GM may go bust

[Haydn]

You may have all seen it on the news, but GM have said that they need to be bailed out by the US Government before the end of the year as they are runing out of cash.

German govt. rejects GM's plea for state aid
Berlin The German government rejected Tuesday a plea from General Motors, the world's biggest carmaker, for targeted aid for German car factories.

Parts supply could get harder than you think in the future

Watch this space let all sit back & see if the US Government will bail out GM.

Just so that puts you all in the picture this includes.

Vauxhall / Opel / GM & other US brands / Holden / SAAB / Isuzu / Chevrolet

Regards Haydn

[Drift]

This will affect B owners more sadly as most parts for the A's are after market or Isuzu or scrap yards.

GM wont go under hey will just sell sections of their company to Asian companies as Ford did with LR, Asia is riding the economic storm quite well at the moment.
Assets may not gain a good price but still will raise enough to save a company

[SPEEDBIRD 202]

The thing is its not just confined to GM. There are other big players who have similar problems Jaguar, Land Rover and Ford all have cut back or going through some sort of reorganization

There was a guy on the BBC Radio this morning saying he wants the British Goverment to put billions of pounds in to the Briish Car Industry to stop some of those companies going bust .......... !

It would be intresting to know how profitable the GM spares business is. Im sure it makes money ..........

[Ruathar]

GM will not disapear, simple as that. Chapter 11, which is what they are threatening to file for, is not like bankrupcy in this country. It is basically a protection from the people you may owe money to (including the workers you get rid of whilst under Chapter 11 protection) allowing a major restructure, slimlining, carving off of waste without all the normal associated costs.

GM has over $11 billion in assets, they have less than $1 billion in debts, but they have no ready cash and the banks are not lending. They are trying to find a way to raise the cash to allow them to restructure to survive the recession, and in the US Chapter 11 is an easy way for them to do that if the US government will not throw loads of free money at them.

If the US government do bail them out what will happen is that they will throw loads of money at the problem, continue as they are and just delay the necessary tough decisions they will need to make to continue to survive as a viable company, normally causing a doubling of debt and a halving of turn over (why would you buy a GM car if you think the company is not going to be around in a year or two to honour the warranty?). The best thing they can do is apply for Chapter 11 protection and they will then find there are suddenly a lot of investors with major money looking to help them out (because a company in Chapter 11 is worth a lot less on the books so investing in them then will get you a bigger stake of GM and so more profit in the future).

[Haydn]

Hmm GM are already supporting Delphi who are themselves in chapter 11 already, Delphi have already sold off large parts of their business to keep afloat, GM is caught in a two way battle with Delphi, as Delphi manufacture a large part of GM porfolio of parts, GM are responsible for Delphi pensions. so if anything happens to Delphi GM will end up mopping up, but mean time they would loose a parts supplier too, which would prevent them making cars.

US emplyment law is very different to here, Delphi have thousands of workers in the states that can not be laid off,but who do not work, but mean time Delphi have all these workers on their payroll.

GM sold off a large part of their manufacturing business a long time ago, this was then under the AC brand, hence this is how Delphi took over the business & all the problems that go along with it.

In other words it's a big mess