The last thing GM needs right now is a $2.25b bill to go splat on the mat. But if rumors are accurate, The General will spend yet more money on its bankrupt former parts maker Delphi. While examining various scenarios for Delphi to come-up up with the $4.5b in needs to exit Chapter 11, the Financial Times hypothesizes "the exit funding would consist of a USD 2.275bn first lien loan, while GM would assume a USD 2.25bn junior facility." GM would have to pay their chunk to take the remaining debt down to a size that current debt holders JPMorgan and Citibank could sell. They'll have to move fast, though. The current funding agreements will all be history by the end of April, and Delphi will be back to square one. Unless… nah… GM wouldn't be stupid enough to try to pay all the debt, would they?Could they?
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Where on earth is this money gonna come from, if not the GM pension fund?
Delphi has too many parts in too many GM cars. Speculation has always been that if Delphi can’t find the cash for their end of March get-out-of-bankruptcy plan, GM will help bail them out. Will it push GM into bankruptcy? Not in and of itself, but combined with other factors that are raised in these articles, it will probably push them in that direction.
GM needs to build about a dozen vehicles REALLY well instead of 3 dozen mediocre vehicles.
Let these companies fall on their face. When they rise from the ashes they’ll be alot smarter next time…
No other investors were interested in aiding Delphi’s lift out of bankruptcy in the past couple of weeks, so GM’s cash hoard will have to do.
Makes you wonder why did they bother to spin it off in the first place…
Sure GM could be stupid enough to pay off all of Delphi’s debt for the simple reason that Rick Waggoneer, Bob Lutz, and the other upper mgt. types have golden parachutes.
“Screwed up again. Oh well it ain’t comin out of our pockets”.
Regardless of what happens to GM, they’re set for life – as well as their grandkids. So they can think of GM’s money not as their own but like a politician would think of taxpayers money – easy to spend massive amounts of OTHER people’s money for the real or perceived personal payoff.
Just think of how GM might perform if Waggoneer, Lutz, etc. had personal accountability and if their compensation was directly tied to their performance.
Just think of how GM might perform if Waggoneer, Lutz, etc. had personal accountability and if their compensation was directly tied to their performance.
Do you mean like normal people?
Can you say
Visteon?