GM = bankrupt

[Sam Spade]

It's probably been bankrupt for 20 years, but now officially...

http://online.wsj.com/article/SB124380079212769963.html

Let me kinda lay out what this means and give my own opinion on things:

If you own GM stock (and if you still do, I have to question your intelligence), it's worth nothing and will probably be halted tomorrow (i.e. sales stopped).  Unsecured creditors will get nothing in bankruptcy, unless you are a government-favored class = unions, government.

If you own GM bonds (and there are hundreds of thousands of you out there, mostly individuals), you'll probably get 10 cents on the dollar if your lucky.  Basically, GM's debts are so large (and have grown exponentially over the past 15-18 months or so), that bondholders are likely to get really, really bad haircuts in bankruptcy.

You see, the big corporations who own GM bonds (975 bondholders in particular) voted for the plan that gives UAW (unsecured creditors), the government (unsecured creditors) and those big bondholders (secured creditors) common stock shares in the new "company".  Since they comprise of over 50% of the bonds total, I suspect the plan will be approved at the bankruptcy level (after some litigation, of course).  In short, if you're a secured bondholder, and did not vote for this plan, you're probably screwed.  This report was on Bloomberg that I read earlier, then disappeared later.  I tend to believe it, given the way these companies usually work.

Just remember, the new government is no different than the last government (except the unions and Acorn get paid off this time, as opposed to the fundies and the oil men last time).

If you're a GM parts supplier, you're going to get nothing on your current obligations because you're an unsecured creditor.  If you're a "critical supplier" and can survive the potential loss of income, you can survive.  For the rest - hello Chapter 11.  Wonder what impact this will have to the job market.  Or maybe now there will be an auto parts supplier bailout.  (ugh)  Too bad Visteon missed it.

If you have any balls, and given a quick perusal of this forum, that ain't many, I would advise to boycott anything GM until it is in 100% private hands.  I might even spit on some GM cars for good measure.  Although I expected this to come, I am not happy.  You shouldn't be either, if you have a brain, and especially if you live in the Midwest.  This bankruptcy should have happened many months ago and something would be left.  Now, it's just the government.

The future danger here, btw, is that the government will use its leverage to squeeze Ford out (not to mention other foreign car companies), which is partially why I stated the above.

[TeePee4Prez]

Sad to say, maybe the "bankruptcy before" crowd was right.  Now the US taxpayer effectively owns GM anyway.  Canada also has ownership as well.   

[Sam Spade]

http://www.marketwatch.com/story/us-providing-gm-30-billion-in-bankruptcy-deal

Summary:  The US government will "loan" (i.e. give) GM $30 billion through "DIP financing"  (bankruptcy term of art) for a bankruptcy proceeding which will last an estimated 60-90 days.

My Comment:  If this new bankruptcy lasts 60-90 days, then the government has found a much more corrupt judge than usual (or that I've ever seen or at least Judge Peck).  Good luck to them (or maybe not).  I expect this to be the first $30 billion of many more billions.

Disclosure:  I did some work at that court for a judge.

[Sam Spade]

Sad to say, maybe the "bankruptcy before" crowd was right.

Especially if you were an individual bondholder.  Especially then.  Boy, I can't tell you enough how different it would have been 24 months ago and a private bankruptcy.

GM hasn't been a viable company for many years with its obligations, the numbers always said "curtains" to me - however, the last 24 months delivered the final death blow.

[TeePee4Prez]

One thing I didn't like in the midst of all this are the assholes like Dick Shelby using this as an anti-union powerplay.

[Sam Spade]

One thing I didn't like in the midst of all this are the assholes like Dick Shelby using this as an anti-union powerplay.

Well, the unions are using it as a powerplay, so that makes sense, doesn't it? 

[The Mikado]

If you have any balls, and given a quick perusal of this forum, that ain't many, I would advise to boycott anything GM until it is in 100% private hands.  I might even spit on some GM cars for good measure. 

Why do you think it would take balls to avoid GM products, especially now?  I couldn't imagine anyone buying one of their cars, and it would take balls to invest in GM before it becomes private again.

[2952-0-0]

So can we arrange an Atlas Forum meetup at the next GM Shareholder AGM?

[Lunar]

interesting juxtaposition with BRTD's thread a few slots down

[??????????]

Good riddance to a crappy product.

[Sam Spade]

If you have any balls, and given a quick perusal of this forum, that ain't many, I would advise to boycott anything GM until it is in 100% private hands.  I might even spit on some GM cars for good measure. 

Why do you think it would take balls to avoid GM products, especially now?  I couldn't imagine anyone buying one of their cars, and it would take balls to invest in GM before it becomes private again.

Maybe.  I hope that everyone on this forum shuns GM and their products completely.  I think most Americans agree on this point.  I'm just taking it to active protest and maybe I was a little harsh on the words wrt forum.  

Nonetheless, I can't be sure that this complete shunning occurs because of the possibility outlined above which crawls in the back of my mind.

[TeePee4Prez]

One thing I didn't like in the midst of all this are the assholes like Dick Shelby using this as an anti-union powerplay.

Well, the unions are using it as a powerplay, so that makes sense, doesn't it? 

Uhh, no.  The UAW has made numerous concessions, but I must say they got greedy in the past and screwed themselves over.  I just couldn't stand that assclown Shelby going on TV basically rubbing in our faces why unions don't work.

[True Federalist (진정한 연방 주의자)]

One major reason GM went bankrupt is they managed to get themselves a reputation for shoddy products. Back when I last bought a new car (in 2000) I started off with a very eclectic list that had vehicles that didn't get a unreliable rating from Consumer Reports and cost less than $30K list price.  Gave me about 50 models to pare down via other info, but even at that early stage of my search, not a single GM car made that quite unselective list.  (To be fair, GM did have some reliable vehicles above my price point back then.)  Ford and Chrysler both managed to get a model or two on that list.  My 2000 Camry is still running fine today and I am unlikely to buy a replacement anytime soon.

[Bleeding heart conservative, HTMLdon]

One major reason GM went bankrupt is they managed to get themselves a reputation for shoddy products. Back when I last bought a new car (in 2000) I started off with a very eclectic list that had vehicles that didn't get a unreliable rating from Consumer Reports and cost less than $30K list price.  Gave me about 50 models to pare down via other info, but even at that early stage of my search, not a single GM car made that quite unselective list.  (To be fair, GM did have some reliable vehicles above my price point back then.)  Ford and Chrysler both managed to get a model or two on that list.  My 2000 Camry is still running fine today and I am unlikely to buy a replacement anytime soon.

'98 Camry here.  I treat it like crap and it still runs without any problems.  Its an amazing vehicle.

[??????????]

They sure did have a shoddy product. I remember my uncle bought a chevy truck and had to rebuild the front end after only 25k miles.

[Jacobtm]

An excellent analysis of the issues relating to the GM bailout and restructuring:

http://www.theonion.com/content/video/in_the_know_should_the_government

[Franzl]

The competition aspect troubles me the most....Ford is now being punished for being more successful than GM.

[minionofmidas]

Obviously, what should happen (but probably won't) is the GM name disappears forever but some of its brand names - Opel immediately comes to mind, at least some of its five big US brands too - and some of the traditional production sites, survive. Preferably as more or less independent companies, and preferably saddled with as little old debts as possible.

[memphis]

One major reason GM went bankrupt is they managed to get themselves a reputation for shoddy products. Back when I last bought a new car (in 2000) I started off with a very eclectic list that had vehicles that didn't get a unreliable rating from Consumer Reports and cost less than $30K list price.  Gave me about 50 models to pare down via other info, but even at that early stage of my search, not a single GM car made that quite unselective list.  (To be fair, GM did have some reliable vehicles above my price point back then.)  Ford and Chrysler both managed to get a model or two on that list.  My 2000 Camry is still running fine today and I am unlikely to buy a replacement anytime soon.

'98 Camry here.  I treat it like crap and it still runs without any problems.  Its an amazing vehicle.

Ditto for my 2001 Camry with 190,000 miles.

[Small Business Owner of Any Repute]

There's not much worth salvaging in the GM lineup. The only car that immediately comes to mind is the iconic Corvette, though the only good ones are the classic ones.

I'm a bit biased, though, since my mother is employed as the COO of a company that sells nothing but original and aftermarket parts for vintage Corvettes.  Business is, surprisingly, better than ever.

[The Mikado]

There's not much worth salvaging in the GM lineup. The only car that immediately comes to mind is the iconic Corvette, though the only good ones are the classic ones.

I'm a bit biased, though, since my mother is employed as the COO of a company that sells nothing but original and aftermarket parts for vintage Corvettes.  Business is, surprisingly, better than ever.

But...But...how will the hip-hop community and the Secret Service survive without the Cadillac Escalade?

I'm getting visions of the Presidential motorcade filled with black Toyota Highlanders with sirens on the top.

[Small Business Owner of Any Repute]

There's not much worth salvaging in the GM lineup. The only car that immediately comes to mind is the iconic Corvette, though the only good ones are the classic ones.

I'm a bit biased, though, since my mother is employed as the COO of a company that sells nothing but original and aftermarket parts for vintage Corvettes.  Business is, surprisingly, better than ever.

But...But...how will the hip-hop community and the Secret Service survive without the Cadillac Escalade?

I'm getting visions of the Presidential motorcade filled with black Toyota Highlanders with sirens on the top.

I forgot the Cadillac brand. That's probably worth something too.

[dead0man]

There's not much worth salvaging in the GM lineup. The only car that immediately comes to mind is the iconic Corvette, though the only good ones are the classic ones.

The last few generations of Corvettes are very good cars, but you can't keep a giant company alive because of one very good niche market car.  They need, and have needed for 30 years, a Camry/Accord beater.  Or at least a Civic/Corrola beater.

[Small Business Owner of Any Repute]

There's not much worth salvaging in the GM lineup. The only car that immediately comes to mind is the iconic Corvette, though the only good ones are the classic ones.

The last few generations of Corvettes are very good cars, but you can't keep a giant company alive because of one very good niche market car.  They need, and have needed for 30 years, a Camry/Accord beater.  Or at least a Civic/Corrola beater.

I disagree about the most recent Corvettes.  My mother has a 1999, and there's a lot on the interior that looks just too "standard GM." For a $60,000 car, Corvettes need some higher-end finishes.

They look nice from the outside, though.

[Fmr. Pres. Duke]

I agree that I've been looking at investing in Ford, but I heard an interesting perspective that GM's bankruptcy may also trigger Ford to eventually go under as well in the distant future due to having to compete with a now debt free GM, as well as the potential fallout from suppliers.