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Or it would seem from the looks of the CNN piece:
General Motors is preparing to announce that the Pontiac car brand — once marketed as GM’s “Excitement division” — will be killed off, according to a source familiar with the decision.
These are, of course, the death cries of the company, which had hitherto been muffled with yards of duct tape bearing Management and UAW fingerprints. This is the end. Can we please stop sending money now?
Pontiac: End of the road [CNN.com]
Have we really reached the point of unadulterated fantasy such that anyone still thinks GM is going to avoid not just bankruptcy but an ugly and protracted bankruptcy? Seriously, how much longer is the investing public going to tolerate C-Level executives who are either so out-to-lunch that they believe their own prattle, or so spun that nothing that escapes their lips has a signal-to-noise ratio that exceeds that of the Pioneer 10 spacecraft?
General Motors Corp Chief Executive Fritz Henderson said on Friday the automaker was readying detailed plans for a bankruptcy filing that now appears more likely even as it races to complete a business plan under federal oversight.
Henderson said GM faced no pressure from the Obama administration’s autos task force to make a decision on whether to file for bankruptcy before an established June 1 deadline and said it was “feasible” that the automaker could still avoid bankruptcy despite the short time frame remaining.
Maybe it is just us, but there are a number of things that just scream “wishful thinking.” Like the return of Growing Pains to television, a re-do on the OJ Simpson trial, owning your own private island, or a widely successful debt-for-equity swap at General Motors.
General Motors Corp. is planning to make a formal offer to all bondholders by April 27 to exchange their $27.5 billion in claims for equity, according to a person with knowledge of the discussions.
Yes, we know, we know, the administration wants 66% of the original bonds whacked out via such a swap so their fantasy of a “surgical bankruptcy” can be realized (where “surgical bankruptcy” means “fail to piss off the UAW too badly”) but no one seems very likely to want to make nice-nice with this administration in a case like this (when being “nice” means giving up cash). This hasn’t stopped the administration from trying, though the latest efforts (concentrating on how bad it would be for Detroit if the bankruptcy turns out as anything but a blistering bit of unexpected caning for bondholders) seem a little familiar to us. Familiar sort of like the guilt trip your mother used to play on you when you were twelve. Or certain 1970s public service announcements.
GM Said to Plan All-Equity Offer for Bondholders [Bloomberg]
It’s one thing to say that a firm might be better off in bankruptcy. It is another entirely to prod it down the plank towards the sea.
General Motors Corp.’s 60-day deadline to restructure is unlikely to be extended because the U.S. won’t repay $1 billion in convertible notes maturing June 1, according to a person with knowledge of the discussions.
President Barack Obama’s auto task force told the biggest U.S. automaker it doesn’t want taxpayer funds used to repay debt maturities, said the person, who declined to be identified because the talks are private. Detroit-based GM has $1 billion of 1.5 percent convertible securities coming due June 1. The debentures, issued in increments of $25, fell $2.05 to $7.20 as of 1:56 p.m. in New York, which would be the lowest closing price since December, according to data compiled by Bloomberg.
Funny, we don’t remember any sort of squeamishness about “taxpayer funds used to repay debt maturities,” before now. Why the sudden change in heart?
GM Said to Be Warned Government Won’t Make June 1 Debt Payment [Bloomberg]
Back when it wasn’t totally clear that GM would suck away every dollar unfortunate enough to even cross the expanding event horizon of fail that surrounded the company, you would have looked at us skeptically and slowly backed away (or jabbed us in the eye with a sharp stick). Still, that’s exactly what happened with the auto giant. But, as it happens, Obama doesn’t listen much to us, so, we were a little taken aback when he finally admitted the inevitable.
President Barack Obama believes a quick, negotiated bankruptcy is the most likely way for General Motors Corp. to restructure and become a competitive automaker, people familiar with the matter said.
GM’s $500 million of 7.7 percent notes due in 2016 tumbled 8.8 cents to 10.4 cents on the dollar as of 9:45 a.m. in New York, a record low, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The debt yields 79.7 percent, or 77 percentage points more than similar- maturity Treasuries, Trace data show.
Obama Said to Find Bankruptcy Likely for GM, Chrysler [Bloomberg]
With President Barack Obama showing the ailing U.S. auto industry some tough love Monday, POLITICO wondered — what’s …
… in the driveways of White House aides? A lot of foreign cars, as it turns out.
Explore the depths of auto-psychoanalysis, after the jump.
Wow. That whole “Bankruptcy one option of many” thing lasted about, what, three whole hours?
Updates to come. The situation is fluid.
The situation is fluid.
Obama (In his capacity as the First GM Human Resources Director): Wagoner is moving on to pursue other opportunities.
Obama (In his capacity as the First Managing Director, Investment Banking/Advisory): Chrysler needs a deal with Fiat.
Mr. Wagoner has been CEO since 2000 and has managed the company through some of its most difficult moments. Over the last four years, GM has reported losses of $82 billion and nearly ran out of money at the end of 2008 before the U.S. Treasury Department provided emergency loans.
GM’s Wagoner Will Step Down [The Wall Street Journal]
Now that Big Auto looks poised to do its run down the double black diamond run “Bankruptcy,” seems like a great time for some free lift passes to Big Auto Supply, right? After all, where is the money going to come from to keep all those plants full of employees when Big Auto stops buying parts in mass quantities to fill up lots with unused inventories of new cars no one wants?
The Obama administration plans to announce a financing facility that would provide up to $5 billion in assistance to the country’s beleaguered auto-parts suppliers, many of which are teetering on the edge of bankruptcy.
The assistance would pump money into dozens of the country’s biggest suppliers to help pay for seats, axles and other components shipped to the Big Three auto makers, but not paid for, people familiar with the announcement said.
The administration plans to announce the details of the plan this morning.
Always later with the details. Sheesh.
Lenders have already gotten wise and have closed lines of credit to firms that rely on Ford, GM and Chrysler for major fractions of their revenue. It isn’t surprising that the suppliers would turn to the government, the “lender of last resort” as it were, since this is their last resort. This begs the question: Will this administration ever let a dying firm just die?
U.S. to Provide $5 Billion in Aid to Auto-Parts Suppliers [The Wall Street Journal]
Chrysler might not be long for Canada.
In its continual quest to trim operations the big C is presently focused on Canada, where, in addition to a $2.3 dollar loan (we hope that’s in Canadian dollars) the automaker is seeking concessions from the Canadian Auto Workers Union.
Chrysler LLC is studying how it could pull operations out of Canada if it doesn’t win wage and benefit concessions from the country’s auto union that are considerably larger than those given to General Motors Corp.
Chrysler officials are talking to leaders of the Canadian Auto Workers union today to see whether the union will be flexible in terms of changing its contract, said a person involved in the negotiations who asked not be named because the talks are private.
We aren’t hopeful.
Chrysler Is Said to Ready for Canada Pullout on Union [Bloomberg]
This is a guest post written by SoFi’s CEO, Mike Cagney.
CLICK HERE TO READ THE FULL ARTICLE
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