Breaking: Obama to Announce Bankruptcy Deadline Monday

[nsap]

Breaking: Obama to Announce Bankruptcy Deadline Monday
GM, Chrysler to get deadline to comply with debt reductions.
www.gminsidenews.com
March 27, 2009
By: Nsap

As the mainstream media has been reporting, Monday the Obama Administration is supposed to announce plans for the future of General Motors and Chrysler. Both companies have received several billion in U.S. government-backed loans in order to avoid having the two auto giants fall into bankruptcy protection. Tonight GMInsidenews is burning the midnight oil because our sources have told us that Monday the final straw is going to be announced by the Obama Administration in regards to GM and Chrysler; that plan, we're told, is going to include a bankruptcy deadline for both companies.

GM CEO Rick Wagoner arrived in Washington D.C. today to meet with President Obama's Auto Task Force, the group responsible for overseeing the U.S. automotive industry (namely GM and Chrysler) to see that the two corporations are restructuring in a correct and timely manner. GMI is told that Rick will be staying in D.C all weekend in an effort to pitch GM's restructuring story as much as possible. However, it has been decided that Monday will bring an announcement of a specific date in which GM must have the issues with the United Auto Workers and GM's bondholders resolved, or General Motors will fall into a government-backed pre-packaged Chapter 11 bankruptcy filing.

GMI has been told that this is an effort by the Administration to prod the bondholders of both companies to comply to debt-to-equity swaps in an effort to reduce their debt. We're also told that a pre-packaged bankruptcy would lead to the UAW and federal government getting most of the voting power surrounding GM because the loans GM has from the U.S. government are considered secured (backed by assets). Most of GM's other debt is not secured by assets. The UAW VEBA obligations are also considered unsecured debt, but would make up 60% of GM's unsecured debt. Bondholders whom hold secured debt get first dibs and more voting power in a bankruptcy scenario.

Stay tuned for the latest, as we fully anticipate more details to break throughout the weekend.

[ColinOpseth]

GM it utterly screwed. I hope the company weathers this storm but I'm getting more and more disparaged with those prospects.

[zete]

If the US government follows historical precedent with how they handled some railroads and other businesses they effectively took over and fixed, then the future of GM might actually be rosier than most figure.

I read this article recently: Washington's Turnaround Artists. It was quite eye opening and introduced me to some history I wasn't aware of. I wonder if this is what's actually being thought about.

And the irony of such a thing would be that GM would come out the other side of the process as a renewed company. Not just financially, but also in terms of perception.

We'll have to see what happens, but it's obvious the government wants the debts dealt with while not impacting the workers excessively. The bond holders are going to go to the cleaners. But when the biggest creditor is about to become the government, everyone else takes the back seat regardless.

And since I can't influence things one way or another, I'll have to sit back and watch history unfold.

[Highlander]

Nothing like what is likely the most wasteful and finacially challenged organization in the world telling these businesses the proper way to restructure. Oh, the irony!

Hey, we're in the process of the most unbalanced budget in history and spending more in the budget than has been spent in the history of the country combined, but hey, we know what's best for business! What the frak?!?

[ausrutherford]

There is no way they can get all the stuff they need to get done in three days.

[MonaroSS]

Nothin' like the cold sharp edge of a drop-dead deadline to motivate people.

About time I say. It's time to **** or get off the crapper...

[ChevyRules]

Guys, this isn't meant to get GM and Chrysler to fail. It is a way to force the bondholders to accept the a deal or they will get the shaft.

[jmlee0695]

Originally Posted by ausrutherford

There is no way they can get all the stuff they need to get done in three days.

Dude, R-E-A-D! The deadline isn't Monday, hes announcing it monday!

[kylepo]

Originally Posted by MonaroSS

Nothin' like the cold sharp edge of a drop-dead deadline to motivate people.

About time I say. It's time to **** or get off the crapper...

pretty much spot on!

Originally Posted by jmlee0695

Dude, R-E-A-D! The deadline isn't Monday, hes announcing it monday!

what can you expect coming from him?

[djo165]

If GM could come out of a pre-packaged bankruptcy with less long term debt, then that wouldn't be a bad idea, IMO. Get it over with already.

Many of the moves they've made over the past 12 months (trying to sell Hummer and Saab and reducing brands) should have been done two to three years ago.

[tollytime]

I am utterly amazed that people actually think GM will have a new afterlife. This is not going to be a happy ending if GM goes bankrupt. It's going to be very sad. You can believe all the happy stories of debt release you want, but they are just stories. GM will lose everything they own.

[GM-Joe]

I believe this is good news, more so than the 8% hike in fuel economy. Obama is forcing everyone to ante up. The UAW will not be able to keep stalling until times are good. Now is the time to call or fold; hopefully Gettlefinger and company will fold and necessary concessions are made to align UAW workers, as well as franchise laws, and related issues, to the rest of the U.S.

I have been jealous of UAW workers for a long-time. They go on vacations, watch football every weekend, and live care free lives, others are forced into job re-training and spend their weekends reading books and their vacation monies paying tuition!

[2002 Caddy]

Originally Posted by ChevyRules

Guys, this isn't meant to get GM and Chrysler to fail. It is a way to force the bondholders to accept the a deal or they will get the shaft.

The bond holders hold all of the cards... Why would you trade a basically guaranteed 20-40 cents on the dollar for zero cents on the dollar.

The ONLY way that the bond holders will get the shaft would be if they were to accept a stock swap.

This announcement, if its really true, forces nothing.

[member12]

The government backed bankruptcy option sounds good to me if the bond holders and the union don't get the message.

Apparently GM can't work this out on it's own, and needs a push from the white house...which is really sad.

Less long term debt, a "right sized" work force with market wages, and a completely new team of managers would be the outcome of a pre-packaged bankruptcy...not a bad deal.

Rick might as well put his place up for sale right now.

[Mikkoo]

Originally Posted by ChevyRules

Guys, this isn't meant to get GM and Chrysler to fail. It is a way to force the bondholders to accept the a deal or they will get the shaft.

Precisely. They have been one of the root causes of GM not getting their restructuring
plan completed. Everyone involved has to make huge sacrifices.