GM Bankruptcy Woes: GM Prepping for Bankruptcy and New Offer to Bondholders

No doubt that the majority agree that GM filing Bankruptcy would not be such a bad thing. Many support the idea that bankruptcy would “force” them into restructuring and emerging as a better and much more profitable company. Lately GM set into preparation to give a new offer to bondholders for a debt restructuring critical turn around that could be worse than the previous terms set by the automaker.

GM is actually preparing for bankruptcy as the outlook points more towards them doing such a thing. Restructuring alone is simply not good enough says the majority of tax payers who do not wish to bail them out mainly because of the poor decision making over several years of operation.

What will they do? It is possible GM will file and then eliminate several brands. Don’t worry, your GM car will still be covered under the current warranty terms and agreements if GM files for bankruptcy, even that part is backed by President Obama. What do you think GM should do at this point? File bankruptcy and restructure? Sell off a few brands? Eliminate a few brands? Build better cars? Close shop? Apologize to the customers? Build a bunch of Chevy Volts?

Tell us what you are thinking! Post your comments below!

Obama Says U.S. Will Guarantee GM, Chrysler Warranties

Today is my “what to do in case of Automotive Industry emergency” news day. All of the major news networks are steadily reporting today updates of the Obama administration’s plans for the automotive industry. It seems they already want federally regulate everything else so why not do it with the Automotive industry. I mean, heck, they already gave Rick Wagoner, GM’s CEO, the boot and now they will guarantee the federal government paying for any warranty repairs on a General Motors or Chrysler vehicle if either company can’t because of financial problems or a bankruptcy filing. That’s actually good news now that I think about it because all my neighbor has to say about his Chevy Tahoe other than it is gas guzzler is that GM may not be able to fulfill their 100,000 mile warranty if they go under.

This has been the topic of discussion for thousands who happen to drive a GM or Chrysler vehicle currently. Many of these cars are still under warranty considering the 100,000 mile warranty offered in the past couple of years by both GM and Chrysler.

“Given where the industry is, these highly unprecedented actions are consistent with the unprecedented times we’re in,” Standard & Poor’s analyst Robert Schulz told Reuters today.

Let’s face it, bankruptcy is a very feasible option for Chrysler and GM and many are finally realizing this. We all knew it may come to this. I guess for now it is good that the government and/or Obama administration is on our side… or are they?

GM CEO Rick Wagoner Calls It Quits

General Motors CEO Rick Wagoner will step down from his position immediately as recently reported by various news associations. This comes about maybe as a slight surprise on the eve of President Barack Obama’s expected announcement of a deadline for Chrysler and General Motors to finalize their terms for restructuring or deciding on a Chapter 11 bankruptcy package.

As the economy shows no apparent signs of improvement except for the recent stock market rallies the auto industry continues to suffer and look for some type of outlet. The outlet for Rick Wagoner was specifically requested by the Obama administration.

Rick Wagoner spent 32 years with GM and in part over-seeing the operations of General Motors all through its better days and recent slump.

Below after the jump is the official message from Rick Wagoner and GM’s board restructuring announcement.

[source: Associated Press]

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President Obama Vows Not to Walk Away From Auto Industry

One of the highlights of the delivery that President Obama gave to the joint session of congress was a vow not to walk away from the automotive industry. The tone seemed directed at the American infrastructure of the automotive industry which directly includes the suffering Big 3.

The points that were brought out by autonews and others in the automotive industry were the positive inspirational parts of the speech saying, “We will rebuild, we will recover, and the United States of America will emerge stronger than before.” Then later a specific address was directed towards the automotive industry having an obvious effect on the economy where the President said, “As for our auto industry, everyone recognizes that years of bad decision-making and a global recession have pushed our automakers to the brink. We should not, and will not, protect them from their own bad practices. But we are committed to the goal of a re-tooled, re-imagined auto industry that can compete and win. Millions of jobs depend on it. Scores of communities depend on it. And I believe the nation that invented the automobile cannot walk away from it.”

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Automotive Industry Struggle: Unsold Cars Pile Up On Leased Lots

The Big 3 are not the only car makers to suffer during this economic downturn or what some call it, a recession. Many manufacturers such as Toyota, Nissan, Honda and Mercedes Benz have to lease out additional port space to stock pile their unsold vehicles. These cars have not even made it to the dealerships mainly because the dealerships are full of inventory and simply cannot stock any additional vehicles. Yes, it is that bad!

Some manufacturers have ceased production of some vehicles for now. The deals on 2008 model year cars may become “unbelievable” very soon so they can start to move some cars. We can now only pray that the state of our economy gets better so they do not have to start stacking Toyota Camrys on top of Benzes. Then again, who would really care if a $100K Benz gets trashed, it would not make it to the dealership anytime within the next 6 months anyway.

The Automotive Industry Has A New Friend Headed To The Whitehouse

Automotive industry analysts have said today that an Obama Presidency is going to help US automakers in many ways.

Union leaders will have an Employee Free Choice Act put in place making it easy to unionize the foreign automakers plants in the USA. Think of it as more Toyota-GM type set-ups where a larger portion of the foreign automakers set up shop here in America to produce cars for America. A win win situation to help many automakers get back on their feet.

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