GM files for bankruptcy, gets delisted from Dow Jones and NYSE

This article belongs to the GM, Ford and Chrysler bankruptcy watch story arc.

news.yahoo.com :

General Motors filed for bankruptcy on Monday [1 Jun 2009], the largest ever in US manufacturing, as the Obama administration took the first steps to try to revive a failed icon of American industry. GM had been kept alive by $50 billion in US government funding. GM plans to close or idle 14 US plants and warehouse operations. The closings will cut 18,000 to 20,000 GM workers in the US. GM would also cut almost 8,000 white-collar jobs.

Chrysler's bankruptcy was seen as a test run for the much bigger reorganization of GM. A bankruptcy judge has approved the sale of Chrysler's assets to a group led by Fiat. President Barack Obama said he was confident GM could emerge quickly from bankruptcy. GM will be divided into two : "New GM" and "Old GM", its shuttered plants, stranded equipment and other spurned assets left to liquidation. In the wake of its bankruptcy, GM stock was removed from the Dow Jones index and delisted by the New York Stock Exchange. GM's stock fell to a low of 48 cents on Monday, a level last seen during the Great Depression.

- The wait is over. And with a 60% stake by the US government, General Motors is now, as the pundits would say, Government Motors. Sure, it's still going to be GM, but it's going to be a very different GM. And as GM goes, so goes America. The mantle of leadership is being passed on by the Americans to the Asians and the rest of the world, and it's not only leadership in the auto industry. From the most basic of commodities production to the heights of space exploration, it is time to let the Chinese, Indians, Koreans, Russians, Brazilians and others, take over the reins and lead the way in new directions. For it is apparent, and it has been apparent for some time, that the American Way is not quite what it once used to be. It is time for change.

GM to file for bankruptcy on Mon 1 Jun 2009

This article belongs to the GM, Ford and Chrysler bankruptcy watch story arc.

news.yahoo.com :

General Motors will file for bankruptcy on Monday [1 Jun 2009], as the government tries to revive the 100-year-old automaker once seen as the symbol of American economic might and dynamism. The planned filing would be the third-largest in US history and the largest manufacturing bankruptcy. The administration saw few other options at a time when the jobless rate is soaring, given that GM employs 92,000 in the United States and is indirectly responsible for 500,000 retirees. The filing is expected before US markets open and caps a three-decade-long decline for GM that ended in outright crisis after the weak global economy, high oil prices and tight credit slammed sales and left it unable to raise cash.

By preparing to take a 60% stake in a reorganized GM, the Obama administration is gambling that the automaker can compete with the likes of Toyota after its debt is cut by half and its labor costs are slashed under a new contract with the United Auto Workers union. While the "new GM" is expected to emerge quickly from court protection, the automaker's shuttered plants, stranded equipment and other spurned assets would be left to liquidation in bankruptcy. GM's stock fell to 75 cents on Friday, on what was expected to be its last trading day before bankruptcy.

- This had been the only viable solution all along and it sure took them long enough to carry it out. Now that the decision has been made all that is left is to await the fallout and to see how far it spreads. The pundits have been saying that the so-called "green shoots" recovery might ameliorate things a little, but many of them were the same ones who had been saying that GM did not necessarily need to go into bankruptcy in the first place. So would you believe them? I sure don't.

You know what they say : "So goes GM, so goes America". Read that last paragraph once again. Whatever is shut down is going to be liquidated. It's a fire sale. Sure, "nobody's talking about a fire sale here". Not yet, anyway. So if you're some private entity or individual with spare cash looking for a nice and cheap building, here's your chance to grab a former GM factory or two.

1. Report: GM mulling bankruptcy
2. GM warns of bankruptcy risk
3. GM said to speed bankruptcy plans
4. Chrysler files for bankruptcy, enters Fiat deal
5. GM bankruptcy still likely despite plans to cut 23000 jobs, drop Pontiac brand

(2009-06-01 18:08:48 SGT) [Biz] Permalink

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