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Motor Authority - blog Tag: bankruptcy

  • GM gets 5 new board members appointed by U.S., Canadian governments

    GM gets 5 new board members appointed by U.S., Canadian governments July 25th, 2009 ByRalph Hanson Ralph Hanson, Author, July 25th, 2009 Ralph Hanson 1 Comment

    GM gets 5 new board members appointed by U.S., Canadian governments General Motors' recent bankruptcy proceedings have seen the company transformed as it leaves behind failing assets, and according to the company these changes have also been reflected through a restructured board of directors. Five new members have been added to the board following the bankruptcy, with major stakeholders being given discretion to hire new board members depending on the size of their stake.

    For the U.S. Treasury, which now owns roughly 68% of GM, the government department was able to select 4 of the new 5 board members. The Treasury appointed Daniel F. Akerson, David Bonderman, Robert D. Krebbs and Patricia Russo as their... General Motors' recent bankruptcy proceedings have seen the company transformed as it leaves behind failing assets, and according to the company these changes have also been reflected through a restructured board of directors. Five new members have been added to the board following the bankruptcy, with major stakeholders being given discretion to hire new board members depending on the size of their stake. For the U.S. Treasury, which now owns roughly 68% of GM, the government department was able to select 4 of the new 5 board members. The Treasury appointed Daniel F. Akerson, David Bonderman, Robert D. Krebbs and Patricia Russo as their designated board members for the new company. Akerson is a director at the Carlyle Group, a private equity firm based in Washington D.C. that is ranked as the world's largest. Meanwhile, the Canadian government also has a stake in the new GM, and although it is not as sizable as the U.S. Treasury's, its 11.7% stake affords the Canadians a spot on the board to designate someone of their own choosing, which in this case was Carol Stephenson, a business school dean and director of ING Canada. According to GM, there will be a total of 13 directors on the board, including the 5 new additions that will join current board members such as CEO Fritz Henderson and Kent Kresa. Each of the non-GM executives will be paid $200,000 annually for their services. Read More

  • There's a new carmaker in town, and its name is...General Motors

    There's a new carmaker in town, and its name is...General Motors July 10th, 2009 By Nelson Ireson Nelson Ireson, Author, July 10th, 2009 Nelson Ireson 1 Comment

    There's a new carmaker in town, and its name is...General Motors Lighter, smaller, quicker and more responsive to customer needs - that's how the new General Motors Company is comparing itself to the now-defunct General Motors Corporation it replaces. Today's emergence from bankruptcy - just 40 days after it went in - marks the start of what the new GM hopes will be a very different way of doing business.

    The core points of the new GM plan were released in an announcement this morning, with more details to follow shortly in a media call with CEO Fritz Henderson. Central to the new GM manifesto is an openness to customer input, a new buying structure that allows eBay-like purchasing, including 'but it... Lighter, smaller, quicker and more responsive to customer needs - that's how the new General Motors Company is comparing itself to the now-defunct General Motors Corporation it replaces. Today's emergence from bankruptcy - just 40 days after it went in - marks the start of what the new GM hopes will be a very different way of doing business. The core points of the new GM plan were released in an announcement this morning, with more details to follow shortly in a media call with CEO Fritz Henderson. Central to the new GM manifesto is an openness to customer input, a new buying structure that allows eBay-like purchasing, including 'but it now' pricing, and a focus on continuing to turn out new products that are their own best argument for buying GM. "Customers will be able to bid on actual vehicles just like they do in an eBay auction, including the option of choosing a predetermined 'buy it now' price," Henderson said of the as-yet-unannounced plan to partner with eBay for sales. GM's transformation into its newer, lighter self isn't yet complete, however. Downsizing will continue through 2011 at least, with a reduction of 13 plants to just 34 in operation by the end of 2010, and a cut in U.S. jobs from the 91,000 GM had at the end of 2008 to around 64,000 by the end of 2009. Opening more communications channels, including direct employee interaction with customers, is also a core element of GM's plan to help bridge the 'perception gap' between its products and what people think when they hear the GM name. Fritz Henderson will lead the charge, launching his own blog and ramping up use of social media tools like Twitter. "In August, we'll begin regular visits with customers, dealers, suppliers, employees and others - in the U.S. and abroad - who impact our relationships with customers. We'll be listening to their ideas, and acting on the ones that will improve our ability to serve our customers better," said Henderson. "And of course, other executives and I will continue to reach out to customers through our ongoing web and Twitter chats." Stay tuned for more details and information as the re-launch of GM unfolds. Read More

  • Bankruptcy court approves GM asset sale

    Bankruptcy court approves GM asset sale July 6th, 2009 ByJames Martinez James Martinez, Author, July 6th, 2009 James Martinez 1 Comment

    Bankruptcy court approves GM asset sale General Motors is one step closer to emerging from bankruptcy, with a judge on Sunday approving an asset sale to allow the most profitable assets to exit bankruptcy protection under government ownership. Judge Robert Gerber of the U.S. bankruptcy court in Manhattan said the sale would "prevent the death of the patient on the operating table."

    Gerber has issued a four-day stay of the order approving the sale, which should allow it to close as early as Thursday.

    The sale will include substantially all of GM’s assets to the newly established NGMCO Inc., an entity funded by the U.S. Department of the Treasury. Once the sale is... General Motors is one step closer to emerging from bankruptcy, with a judge on Sunday approving an asset sale to allow the most profitable assets to exit bankruptcy protection under government ownership. Judge Robert Gerber of the U.S. bankruptcy court in Manhattan said the sale would "prevent the death of the patient on the operating table." Gerber has issued a four-day stay of the order approving the sale, which should allow it to close as early as Thursday. The sale will include substantially all of GM’s assets to the newly established NGMCO Inc., an entity funded by the U.S. Department of the Treasury. Once the sale is completed, NGMCO Inc. change its name to ‘General Motors Company’ and continue to operate under GM's historic corporate and sub brands. The new company, with Fritz Henderson as CEO, will acquire GM's strongest operations and will have a competitive operating cost structure, partly as a result of recent agreements with the United Auto Workers (UAW) and Canadian Auto Workers (CAW). Furthermore, the new General Motors Company will have lower debt and a stronger balance sheet, which when combined with a lower break-even point, will allow it to reduce its risk and operate profitably at much lower volume levels. Importantly, GM's subsidiaries outside the U.S., such as Holden and Daewoo, will be acquired by the new company and are expected to continue to operate without interruption. The company shares will be broken down into a 60.8% stake owned by the U.S. Department of the Treasury, a 17.5% stake owned by the UAW Retiree Medical Benefits Trust, a 11.7% stake owned by the Canadian and Ontario governments, and finally a 10% stake that will consist of the old GM’s bondholders. Additionally, the old GM and the UAW Retiree Medical Benefits Trust will hold warrants that are exercisable for 15% and 2.5% of the interests in the new GM, respectively. Once the restructured General Motors Company is fully up and running, shares in the company may be offered via an initial public offering conducted by the government. This is expected to take place sometime next year, however, no official confirmation has been given yet. Read More

  • Karmann shuts its doors as last convertible rolls off the line

    Karmann shuts its doors as last convertible rolls off the line June 23rd, 2009 ByRalph Hanson Ralph Hanson, Author, June 23rd, 2009 Ralph Hanson 3 Comments

    Karmann shuts its doors as last convertible rolls off the line Last year a spate of bankruptcy threats and possible acquisitions or closures hit the coachbuilding industry, but today Karmann, perhaps most famous for the Karmann Ghia conversion, is closing its doors. Bankruptcy is the next step, and it's not clear if the firm will come out the other side.

    The final car built by Karmann, which also does contract work for other carmakers, was a Mercedes-Benz CLK - now replaced by the E-Class Coupe. The convertible rolled off the line on Monday. A company statement said simply, "Today, the last car built entirely by Karmann rolled off the assembly line," reports The Straits Times, leaving the world to... Last year a spate of bankruptcy threats and possible acquisitions or closures hit the coachbuilding industry, but today Karmann, perhaps most famous for the Karmann Ghia conversion, is closing its doors. Bankruptcy is the next step, and it's not clear if the firm will come out the other side. The final car built by Karmann, which also does contract work for other carmakers, was a Mercedes-Benz CLK - now replaced by the E-Class Coupe. The convertible rolled off the line on Monday. A company statement said simply, "Today, the last car built entirely by Karmann rolled off the assembly line," reports The Straits Times, leaving the world to guess at the possibility of a new Karmann coming back to life with one or more co-owners. The shutdown and insolvency filing was precipitated most immediately by a fight with its workers union, IG Metall, but ultimately the industry slowdown, which has called for a reduction in production capacity across the board, is to blame. The Karmann Ghia, a coachbuilt Volkswagen coupe and convertible, along with the Beetle, Ford Escort, Mercedes CLK and several Audi cabrios, accounted for Karmann's 3.3 million-vehicle output since 1949. Read More

  • GM sees possibility for early exit from Chapter 11

    GM sees possibility for early exit from Chapter 11 June 19th, 2009 By Nelson Ireson Nelson Ireson, Author, June 19th, 2009 Nelson Ireson 0 Comments

    GM sees possibility for early exit from Chapter 11 Much talk over the messiness of so-called 'surgical' bankruptcies has spun about the web, and before Chrysler and General Motors went into the process, there was a lot of doubt that they'd be out within the planned 60 days. But Chrysler is already working with Fiat and now GM sees itself possibly setting up the New GM shop by July 15.

    There are still several technical hurdles to clear in the mean time, however. And much of the process is out of GM's hands, reports the Wall Street Journal. Much of the remaining work rests on the shoulders of the bankruptcy judge, which will have to clear the remaining issues by July 1 in order to meet a July... Much talk over the messiness of so-called 'surgical' bankruptcies has spun about the web, and before Chrysler and General Motors went into the process, there was a lot of doubt that they'd be out within the planned 60 days. But Chrysler is already working with Fiat and now GM sees itself possibly setting up the New GM shop by July 15. There are still several technical hurdles to clear in the mean time, however. And much of the process is out of GM's hands, reports the Wall Street Journal. Much of the remaining work rests on the shoulders of the bankruptcy judge, which will have to clear the remaining issues by July 1 in order to meet a July 15 date for the Section 363 sale. Once GM is out of bankruptcy - whether that's in mid-July or early August or later - is when the real work will begin. Shedding the least profitable/most costly portions of its business is just the first step toward rebuilding a corporate model that can succeed both in the U.S. and around the world. Read our previous coverage for more on GM's restructuring plans and what will happen post-bankruptcy. Read More

  • Ford: Government loans to Chrysler, GM saved the industry

    Ford: Government loans to Chrysler, GM saved the industry June 15th, 2009 ByAlex Kaufmann Alex Kaufmann, Author, June 15th, 2009 Alex Kaufmann 1 Comment

    Ford: Government loans to Chrysler, GM saved the industry It's easy to look at the bailouts and bankruptcies of General Motors and Chrysler as a big-government bonanza. Some even see tints of socialism in the loans and subsequent government ownership stakes. But as Ford points out today, there was more at stake than just two companies.

    The entire industry, and in some ways, the entire U.S. economy, was riding on the survival of GM and Chrysler, says Ford Motor Co executive chairman Bill Ford, Jr. "It would have been so catastrophic to have a supply-base meltdown because it would have brought down all the auto manufacturers and frankly some other industries as well," Ford told CNBC TV according to... It's easy to look at the bailouts and bankruptcies of General Motors and Chrysler as a big-government bonanza. Some even see tints of socialism in the loans and subsequent government ownership stakes. But as Ford points out today, there was more at stake than just two companies. The entire industry, and in some ways, the entire U.S. economy, was riding on the survival of GM and Chrysler, says Ford Motor Co executive chairman Bill Ford, Jr. "It would have been so catastrophic to have a supply-base meltdown because it would have brought down all the auto manufacturers and frankly some other industries as well," Ford told CNBC TV according to an Automotive News report. A cascading chain of bankruptcies was one of the primary fears of an unassisted GM or Chrysler bankruptcy. Because so many companies rely on GM and Chrysler to purchase their parts, and because there's no easy replacement outlet for those parts, there's no way for the supplier base to survive without them. Ford cautions that the fix remains in a state of flux, however, and that further action, including direct supplier support, should be taken. Read More

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