This kind of leadership doesn’t come along often. Read more »
You can’t take the pressure at your job, you’re tired of getting kicked in the nuts and blamed for everything’s that’s wrong in the world. You need some lovin’ and can’t seem to get it anywhere. You”re completely burned out. Where to turn? If you’re Fritz Henderson, you go crawling back from whence you came. Only this time, you play hard ball, and you do it on your terms. That’s how the former GM CEO, who resigned in December after eight months on the job, is doing it. He’s back, baby, but now as a “consultant” for GM, in a gig that pays about $59,000 per month, for 20 hours- or about $3000 an hour.
Of course there is no way they would try to abuse the 363 sale process again since that trick is kind of old.
General Motors Corp’s plan for a bankruptcy filing involves a quick sale of the company’s healthy assets to a new company initially owned by the U.S. government, a source familiar with the situation said on Tuesday.
The source, who would not be named because he was not cleared to speak with the media, did not specify a purchase price. The new company is expected to honor the claims of secured lenders, possibly in full, according to the source.
The remaining assets of GM would stay in bankruptcy protection to satisfy other outstanding claims.
WOOPS. Yes, sure enough, here it is again. Of course, part of the problem here is that much of GM’s debt is spread out down to even retail levels. Craming down Grandma UAW’s GM bonds is, ironically, going to be much less easy than screwing over a few hedge funds, both public relations wise and as a practical matter.
GM bankruptcy plan eyes quick sale to gov’t [Reuters]
Remember the good ole’ days? You know, back when it was believable fantasy that Chrysler and General Motors would be fine if only they could get several billion dollars to patch things up for the several months it was going to take until unit sales got back up to 2007 levels? Back when the cash sent to GM and Chrysler was a “loan” that might be paid back? Times have changed. Even GM’s own CFO admits that about the only hope for GM at this point is the total socialization of the automobile market in the United States. Can you remember a time in recent memory when this paragraph from GM’s CFO would have been greeted with anything but howling laughter?
Young said there were sales bright spots in such markets as China, Germany and Brazil, where governments implemented programs to stimulate demand. Results in those countries support GM’s argument in favor of U.S. incentives to promote auto purchases, he said.
So not only do we have to pay you to stay alive, we have to pay customers to buy your product? We pay customers to push revenue to pay ourselves back with and increase the number of cars on the road at a time when consuming oil is one of the nation’s cardinal sins. Mind you, this plan is actually delivered with a straight face.
Well, there is always the forward, out of the box thinking that gives us brilliant epiphanies like the GM-Segway PUMA partnership. (Crashtesting should be interesting to watch here). That ought to bolster revenues!
As for bondholders? Those evil fat cats with the arrogance to expect bankruptcy law to have meaning? Prepare to be demonized: The Treasury isn’t planning to give bondholders more than 10% of equity in any case. Bondholders value their stake at 58% which would frustrate the government’s plan to control the company post-bankruptcy. This makes GM’s bankruptcy, which seems a near certainty now, likely to be the massive, megabudget Hollywood blockbuster remake of that little independent picture “Chrysler,” that was filmed by the no-name director with some stolen film stock, a few friends and $15,000 in a Mexican border town. Remember, GM’s debt is all over the place, not concentrated 70% with four TARP wards.
General Motors Corp. said its first- quarter net loss widened to $5.98 billion as sales plunged by almost half, ratcheting up the prospect of a bankruptcy filing by a U.S.-imposed June 1 deadline.
The net loss of $9.78 a share swelled from $3.3 billion, or $5.74, a year earlier, Detroit-based GM said today. Revenue tumbled 47 percent to $22.4 billion, while cash consumption almost doubled from the previous quarter.
The results add to the pressure on GM as it races to cut costs and debt to avoid bankruptcy. With bondholders resisting a plan ordered by the Obama administration to exchange $27 billion in debt for a minority stake in a reorganized GM, the 100-year- old automaker may end up in court.
But don’t worry. According to GM, GM is ready to go “in and out” of bankruptcy “quickly.”
That’s a relief.
GM Loss Widens to $5.98 Billion as Bankruptcy Deadline Nears [Bloomberg]
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 is a pity that what is probably the busiest the Executive Suite over at General Motors has been in the last twenty years is during its current preparation for a bankruptcy filing. And as tempting as it is to regard a filing for bankruptcy protection by the automaker as something of a triumph of rationality, it is, in fact, the reverse. It should be quite difficult not to be beyond pissed off at the billions of cash, taxpayer cash, that has been burned over the last many months, all for the sake of the PR gloss of calling the currency whirlpool a “going concern.” This also bodes rather poorly for the many financial institutions that would seem to be in similar condition, though perhaps with slightly less advanced pathology.
Of course, the news could be little more than the latest bit of leaked brinkmanship, but we think that ship has sailed.
General Motors Corp is in “intense” and “earnest” preparations for a possible bankruptcy filing, a source familiar with the company’s plans told Reuters on Tuesday.
A plan to split the company into a new company made up of the most successful units, and an ‘old company’ of its less-profitable units is gaining momentum and is seen as the company’s best configuration for the future, said another source familiar with the talks.
Don’t worry. Nothing is fucked. We are beyond certain that the current plan to mass produce wheelchairs with windscreens (note the wheelie wheels on the back!) in partnership with Segway (free colostomy bag with every purchase!) will pull the chestnuts out.
GM in “intense” bankruptcy preparations: source [Reuters]