GM

  • 01 Jun 2009 at 1:26 PM

Michael Moore Bursting With “Joy” At GM “Deathbed”

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Picture 1405.pngAfter performing a victory dance through the streets of downtown Detroit, which onlookers tell us was quite the sight to see, Mikey sat down to write a list of suggestions he’s got for what to do with the place. Do we sense someone angling for a ride in Fritz Henderson’s sidecar?

So here we are at the deathbed of General Motors. The company’s body not yet cold, and I find myself filled with — dare I say it — joy. It is not the joy of revenge against a corporation that ruined my hometown and brought misery, divorce, alcoholism, homelessness, physical and mental debilitation, and drug addiction to the people I grew up with. Nor do I, obviously, claim any joy in knowing that 21,000 more GM workers will be told that they, too, are without a job.
Twenty years ago when I made “Roger & Me,” I tried to warn people about what was ahead for General Motors. Had the power structure and the punditocracy listened, maybe much of this could have been avoided. Based on my track record, I request an honest and sincere consideration of the following suggestions:

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  • 29 May 2009 at 3:38 PM

With Sugar On Top?

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gm-ten.jpgPleading, urging, begging, whatever. Call it what you will, this one isn’t going to drift by as “easily” as Chrysler. But then, the Chicago machine is just getting warmed up, isn’t it? Either way, we continue to be amused by the (1 – 0.65) reverse spin on the debt holder (dis)approval numbers.

Advisers to General Motors Corp bondholders representing $27 billion in the automaker’s debt urged investors on Friday to support a debt swap negotiated over the past week with the Obama administration.
Bondholders have until Saturday to register their support for the terms of a deal that would give them up to 25 percent of a reorganized GM. That offer is contingent on the U.S. Treasury determining that enough investors have signed on in support.
Investors representing at least 35 percent of GM’s bonds are expected to support the sweetened offer from the U.S. Treasury, which will be the automaker’s largest shareholder and creditor.
In a conference call open to GM bondholders, advisers to an ad hoc committee representing institutional investors urged other bondholders to offer their support for the deal.

But we wonder if the real story here isn’t this:

For the government to be repaid in full, GM would have to have an enterprise value of $69 billion based on its expected 72.5 percent stake in the company, Siegert said.

Really, the jobs we are “saving” are getting obscenely expensive. What happened to a “bridge loan” and the rough backhand pimp-slap that Treasury and company were supposed to deliver to a GM that was not viable by the deadline?

  • 28 May 2009 at 10:47 AM

We Have The Agreement Of (20% Of) The Unsecured Debtholders!

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gm-ten.jpgIn the latest GM clusterfuck drama, the Wall Street Journal flashes the pressing news that a group of unsecured GM noteholders has agreed to the latest 10% debt for equity swap amusement. Outstanding work guys and gals! How many votes have you got in the bag?

We have been informed by the advisors to the unofficial committee of unsecured GM Noteholders, Houlihan Lokey Howard & Zukin Capital, Inc. (financial advisors) and Paul, Weiss, Rifkind, Wharton & Garrison LLP (legal counsel), that the unofficial committee and other large Noteholders (who collectively hold approximately 20% in aggregate principal amount of the Notes) support the economic terms of the Proposal. (emphasis added)

Oh. Need we point out that this appears to suggest you have failed to obtain agreement from 80% of the unsecured debtholders? So, do the ad hoc and the official credit committee agree? Any news on secured debt holders. Anyone? Anyone? Bueller? Bueller?
Maybe we were a bit quick ordering the Presidential Suite for the weekend.
GM’s SEC Filing on the Treasury Offer [The Wall Street Journal]

  • 17 Mar 2009 at 10:35 AM

Breaking: WSJ Reports GM CEO Reports Bankruptcy Could Work, But Risky.

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“GM CEO says bankruptcy ‘could work’ but would be too risky,” is the exact ticker line.
“That, Mr. Wagoner, is the sound of inevitability.”
The situation is fluid.

  • 05 Mar 2009 at 9:58 AM

G^M = B^K?

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GMLogo.jpgAs we mentioned in the Opening Bell, GM is staring default and potentially bankruptcy in the face (“we actually need about $30 billion”). A lot of light and noise has been emanating from GM’s general direction for several weeks now, but it looks like this is the main event. Of course, this isn’t a surprise. GM warned last month that Deloitte & Touche might excommunicate the company from its close circle of friends, and that, certainly, sounds like the beginning of the end.
GM has until the end of March to close deals with the UAW and debt holders to qualify for government assistance (again). One wonder’s if they are likely to make it that far.

GM said its creditors had agreed to waive a requirement that could have allowed them to force the automaker to repay more than $6 billion in loans because of the warning in order to allow GM to press its case for government aid.

In fact, GM has been begging for, and mostly getting, lots of waivers for call and acceleration provisions- at least until the Treasury fails to give the automaker the Goodhousekeeping Seal of Bailout Approval. And why not? The bond holders are really buying an option by laying off of GM here. That government cheese might be the lion’s share of what they see. It would be interesting to know what power creditors waived with respect to forcing liquidation owing to the government involvement.

Separately, GM said in its SEC filing that its lenders had waived “call” provisions that could have forced early payment of its $4.5 billion secured revolving credit facility, a $1.5 billion term loan and a $125-million inventory financing facility.
The new waivers allow GM’s lenders to call those loans if the U.S. Treasury rejects GM’s restructuring plan and request for additional aid and forces it to repay the $13.4 billion it has already borrowed from the U.S. government.

Gotta love priorities.
GM warns it may be forced into bankruptcy [Reuters]

  • 17 Feb 2009 at 10:40 AM

We Totally, Seriously, Honestly Won’t Need Any More. Really.

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So GM is going to grudgingly accept another check for $4 billion. Is anyone else so numbed to large numbers at this point that $4 billion really doesn’t seem like much money? I mean, John Paulson spits $4 billion. Tim “The Safecracker” Geithner exhales larger sums while taking his afternoon nap. (And you believed that story about closing the cash room for “painting” every afternoon).
Yes, oddly, those sorts of figures seem boring now. Even when the UAW and management have walked away from the table, we seem so attached to the Buick Lucerne that a few billion more seems trivial to throw down the tubes in order to save it from oblivion.

The U.S. government will release $4 billion in additional aid to General Motors Corp (GM.N) on Tuesday as planned, a White House aide said on Monday, ahead of the deadline for the automaker to submit a new survival plan.

I suppose we can just hope they did their homework right this time.
GM to get $4 billion aid tranche Tuesday [Reuters]

  • 10 Feb 2009 at 10:09 AM

GM Makes A Final Lap

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Just in case you weren’t sure, General Motors is in trouble. Big trouble. On top of all the other trouble you’ve no doubt heard about they are now planning to cut 10,000 jobs. Yesterday’s rumors are fact this morning as the flagging former giant begins to face the music.

General Motors Corp., the largest U.S. automaker, plans to eliminate 10,000 salaried jobs globally, people familiar with the situation said.

The situation is fluid (except for the cuts, which are solid as can be).

General Motors Is Said to Plan to Eliminate 10,000 Jobs [Bloomberg]