Couldn't sleep, been watching the over night markets. Saw an interesting piece on Reuters about everyone's favorite car company. Bankruptcy is looking more and more likely. According to the news report, it appears that that one possibility being talked about is breaking up the company into two parts. One "good" GM consisting of brands that still sell, and one made up of the Bad News Bears brands that the company is having a hard time unloading.
A plan to split the corporation into a "new" company made up of the most successful units, and an "old" one of its less-profitable units, is gaining momentum and is seen as the most sensible configuration, said another source familiar with the talks.
If the plan goes through, the new GM would be expected to assume some previous creditor debt from bankruptcy proceedings, such as secured debt, said the second source, adding that GM bondholders were likely to lose substantial value in bankruptcy.
Certain GM dealer and litigation claims would also be hurt if the new company structure is used as part of a company bankruptcy, said the second source.
Now if they go into bankruptcy, even one of those "structured" ones now even being queitly promoted by the Obama Administration, this throws all their commitments into question. The auto parts suppliers are nervous. The dealers are nervous. The bond holders are already going for another set of Depends, nevermind what the shareholders are going through. Then there are the union "legacy costs", you know the retirement packages and such.
You put the company through bankruptcy and then split the company, it may revive the firm. I never liked GM going for the big BK (to use a little real estate lingo), but its options are now dissappearing more and more every day. There is nothing to stop a bankruptcy judge from joining the unionized manufacturing facilities to the fucked up GM, while the good one gets to rebuild new plants in say...oh I don't know....the South? Remember, it will be a new company, a new start. Well, we'll all know more soon enough.