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The General's last stand

By Samantha Stevens, 01 Jun 2009 Industry

The General's last stand

Angry bondholders may have finally fired GM straight into Chapter 11 of the bankruptcy book, as the Obama administration and GM boss Fritz Henderson prepare to address the media tomorrow.

Most of GM's bondholders have unsurprisingly refused to exchange the carmaker's piles of debt for shares of dubious value, ruining any last-ditch attempt to re-finance the company's coffers.

It is proof of how far the General has fallen, with debtors preferring a devalued repayment of the loans through the court rather than take up stock in the company. The official filing is expected in the next few days.

The Obama Administration will fork out up to US$30 billion on top of the billions already donated (and lost) to keep the company breathing through the bankruptcy, which is expected to take several months at best. GM lost over US$30 billion last year alone.

In the end, the US government will own whatever remains viable and profitable out of Buick, Cadillac, Chevrolet and GMC trucks, while Hummer, Opel/Vauxhall, Pontiac, Saab and Saturn may prove saleable or inevitably disposable.

Locally, Holden's own government grants, Daewoo Korean alliance and reasonably independent operating structure should keep it ticking along, despite the current economic forecast and drop in car sales across the board.


Holden's Mark Reuss will also address the media at 9am tomorrow morning at Fisherman's Bend, following the announcement from The White House and Henderson. Stay tuned to Wheelsmag.com.au for all the goss.

General Motors Corp. (NYSE: GM) President and CEO, Fritz Henderson, will host a press conference, beginning immediately following President Obama's media briefing. According to a White House media advisory, President Obama will begin his remarks at approximately 11:55 a.m. EDT. Mr. Henderson will address media separately from New York following the President, beginning at approximately 12:15 p.m. EDT.