tic tic tic

[ryan34]

So what exactly would bankruptcy mean for GM? Are we talking voiding of warranties for customers? Jobs being cut? What exactly is involved?

[markd79ta]

So what exactly would bankruptcy mean for GM? Are we talking voiding of warranties for customers? Jobs being cut? What exactly is involved?

Under Chapter 11, the company would be restructured, divisions may be closed, and the company could petition to invalidate labor and supplier contracts, close factories, etc. The question is this...will they get the lending necessary to re-emerge from bankruptcy? Chapter 11 could be a good thing in that GM could finally restructure the company and downsize. However, a lot of people would be laid off.

Under Chapter 7, the company would liquidate and most likely everyone with an vested interest would be screwed. Government may step in and guarantee pensions and unemployment at a huge cost.

[ryan34]

Under Chapter 11, the company would be restructured, divisions may be closed, and the company could petition to invalidate labor and supplier contracts, close factories, etc. The question is this...will they get the lending necessary to re-emerge from bankruptcy? Chapter 11 could be a good thing in that GM could finally restructure the company and downsize. However, a lot of people would be laid off.

Under Chapter 7, the company would liquidate and most likely everyone with an vested interest would be screwed. Government may step in and guarantee pensions and unemployment at a huge cost.

Well chapter 11 doesn't sound TOO bad, I mean they could always get new contracts with HOPEFULLY american companies. But chapter 7 def sounds like it would cripple the economy. So who determines which one is filed?

[99Firebird3800]

Well chapter 11 doesn't sound TOO bad, I mean they could always get new contracts with HOPEFULLY american companies. But chapter 7 def sounds like it would cripple the economy. So who determines which one is filed?

The problem is, Chapter 11 could lead to Chapter 7 for an automaker. There's been some independent research company (the name escapes me right now, but it was quoted on the news) that did a study and found something like 80% of new car buyers wouldn't look at vehicles from an auto supplier that was under bankruptcy protection. If 80% of your prospective buyers aren't going to buy from you, then 80% of your revenue is gone. You just can't survive that.

Even if they survived Chapter 11, I doubt they'd go for American companies as suppliers. They would go with as many Mexican and Asian suppliers as possible because they are, around 8 times out of 10, cheaper than US built components. So you're going to see alot of US suppliers hitting bankruptcy courts as well when their revenue drops off the chart.

For example, my current employer gets about 48% of their revenue from GM. If GM liquidated, that 48% would simply be gone, no questions asked, and it would probably drive us to liquidation (we're already in bankruptcy). If they didn't, but they pulled all interests from us, we would still lose that 48%. If it was renegotiated to drastically lower prices (let's say half, for giggles), we're still losing 24% of our revenue. To meet that, we'd have to do substantial cost-cutting, which would involve serious job losses. What else it entails (health care cuts, 401k matching, R&D, pay cuts, etc) is the only unknown.

No matter what way this shakes out, unemployment is going to rise. How much is the unknown.

[Jeff_in_Atl]

http://info.detnews.com/video/index.cfm?id=1189

[Jeff_in_Atl]

South of the equator, Ford and GM prosper

http://detnews.com/apps/pbcs.dll/art...-SOUTH-AMERICA

[Jeff_in_Atl]

GM says it "disappointed" and "betrayed" consumers

http://www.reuters.com/article/domes...rpc=22&sp=true

[FroSSty]

This is from a man on another board that I respect a lot and yet have never met in person. Much like most of you here. It is a long video and there is some flipping of the bird which some may not like to see, but worth it , imho. It shows a local Michigan company of 42 years that was basically bankrupted by the unfair business practices of GM...No bailout for these folks, and there are a LOT more companies just like them. Some may see it as simple p!ssing and moaning but it becomes real when it affects your life directly like the 300+ that lost their jobs at The American Team.
http://www.youtube.com/watch?v=IYfU4EdJ-NU