General Motors Moves Closer to Bankruptcy Filing
April 6, 2009 By
Bloomberg reports that General Motors is speeding up preparations for a bankruptcy filing.
General Motors Corp. is speeding up preparations for a possible bankruptcy filing even as directors seek deeper savings this week to avoid that outcome, people familiar with the plans said.
The bankruptcy readiness focuses on forming a new company from GM’s best assets if necessary, said the people, who asked not to be named because the matter is private. The cost-cut discussions center on how to go beyond GM’s proposal to slash debt by 46 percent and shed 47,000 jobs in 2009, and will include talks with Treasury officials, the people said.[...]
[...]GM’s board met today and yesterday, and more discussions are planned inside GM and with the Obama administration, the people said. Obama gave the biggest U.S. automaker 60 days to restructure, without specifying what steps were needed to stem $82 billion in losses since 2004.
Planning for a court filing was ratcheted up in February as a precaution against a defeat for GM’s bid to keep its U.S. loans, the people said. Detroit-based GM said it prefers to restructure outside bankruptcy court.
GM’s preparations include looking at a so-called 363 sale, a reference to a section of the Chapter 11 bankruptcy code that would help create a new automaker from the assets and brands of GM, boosting the company’s survival chances, the people said.[...]
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General Motors (GM) Says it May Need $30 Billion to Survive
February 17, 2009 By
I feel General Motors has now crossed the line of having any public support going forward. Before today’s announcement from General Motors (GM) that it may now need as much as $30 Billion (tax payer) dollars to survive, public support of all ‘bail outs’ has been waning.
Now General Motors is coming back to Washington saying that they under estimated the economic declines and may now need more than twice as much money from the tax payers in order to become a profitable company by 2012, but may still need even more money in 2013 to help pay retiree pensions.
General Motors has now crossed the line. You are asking for more tax payer support at a time when tax payers are already hurting in this economy. This is now about individual preservation of capital. Rick Wagoner, your request for additional funds is appalling and disgusting, and an insult to the American people.
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General Motors (GM) Seeks to Avoid Paying Taxes
February 1, 2009 By
The Detroit News has uncovered that General Motors is “quietly” lobbying congress to avoid paying billions of dollars in taxes. The taxes are due under the original $13.4 bailout agreement provided by the U.S. Government (tax payers).
The newspaper reports that lobbyists for General Motors is attempting to have a provision added to the $800+ Billion economic stimulus package a provision that would grant General Motors a special exception so they can avoid paying the projected billion in taxes.
General Motors claims that if they are forced to pay the taxes it could jeopardize their attempt to restructure the company and stay afloat.
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General Motors – To Cut the Number of Car Dealers
January 12, 2009 By
Off the news wires…
GM NORTH AMERICAN SALES CHIEF: EXPECTING 500 FEWER DEALERS IN 2009, SEES CUTTING 1,700 DEALERS THROUGH 2012
- Note the planned losses in dealerships represent approx 25% of total dealership force.
If we use a figure of 25 employees per dealership, that would equate to job cuts of 42,500 by 2012 just in GM dealerships alone.
Auto Sales – December Numbers
January 5, 2009 By
General Motors (GM) – Reports December North American Vehicle sales -31.4% V -41% expected
- Full year sales -23% y/y
Ford (F) – Reports December vehicle sales -32.4% V -33% expected
- Full year sales -20.7% y/y
Toyota (TM) – Reports December U.S. vehicle sales -37%
- Full year 2008 sales -16%
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Market Summary – Case Shiller, GMAC, and the Federal Reserve… OH MY!
December 30, 2008 By
Where to begin…
First I will discuss some of today’s economic events then I’ll dive into the charts.
This morning we received additional confirmations that the housing market is still declining. The Case-Shiller 20-city price index dropped an additional 2.2% from the previous month, and is now down nearly 25% from the peak 2 years ago. No bottom is in sight yet, but the Government is trying to put in a temporary floor by throwing (our) money at it like mad.
Then came the consumer confidence reading of 38, and that was another record low. The monthly consumer confidence data comes from “The Conference Board” and has been used as a gauge of ‘real world’ economic conditions for many decades.
The Consumer Confidence Survey measures the level of confidence individual households have in the performance of the economy. Survey asks a nationwide representative sample of 5,000 households, of which approximately 3,500 respond. Households are asked five questions that include (1) a rating of business conditions in the household’s area, (2) a rating of business conditions in six months, (3) job availability in the area, (4) job availability in six months, and (5) family income in six months. The responses are seasonally adjusted. An index is constructed for each response and then a composite index is fashioned based on the responses. Two other indexes, one for an assessment of the present situation and one for expectations about the future, are also constructed. Expectations account for 60% of the index, while the current situation is responsible for the remaining 40%. In addition, indexes for the present and future economic situations are calculated for each of the nine Census divisions. In the base year, 1985, the value of the index was 100.
And just hours after GMAC was provided $5 Billion tax payer dollars they came out screaming loudly about how fast they will begin making new loans this morning. The fact that tax payer dollars are going to be used to backstop new car loans for GM car shoppers is bad enough. But what is even more disturbing is how GMAC plans to make new loans.
[...]The company will modify its credit criteria to include retail financing for customers with a credit bureau score of 621 or above, a significant expansion of credit compared to the 700 minimum score put in place two months ago. [...]
A credit score of 621 is just one point above the classification of ‘sub prime borrowers’. GM will begin aggressively selling cars and trucks to people who are just an inch away from being sub prime quality borrowers. This in the face of rising unemployment and a deteriorating economy. This is set to be another round of defaults in the coming years and this time the damage from the resulting bad loans will be taken out of the tax payers pockets.
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GMAC To Begin Making Car Loans Immediatelly
December 30, 2008 By
GMAC says it will begin writing new car loans ‘immediatelly’. The ink on the check written by Hank Paulson to GMAC is not even completely dry yet and GMAC is planning on spending our tax dollars by lowering their standards on making new car loans.
Why is it I am very bothered by this? Simple… Americans who are already struggling to get by everyday pay their taxes. The Government then gives some of that tax money to GMAC, then GMAC uses that money to lend it back out to the American people again (plus interest) to people who are already in debt up to their eyeballs in a deteriorating economy. This scenario has ‘epic disaster’ written all over it.
GMAC has said themselves that the new loans is a direct result of having a new source of money… taxpayers!
GMAC UNIT SAYS WILL IMMEDIATELY RESUME AUTO FINANCING LOANS
- The company will modify its credit criteria to include retail financing for customers with a credit bureau score of 621 or above, a significant expansion of credit compared to the 700 minimum score put in place two months ago.- GMAC President Bill Muir: The actions of the federal government to support GMAC are having an immediate and meaningful effect on our ability to provide credit to automotive customers,We will continue to employ responsible credit standards, but will be able to relax the constraints we put in place a few months ago due to the credit crisis. We will immediately put our renewed access to capital to use to facilitate the purchase of cars and trucks in the U.S.
Bumper sticker for new GM cars and trucks:
I just got my new GM vehicle, THANK YOU tax payers!
More on this topic
(What's this?)
Bankrupt GM uses $3.5 billion of taxpayers’ money to buy subprime auto lender AmeriCredit and s...
(naked capitalism, 7/22/10)
Super-sized 'McMansions' Meet Reality
(Wealth Daily, 8/19/10)
Can GM Really Call That an "Initial" Public Offering?
(Jr Deputy Accountant, 8/17/10)
