GM to Offer Obama Administration Two Choices: Bankruptcy or More Aid

[TeamJordan23]

Here comes a true headache for the administration

February 14, 2009
GM to Offer Two Choices: Bankruptcy or More Aid
By JOHN D. STOLL and SHARON TERLEP

General Motors Corp., nearing a federally imposed deadline to present a restructuring plan, will offer the government two costly alternatives: commit billions more in bailout money to fund the company’s operations, or provide financial backing as part of a bankruptcy filing, said people familiar with GM’s thinking.

The competing choices, which highlight GM’s rapidly deteriorating operations, present a dilemma for Congress and the Obama administration. If they refuse to provide additional aid to GM on top of the $13.4 billion already committed they risk seeing an industrial icon fall into bankruptcy.

Some experts and members of Congress say bankruptcy reorganization is the surest way for GM to cut costs and become viable. But it could be a politically unpalatable development during a recession that already has thrown millions of workers out of jobs.

GM may close more plants under a restructuring plan it must present to the Treasury by Tuesday. Its Hamtramck, Mich., plant has been idled.

Treasury Department officials believe GM needs at least $5 billion more in U.S. loans to keep operating beyond the first quarter, said people familiar with the situation.

The call for additional funds will be a key part of the revitalization plan GM is required to file with the Treasury by Tuesday, though it is unclear whether GM will furnish a dollar amount, said people familiar with the matter. The plan is supposed to describe how the company will become self-sustaining and better compete with foreign rivals.

But it’s increasingly unlikely GM will have a finished plan in time. Negotiations with GM’s unions and bondholders haven’t yet produced commitments to concrete concessions as required by terms of the federal loans; talks are expected to continue over the holiday weekend. People involved in the talks say progress has been slowed by the fact the Obama administration has yet to appoint a “car czar,” as envisioned by the bailout program.

GM will argue it needs the additional government funds to stay out of bankruptcy court, people familiar with the matter said. At the same time, the company — which previously had dismissed suggestions that it might need to file for bankruptcy — has moved closer to such a prospect.

WSJ - http://online.wsj.com/article/SB123458663412987489.html?mod=rss_Politics_And_Policy

For people who don't WSJ have access, I also found the article searching Google Blogs (no way do I represent or share any views of the blog site) - http://www.luxlibertas.com/gm-to-offer-two-choices-bankruptcy-or-more-aid/

[LakeSamish706]

1. Time to fire all upper Management (Miss Management) and start over. n/t

[havocmom]

4. yep. No funds for the same dipshits who can't get a car outta the garage

[BlooInBloo]

2. Presumably the response will be: Accept restrictions X, Y and Z, or bankruptcy.

[firedupdem]

3. Jeez...it just gets worse and worse. n/t

[TheKentuckian]

5. Give them 50 billion if they

fire management, give majority ownership to workers, and phase out carbon based internal combustion by 2012/2013.

[LiberalFighter]

17. Advise the stockholders the consequences they face if Rick Wagoner

continues as CEO.

[Thrill]

6. Are they going to come back for more money every quarter?

[quakerboy]

7. Nationalize them.

We have a problem. That problem is that the republican policies of the past my lifetime have earned us a lot of hate and dislike around the world. Hopefully the president will end our more active wars, but unless the rest of the country wants to join me in being pacifists, we need to have the means of production for our massive war machine.

But clearly GM, and likely others of our big manufacturers, are not capable of running themselves any longer as for profit companies.

So nationalize them. We privatized the soldiering side of our war machine, why cant we socialize the production end of it? Hell, as government employees, the execs wouldn't have the crazy pay scale they do now and the companies might even start to make some money.

[Skink]

8. With the scale of Toyota cutting back we should nationalize GM and make stuff we need.

Like trains. This way we keep the unions and get something for our investment.

[BluegrassDem]

9. All the carmakers are going to struggle until the credit markets open

They can't sell cars if you can't get credit to buy them. I know people with scores close to 700 and can't get a car loan. The only reason why it's affecting the Big 3 more is cause they got less of a cushion, unlike Toyota. Toyota is also struggling, but they got huge piggy bank to bring them through. So filing bankruptcy is not going to solve the problem.

[Kalyke]

11. The piggy bank being the Japanese government. n/t

[rollingrock]

10. Isn't blackmail and extortion against the law?

is GM run by the mob?

[Maven]

12. Where does it end???

How many times will they keep doing this? It's obvious they can't stay afloat EVEN WITH government help. They need to reorganize.

[Deja Q]

13. The GM people need to sit down and watch this employee morale video

http://www.youtube.com/watch?v=8RtfNdg1fQk&feature=rec-HM-r2

[Vinca]

14. I thought I read they spent the last pile of dough in Brazil.

If that's the case, I say we wish them well and let them reorganize under the bankruptcy laws.

[backscatter712]

15. How about option three: nationalization.

Seize GM as soon as it files its bankruptcy papers, toss all the executive parasites out on the street, put GM under new government management for a while, and keep it that way until it becomes profitable.

Once it is profitable, break it up into Chevrolet, Buick, Cadillac, GMC, etc. and sell them to private industry, under steep new regulation to keep the new bosses from pulling the same shit the old bosses did...

[PM7nj]

16. Surprise!

Did anyone really think this wouldn't happen?