**GM preparing for bankruptcy**

[Nikked]

before Gm bought out holden were coachbuilders, they were making local bodies for us imports, Ford, GM and Chrysler/dodge. They then went on to be the australian out post of GM

[ebxr8240]

Keep in mind chapter 11 doesn't mean the end of G.M !!
Its actually better long term if they do, the sooner the better.. Heaps of management would get a shake up also...
If I remember correctly ?? Some of their airlines are under chapter 11..
On February 1, 2006, United emerged from Chapter 11 bankruptcy protection under which it had operated since December 9, 2002, the largest and longest airline bankruptcy case in the history of the industry..
How chapt 11 works..
http://en.wikipedia.org/wiki/Chapter...ed_States_Code

So a company can come back!! It seems G.M is going to down size big time!!

[vztrt]

Some more news on the GM Bankruptcy

GM bankruptcy could spread overseas

GM chief doesn’t rule out bankruptcy move for subsidiaries

By IAN PORTER 12 May 2009

GENERAL Motors is considering putting its international operations into bankruptcy if it chooses to take that course in the US, chief executive Fritz Henderson said last night.

The decision is a potential blow for GM Holden, which is already set to lose its Pontiac export deal to the US.

However, Mr Henderson said bankruptcy for subsidiaries was not the preferred course of action, and that analyis was being done on a country-by-country basis.

GM Holden spokesman Scott Whiffin said yesterday there was no suggestion Holden was going to go bankrupt.

“I actually don’t think there is anything new in what Mr Henderson said,” he said, adding that there was nothing unusual about the analysis being done on a country-by-country basis.

“There’s no question these are tough, interesting times for the global automotive industry, but we, Holden, are planning to be here for a long time yet.”

Mr Henderson was giving the second in a promised series of regular press conferences, although he started by saying he did not have anything specific to announce.

In answer to a reporter's question, he said it might not be only the US company that was put into Chapter 11 bankruptcy, which he said was still the most likely course of events in the US.

“Given the objectives we have set for ourselves, it is more probable we will need to accomplish our goals in a bankruptcy,” he said.

Mr Henderson said it was still not clear if all or some of the company’s international operations would also have to be put into bankruptcy.

“Work continues on that front on a country by country basis,” he said.

“It is not a foregone conclusion a US filing would result in filings in other places. As a general principle, I think it would be our preference to avoid that.

“But in a number of cases it might be necessary.

“I’ll have more to say when we get to that point about what we need to do. But at this point the analysis is being done country by country.”

Asked about disquiet in the United Auto Workers (UAW) union about a prospective doubling in the number of vehicles imported for sale in the US, Mr Henderson said the company was in discussion with the UAW.

“Our (restructuring) plan had, by 2014, about 7.5 per cent of production for US sales outside North America. That’s about 235,000 vehicles,” he said, adding that it would be spread over six products.

“This is something we would want to have a discussion with them about, because in general, as a matter of policy, we have the philosophy of building where we sell.

“Not only do we think it is the right thing to do, it’s the most profitable thing to do, historically, so we would anticipate having a dialog about the union concerns that are on the table.”

The planned closure of the Pontiac brand in the US will spell the end of Holden’s US export program, which saw Commodores being shipped to the US as Pontiac G8 sedans.

Last week, Mr Henderson said no American-built Pontiacs would be rebadged for sale in any of the continuing GM brands – Chevrolet, Buick, Cadillac and GMC.

It is not clear if that policy would also apply to the Commodore, which has recently been touted as a possible export candidate to the US as a police squad car.

The stated preference to build where the vehicles are sold might also rule out possible exports of the Commodore utility to the US as a small GMC pick-up.

Mr Henderson said the sale of the Hummer operation had run over time, although GM was still negotiating with two parties.

“We had three offers for Hummer and we are negotiating with two parties trying to reach acceptable terms,” Mr Henderson said.

He had wanted to have Hummer sold by the end of April, but said last night he now expected talks to be concluded by the end of May.

A number of parties, all Swedish, had expressed interest in Saab. However, Mr Henderson said that the process was being run by Saab and he had no direct knowledge of the talks.

On the sale of Opel/Vauxhall, Mr Henderson appeared to rule out the possibility that a new partner in the business, such as Fiat, might choose to close down Vauxhall.

“I am not going to talk about the discussions, but I will say that our business in the UK is our largest in Europe,” he said

“Vauxhall dealers do a fantastic job and Vauxhall is an integrated and crucial part of our business.”

Mr Henderson said GM was talking with several interested parties about Opel and was hoping to have an idea about the form of any agreement by the end of May.

He indicated that GM would retain a stake of some kind, but acknowledged that Opel needed fresh capital, and quickly.

“With respect to the German Government, we have a need for funding, actually, in our European business.

“That’s important and urgent and the German Government hasn’t indicated an interest in running our business but, on the other hand, we do need their support in terms of funding.

“To the extent that we will have a partner in our European business, and we anticipate we will, we need to respect the legitimate interests of that partner, whichever that partner is.

“I think there will be substantial benefits from running the business on a global basis. On the other hand, you need to respect the rights of the partner in any such agreement.”

He pointed to Daewoo in Korea, where GM a little more than 50 per cent of the capital, and the joint venture in China with Shanghai Automotive, as examples of where GM has had success with partnerships.

[Road_Warrior]

I gotta wonder what the hell is going on at GoAuto lately. When that article was published this morning, it had a title of "Holden faces bankruptcy" - quite misleading and incorrect. Someone has obviously given them a rude phone call because they've changed it.

[R-Design]

"GM Holden spokesman Scott 'Deny Everything' Whiffin said yesterday there was no suggestion Holden was going to go bankrupt."

At least GMH's PR team is running on all cylinders.

[XplosiveR6]

Originally Posted by Road_Warrior

I gotta wonder what the hell is going on at GoAuto lately. When that article was published this morning, it had a title of "Holden faces bankruptcy" - quite misleading and incorrect. Someone has obviously given them a rude phone call because they've changed it.

mm interesting, seems like another example of holden controling the media. I bet if it was FOA facing bankruptcy the title would have stayed.

[Road_Warrior]

Originally Posted by XplosiveR6

mm interesting, seems like another example of holden controling the media. I bet if it was FOA facing bankruptcy the title would have stayed.

Well I guess it would depend on whether FoA rang them up and threatened them with legal action! I'd be willing to bet that's what happened here.

As an aside, has anyone noticed the lack of content on Drivel.com lately, particularly relating to Ford? Could it be that Ford has gotten the on with them about some of the crap they publish about the Falcon and decided to 'decline' to invite Drive journos to press releases and such?

[R-Design]

Originally Posted by Road_Warrior

As an aside, has anyone noticed the lack of content on Drivel.com lately, particularly relating to Ford? Could it be that Ford has gotten the on with them about some of the crap they publish about the Falcon and decided to 'decline' to invite Drive journos to press releases and such?

Probably a case of, if you can't say something negative, say nothing at all.

[phillyc]

Originally Posted by Boss315

Probably a case of, if you can't say something negative, say nothing at all.

Exactly.

PS Having a laugh thinking about a situation at work the other day. One mate was looking at a Terri or Adventra V8 and ended buying the Adventra for the power. The other mate was talking up the economy of his Holden Adventra V8 and saying it gets 14s around town. I asked was that off the computer or at the bowser. He said computer, I said well check it. Holden have been known for years to be optimistic with several journo's running out of fuel. Mentioning it was probably mid 15s. He asked why would they do that. I said to make you feel better if your too lazy to check yourself. The other mate then said he'd say that, he likes Fords. To which I got called a Ford loser. Needless to say I mentioned, how many days before GM go bankrupt? The room just burst into laughter! Table quickly turned to inevitable demise (in current form) of GM!

[phillyc]

Originally Posted by Road_Warrior

Well I guess it would depend on whether FoA rang them up and threatened them with legal action! I'd be willing to bet that's what happened here.

As an aside, has anyone noticed the lack of content on Drivel.com lately, particularly relating to Ford? Could it be that Ford has gotten the on with them about some of the crap they publish about the Falcon and decided to 'decline' to invite Drive journos to press releases and such?

Marin Burela would be the perfect man to tell Gover and the other idiots at Drivel that they are idiots and lacking in both journalistic aptitude and biased!

He sure seems to be an "ask questions & tell it like it is then back it up ith facts type of guy!"

Shame the drivel hasn't been writing up any of the positive stuff, which there has been plenty of lately. Better than just turning positives into negatives though.

[MickyB]

The interesting thing is that in Australia company's cannot become 'bankrupt'. They can be put under administration, enter receivership, or enter liquidation. I'm not sure how a foreign owned company would be dealt with, but if it occurred in Aus then it could not undergo bankruptcy. Only non corporate entity's such as individuals and partnerships can become bankrupt.

[Dave_au]

Originally Posted by MickyB

The interesting thing is that in Australia company's cannot become 'bankrupt'. They can be put under administration, enter receivership, or enter liquidation. I'm not sure how a foreign owned company would be dealt with, but if it occurred in Aus then it could not undergo bankruptcy. Only non corporate entity's such as individuals and partnerships can become bankrupt.

Apart from the outcome of the GM restructure, Holden could end up in Receivership or Administration if the company was reliant in a letter of support from GM to satisfy and pay the debts of GMH if or when they occur.

That is to say, if Holden needed the support of it's parent to remain a going concern (which could be possible if Holden bore the brunt of a number of costs eg engineering etc) and then if the parent collapsed, the company may not be solvent, resulting in the directors going to a VA or a race by what I would assume to be a local banking syndicate to appoint a receiver.

[MickyB]

Originally Posted by Dave_au

Apart from the outcome of the GM restructure, Holden could end up in Receivership or Administration if the company was reliant in a letter of support from GM to satisfy and pay the debts of GMH if or when they occur.

That is to say, if Holden needed the support of it's parent to remain a going concern (which could be possible if Holden bore the brunt of a number of costs eg engineering etc) and then if the parent collapsed, the company may not be solvent, resulting in the directors going to a VA or a race by what I would assume to be a local banking syndicate to appoint a receiver.

Yeh I agree with you there, my main purpose was to point out that Holden could not become bankrupt in this country. Being technical I guess
I certainly agree that if GM withdraw their funding then Holden faces insolvency.

[Piotr]

Originally Posted by MickyB

Yeh I agree with you there, my main purpose was to point out that Holden could not become bankrupt in this country. Being technical I guess
I certainly agree that if GM withdraw their funding then Holden faces insolvency.

You are just nit picking at the name

[Piotr]

Well for receivers and managers to be appointed a default under the relevant charge would need to occur first

[Dave_au]

Originally Posted by Piotr

Well for receivers and managers to be appointed a default under the relevant charge would need to occur first

Wwitching into space cadet mode:

Your right, but it depends on the charge document. Usually most charges can be "defaulted" if an Insolvency Event occurs or the company stops or threatens to stop carrying on its businesses or a material part thereof without the consent of the bank.

Regardless the directors would jump straight to VA as the repercussions of trading whilst insolvent are significantly more onerous than in the US. Going to VA should allow a banking syndicate with security over substantially the whole of the company to appoint a receiver and manager within 13 days of the VA commencing.

I'm sure if any of these occur, the validity of appointment would be challenged one way or another whether it's a VA or an R&M.

[Ghiadude]

Originally Posted by Dave_au

Wwitching into space cadet mode:

Your right, but it depends on the charge document. Usually most charges can be "defaulted" if an Insolvency Event occurs or the company stops or threatens to stop carrying on its businesses or a material part thereof without the consent of the bank.

Regardless the directors would jump straight to VA as the repercussions of trading whilst insolvent are significantly more onerous than in the US. Going to VA should allow a banking syndicate with security over substantially the whole of the company to appoint a receiver and manager within 13 days of the VA commencing.

I'm sure if any of these occur, the validity of appointment would be challenged one way or another whether it's a VA or an R&M.

exactly what i was thinkin..:

[MickyB]

Originally Posted by Dave_au

Wwitching into space cadet mode:

Your right, but it depends on the charge document. Usually most charges can be "defaulted" if an Insolvency Event occurs or the company stops or threatens to stop carrying on its businesses or a material part thereof without the consent of the bank.

Regardless the directors would jump straight to VA as the repercussions of trading whilst insolvent are significantly more onerous than in the US. Going to VA should allow a banking syndicate with security over substantially the whole of the company to appoint a receiver and manager within 13 days of the VA commencing.

I'm sure if any of these occur, the validity of appointment would be challenged one way or another whether it's a VA or an R&M.

Did you write the CPA 'Insolvency and Reconstruction' module, because it's all coming back to me now after reading that mate!
I don't know much about the corporate structure of Holden, but who are it's Directors? Are they based here or abroad?

[Piotr]

Originally Posted by Dave_au

Your right, but it depends on the charge document. Usually most charges can be "defaulted" if an Insolvency Event occurs or the company stops or threatens to stop carrying on its businesses or a material part thereof without the consent of the bank.

All of those are example of non-monetarydefaults which may be written into the charge, but it does depend on the charge itself.

Originally Posted by Dave_au

Regardless the directors would jump straight to VA as the repercussions of trading whilst insolvent are significantly more onerous than in the US. Going to VA should allow a banking syndicate with security over substantially the whole of the company to appoint a receiver and manager within 13 days of the VA commencing.

13 Business day

Originally Posted by Dave_au

I'm sure if any of these occur, the validity of appointment would be challenged one way or another whether it's a VA or an R&M.

You can not challenge the validity of the appointment of an administrator.

[Dave_au]

Originally Posted by Piotr

You can not challenge the validity of the appointment of an administrator.

Completely off topic now - You can through 447C.

[R-Design]

More GM doom and gloom:

http://www.caradvice.com.au/30802/gm...t-76-year-low/

[R-Design]

I think the last line promoting GM's JV with Shanghai Automotive in China & its shared owndership of Daewoo are more telling with respect to where GMH is headed.

[Gobes32]

I call bulls&^t that Holden do not know what will happen to them in the event of a GM bankruptcy, this whole situation would be a joke if it were not so serious.

[z80]

Somehow me thinks no aussie car maker is immune from the economic downturn.

The rot hasn't even begun in Aus...

[phillyc]

The GM executives have all started to sell all of their GM stocks in the last week. Lutz was the biggest seller.

I'm not saying Lutz is a rat, because he actually helped Holden get a foothold in the US and in turn awareness of Falcon in the US. But it would appear the rats are leaving the ship. I would 99% expect bankruptcy within the next 2 weeks.

All of which is great news for Ford US as they will continue to increase their market share as they have done for 6 of the last 7mths.

Chrysler, have just announced that parts of the business will be in Ch11 for 2years...

GM is a company more than double the size and with much more downward momentum.

[vztrt]

GM is having problems with the unions.

http://news.theage.com.au/breaking-n...0516-b6le.html

GM, union at odds as bankruptcy deadline looms
May 16, 2009 - 3:44PM

General Motors remains at odds with its main union over key contract changes as a deadline to prove viability and avert bankruptcy fast approaches, union officials said.

The United Auto Workers union objects to GM's plans to shut down more US plants and import as many as 50,000 vehicles from China.

"If GM is going to receive government assistance to facilitate its restructuring, along with substantial benefits from the tremendous sacrifices by UAW active and retired members and other stakeholders, we believe it should be required to maintain the maximum number of jobs in the US, instead of outsourcing more production to countries where the vehicles will have little or no US content," UAW legislative director Alan Reuther wrote in a letter distributed to lawmakers Friday.

The struggling automaker also faces steep opposition from dealers after announcing plans Friday to shrink its dealer network 40 percent, cutting some 2,300 sales outlets by the end of 2010 from the current level of 5,969.

It must also reach an agreement with bondholders to slash its massive debt-load with an equity swap.

GM is funding its operations with more than 15 billion US dollars in emergency government loans and faces a June 1 deadline to complete a major restructuring plan or be forced to follow its rival Chrysler into bankruptcy court.

GM's chief executive officer Fritz Henderson acknowledged earlier this week that a bankruptcy filing is the "more probable" outcome "given the objectives that we've set for ourselves."

The automaker announced it would move up payments to suppliers to May 28 from June 2 specifically so the money could not get tied up in a bankruptcy filing.

UAW spokesman Roger Kerson declined to comment on reports that GM wants to cut as many as 21,000 additional blue-collar jobs in the next phase of its restructuring in order to reduce costs by as much one billion US dollars.

GM has already announced plans to slash 26,000 union jobs and the fresh cuts would mean its hourly workforce would be more than halved to about 42,000 from 87,000 in the spring of 2008.

GM declined to comment on the status of negotiations.

GM's plans to import up to a third of the vehicles it sells in the United States by 2014 will mean the US government has spent billions of US dollars to lose jobs instead of protect them, said Harley Shaiken, a labor expert from University of California-Berkley.

"GM has tended to be tone deaf on the political implications of these kind of decisions," Shaiken told AFP.

"The Auto Task Force also tends to a little tone deaf as well... A large part of their approach tends to be at cross purposes with the stimulus package."

© 2009 AFP

[vztrt]

Also as some of you may have seen, The closing of dealerships.

http://news.theage.com.au/breaking-n...0516-b6n6.html

Job losses as GM, Chrysler close dealerships
Charlotte Raab
May 16, 2009 - 5:24PM

Moves by ailing carmakers Chrysler and General Motors to slash their US dealerships will cost tens of thousands of jobs, taking a heavier toll than cuts in production, analysts say.

General Motors, the largest US automaker, said Friday it would seek to eliminate nearly 40 percent of its US dealers, more than 2,300 sales outlets, by the end of 2010 as part of its reorganisation to avert bankruptcy.

Chrysler, which has filed for bankruptcy protection, said Thursday it had asked the bankruptcy court to shut down 789 dealers, nearly one-fourth of its sales outlets.

For GM, the decision to close the dealerships, which employ about 50 people each, could translate into the loss of as many as 150,000 jobs -- representing a 0.2 percentage point rise in the unemployment rate, Joel Naroff at Naroff Economic Advisors said.

By contrast, the restructuring plans of GM and Chrysler project the loss this year of 47,000 and 3,000 jobs, respectively, in the recession-ravaged economy.

The two struggling automakers have already taken the hatchet to payrolls in the last several years: Chrysler has slashed 32,000 jobs since 2007; GM cut 31,000 in 2008 alone.

David Cole, chairman of the Center for Automotive Research, based in Ann Arbor, Michigan, said the announcements of the dealership closings "brings the issue of the problem of the auto industry to the attention of the entire country."

The crisis affects not just the hub of the US auto industry in Detroit, Michigan, and its industrial spokes in the Midwest, but directly touches dealerships across the country, from large cities to small towns.

George Magliano, an auto industry specialist at IHS Global Insight, said that unlike factory closings, the shuttering of dealerships "is more painful -- it's more localized."

"These guys were a source of support of a lot of the community activity," he said.

"The ripple effect of the dealership closings can be significant, they can be the key employer of the area. You shut them down, and it hurts the revenue base there," he added.

Cole estimated that each dealership job acts as multiplier, creating three related jobs.

Magliano noted that it was impossible for GM and Chrysler, faced with a severe US auto industry slump in general and their loss of market share, to maintain dealerships at boom-year levels.

Rival Japanese automakers operate nearly half as many dealerships as GM intends to keep.

"They've been trying to consolidate dealerships for years, it's a 10-year process," Magliano said of the US auto giants.

Naroff said that at least a disorderly dismantling at bankrupt Chrysler was avoided.

"Had they just shut down, then you can multiply the (social) impact by three or four -- that's just Chrysler. With GM you see the disaster was there," he said.

Naroff noted the "large" impact of the dealership closures on unemployment, but said it would have been bigger without the working capital given by President Barack Obama's administration to GM and Chrysler to help them through restructuring.

"The fact that money was used to stabilize the situation and give them a chance to have some sort of reasonably controlled and negotiated bankruptcy probably has saved a lot of jobs," Naroff said.

The Treasury Department acknowledged the "difficult" decisions and stressed Obama's auto task force had not been involved in deciding which dealers, or how many dealers, would be closed.

"Without the president?s intervention, the entire GM and Chrysler dealer networks could have been lost," the Treasury said in a statement.

© 2009 AFP

[vztrt]

Some more info.

http://business.theage.com.au/busine...0516-b6vq.html

GM dealer cuts raise spectre of insolvency

Nick Bunkley
May 17, 2009

GENERAL Motors told more than 1100 US dealers on Friday that their franchises would not be renewed next year, bringing the total for the week to nearly 2000 car dealers no longer wanted.

The action, involving only half of the showrooms that GM hopes to eliminate, was another step towards a likely bankruptcy filing at the end of this month.

GM — which owns Holden in Australia — says it still hopes to avoid bankruptcy and subsist on more government loans.

But Mark LaNeve, GM's vice-president for North American sales and marketing, acknowledged that the dealer cuts "would be hard to enforce" outside court.

The letters to GM dealers arrived just one day after Chrysler sent similar notices to 789 dealers. Chrysler is asking a bankruptcy judge to terminate the agreements with its cast-offs by June 9.

One of the GM letters was delivered Friday morning by FedEx to Thomas Epperson, whose father started Epp's Chevrolet 50 years ago in Middlesboro, Kentucky. Mr Epperson was already reeling from the letter he got from Chrysler, revoking his long-standing franchise to sell Jeeps.

"It's more than I can handle right now," he said. "I don't know what to do. I'm in shock. I'm looking at a plaque they just gave him (referring to his father) two months ago, that says 50-year dealer. And now I got a letter today saying we're done."

GM and Chrysler say they need far fewer dealerships to become more efficient and profitable in a shrinking industry. After the cuts, their dealer networks will still be larger than those of foreign competitors Toyota and Honda.

In 2008, Chrysler dealers sold an average of 303 new vehicles each, compared with 1292 sales at an average Toyota showroom, Chrysler said in a filing in bankruptcy court.

The ousted 1100 GM dealers represent 18 per cent of GM's 5969 outlets, but just 7 per cent of last year's sales. Nearly 500 of them sell fewer than 35 new GM vehicles a year, Mr LaNeve said.

Unlike Chrysler, GM did not announce publicly the dealers that it does not want.

NEW YORK TIMES

[R-Design]

It's roughly two weeks before we get an announcement from GM regarding their entering CH11. I wonder how long after that consumer confidence in GMH will start to be eroded due to the financial mismanagement of their US parent.

Ford US seem to doing their best as winning over current Chrysler owners, I wonder if Ford AU has a similar plan here with respect to GMH’s retail & fleet business. If they don't they should, it might be time for Ford introduce some adverting mentioning the 50th anniversary of Falcon & it’s plans to build Focus in Australia. You don’t get a better free kick than the one they’re about to be handed.

[vztrt]

Originally Posted by Boss315

I wonder if Ford AU has a similar plan here with respect to GMH’s retail & fleet business.

The government is purposely propping up Holden sales in Australia. Even if the car emits more C02 and is not as fuel efficient as the Falcon counterpart.