**GM preparing for bankruptcy**

[Jason[98.EL]]

we can only hope that is the case

i dont think au needs that many people on top of what we have now looking for work

weather the cruze has 25 % or 75% aus in it i dont think that realy matters what does is keeping people in work ( i could only wish )

Jason

[Paxton]

Originally Posted by Jason[98.EL]

we can only hope that is the case

i dont think au needs that many people on top of what we have now looking for work

weather the cruze has 25 % or 75% aus in it i dont think that realy matters what does is keeping people in work ( i could only wish )

Jason

I think it is safe to say that should Holden stay owned by GM (we should find out tomorrow), Cruze will enter Australian production. If, SAIC or Chery or Geely buy Holden, Cruze goes out the window, and it's back to square one.

We just have to hope that Holden stays under GM ownership, and also thank our lucky stars that this didn't happen to Ford.

[R-Design]

"GM's rebirth begins now"

A brief article outlining some of the benefits from GM's CH11 restructure.

http://www.thestar.com/Business/article/643137

[Swordsman88]

Originally Posted by Paxton

With Cruze only being 25% local content, will Focus contain more Australian content?

It would be a strange outcome.....considering the cruze is a supposedly such 'australianised' Opel astra platform. Holden claims it will have made significant changes to its suspension/handling set up and a whole host of other systems for the aussie market. Plus off course the all new sheetmetal.

The aus focus would basically be a tested and approved euro focus....apart from some adr changes and local tunes (maybe...) of suspension (dampers etc.) that's it. If the local content of cruze was higher its be interesting to find out why... would it not??? Maybe holden rushed the 'aussie' small car out so quickly (to combat focus) that in effect its a kit car. Panels stamped here, put together here but the rest comes in the box....probably from korea.

Funny that seeing as people were complaining when the green car fund was used by Rudd to help Toyota bring the hybrid camry to aus even though the hybrid tech was 100% imported. Didn't Rudd fund this HOlden small car too...deja vu!!!!!

[vztrt]

GM to get thrown of the Dow Jones Index.

http://news.theage.com.au/breaking-n...0601-bs1m.html

GM to lose prestigious spot on Dow
Marine Laouchez
June 1, 2009 - 8:59AM

General Motors' fall from grace is not yet complete. The firm's expected bankruptcy would spell its eviction from the Dow Jones coveted list of 30 top US companies, of which GM has been a pillar since 1925.

Even if GM's court filing has not yet been inked, speculation is rife about which firm might take its place on the Dow Jones Industrial Average, as the former behemoth's share price tumbled 47 percent last week.

GM's shares fell to 75 cents each on Friday, well below the one dollar minimum for listing on the New York-based exchange.

It is a confluence of factors that means GM will suffer the same fate as AIG. In September, the insurance giant was removed from the Dow Jones index two days after its nationalization, replaced by Kraft Foods.

"Once a company files for bankruptcy protection it is disqualified from being one of the 30 Dow components," said Dow spokesperson Sybille Reitz.

"We are aware of GM's situation and are taking steps accordingly. We have been following the situation closely."

There is great competition to replace GM on the venerable list, which has served as a bellwether for US business since it was launched in 1896.

One solution could be to replace GM with its rival Ford -- which has so far managed to escape the crisis without government aid.

But Ford's share price is far from stellar, trading at around 5.75 US dollars. According to John Ogg of 247wallst.com, that makes the firm -- which had previously been a member of the elite club -- an unlikely inductee.

One of the more frequently cited names is that of Wall Street darling Goldman Sachs.

The investment giant should be one of the first to pay back government loans, thanks to a share price of more than 144 US dollars.

Nicholas Colas, head of investment strategy at the BNY ConvergEx Group, said that makes Goldman Sachs a favorite.

It may also have been helped by AIG's departure.

During the AIG shakeout in September the Dow Jones group noted that the exit of one financial firm meant that that economically vital sector was under-represented.

But there are other contenders. From the technology sector Apple, Google, Cisco and Oracle are mentioned as possible replacements.

Google's candidature runs into the difficulty that its share price -- at over 400 US dollars a piece -- may skew the index.

And technology stocks are already well represented by heavyweight IBM.

A recent poll by CNBC has further muddied the picture. The financial news provider asked customers who should replace GM. The response was Abbott Labs, a pharmaceuticals firm.

From the biotech field, Monsanto is an outsider. Owen Patrick of Deutsche Bank pointed out that Monsanto was an important member of another index, the Standard and Poor's 500.

"It is a little smaller in market cap," said BNY's Colas, "and not as well known, but its technology and competitive advantage would be unique in the Dow."

If the GM change has been keenly anticipated, that is because change on the Dow is rare.

Only six firms have come in this decade, with three in 2008 including Kraft -- Bank of America and Chevron replaced Altria and Honeywell.

According to Ogg the index's managers may use the opportunity to dump other listings hit by the financial crisis.

Citigroup, now trading at four US dollars a share, must feel its head is on the chopping block.

© 2009 AFP

[vztrt]

http://news.theage.com.au/breaking-n...0601-bry4.html

GM bankruptcy announcement expected soon
Kimberly S Johnson and Tom Krisher
June 1, 2009 - 7:19AM

General Motors is making final preparations for its bankruptcy protection announcement after bondholders accepted a sweetened deal, smoothing the way for the company's reorganisation.

A statement from a group of large, institutional bondholders on Sunday said 54 per cent of the GM bondholders had agreed to exchange their unsecured bonds for a 10 per cent stake in a newly restructured company, plus warrants to purchase a greater share later. Their acceptance is seen as critical in moving the company through bankruptcy quickly.

The company has not confirmed it will seek bankruptcy protection, but chief executive Fritz Henderson has scheduled a news conference on Monday morning in New York. President Barack Obama is also expected to give a speech addressing the Detroit carmaker's fate.

The company made a huge stride toward restructuring on Friday when the United Auto Workers union agreed to a cost-cutting deal, and early on Saturday, Germany's finance minister said a plan was approved for Canadian car parts maker Magna International Inc to move ahead with a rescue of GM's Opel unit.

GM is racing to meet the government's Monday deadline to qualify for more aid. It has already received about $US20 billion ($A25.5 billion) in government loans and could get $US30 billion ($A38.3 billion) more to make it through what is expected to be a 60-to-90-day reorganisation in bankruptcy court.

GM's stock tumbled to the lowest price in the company's 100-year history on Friday, closing at just 75 cents after trading as low as 74 cents. In a Chapter 11 bankruptcy reorganisation, the shares would become virtually worthless.

© 2009 AP

[DoreSlamR]

Apparently the US government is about to break the news that they are going to take a 60% stake in GM.

[DoreSlamR]

11 plants to be closed with 3 others idled.

Canada will also take a 12% stake

More info here:

http://www.bnonews.com/news/341.html

[vztrt]

Announcement expected at 2am.

http://www.goauto.com.au/mellor/mell...2575C800049AD4

GM bankruptcy D-day tonight

GM, Obama set to announce Chapter 11 restructuring

By IAN PORTER and RON HAMMERTON 1 June 2009

PRESIDENT Barack Obama and General Motors president and CEO Fritz Henderson have called back-to-back media conferences tonight (about 2am eastern Australian time), in which they are almost certain to announce GM’s application for Chapter 11 bankruptcy.

Mr Obama is scheduled to go first in a video announcement from the White House, before Mr Henderson goes before the media at the GM Building in New York.

These announcements will be followed by a GM Holden media conference at 9am tomorrow in Melbourne to spell out the implications for the Australian manufacturer.

GM’s decline into bankruptcy would mark the biggest corporate Chapter 11 application in US history, but is likely to provide the circuit breaker for a leaner, keener GM with a focus on more fuel-efficient cars.

GM has been forced to go the US federal court to seek bankruptcy protection because a number of bondholders have refused to accept a sweetened debt-for-equity swap deal.

Bondholder agreement for the swap was an essential part of the US treasury department’s requirements for continued government financial support for GM as it restructures. It had initially wanted 90 per cent of bondholders to support the swap, but a little more than 50 per cent accepted by Saturday’s deadline.

Treasury has already lent GM $US19.4 billion ($A24.2 billion) and there is another $US30 billion, perhaps $US40 billion, on offer when GM emerges from bankruptcy.

In a surprise switch, GM and the treasury offered bondholders the chance to lift an initial 10 per cent stake in the company to 25 per cent by issuing warrants allowing them to buy a further 15 per cent of GM’s share capital.

The initial offer of 10 per cent in return for a minimum of $US24 billion ($A30 billion) of unsecured debt was roundly rejected by bondholders in a vote last week. The bondholders are owed a total of $US27 billion.

The new deal, however, attracted the support of just more than 50 per cent of the bondholders by the 5pm deadline on Saturday.

The deal offered to the United Auto Workers (UAW) union has also been improved. Instead of a 10 per cent stake, the union will now receive a 17.5 per cent stake in return for swapping half the $US20 billion that GM has agreed to pay into the Voluntary Employee Benefit Association (VEBA).

On behalf of the VEBA, the UAW will also be granted warrants allowing it to buy a further 2.5 per cent to lift its total stake in GM to 20 per cent.

After conversion of some of its loans, the US treasury will hold more than 70 per cent of GM. The UAW would hold around 17.5 per cent and the bondholders 10 per cent before they exercised their warrants. The current shareholders will see their stake shrink from 100 per cent to 1 per cent.

It is expected that the warrants issued to the UAW and the bondholders will give them the chance to buy part of the treasury’s GM holding.

GM is preparing documents and an application for Chapter 11 protection on Monday. President Obama is expected make a speech about the government's unprecedented role in helping to restructure a company that was once the benchmark for manufacturing enterprises around the world.

It is believed the US government plans to invest $US60 billion in GM. A further $US12.5 billion of government funding has gone to GM's 50 per cent-owned finance company, GMAC.

“My preference would have been to stay out of it completely,” Mr Obama said in an interview with NBC News recorded on Friday at the White House and broadcast on Saturday.

“But the alternative was to see a liquidation, bankruptcy in which an enormous institution with huge importance to our economy simply gets broken up into pieces,” he said.

[Dave_au]

Albert A Koch of AlixPartners is the Government's choice for "administrator"/Chief Restructuring Officer

http://www.nytimes.com/2009/06/01/business/01gm.html?hp.

[4Vman]

Anyone want to go out on a limb and predict Holdens's future as a result of this?

[R-Design]

Originally Posted by 4Vman

Anyone want to go out on a limb and predict Holdens's future as a result of this?

No, but I'm pretty sure we won't learn anything new in their press converence tommorrow morning.

Everything will smell like roses, that is until someone changes the locks on the door.

[JG66ME]

Originally Posted by 4Vman

Anyone want to go out on a limb and predict Holdens's future as a result of this?

Whats your view Norm? I am tipping they could be sold and end up as a badge on an import.

[Dave_au]

Originally Posted by 4Vman

Anyone want to go out on a limb and predict Holdens's future as a result of this?

I wouldnt be suprised if they closed the engine plant and moved it to Korea, I think Elizabeth ops will remain with the Cruze to be built locally via complete knock-down kits from Korea (so they can still benefit from Krudd's handouts)

[vztrt]

Originally Posted by 4Vman

Anyone want to go out on a limb and predict Holdens's future as a result of this?

Nothing even if they are in trouble Rudd and co will come to the rescue.

[4Vman]

Originally Posted by JG66ME

Whats your view Norm? I am tipping they could be sold and end up as a badge on an import.

Dunno Steve.. too many parachutes being handed out here and in the US, it may have no effect or it could mean Holden become the re-badge company, who knows.
Ford are not in the position to cater to a 130% increase in locally manufactured product sales demand that a demise of Holden would leave that's for sure.

[ea90gl]

So no hope for a future 10 ltr 330KW pushrod donk in the HSV's then

[4Vman]

Originally Posted by ea90gl

So no hope for a future 10 ltr 330KW pushrod donk in the HSV's then

I think its fair to say we've seen the largest capacity/highest output engine from GM for a long time if not ever.. HSV are concerned no doubt.

[tapeworm]

On ABC radio this morning everything will be sweet for Holwoo Australia

[Windsor220]

I know that Holden here will be fine but I still cant figure out why GM would want to keep them.

No profit for ages, mostly rebadged cars from some other country, they offer nothing for the future.

[Mark s]

Really I dont know how anyone can predict the future of Holden. We read stuff in the Australian Media and also from GMH HQ. Unless these folks have a crystal ball or have a bat phone to the US govt, creditors, etc. How the hell can they really predict.

I have read that Holden are in a really good position to survive what is happening in the US. Great but how are they in such a strong position, where are the facts to show us Holden are going great guns? All I am reading is the Holden PR dept going ahead full steam, with the media jumping on board as well.

I mean they were getting major handouts from the Australian Govt to the tune of $150 million + the other $450 million from the parent. If Holden were in such a wonderful position, why is it they are after all these handouts?

Maybe the media smoke and mirrors US police car deal people have been talking about in the media, will be there to save the day for GMH.

The question is can Holden really survive without the handouts from the parent and the Australian tax payers?

I cant see the parent willing to throw money at Holden, when it can and will look at much cheaper options in China and Korea.

[4Vman]

"Best position" should read "least unprofitable" (but unprofitable none the less) subsidiary of the GM family..
Bit like sitting on the stern of the titanic as if goes down bow first..

[Mark s]

At the end of the say. GM US looking at its own survival and that is what the US govt will be looking at. The US Govt is concerned about its workers, stockholders and companies first and foremost. If they have to dump offshore companies to keep its head above water, then the US govt will do it. Maybe if Holden are doing great guns as we have been told, it might make the sale to another company more attractive, say over the sale of SAAB or something simular which is show far less profitability.

All I really know is GM are in a world of crap and it's going to be a mamoth task to become the empire they once were and this GMH being the "jewel within the empire" Will mean sweet FA when push comes to shove.

[Wally]

Originally Posted by 4Vman

"Best position" should read "least unprofitable" (but unprofitable none the less) subsidiary of the GM family..
Bit like sitting on the stern of the titanic as if goes down bow first..

Remember that saying a while back.." I have more money than Bondy"? Well I suspect every individual on this board is wealthier than Ford and GM combined.

[R-Design]

Originally Posted by Wally

Remember that saying a while back.." I have more money than Bondy"? Well I suspect every individual on this board is wealthier than Ford and GM combined.

Based on current form I don't think it's fair to put GM & Ford in the same sentence.

One Company has a plan, while the other has an extended hand.

[4Vman]

Originally Posted by Boss315

Based on current form I don't think it's fair to put GM & Ford in the same sentence.

One Company has a plan, while the other has an extended hand.

You need to see past the comment to understand why he lumps them together... Yes i agree, it isn't fair or logical to lump them together, nor is it relevant to the topic.

[EgoFG]

Interesting times

on the 'GM will be lean mean and cleared of debt'
Chapter 11 is a way of protecting the operations of a company from debtors, not eliminating debt.
Ordinary business says you must 'sell the assets to pay the debts' - this will leave a company with no assets, and no future.

Chapter 11 means that the company can restructure while the law keeps the vultures at bay.

On top of this protection, the governments of this world are aiding to the tune of over 60billion, but at least 60billion is actually loans. Loans disguised as purchase of equity.

GM will still have to repay these 'loans' if it is to gain control of itself (from the Governments).

Will it be in a better position than Ford ? ... well that depends on three things
1) how quickly the governments require their money back ?
2) will the government controlled management be any better than Ford's free market management ?
3) what will the buying public think of the arrangement ?

[phillyc]

Originally Posted by 4Vman

I think its fair to say we've seen the largest capacity/highest output engine from GM for a long time if not ever.. HSV are concerned no doubt.

Pretty good for Ford & FPV though!

[imugli]

Originally Posted by EgoFG

GM will still have to repay these 'loans' if it is to gain control of itself (from the Governments).

Not quite.

The idea is that, in return for forgiving the $60b in loans, El Presidente and his Treasury whatits get 60% of the stock in the NEW GM.

Over time, as the value of this share increases, the US Government will sell their share, HOPEFULLY for a profit. Now if they've loaned $60B and they get 60%, that would mean the company would need to be valued at $100b at some stage for them to get their cash back.

Can someone tell me what Toyota's market cap is? And if GM's was EVER $100bn?

[Wally]

Originally Posted by Boss315

Based on current form I don't think it's fair to put GM & Ford in the same sentence.

One Company has a plan, while the other has an extended hand.

Ford have had the same helping hand, only from private financiers.... probably conduited govt bailout monies. It's all really horses of a different colour. I'm not sure what Ford has planned, but I hope it works out for them.

GM must have a plan, otherwise no handouts, I hope it works out for them too, although like any company that has been operating insolvent for so long they deserved to be wound up. I know if my company was running on less than empty, I am bound by law to appoint an administrator. It seems the three biggest automakers in the US have been exempt from such a responsibility and in the end workers and creditors have lost out bigtime.