35R
04-12-2008, 10:08 AM
So, anyone care to ponder affects on Holden if GM implodes?
- is Holden linked to GM in any critical financial sense?
- Holdens exports are branded under GM right? If the GM brand goes belly-up how would that affect things?
On the brink: GM begs for $6b immediately
Date: December 04 2008
GENERAL MOTORS will drastically cut jobs, factories, brands and executive pay in a desperate effort to persuade the US Congress to give it $US12 billion ($18.6 billion) in loans to stave off a financial collapse.
In a plea for emergency aid, GM said it needed $US4 billion ($6.2 billion) in immediate loans to stay in business after this month, and another $US8 billion to carry it through the first part of next year.
Without help, the nation's largest car maker could topple into insolvency within weeks and drag down the other two members of Detroit's troubled Big Three. The company said it needed $US10 billion in federal loans to keep running through to March, another $US2 billion for the balance of 2009 and a $US6 billion line of credit in additional support beyond that.
"The first $US4 billion is crucial," GM's president, Frederick Henderson, said.
The revelation that GM is on the verge of running out of cash lends urgency to discussions this week among politicians on whether to bail out the Detroit car makers. The chief executives of GM, Ford and Chrysler are scheduled to be in Washington today and tomorrow for hearings on their requests for assistance.
New figures showed US car sales plunged 37 per cent in November to the lowest annual rate in 26 years as the recession and the pleas for aid from the car makers kept buyers out of showrooms.
GM sales tumbled 41 per cent, the second fall of that size in as many months. Ford sales fell 31 per cent and Toyota's 34 per cent, the most since at least 1980, while Chrysler's 47 per cent slide was the worst since 1981.
While GM forecast a dire situation if it is unable to secure government assistance, Ford said it could survive for now without federal aid, although it asked for up to $US9 billion in loans should the US vehicle market continue to deteriorate.
Chrysler, the smallest of the Detroit companies, asked Congress for a $7 billion loan before the end of December to ward off a potential bankruptcy.
GM is rapidly running out of time.
Without government aid, GM would be unable to keep operating and probably be forced into bankruptcy reorganisation.
"Absent support, frankly the company simply cannot fund its operations," Mr Henderson said.
The House Speaker, Nancy Pelosi, said she had discussed a bail-out package with President George Bush on Monday and she raised the possibility of some sort of announcement from the White House. She offered no hint of what the announcement might be, but said bankruptcy was not a viable option.
To get the loans, GM is taking an axe to its money-losing North American operations from top to bottom.
GM said it planned to focus on four core brands - Chevrolet, Cadillac, Buick and GMC - and either sell, eliminate or consolidate the Saturn, Saab, Hummer and Pontiac brands.
Despite having radically reduced its operations in the last three years, GM said it would cut another 20 per cent of its factories and jobs, seek to renegotiate the terms of $US66 billion in debt, and push to re-open contract talks with the United Auto Workers to reduce labour costs.
The cutbacks will extend into the executive ranks as well. GM's chairman, Rick Wagoner, and its board members will reduce their compensation to $US1 in 2009. Both GM and Ford said they would sell their corporate jets.
GM, which has lost more than $US20 billion this year, revealed in October that it was burning through more than $US2 billion in cash a month and would fall below the minimum level required to run its business by year end.
Last month Mr Wagoner, along with the chief executives of Ford and Chrysler, were grilled during two days of congressional hearings in Washington about their request for a combined $US25 billion in federal loans. At the hearings, the companies were criticised for failing to fix their long-term business models and stay competitive with foreign car makers.
Mr Wagoner, as well Ford's chief executive, Alan Mulally, and Chrysler's chairman, Robert Nardelli, were also taken to task for the size of their salaries and the fact that they had flown to Washington in corporate jets.
- New York Times and Bloomberg
- is Holden linked to GM in any critical financial sense?
- Holdens exports are branded under GM right? If the GM brand goes belly-up how would that affect things?
On the brink: GM begs for $6b immediately
Date: December 04 2008
GENERAL MOTORS will drastically cut jobs, factories, brands and executive pay in a desperate effort to persuade the US Congress to give it $US12 billion ($18.6 billion) in loans to stave off a financial collapse.
In a plea for emergency aid, GM said it needed $US4 billion ($6.2 billion) in immediate loans to stay in business after this month, and another $US8 billion to carry it through the first part of next year.
Without help, the nation's largest car maker could topple into insolvency within weeks and drag down the other two members of Detroit's troubled Big Three. The company said it needed $US10 billion in federal loans to keep running through to March, another $US2 billion for the balance of 2009 and a $US6 billion line of credit in additional support beyond that.
"The first $US4 billion is crucial," GM's president, Frederick Henderson, said.
The revelation that GM is on the verge of running out of cash lends urgency to discussions this week among politicians on whether to bail out the Detroit car makers. The chief executives of GM, Ford and Chrysler are scheduled to be in Washington today and tomorrow for hearings on their requests for assistance.
New figures showed US car sales plunged 37 per cent in November to the lowest annual rate in 26 years as the recession and the pleas for aid from the car makers kept buyers out of showrooms.
GM sales tumbled 41 per cent, the second fall of that size in as many months. Ford sales fell 31 per cent and Toyota's 34 per cent, the most since at least 1980, while Chrysler's 47 per cent slide was the worst since 1981.
While GM forecast a dire situation if it is unable to secure government assistance, Ford said it could survive for now without federal aid, although it asked for up to $US9 billion in loans should the US vehicle market continue to deteriorate.
Chrysler, the smallest of the Detroit companies, asked Congress for a $7 billion loan before the end of December to ward off a potential bankruptcy.
GM is rapidly running out of time.
Without government aid, GM would be unable to keep operating and probably be forced into bankruptcy reorganisation.
"Absent support, frankly the company simply cannot fund its operations," Mr Henderson said.
The House Speaker, Nancy Pelosi, said she had discussed a bail-out package with President George Bush on Monday and she raised the possibility of some sort of announcement from the White House. She offered no hint of what the announcement might be, but said bankruptcy was not a viable option.
To get the loans, GM is taking an axe to its money-losing North American operations from top to bottom.
GM said it planned to focus on four core brands - Chevrolet, Cadillac, Buick and GMC - and either sell, eliminate or consolidate the Saturn, Saab, Hummer and Pontiac brands.
Despite having radically reduced its operations in the last three years, GM said it would cut another 20 per cent of its factories and jobs, seek to renegotiate the terms of $US66 billion in debt, and push to re-open contract talks with the United Auto Workers to reduce labour costs.
The cutbacks will extend into the executive ranks as well. GM's chairman, Rick Wagoner, and its board members will reduce their compensation to $US1 in 2009. Both GM and Ford said they would sell their corporate jets.
GM, which has lost more than $US20 billion this year, revealed in October that it was burning through more than $US2 billion in cash a month and would fall below the minimum level required to run its business by year end.
Last month Mr Wagoner, along with the chief executives of Ford and Chrysler, were grilled during two days of congressional hearings in Washington about their request for a combined $US25 billion in federal loans. At the hearings, the companies were criticised for failing to fix their long-term business models and stay competitive with foreign car makers.
Mr Wagoner, as well Ford's chief executive, Alan Mulally, and Chrysler's chairman, Robert Nardelli, were also taken to task for the size of their salaries and the fact that they had flown to Washington in corporate jets.
- New York Times and Bloomberg