lawyer, Wilson agreed that if GM had succeeded in restructuring outside of bankruptcy court, the automaker would not have been able to avoid liability for some cases involving GM vehicles. In a court filing, Wilson said the new GM's rapid emergence from bankruptcy court is necessary for the company to start manufacturing automobiles again and will result in GM needing less money from taxpayers. "A rapid emergence from bankruptcy creates the highest probability of avoiding the catastrophic and expensive meltdown in GM auto sales that virtually all industry observers predicted would happen in the event of a GM bankruptcy filing," Wilson wrote. "Importantly, Treasury cannot make an open-ended commitment to GM that Treasury will continue to fund GM's operations if GM's critical assets languish in the bankruptcy process." On Tuesday, GM President and CEO Fritz Henderson testified for six hours and faced questions from several lawyers representing creditors, consumers, union retirees and others opposed to GM's plan. The objectors, who risk seeing lawsuits, claims and benefits left behind in bankruptcy court, want the judge to force GM to give them a better deal. They pose the largest obstacle to a new GM emerging from bankruptcy largely debt-free. The automaker is using Section 363 of the chapter 11 bankruptcy code, which allows it to divide its assets and sell the best to form a new GM; the bad assets remain in court as part of the old GM to be liquidated.
just so i understand how this works....we spend $13 trillion....that's nothing more than paper, (be nice were it absorbent, 2 ply, and came on a roll so it would have some value), we will raise taxes on business, and the wealthy (small ones like mine too, making it harder to put money away for MY retirement, invest in new equipment, hire new employees....to "give" the UAW 55% ownership of the company, we steal the value of bondholders holdings...this helps me how? were GM and chrysler go down, i don't think people would be back to walking or bicylcling to their destinations...somebody would pick up the slack, just like fiat did with chrysler. the initial chunk of change to the auto companies, wasn't for R&D, or building new factories....it shored up UAw retirement accounts. look where your stimulus dollars went. initial package, 54 bil to infrastructure...98 bil to dept of education. i wonder who will put more people to work? i guess the NEA has to be compensated for their support. bondholders lose value of their holdings to give ownership to the UAW? again, a voting bloc being compensated.
btw, what's your personal opinion? i see a lot of copy/pastes from the detroit news. i like to see personal viewpoints vs. editorialized news articles.
My view point is I am sick of countries dumping products here while having there home markets basically closed to US products. Korea ships in 800,000+ cars per year and blocks just about all foreign cars of any type to Korea. Japan has done it for years also. Will we lose another entire industry in this country? Trade is fine but hey make it fair trade not a oneway street to the US disadvantage.We are losing our manufacturing capabilities at a rapid rate should we let China build our weapons? When you lose manufacturing you also lose the research and development. I remember when Japan would not take any finished wood products in just raw wood materials. Why couldn't we send an Anderson window to Japan then? As for the unions they are overboard but the problems you see go much deeper than unions alone. They have made many concession recently but they shouldn't have waited so long. Japans currency manipulation is said to give them about 4,000 per car advantage on average with the more expensive ones near 12,000 per car. China does the same thing with their currency putting US manufacturing at about 20% disadvantage right off the bat. All while they have broken every trade agreement they have signed for the last 30 years +- Tired of auto companies coming here nad pitting one state against another in bidding wars so they can pay no taxes and get all types of incentives while states have done near nothing for domestic companies. Is giving a foreign company all types of great deals like no property taxes for 20-30 years not a bailout? hope this helps ya Thursday, July 2, 2009 Lawyers wrap up; GM awaits judge's decision on sale of best assets Robert Snell / The Detroit News New York-- A judge ended the General Motors Corp. asset sale hearing at about 4 p.m. without signaling when he might decide whether to let the bankrupt automaker emerge as a new, largely debt-free company. A decision is not expected before Saturday because GM's lawyers need to draft and submit a proposed order approving the sale, which won't be completed until Friday night or Saturday, the federal July 4th holiday. One point emphasized by GM's lawyers, and debated by attorneys representing some objecting creditors, is that GM needs approval of the asset sale by July 10, or the government will stop funding the automaker's restructuring. Advertisement U.S. Bankruptcy Judge Robert Gerber has heard more than 25 hours of testimony spread over three days and pored over approximately 3,000 legal filings and more than 850 objections. While it is unclear when Gerber will rule, in the Chrysler LLC bankruptcy case, U.S. Bankruptcy Judge Arthur Gonzalez electronically filed his approval of the asset sale around midnight on a Sunday. Earlier today a lawyer representing GM's small bondholders urged a judge to call the government's bluff that it will stop funding the automaker's restructuring if a sale is not approved by July 10. The lawyer, Michael Richman, objects to GM using Section 363 of the Chapter 11 bankruptcy code to try to divide its assets and sell the best to form a new GM. The bad assets would remain in court as part of the old GM and be liquidated, leaving many creditors with lawsuits, claims and benefits left behind in bankruptcy court. "Bankruptcy courts call the bluffs of bullying lenders and purchasers all the time," Richman said. "You go to a Broadway show, you expect an orchestra. For a 363 transaction, you need a deadline. It's part of the scenery, part of the show." His testimony began the third day of GM's asset sale hearing. Creditors, who have objected to the sale and speedy emergence of GM from bankruptcy court, are delivering closing arguments this morning. Richman also dismissed arguments from GM President and CEO Fritz Henderson and others that the automaker's best assets are jeopardized by a prolonged stay in bankruptcy court. "GM's assets are not wasting, not deteriorating, not melting," he said. He urged Gerber to reject the sale, saying GM could still restructure in an accelerated, traditional Chapter 11 case. The objectors are endangering thousands of jobs, the welfare of communities that rely on GM and imperiling the automaker's assets by betting the government is lying about its intention to pull its funding, the automaker's lawyer Harvey Miller said. "This is an awesome gamble," he told the judge in his rebuttal. "It ignores the interests of all the economic stakeholders. They are essentially asking to play Russian roulette." It is unclear whether Gerber would rule later today or wait until after the July 4 holiday weekend. Henderson this morning was sitting in the front row of Gerber's courtroom listening to testimony. GM made more progress resolving certain objections today filed by a creditors committee. The committee has agreed to withdraw its objection after negotiating a deal that will have the new GM assume responsibility for workers compensation claims filed in Michigan. Michigan is believed to have the most workers with claims in the country. The creditors committee also agreed to withdraw its objection after finalizing the makeup of the old GM's Board of Directors. If a sale is approved and GM is split into old and new companies, the old GM's Board of Directors will include at least three members, one of whom will be selected by the automaker's consultant, AlixPartners, and one selected by the creditors committee. A third member has been identified, but there were no additional details available today. Those appointments will be in place until the consummation of a plan of reorganization, said creditors committee lawyer Thomas Moers Mayer. GM and the U.S. Treasury Department updated estimate on the cost of liquidating and selling the automaker's bad assets and covering environmental issues. It will cost an estimated $1.175 billion. That's up from an earlier estimate of $950 million, which is needed to close dealerships, cover asbestos and product liability claims, and dispose of shuttered facilities. The objectors risk seeing lawsuits, claims and benefits left behind in bankruptcy court and want the judge to force GM to give them a better deal. They pose the largest obstacle to a new GM emerging from bankruptcy. A member of the Obama administration's auto task force, which is overseeing GM's restructuring, testified Wednesday that the U.S. government has no intention of funding GM's restructuring beyond July 10 if the automaker's asset sale is not approved in bankruptcy court. GM filed for court protection from creditors June 1. There have been more than 850 objections filed to the proposed sale, which would leave many creditors who are owed money or who have pending lawsuits against the automaker with the likelihood of receiving little money, or nothing, if GM is able to dump liabilities and debt in the old GM. The Treasury Department plans to buy GM's good assets and provide the automaker with an additional $30.1 billion to operate while in bankruptcy. That will boost the government's total investment in GM to $50.5 billion. The U.S. government will own 60.8 percent of GM, while the Canadian government will hold 11.7 percent and a United Auto Workers health-care trust will own 17.5 percent. Unsecured creditors will own 10 percent.
Speedpup very well said, I agree with everything you. It just too bad that our legislators can't seem to see the problems and how it could be fixed.
one word lobbyist
I'm tryin' my darndest to avoid this thread, I could succomb to the urge to get suspended for inappropriate conduct quickly concerning this subject. But one thing you should keep in mind, Speedpup, is that we are all lobbyist's. Everytime I contact one of my rep's I am being a lobbyist. And I think it's appropriate to say there is lobbying that is productive for society as a whole, like when a group lobby's the reps for stronger penalties for child abuse cases, as well as lobby groups that have nothing but their own self interests in mind and even advocate things that are detrimental to society. But, good or bad, the lobbyist requires one thing; an ear to hear. Washington could be overrun with lobbyist's; but they can only achieve their desired results when they find a willing representative to hear them and are willing to advance their agenda. My point is; I don't think lobbying is necessarily the problem. On the contrary, it's part of how our system works. The problems arises when you have a rep that is willing to take part in a legislative exercise that is self serving to them and the lobbyist and plays no part in legislation that is benificial to society as a whole. I had a buddy once complaining about how crappy our government works, I told him for our government to work properly as it was designed it requires one thing; honest and ethical representatives. Sadly...we are lacking these attributes in our leaders today. :usa
your right most politicians are self serving greedy ego maniacs. I would doubt if I knew all politicians in depth I would have respect for more than 15% of them just my guess. I hope I am totally wrong about the percentage.:Banghead:Banghead:Banghead
Judging by the way Washington is spending money nowdays...there's not a whole lot of evidence that would prove your wrong.
we have to remember, that it's NOT washington spending the money....WE are...the elected are our employees, they were hired a job to do what's in our best interest. apparently, many of them have forgotten who they work for, and need to be terminated. as far as the auto bailout issue is concerned....nobody seems bothered that legit bondholders of those companies were robbed. maybe we just need to alter the scenario somewhat......what "if"......the only way to save that auto company, was to gather up most of the lull material handlers in the country, you know they're worth (let's use this for this example) $50k a piece....but now the govt. says they're only worth $5k....that's what we're giving you, and you'd best feel damn fortunate you're getting that much. i view the fed govt. as parents, the states as offspring....there are times when mom and dad need to help one of the kids out...but if the one kid is habitually in a financial mess, and all the sudden mom and dad don't have the wherewithall to assist them anymore....they come knocking on your door...okay, once, maybe twice is understandable....but when you see your siblings not lowering their standard of living that you've had to adjust to....you become very bitter...especially when mom and dad threaten you unless you help. as a country we've become very apathetic unless it hits our own pocketbook. i fear that day is very near for all of us, now we've added $13 trillion on top of it.
From the begining I have said let them fall. There WILL be someone to come in & take that peice of the pie. (Fiat wasn't the only one looking at Chrysler). As for Washington. Yeah, we ellect them, but we get the choice of either Diablo, or The Devil. Neither are good choices. GM Closing WILL NOT be the end of the secondary market. BUT, auto parts manufacturers will make more of their own parts, recycled parts will be worth more. But in the end SOMEONE (free enterprize at work) WILL take over GM....& NOT on the tax payers dime.
Great post as usual, dayexco... (My bold) Remember this? Here's the fellow who said it. http://en.wikipedia.org/wiki/John_Emerich_Edward_Dalberg_Acton,_1st_Baron_Acton It's a bit long, so if you don't want to read it all... scroll down to Famous sayings of Lord Acton. Here's a few more from Wikiquote. http://en.wikiquote.org/wiki/Lord_Acton Read at your leisure, sir.... Best regards, OCR
"Imagine, if you will, that I am an idiot. Then, imagine that I am also a Congressman. But, alas, I repeat myself." Mark Twain
:drinkup