GM to receive $4 billion in aid

By George Skentzos | February 18th, 2009

General Motors is set to receive an additional $4 billion in aid from the US government as planned, ahead of the deadline to submit a new survival plan amid initial reports the company may have had to file for Chapter 11 bankruptcy.

The company is seeking concessions from the United Auto Workers union and creditors under the terms of its $13.4 billion federal bailout, and is required to submit a restructuring plan to US officials to show how it can cut costs and pay back the loans.

To date, GM has received $9.4 billion in federal aid which has allowed the company to stay in operation since the start of the year and is expected to seek further assistance after the deadline has passed.

A White House aide has said additional funding for GM’s smaller rival Chrysler LLC would be treated as a new request and dealt with separately.

Chrysler, controlled by Cerberus Capital Management, has been granted $4 billion in federal and is seeking an additional $3 billion.

This report follows news that President Barack Obama has decided against naming a “car czar” with sweeping powers, instead deciding to launch a government task force for restructuring the U.S. auto industry.

The President will appoint Treasury Secretary Timothy Geithner as his “designee” for overseeing auto bailout loans and as co-head of the new high-level panel together with White House economic adviser Lawrence Summers.

Cupid Stunt

They got it! Either with it or without it they would have survived in one way or another.
Now all they go to do is actually make vehicles that people want to buy, be reliable and cheap to repair.
Captain Mainwaring

Enough for about another 3 months of continuing to make the wrong decisions. Then it’s Chapter 11, a newly-structured de-unionised company under new management, and a reasonable chance of making it into the future.
WVB

Future white collar generations not even born yet will be responsible for the burden of paying these loans back to future governing generations not even born yet.
Once again, our children’s children will still be paying for this generation’s ineptitude over ‘fossil’ technology and greed at a time when hydrogen cell cars will be old hat.
adam (aka mada)

And the alternative is? you experts!

Lots of winging but i see no solutions being put forth by any off you?
max

Adam, let them go chapter 11 and try and rebuild, but with new management and no union/debt hanging over their head. A fresh start so to speak. Won’t be easy, but its not exactly easy now is it.

To paraphrase your comment, and the alternative is? Let them continue? I that an alternative?
Tony

A few hours ago, GM announced it will cut 47,000 jobs and will need a further US$16.6 billion from the US Government, or it will go into insolvency and eventually cease to exist.

RIP.
max

LOL, forget chp 11, send em chpt 7, they are a basket case. And if they are saying they need 16.6 billion dollars, you can bet the farm they actually need another 33 billion dollars. This is a business apparently.
max

Was not all this about saving jobs?
http://skyline The Salesman

The hemoridge is too big, throwing good money after bad wont stop it. Soon they will just bleed out. In one way or another.
Limited slip

Whats the point of wasting more and more of taxpayers money? if they have to shed 47000 jobs why are they giving them money? They will obviously just keep on needing more money and no jobs are going to be saved…….just let them die and the economy will actually save money.
Marcoz

i have a great solution Adam…LET EM SINK..Problem solved…
http://www.facebook.com/profile.php?id=674330849 lazybones

You’ve got to wonder at what point the US government is going to stop throwing good money after bad. So i’m going to agree with Limited Slip & a bit with Max.

4bn is only going to delay the inevitable. The question will be has Rudd got any dollars left to help Holden when the administration starts selling off assets cheap. Who knows maybe we could be looking at “Hyundai Holden” shortly. Might not be such a bad thing if it means saving jobs a losing the clueless US leadership.
WVB

GM’s upcoming plight needs to be tough. Tougher than a bailout.
A global example needs to be made of GM and the other US auto makers albeit via a ‘chapter 11’ as a lesson to all other manufacturers of cars or other products for that matter worldwide, that poor judgement, mistakes, sitting on your hands, greed and/or lacklustre/dreary design can not ultimately be remedied with public bailouts.
I do feel sorry however for the tens of thousands of blue collar workers that have really had no input into GM’s/ford’s/chrysler’s downfall.
Andrew M

chap 11 is the best option.

Why are they allowed to take the path that passes Go and collects billions on the way.
GM will be stronger and better if they went chapter 11 versus trying to put a bandaid on a broken leg like they are doing
topdog

I just herd on the radio that there going to cut 60 thousand jobs all around the world here to and that thay will need at least 35 billion more can this be true so bye the time its all done there going to owe like nearly 80 billion dollars how the hell is that ever going to be paid back you will have to make over 200 million a year profit and with interest it will take dozens of years to pay back
Dan

Basically, another 4 billion bucks wasted. GM is doomed. They will go bust. That money will never be repaid. Imagine how much good could have been done with all that money wasted so far.
Tony

More details on the internet about GM’s plan. 47,000 job cuts this year and another 20,000 job cuts by 2012. Anyone left standing after that?
Limited Slip

Topdog……is that right ? 60,000 jobs to go at GM? WOW……I think GM has pulled the wool over the U.S. governments eyes a bit ……they havent really let them know how much worse off they are than they are letting on. This is surely the end……..the smart way is to start over again because the longer it drags on the deeper the shit gets.
Frontman

Firstly it is 47,000 jobs globally. Out of several hundred thousand (some quarters say 600,000) so whilst bad, not catastrophic.
Secondly the financial sector (you know the mob who added the final catalyst to create the global melt down (AKA Sub Prime Market Lending) got 700 billion straight off the bat. Some groups then immediately paid their CEO’s bonuses, shareholders got bonuses and I read somewhere the one organisation went out and bought new corporate jets yet so many of you think it is wrong to LOAN a poorly run company 4 billion?? Especially when that company is in favour of regulators being put in to assist it in getting things right!
Yes the head honcho needs to be turfed, yes they need to get rid of some brands, but most of all they need the government officials on hand to get them out of the black hole that is employee benefits
adam (aka mada)

I’m not saying we shouldn’t let them slip into bankruptcy.

It is better value for money to plunge loan money into GM and Crysler than to let them go bankrupt?

Thats the question here…

It’s not black and white like many of you think, it’svery, very grey.
Limited Slip

Dan….I agree. Why keep an old dying dog alive for a few months when it is more humane to put it to sleep?
Dragging things on and on in business matters like this often makes the end result worse when the end finally comes. The way I see it is that the more money they are given the more they will want, on and on and on……….it will NEVER be paid back, I dont care what anyone says…….
max

But wait, Holden is here to rescue GM ;”Holden and the Australian government have developed a plan to bring to market a new, more fuel-efficient vehicle, with project funding provided by the Australian Government in the form of permanent grants(ie, not repaid),” GM said in a revised viability plan submitted to US Treasury officials yesterday.

“With this support, Holden is projected to be a viable operation, making a positive (net present value) contribution.”

Now I got it, so our fed gvt is going to give Holden 150 million(not a loan, give) then the SA state throws in another 30 million over 4 years(not a loan, give) and Holden is now viable. That is to say, without the federal and state(read taxpayers) handouts, they would not be viable. This is getting to be just plain silly really, business that can only be viable if the taxpayer hands over 200 million, that is, we taxpayers fund Holden’s losses.
max

“bring to market a new, more fuel-efficient vehicle” read, 4 cylinder small car, yup, that’s revolutionary stuff that.
max

yet so many of you think it is wrong to LOAN a poorly run company 4 billion?? Especially when that company is in favour of regulators being put in to assist it in getting things right! Frontman

Actually its about 20 billion at the moment including GMAC, also they would like another 17 billion, which I suspect means they really need another 32 billion, thats GM. Then of course there is chrysler..
adam (aka mada)

Limited slip,

You simply prove my point of treating such an issue with inaccurate business assumptions.

Max,

You don’t seem to understand the scale either…

You think no other auto company has recieved goverment loans??

Think again!
adam (aka mada)

Max,

So let me ask you this…

1. How much will it cost the US goverment/tax payers to let GM slip into bakruptcy??
2. How much will GM’s bankruptcy affect, Ford, Toyota, Honda, Nissan operations in the US?
3. Ho many jobs will be lost if GM go bankrupt?

So?
adam (aka mada)

Every developed country has given it’s local auto industry support in one form or another…

Even almighty Toyota in japan!

Wake up and smell reality.
adam (aka mada)

Where does GM say they are cutting 60,000 jobs? it’s more like 20,000.
topdog

What happens if thay go bankrupt anyway after burning up 30 billion will thay still have to pay it off i dont know dose anyone know what happens.Maybe there just suking all the money then thay will just close the doors who knows
max

Smell the reality! I’m smelling it alright Adam, are you?

How this from Wagoner “Take a look at the products we can do,” Wagoner asserted at the end of the post-$34b PR bomb drop press conference. We haven’t done it a lot, but we can do it, because we kinda did it, a bit, here and there.”

This just inspires me, man give then 100 billion, its kinda like evolution, you know, add water and anything can happen!
adam (aka mada)

Topdog,

That is why the US goverment is making GM and Crysler submit restructuring plans!!
If they don’t convince the US goverment, they don’t lend them the billions!!! simple.
adam (aka mada)

Max,

You didn’t answer the questions…

You just ranted again.
adam (aka mada)

So it’s 60,000 jobs or 20,000…
Bret

Adam, they have said tha they will shed 47,000 jobs worldwide, including 26,000 outside of the USA. Saab will be a big chunk of these, sell Saab, jobs gone from the books.
I wouldn’t expect too many from Aus (currently 6000).

So that’s 47,000 from 252,000 worldwide.
max

Adam, I’m guessing you think this is 20 questions, its not. Use those little hands god gave you and google, then tell me what the ramifications are. Will be happy to respond at that time. TBH, as soon as people start using the word “jobs” I tend to switch off, as the rhetoric from there is pretty much BS.
This is globalization, whats the problem people? GM and Chrysler are rotten to the core, if you can’t understand that
at the base level, whats the point in answering questions?

They are rotten, burn them, watch something NEW replace it.
adam (aka mada)

Max,

That’s your response? sarcasim…

Not surprising.

It’s a pity your rants weren’t more amusing.
max

Its a pity you can’t introduce any fact into a discussion Adam, do your own research mate and stop feeding of others.
adam (aka mada)

Max,

What fact did i feed off??

You rant that GM and Crysler should just be left to die, you haven’t shown any other methods that maybe reached…

let them die
let them die

Thats all you have said, only so may times you can say something.
http://skyline The Salesman

Maybe the fed gov should just buy us all new Holdens to drive?
Bavarian Missile (.)(.)

hahaha, Great idea Salesman…………..
max

Adam they can either chapter 11 or chapter 7. Alternatively the taxpayers of the world can GIVE them probably ANOTHER 40 – 50 billion dollars and they can continue as is.

If they chapter 7 they die, if they chapter 11 decisions get made for them, they receive protection from litigation and can attempt to start again.

Alternatively the taxpayers of the world can GIVE them another 40 – 50 billion dollars so they can sort out THEIR problems created by THEIR DECISIONS.
adam (aka mada)

I asked you if GM goes bankrupt, how much thats going to cost the US federal goverment and the US auto industry as a whole at the end of the day compared to loaning them a total of 30 billion as it stands??
adam (aka mada)

I’m actually all for letting GM die, but you have to look at the ramifications that has as whole for the US economy and auto industry moving forward, not ‘just’ GM and Crysler themseleves individually.
Limited Slip

The Salesman…….I wouldnt drive a Holden of any sort even if they gave it to me. I like to drive good cars…..
Dan

“Maybe the fed gov should just buy us all new Holdens to drive?”

LOL! I’d rather walk!
Limited Slip

The fact is that there WILL be jobs lost at Holden. Poor sales, loss of design programs, cancellation of exports, poor performing existing exports and a heavy reliance on crappy daewoo’s will no doubt result in alot of sackings.
Frontman

The biggest laugh is that Forums like this less than 12 months ago were filled with the absolute truth that FORD was about to go under!! Ford would die the MMAL death and become an importer leaving the mighty Holden and Toyota as the only vehicles worthy of manufacturing in Australia.
How much wisdom and foresight actually passes through these pages of public opinion
Wheelnut

Sales man says: “Maybe the fed gov should just buy us all new Holdens to drive?”

Dan Says: LOL! I’d rather walk!

That’s okay Dan I will have yours then.

I can have a VE SS Ute and a Sportwagon or maybe WM Statesman with a “BOSE” premium Stereo.

Or a WPS enhanced Clubsport [with a supercharger of course] or a W-427.. Decisions Decisions
http://honda spellbound

Frontman your so right , ford is lucky its got a euro division thats producing world class cars .
Its time for the americans to scrap all the crap their making and look to euro/japan for class leading cars to produce in north america .

Sorry to say but in a shrinking market large rwd is dead in the water .

Guess touring car racing in Oz might be fwd /awd 2 litre class come 2010
Andrew M

QUOTE………..The Salesman……
Maybe the fed gov should just buy us all new Holdens to drive?

You know what Henry Ford did when nobody could afford to buy vehicles?????
he gave all of his workers a raise so they could afford to.

and that wasnt the first nor last thing to come from his very switched on noggin
SteveC

Why bet on last place?

Why put money into a sinking ship?

Stupid people. This is going to suck for the rest of our future, our kids future and their kids future.

SteveC
topdog

Touring cars will be mid sized cars with v6s thats what will be the core selling cars in the near futer i think
topdog

Hay wouldnt it be cheaper for gm to just give the cars away for half price for half the year get heaps turn over keep all the jobs and not have to borrow half as much money till thay fix up what thay got to do
topdog

That web site paints a frighting picture of gm
Dlr1

I still cant see how they can survive without bankruptcy protection. They are still losing money, these latest handouts (or loans if you must call them that) are only delaying the inevitable… insolvency. At some point they must admit they are technically trading while insolvent. But the GM response is typical… we know how to save ourselves… we are restructuring… we have new products… but without bankruptcy they are in exactly the same position that they were in 6,12 or 24 months ago when it comes to negotiating with creditors and the UAW legacy costs. Admit it GM, you’re broke! File for bankruptcy and cut the ties to the UAW contracts that are still dragging you down!