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post #1 of 18 (permalink) Old 06-01-2009, 09:14 AM Thread Starter
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General Motors Bankruptcy Official


While President Obama and General Motors CEO Fritz Henderson are both expected to hold press conferences today, officially GM has already filed for Chapter 11 Bankruptcy Protection.

Once the world's largest automaker and a symbol of the success of free market economics, GM is now a symbol of failure. In the 1950s it employed over 500,000 people and produced more than half of all the vehicles sold in the United States. Now it also holds the dubious title of the world's third-largest bankruptcy - and the largest bankruptcy for a manufacturing company.

General Motors, backed by yet another government loan from the U.S. Treasury is expected to get the same fast-tracked bankruptcy proceedings as the smaller U.S. automaker Chrysler - which filed for Chapter 11 just one month ago and which already appears to be emerging. Just yesterday a judge approved the sale of Chrysler's assets to a group comprised of Fiat, the U.S. government and the UAW. The Chrysler Chapter 11 proceedings were seen by many as a practice for the much larger General Motors corporation.

As a part of the Chapter 11 filing GM will receive $30 billion from the Obama administration, giving it a 60 percent stake in the once-great automaker. The Canadian government will take a 12 percent stake by providing an additonal $9.5 billion, while the UAW gets a 17.5 percent share and bondholders get 10 percent.

The Chapter 11 proceedings are expected to take anywhere from 60 to 90 days but the future of General Motors is anything but certain. In the short term the automaker will most likely push ahead, but the big question mark is if it can become financially viable and build cars that people want to buy - something which is further complicated by the government's involvement.

While the Obama Administration was reluctant to get involved it almost had no choice as without government help both General Motors and Chrysler were doomed to failure - at a time when the U.S. economy already has enough troubles. But now that the government is involved it doesn't appear to be willing to part with its economic engine. Even when GM and Chrysler emerge from bankruptcy, the government's Autos Task Force will continue to be involved in the future of both companies.

With a 60 percent stake in General Motors and a political agenda, will the Obama Administration work with GM and Chrysler to ensure both companies build cars people want - or build cars it wants people to want?

More: General Motors Bankruptcy Official on AutoGuide.com
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post #2 of 18 (permalink) Old 06-01-2009, 09:27 AM
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post #3 of 18 (permalink) Old 06-01-2009, 09:29 AM
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Here a link to GM's press release on the matter.


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post #4 of 18 (permalink) Old 06-01-2009, 09:33 AM
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With a 60 percent stake in General Motors and a political agenda, will the Obama Administration work with GM and Chrysler to ensure both companies build cars people want - or build cars it wants people to want?
This is the scariest part.

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post #5 of 18 (permalink) Old 06-01-2009, 09:36 AM
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Originally Posted by Silver G8 GT View Post
This is the scariest part.
exactly, the judicial branch is supposed to deal with corporate bankruptcy, not the executive...

you know how it goes though, put Obama in it and everyone ignores the rest...

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post #6 of 18 (permalink) Old 06-01-2009, 09:37 AM
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this is the part that scares me. I just got to work....
Date: June 1, 2009

Subject: Warranty Claim Processing

To: All General Motors Dealers - United States Only

Attention: Dealer Principal, General Manager, Service Manager, Warranty Administrator



This is to notify you of the steps Warranty Operations is taking in light of the General Motors bankruptcy filings taking place on June 1, 2009.

GM has requested that the filing will not stand as an impediment to our normal business processes and operations. GM has asked the court to enter orders ensuring that its business operations and processes are uninterrupted by the filing. These papers include a request that the company be permitted to honor all obligations related to warranty claims and processing. We expect entry of that order within the next few days, and if approved there will be no interruptions in payment. That said, there are some administrative hurdles we need to overcome to maintain certain claims submission processes. More specific information is below. Please bear with us and pardon any delays or extra steps as a result of this process.

Until GM receives approval from the court, warranty claim processing will be temporarily suspended. This affects the US only, MIC, ACDelco, Electronic Service Centers, IPC, Medium Duty, Fleet/Commercial, Saab, and Saturn. It does NOT affect Global Warranty Management operating in AP, LAAM or Mexico. This will be effective Monday, June 1, 2009. Please cascade to others in your organizations as appropriate.

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post #7 of 18 (permalink) Old 06-01-2009, 09:39 AM
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With a 60 percent stake in General Motors and a political agenda, will the Obama Administration work with GM and Chrysler to ensure both companies build cars people want - or build cars it wants people to want?
That's the biggest question of all. I'll have to look to make sure, but I think most of the plants they are closing or idling all make trucks and SUV's.

I don't have much faith in the government's ability to "slim down" or "streamline" much of anything besides citizens' rights or bank accounts.

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post #8 of 18 (permalink) Old 06-01-2009, 10:27 AM
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Until GM receives approval from the court, warranty claim processing will be temporarily suspended.
WTF? So if I have a G8 that's disabled due to a warranty issue, I'm supposed to rent a car indefinitely while I wait for a court to decide on this before I get it fixed?

I don't think so. Unless maybe I use the rental to drive to NY BK court and bitch to reporters outside with a lawyer at my side. Then I might bill GM for my expenses, filing in the appropriate small claims court after they refuse to pay. Or maybe I'd just pay to get the car fixed and file a claim later.

Aside from pissing off owners, won't this bring sales to a halt? Who's going to buy a new car which, in effect, has no warranty?

What happened to Obama's promise of months ago -- "Don't worry about your warranties, they're backed by the federal government" or whatever it was that he said? Can someone dig up that quote? Maybe he worded it in such a way that it leaves wiggle room? It wouldn't be the first time.

If this goes on for a while, won't warranty claims become backed up -- making matters worse for GM?

If it gets resolved within a few days, as hoped, maybe it won't be so bad. But right now I'm pissed -- and grateful for now that at 9K mi I've had no need for warranty repairs.

PS update -- I just saw this, which seems to be saying warranty coverage continues as usual. WickedMom, what do you make of this vis-a-vis the memo you received?
"Warranty, service and customer support continue uninterrupted, backed by the U.S. and Canadian governments"
https://www.g8board.com/forums/showthread.php?t=17144

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Last edited by Snowbird; 06-01-2009 at 11:12 AM. Reason: add re warranty claims possibly piling up
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post #9 of 18 (permalink) Old 06-01-2009, 10:54 AM
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Originally Posted by Silver G8 GT View Post
This is the scariest part.
well its seems nobody wanted any GM cars, hence their current predicament!

i think majority of population wants economical cars, and obama knows this

but as long as they have a niche performance brand (like pontiac), then everyone will be happy

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post #10 of 18 (permalink) Old 06-01-2009, 11:20 AM
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but as long as they have a niche performance brand (like pontiac), then everyone will be happy
Well, it appears that is not going to happen as Pontiac, Hummer, Saab, and Saturn are all getting the chop. That warranty post is really not something any of us want to see...ick.
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post #11 of 18 (permalink) Old 06-01-2009, 11:22 AM
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PS update -- I just saw this, which seems to be saying warranty coverage continues as usual. WickedMom, what do you make of this vis-a-vis the memo you received?
"Warranty, service and customer support continue uninterrupted, backed by the U.S. and Canadian governments"
https://www.g8board.com/forums/showthread.php?t=17144

Of course they want us dealerships to honor everything... what that statement shows is that until the courts say so, we can not submit for warranty payments.

I have a 6.0L motor going into a Denali Truck as we speak, it is being paid for by the MIC (which is the General motors protection plan). Lets say that the courts do something to disrupt warranty payments, the dealer could be left holding the bill. Since it was approved by a MIC inspector prior to the BK, who know what the hell is gonna happen.

I am sure everything will be find and dandy and all peaches... but right now for the first time, I am worried.

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post #12 of 18 (permalink) Old 06-01-2009, 12:25 PM
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What does a leaner GM actually means come 5 years from now?

GM has been making smaller fuel efficient cars abroad from it's other car divisions and other parts of the globe like www.vauxhall.com and holden vehicles for decades. The US has been spoiled with the low cost of gasoline. Yes $4 a gal. is relatively cheap compared to most European countries. GM ALREADY has the technology to build fuel efficient vehicles but not here cause fuel is still cheap!

GM management has done it to themselves with nobody else to blame!
Don't blame the President for GM problems, he's just happens to be the one in charge when the other shoe dropped!

I still have faith in GMs recovery but this is some scary ****! I just hope GM will continue making performance minded vehicles along with more fuel efficient greener people movers.

I dislike the fact that the US government has a 60% viable stake if GM still can't figure it out!!!

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post #13 of 18 (permalink) Old 06-01-2009, 12:44 PM
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i think majority of population wants economical cars, and obama knows this
Hybrids have not been selling very well since gasoline prices dropped. Hybrids are not truly economical cars because they cost thousands of gallons more than regular econoboxes. Hybrids are not green because it takes a lot of energy to produce new cars and huge batteries. In the big picture, a truly economical green car is a decades-old smoke-belching Civic.

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post #14 of 18 (permalink) Old 06-01-2009, 12:53 PM
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Well, given the fact that GM is selling off its branches that build the "high quality, fuel efficient cars of tomorrow" by getting rid of Opel and Vauxhall, I'd say Obama is going to have to convince people that high quality doesn't refer to interiors, panel gaps, or other issues. Shouldn't be too hard, Toyota managed to convince people the same thing.

Here's the issue though. As a part of these deals, the government is is keeping the union happy and in the mix. They're trying to keep as many jobs here as possible. But this is the problem! The UAW labor is responsible for the huge gaps between body panels, and the interior panels not being affixed in the right area, etc. GM needs (among other things) new labor that will do a GOOD JOB and not try to squeeze every last cent out of GM.

GM has some very attractive engines overseas, but people also pay a lot more for cars on average over there. For example, that Astra VXR with the 2.0L DI turbo engine converts out to 35,100.5585 in USD for MSRP. People wouldn't buy the VW R32 for that much and it had AWD and a wonderful interior fit for an Audi. It had 250hp and was quick, but a little thirstier than most cars of its size, though it wasn't bad mpg at all. aybe the new R20 will sell?

Americans don't want to pay to have high quality small cars, they'd rather option up to the next size up and skip the quality. They see a high quality compact hatchback and are like "OMGOSH I COULD GET TEH CAMRY AND ITS WAY BIGGER FOR MY FAT ASS". GM (and other companies) can't even use their high quality efficient turbo diesels, because of CARB regulations and other environmental regulations and whatnot.

I think we're gonna end up seeing more of the same, just with less exciting cars. Anyone driven the new Astra? Total snooze fest. But it's a "high quality and fuel efficient car of tomorrow", that sold so poorly that they are still selling the 08s as new. They canceled 09 production.
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post #15 of 18 (permalink) Old 06-01-2009, 01:55 PM
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I must disagree with the statement that was made regarding GM not making cars that people want to buy. They have indeed made the vehicles that most people want (suv's), however, they cannot afford them. We all want moderate sized people movers that are relatively safe for us, and our families. But why would you buy a GM, Ford, or Chrysler when you have to worry about what day of the week it was cranked out? Why would you buy a car/truck that costs a few thousand more that an equivalent foreign (actually domestic) vehicle? If I wasn't such a softy for American Muscle, I sure wouldn't. Fact is, the Big 3 went to the hill in the mid 90's and told congress that if gov't meddling continued, this very thing was going to happen.

I am not saying that GM leadership doesn't share the blame. Saturn and Saab should have been let go, long ago. Have they ever made a profit with Saab? And Pontiac, all I can say is AZTEC! But most folks I work with, friends and family agree that over regulation by Capitol Hill while intruding in private business and a greedy inefficient union is what got us to where we are today. That being said, I will never buy another product built by the UAW, CAW or the U.S. Gov't. Get in and get out my ass! They have us right where they want us.

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post #16 of 18 (permalink) Old 06-01-2009, 04:16 PM
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Quote:
With a 60 percent stake in General Motors and a political agenda, will the Obama Administration work with GM and Chrysler to ensure both companies build cars people want - or build cars it wants people to want?
I think we know the answer to this question, the latter of course.

With the death of beloved Pontiac I will not settle for a GM eco-weenie hybrid boredom box forced down my throat by the buttholes in office. I'll take my money elsewhere.

Quote:
but as long as they have a niche performance brand (like pontiac), then everyone will be happy

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post #17 of 18 (permalink) Old 06-06-2009, 07:15 AM
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With the death of beloved Pontiac I will not settle for a GM eco-weenie hybrid boredom box forced down my throat by the buttholes in office. I'll take my money elsewhere.

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post #18 of 18 (permalink) Old 06-06-2009, 10:11 AM
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With the death of beloved Pontiac I will not settle for a GM eco-weenie hybrid boredom box forced down my throat by the buttholes in office. I'll take my money elsewhere.


I understand your brand loyalty to Pontiac, but gotta be open-minded to the big picture. Going forward, it is these eco-weenie hybrid boredom boxes that wil give the room needed to build your Mustangs, Corvettes, Camaros, full size pickups, etc. Would I buy an eco-weenie hybrid boredom box, prob not. I do, however, hope they flood the market, please the general public, make money, and give room for companies to build things car guys want.
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