Reports say GM headed for Bankruptcy

Reports are coming in that a GM bankruptcy is now probable.

General Motors Corp. may be more likely to end up in bankruptcy based on the Obama administration’s willingness to place Chrysler LLC into court protection to safeguard union health-care benefits.

With GM and its biggest bondholders at odds over resolving $27 billion in unsecured claims by a June 1 deadline, the Chrysler model indicates that President Barack Obama may resort to bankruptcy to end any impasse over that debt, said Martin Fridson, chief executive officer of New York-based credit investment firm Fridson Investment Advisors.

Of course the articles are all about these hedge funds, investment firms should get their money all the while screwing the workers. If this is the case, the Obama administration is using bankruptcy to protect the pensions and health care of UAW workers, that's a good sign frankly.

Here is the issue with the bondholders:

GM bondholders proposed April 30 they get a 58 percent ownership stake in the Detroit-based automaker in exchange for their $27 billion in unsecured claims. Bondholders are objecting to GM’s proposal they get a 10 percent share of GM equity while a union health fund would get $10 billion in cash and as much as a 39 percent stake for their $20 billion in unsecured claims.

But it's yet to be seen what happens with Chrysler in reality and having 2 of the 3 U.S. auto makers in bankruptcy at the same time, all the while it appears Chrysler will become foreign owned as Italian Fiat, doesn't sound too reassuring.

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You can count on GM entering bankruptcy.

There isn't a doubt in anyone's mind back here in MI that GM will be pushed into bankruptcy by Obama. When they come out, they will be forced to build ONLY tiny little fuel efficient cars that nobody wants. If you look at the price of vehicles, you find zillions of cheap, high mileage little cars made by everyone. What can't be found are cheap, fuel efficient SUVs. Honda is trying to get there, and thanks to Obama, probably will beat Toyota and the Detroit 3. Ford has great products, but they are expensive. Something Detroit has been trying to tell Bush II and now Bush III . If Obama had relieved the Detroit autos of all of their healthcare costs, they wouldn't need his wrong headed bailout.


boy do you have that right. They don't get the harsh conditions and what working America needs in a vehicle and that's why SUVs are so popular. They seem to think it's all about culture and vanity. Uh, no, it's about getting stuck in the snow, needing to haul heavy gear, loads around, having power to get up the mountains.

I have to agree, the market segment is that huge honking SUV but fuel efficient with power and with 4x4 capabilities. That's the break through.

I've got my doubts on the "having power to get up mountains"

Way back in the 1980s, our family car was a VW Karmen Ghia (think bug front nose, and bug tech, but looking a little more like a Porche, if you don't remember this little car). Total engine output, 49 hp, a ridiculously small amount, and two wheel drive.

Yet it was a great ski vehicle. Fit two adults and two kids nicely with a roof rack, and could actually go further up the back roads for cross country ski play than a 4wd Jeep at the time.

Now, a people carrier it wasn't- my brother did fit 7 teenagers into it the night he totaled it somehow, but the one injury in that crash, a broken leg, also caused a broken gearshift.

But having power to get up mountains is much more about proper weight-to-power ratios and gearboxes than it is about raw HP.

Executive compensation is inversely proportional to morality and ethics.

Maximum jobs, not maximum profits.