For July 7, Magna had called a board meeting to rubber stamp the takeover plan of Opel. Now, Reuters says the board meeting has been delayed to July 14. Why, is anybody’s guess.
What is for sure is that the delay gives rival bidder Beijing Automotive (BAIC) more time to convince GM and especially the German government that their offer is better than Magna’s.
There are a few familiar faces on Chrysler’s newly complete board, which was announced over the weekend (via Chrysler Media). But not many. Chairman C. Robert Kidder, Sergio Marchionne and Fiat Powertrain CEO Alfredo Altavilla are the previously-announced, or otherwise-obvious picks. No surprises there. The other picks? Let’s take a look, shall we?
Here’s the (warning) 87-page ruling that allows “Old GM” to sell its best assets to “New GM.” The bottom line: Judge Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York brushed aside objections by dissident bondholders and product-liability claimants. Judge Gerber accepted the government/bankrupt automaker’s argument that there was no alternative to the Old-to-New-GM asset sale save liquidation, which would be “a disastrous result for GM’s creditors, its employees, the suppliers who depend on GM for their own existence, and the communities in which GM operates.” What’s more (or less), “In the event of a liquidation, creditors now trying to increase their incremental recoveries would get nothing.”
After a lot of arm twisting, and several deadlines set by the US court and the German government, the Opel deal finally is entering the final round—for now. After a suitor has been found, a French woman may spoil the whole wedding.
Sean Kane of safetyresearch.net gave us the heads-up on a move to put warning labels on products manufactured by pre-C-11 Chrysler.
WARNING! This vehicle was produced prior to the date when the Chrysler bankruptcy was approved. If you buy this vehicle and are injured or killed, even if your injuries were caused by the manufacturer, you or your survivors will not be able to recover your losses by taking action against the manufacturer. If your passengers are injured or killed, even if their injuries were caused by the manufacturer, they and their survivors will not be able to recover their losses by taking action against the manufacturer.
In the market for a parking lot in Flint, Michigan? Or a nine-hole golf course in New Jersey (needs TLC)? How about some scenic acreage way upstate New York that features prominently on New York State Registry of Hazardous Waste Sites and on the federal superfund list of contaminated places? All—and more—available now to the highest bidder. Come on down!
While the supposedly best of GM is sold to the supposedly new GM, the worst will be auctioned off in bankruptcy court. Call it the Adam and Eve of all foreclosure sales.
Open house in Massena, New York. This fine waterfront property, abutting the St. Regis Mohawk Indian Reservation in the east and the St. Lawrence River to the north, was home to a GM foundry. It made aluminum cylinder heads for the Chevrolet Corvair. It also mass-produced PCB sludge.
Straight from the horse’s mouth:
GM management has noticed the continuing high trading volume in GM’s common stock at prices in excess of $1. GM management continues to remind investors of its strong belief that there will be no value for the common stockholders in the bankruptcy liquidation process, even under the most optimistic of scenarios. Stockholders of a company in chapter 11 generally receive value only if all claims of the company’s secured and unsecured creditors are fully satisfied. In this case, GM management strongly believes all such claims will not be fully satisfied, leading to its conclusion that GM common stock will have no value.
A month ago, we reported that GM offered to buy back Opel some day “when we do better after a restructuring phase.” Offered? GM downright demands the right to buy back Opel after a buyer has successfully resuscitated and restructured Opel.
The rumors of such a demand have been around for a while. GM is pretty much the only one on the planet who thinks this is a swell idea.
The Washington Post reminds us that Uncle Sam’s chance of recouping taxpayers’ $50 billion “investment” in New GM shares are somewhere between slim and none. To recover the money poured down the GM rathole so far, not including “extraneous” bailouts to lender cum banks, suppliers, dealers and car buyers, the automaker’s stock must rise to the point where it’s worth $68 billion. And remain at the level as the feds attempt to off-load their/our 60 percent share. As we like to say in these parts, good luck with that. Or, as the WaPo puts it, “Even at its recent 2000 peak, GM’s stock was worth only $56 billion.”
Automotive News [sub] indulges in the optimism that dare not speak its name, courtesy of the omnipresent Center for Automotive Research. “A happier GM? Billions in costs disappear,” runs AN‘s headline. And then comes the equivocation [emphasis added]:
During its reorganization, General Motors should be able to shed about $12.5 billion in annual costs — paving the way for possible profits, higher product spending and improved supplier health once U.S. vehicle sales recover to more normal levels.
Inspiring stuff! Why, if these “shoulds” and “possibles” come true, CAR research shows that “GM could even eliminate almost $3,000 per vehicle in incentive spending, adding an additional $8 billion in savings when compared with the pre-bankruptcy GM.” It’s already a stretch to believe that GM can hold steady at a 10m SAAR, given its long-term market share losses, but eliminating incentives? Why not a flying, carbon-neutral Camaro?
Date: 06/29/2009
Ref. number: Marketing / Programs and Promotions / G_0000032412
Subject: Miltary, College and Credit Union Member Discount Program Change
Beginning Monday July 1, 2009, Saturn, Hummer and Saab vehicles will no longer be eligible for the GM Military, College, or Credit Union Member Discount programs.
Dealers will still be able to get approvals for any Saturn, Hummer or Saab vehicles delivered prior to July 1, 2009, but BARS will not pay on deliveries of these vehicles that occur after July 1, 2009.
Facing mounting political pressure, GM’s new masters have agreed to allow new liability cases against products made by old (pre- and intra-bankruptcy) GM to proceed against New (post-pre-bankruptcy). According to the New York Times, the deal went down in federal bankruptcy court on Friday. “G.M. and the administration’s [hands-off] auto task force have been negotiating with more than a dozen state attorneys general who have objected to the company’s plan to sell its desirable assets to a new, government-financed entity. A hearing to approve the plan is scheduled for Tuesday in federal bankruptcy court in Manhattan.” So, that’s that then. The Ad Hoc Committee of Consumer Victims of GM and Chrysler can relax. Comcast can kick back. Rep. Andre Carson can chill. Or can they?
For those who would make the unwise decision to roll the old car’s debt into the new car, yet another reason not to. Policy wonks may recall how during the Bush administration the banking industry got its fondest (pre-bailout) wishes granted. The bankruptcy rules were re-written to make it substantially more difficult for a normal person to discharge debt. (Interestingly, mansion owners in Texas and Florida somehow survived unscathed while the vast majority of bankrupts are still done in by medical bills.) The upshot is that fewer qualify for a full Chapter 7 discharge and more must file a Chapter 13 repayment plan. Here’s what that means for the “typical” car buyer.
Political interference in New GM? As Mass. Rep. Barney Frank’s Norton constituents will tell you, it’s not who you know—no, wait, it is. The Ad Hoc Committee of Consumer Victims of GM and Chrysler—the consortium of lawyers trying to make New GM liable for Old GM’s vehicles—must not know any pols senior enough to bend GM to their will. Oh wait! They do! Indiana Representative Andre Carson, who’s just introduced an as-yet-unnumbered bill to do what GM’s suits and a federal bankruptcy judge won’t. It’s not unnamed though: “The Jeremy Warriner Consumer Protection Act of 2009.” Warriner is an Indiana resident who lost both legs in an accident in his Jeep; his product liability lawsuit fell afoul of Chrysler’s “transformation” in bankruptcy. The odds of the bill’s passage may not be high, but its existence proves that the fate of Government Motors lies in the hands of elected officials, rather than the US consumer. As if you didn’t know.
I don’t mind tripping the light fantastic with PR people. No journalist should expect to get the straight dope or the inside line from a person paid to protect his employer from the slightest ding to their rep. It’s the dark side. Deal. And here’s the deal with this story, wherein an ad hoc committee of lawyers created an ad taking New Chrysler and Old Soon-to-be-New GM to task for trying to walk away from post-C11 product liability.
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