AutoBlog: REPORT: GM could be wholly owned by U.S. gov't after bankruptcy, $15.4 billion in loans forgiven

[NewsFeeder]

Filed under: Government/Legal, GM, UAW/Unions

With General Motors' bankruptcy filing all but assured, details of the deal are being hashed out as you read this and sources are coming forward to secretly divulge some of the more critical aspects of the plan. The newest tidbit comes from an unnamed source familiar with the negotiations speaking with Reuters who said that GM's Chapter 11 filing would create a new company comprised of the General's positive assets and will be initially owned by the U.S. government. The report lends further credence to the "good" GM, "bad" GM plan we've been hearing about for weeks, with one company taking on all of GM's deficient assets and another separate entity comprised of the positive assets, the latter of which could honor the claims of secured lenders, possibly paying back most or all of the money owed. But what about the taxpayer loans?

Reuters' source indicated that the new government strategy for GM would include extending the U.S.' credit line to the newly formed company and forgiving the majority of the $15.4 billion federal loans to the automaker. Additionally, the government could give both bondholders and GM's unions a stake in the company, and although a new board would be established - pending review from the government's oversight board - Rick Wagoner's predecessor and GM's new CEO, Fritz Henderson, would likely head the new company. Shocking? Hardly. Disturbing? Sound off in the comments below. Thanks to all who tipped in.

[source: Reuters | Image Source: Bill Pugliano/Getty]

REPORT: GM could be wholly owned by U.S. gov't after bankruptcy, $15.4 billion in loans forgiven originally appeared on Autoblog on Tue, 19 May 2009 19:00:00 EST. Please see our terms for use of feeds.

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[daves87rs]

Ummm..ok....

[Robert Hall]

National Motors!

[Z-06]

National Motors!

No that is too much work for those bums in DC. They will keep GM and call it Government Motors.

[Robert Hall]

No that is too much work for those bums in DC. They will keep GM and call it Government Motors.

Or Generic Motors, making generic cars for Genericans.

[Daryl Z71]

Or keep it going until the economy looks better and then run it into the ground.

[daves87rs]

Or keep it going until the economy looks better and then run it into the ground.

[Daryl Z71]

Thats what were looking at when the government gets control.

[gmcbob]

Well, I hope things aren't as crazy as a lot of us are speculating, but this really is such a travesty. I don't think that "Team Obama" wants to see GM completely go away, but GM will certainly be a lot smaller now, and I think in about 5 or so years, they'll be half of what they are today. They'll have about 12% of the market I think, maybe 15%. Getting rid of Pontiac and Saturn is dumb - those customers (except for the die hards), will more than likely migrate to the competition.

[GXT]

A lot of people like to bemoan how horrible a job the government is going to do. After watching how they squandered 15+ billion on a bailout when bankruptcy was a foregone conclusion, part of me agrees. However after the multi-decade disaster that has been a non-government-owned GM, I really don't see how the government could do much worse.

[BuddyP]

Well, I hope things aren't as crazy as a lot of us are speculating, but this really is such a travesty. I don't think that "Team Obama" wants to see GM completely go away,

Obbie doesn't care about GM, he just doesn't want the Unions to go away, and now he can further manipulate what type of vehicles get produced. I wanted Chapt 11 to happen last fall... was against all bailouts/loans to GM. I am absolutly MORTIFIED by what has happened to GM. I am very worried where this country will be in 3 years. This was a company that I loved and have backed for many... many years. I grew up in MI (and while in IN, I'm only 2 hrs from Detroit). Every year I looked forward to NAIAS, Woodward Dreamcruise, etc. I have just recently heard that the Hot Rod power tour will need find a new stop for June 9th, it was supposed to have a stop at Warren Tech center, but just hears that GM pulled the plug on that and apparently had to do with some Gov't intervention!

My Avalanche replacement may become a F150, the aura replacement won't come for a few years but will probably be blue oval also.

[Drew Dowdell]

And today's idle speculation award goes to....

[FAPTurbo]

That's a very good picture, albeit of something really bad.

[network engineer]

I love the Cadillac CTS. I may buy a Lincoln for my next car. I just can't buy a GM or Chrysler product, until they pay back the loans. This article states, that's never gonna happen, so I guess I'll have to buy a Ford or Lincoln product for my next car.

[Robert Hall]

I love the Cadillac CTS. I may buy a Lincoln for my next car. I just can't buy a GM or Chrysler product, until they pay back the loans. This article states, that's never gonna happen, so I guess I'll have to buy a Ford or Lincoln product for my next car.

I can't see why the loans would make a difference on buying a GM.. I'm seriously considering buying a CTS within the next year or so.

You a fair weather GM fan, then?

Edited May 20, 2009 by Cubical

[gm4life]

Obbie doesn't care about GM, he just doesn't want the Unions to go away, and now he can further manipulate what type of vehicles get produced. I wanted Chapt 11 to happen last fall... was against all bailouts/loans to GM. I am absolutly MORTIFIED by what has happened to GM. I am very worried where this country will be in 3 years. This was a company that I loved and have backed for many... many years. I grew up in MI (and while in IN, I'm only 2 hrs from Detroit). Every year I looked forward to NAIAS, Woodward Dreamcruise, etc. I have just recently heard that the Hot Rod power tour will need find a new stop for June 9th, it was supposed to have a stop at Warren Tech center, but just hears that GM pulled the plug on that and apparently had to do with some Gov't intervention!

My Avalanche replacement may become a F150, the aura replacement won't come for a few years but will probably be blue oval also.

Exactly.

[BuddyP]

Can you all just imagine what Lutz is thinking right now? Look at all the work and effert he put forth over the last few years, just to soon see most of that effort washed away.

[network engineer]

I can't see why the loans would make a difference on buying a GM.. I'm seriously considering buying a CTS within the next year or so.

You a fair weather GM fan, then?

Quite the opposite. I've never owned anything BUT GM. I'll remain a fan of GM's products, but I can't support a publicly traded company taking money from the us taxpayers to fund their business. If they had filed chapter 11 last year, when they should have, I could still be behind them. Nearly 16B later and they end up a ward of the state and stiff the American public? I just can't support that. I love what America is SUPPOSED to be too much and this whole shenanigan is a disgrace to both GM and the United States.

At least it's not as bad as the banks though.

[trinacriabob]

I wonder what the exact date will be. That's what I was thinking today.

I remember that, for Olds, it was December 12, 2000. Right around my birthday. What a present. I was crushed by that but, in retrospect, that was "nothing."

Also, the WaMu collapse doesn't compare.

Sad because everything I've ever owned and driven has been a GM product: Cutlass Supreme, Camaro, Cutlass Supreme Brougham, Regal, and LaCrosse. With the exception of the Camaro which was bought used, the others were bought new and have instilled the loyalty to GM.

[Teh Ricer Civic!]

Sigh...

Well i guess i should be glad Ford is rolling out a new 5.0 because i cannot stomach buying a car from a nationalized automaker... and i was so looking forward to getting a Camaro

Edited May 20, 2009 by Teh Ricer Civic!

[BuddyP]

Sigh...

Well i guess i should be glad Ford is rolling out a new 5.0 because i cannot stomach buying a car from a nationalized automaker... and i was so looking forward to getting a Camaro

Better just go buy a Camaro now, because I'm sure that'll be one of the vehicles Obbie will axe in the near future.

[Drew Dowdell]

I love the Cadillac CTS. I may buy a Lincoln for my next car. I just can't buy a GM or Chrysler product, until they pay back the loans. This article states, that's never gonna happen, so I guess I'll have to buy a Ford or Lincoln product for my next car.

That is quite possibly the MOST ILLOGICAL statement I have EVER seen on this site.... and we've had some big ones out there.

Imagine if everyone in the U.S. thought like you.... how would GM EVER PAY BACK THE LOANS IF PEOPLE WON'T BUY THEIR CARS!?!

The best way to get GM to pay back the loan is to BUY A GM VEHICLE!!!!

Christ! Was 1992 <the year I started highschool> the only year they taught critical thinking in select public schools?!

[Robert Hall]

Imagine if everyone in the U.S. thought like you.... how would GM EVER PAY BACK THE LOANS IF PEOPLE WON'T BUY THEIR CARS!?!

The best way to get GM to pay back the loan is to BUY A GM VEHICLE!!!!

+1. Agreed. Completely irrational. We should support GM (and Chrysler) to help them to move forward to hopefully a successful, prosperious future. This is not the time to turn your back on them and behave like fair weather fans.

Edited May 20, 2009 by Cubical

[Drew Dowdell]

Jesus H. Tapdancing Christ!

IF YOU WANT TO SAVE GM YOU CAN'T BUY FROM THE COMPETITION!!!!!!!@#$@!!~@!@!!@!!!~!!~!

*literally slamming the keyboard.

At this point, I think I'm just content to let the server subscription expire for C&G if this is the kind of thought process GM fans have.

EVERYONE PLEASE take off the tinfoil hats for a second and put your thinking caps on.

If you want to save GM.... and you're in the market for a car already..... what should you do?

You have 3 lifelines left.

[Z-06]

It has been everyone's mentality. Turning back when the help is needed the most.

I WILL BE BUYING GM PRODUCTS NOW.

GM NEEDS US AS MUCH AS WE NEED GM.