General Motors has only been in bankruptcy for a few days, but the Detroit automaker expects to exit its Chapter 11 protection rather quickly. Although many industry experts are calling for GM’s bankruptcy process to take much longer than Chrysler’s, GM is confident it can emerge from Chapter 11 protection in as little as two months.
Under President Obama’s quick and surgical bankruptcy plan, GM is expected to emerge from bankruptcy in 60 to 90 days. However, GM believes its restructuring will be on the earlier end of that scale, with the company emerging in just two months, according to The Detroit News.
Part of that accelerated process is due to GM’s work in the days leading up to its Chapter 11 filing. Before declaring bankruptcy, GM was able to ink a landmark deal with the United Auto Workers. The new agreement, which was ratified just last week, will save GM up to $1.3 billion a year through lower wage rates and retiree benefits.
Additionally, GM was also able to win over some concessions from its major lenders prior to its Chapter 11 filing. About 20 percent of GM’s major bondholders agreed to swap their debt for equity in the ‘new’ GM, making the path to exit bankruptcy that much easier. The federal government’s $30.1 billion investment in GM will also go a long way in helping the ailing automaker back on its feet.
It remains to be seen if all the parts will come together to let GM emerge from bankruptcy in just 60 days, but the proposition looks highly plausible at this point.
06/04, 3:36 PM
posted by:
carstuff
I believe it.
06/04, 3:44 PM
posted by:
johnnycanuck
Well they can thank Chrysler for dialing the car in during practice and turning in a good qualifying lap while they were pre-running for the Bankruptcy 500 down in Bailoutland. But hey, that’s what friends are for.
06/04, 3:44 PM
posted by:
bigs4610
make it happen
06/04, 3:50 PM
posted by:
Borat
I hope it will end shortly. The longer it lasts the more it will cost. I don’t believe for a moment that we will escape with only 50 billions in the hole. I am sure it will be at least twice as much. Then Fritz will be replaced for Schmack.
06/04, 3:54 PM
posted by:
rpiotr01
Crack kills.
06/04, 4:11 PM
posted by:
Dwide Schrude
…but its so easy to make.
06/04, 4:17 PM
posted by:
carstuff
So where is this $30 billion going to go? GM, like every other large OEM, will need over $1 billion per month to just stay in business, which will taper off, until they get profitable. So that is maybe $10 billion(all those bankruptcy savings will cut that $1 billion / month). Who gets the rest?
I guess closing dealers. Maybe $1 billion there.
Suppliers. Not sure how much.
Who else?
06/04, 5:10 PM
posted by:
yarddog82abn
06/04, 6:02 PM
posted by:
mayer_ray_nagin
a nationalized GM is a nasty BM
06/04, 6:24 PM
posted by:
leftwingagenda
and a liquidated GM would be a bag of…ok, i won’t go there…but lets just say it’d be messier…
06/04, 7:11 PM
posted by:
AutoCritical
I’m not sure if this will be the same for everyone, but did you see the google advertising under the image? “Avoid Chapter 11″ – too little too late…!
06/05, 9:16 AM
posted by:
ricky_b
I hope they clean up their Execs and managers during this process. Without a complete overhaul in their “culture” this trip will be a short one.
06/05, 11:22 AM
posted by:
Dante_JoseCuervo
Even though I don’t like much from GM, outside of the solstice/sky and the ZR1 (I’m not a fan of the ZR1 but I can accept that it is a terrifyingly fast car, there’s no doubt about them so my hat’s off to that), this is not a good thing for the U.S. They made up so much of our economy and with them going down we’re going down as well. I really hope they can pull out of this because so many thousands (if not tens of thousands) of businesses depend on GM to themselves stay in business.
06/05, 6:41 PM
posted by:
sprockkets
In the meantime, let’s spin I MEAN, advertise on national TV how we are so going to turn around after this bankruptcy, I MEAN, restructuring, and how we, GM are so awesome and beat everyone with our products!
06/06, 10:37 PM
posted by:
Jason
http://www.youtube.com/watch?v=GFV1vQwMlpU
06/08, 8:14 AM
posted by:
fan
emerge into what? oblivion? kingdom come? they cant seriously be hoping to be out of the red anytime soon…