http://news.bbc.co.uk/1/hi/business/8077255.stm
(extract from the text)
Car giant General Motors (GM) has filed for bankruptcy protection, marking the biggest failure of an industrial company in US history.
The widely expected move comes after GM had seen its losses widen following a steep fall in sales in recent years.
The move into bankruptcy protection has been backed by the US government, which is now expected to take a 60% stake in the company.
The White House is also due to announce an extra $30bn (£18.5bn) of aid for GM (yeah, nobody cares about massive spending anyway).
GM, which had already received $20bn of emergency loans since the end of last year, said in its bankruptcy filing that its current debts total $173bn.
Expected job cuts
US Chapter 11 bankruptcy protection gives an American company time to restructure its finances while being protected from its creditors.
The restructuring will drastically change GM, with some 20,000 US workers thought likely to lose their jobs as the firm streamlines its operations. It currently has 173,000 employees across the US, Canada and Mexico.
It is expected that GM may be able to exit bankruptcy protection in between 60 and 90 days.
While the US government is set to take a 60% stake in GM, the Canadian government is due to own 12.5%, with GM's unions having 17.5%, and bondholders 10%.
Car industry analyst Gary Chaison, a professor of labour relations at Clark University, said the GM announcement marked the end of an era.
"It'll have a huge impact in the US because it's more than just a corporation - it's an icon," he added.
"It represented manufacturing supremacy and good jobs for American workers - that's gone."
GM is now the second of the "Big Three" US carmakers to enter bankruptcy protection, following Chrysler's lead.
Originally posted by KazetNagorraGM is NOT FOLDING. They are filing for Chapter 11; that is reorganization. GM is not ceasing to do business. They may come out of this eventually stronger than ever. Continental Airlines, Delta, United and many other airlines have, at one point or another, went into Chapter 11.
So will Ford come out of this as the winner or will it fold as well?
Some dealerships may close, but the average consumer will barely notice the difference.
Originally posted by sh76Some dealerships may close, but the average consumer will barely notice the difference.
GM is NOT FOLDING. They are filing for Chapter 11; that is reorganization. GM is not ceasing to do business. They may come out of this eventually stronger than ever. Continental Airlines, Delta, United and many other airlines have, at one point or another, went into Chapter 11.
Some dealerships may close, but the average consumer will barely notice the difference.
yes, however there will be many unemployed.
They may come out of this eventually stronger than ever.
But that will take a long time.
Originally posted by sh76That depends on how the story will unfold.
GM is NOT FOLDING. They are filing for Chapter 11; that is reorganization. GM is not ceasing to do business. They may come out of this eventually stronger than ever. Continental Airlines, Delta, United and many other airlines have, at one point or another, went into Chapter 11.
Some dealerships may close, but the average consumer will barely notice the difference.
Originally posted by KazetNagorraBankruptcy filing is just what it says, government protection against proper punishment in the free market.
That depends on how the story will unfold.
Others have to pay for the excesses of both management and labor. The overpaid executives and overpaid labor walk away with everything mostly intact.
Investors are screwed.
Originally posted by normbenignYup.
Bankruptcy filing is just what it says, government protection against proper punishment in the free market.
Others have to pay for the excesses of both management and labor. The overpaid executives and overpaid labor walk away with everything mostly intact.
Investors are screwed.
Then again, investors took the risk.
They're screwed because they took what turned out to be a bad risk.
Any investor or bond holder had to know that Chapter 11 was a possibility. If they didn't, they were under informed and should not have invested.
Originally posted by sh76Of course that's true, and all the gurus carefully preface their advice with the disclaimer, all investments have the risk of loss.
Yup.
Then again, investors took the risk.
They're screwed because they took what turned out to be a bad risk.
Any investor or bond holder had to know that Chapter 11 was a possibility. If they didn't, they were under informed and should not have invested.
The court's job is to fairly distribute the loss among the stakeholders, equity, debt, etc.
In this case it seems that a great deal favoritism was shown to the workers, especially the retired workers. The money paid in the past whether for executives or line workers is gone. IMHO both were overpaid. Their pensions represent continuing to over pay them, and financing that overpayment on the backs of the current labor.
I'm not enamoured with golden parachutes for anyone, or promises of future security that is demonstrably elusive.
Originally posted by normbenignLOLOLOLOLO..........LOLOLOLOLOLOLOLOL
Others have to pay for the excesses of both management and labor. The overpaid executives and overpaid labor walk away with everything mostly intact.
Investors are screwed.
Never in my life have i heard someone yammer on about entitlement so stupidly. Jebus buddy.
You act like "investors" are entitled to something. You make an investment, it's a RISK. plain and simple. NO guarantee you will ever get your money back.
The only one's who may have a case are the BOND HOLDERS. But these aren't investors. They buy company debt hoping that the company survives long enough to pay back the debt. But that itself is also a risk, a gamble. Should the company go into bankruptcy, the bond holders were gambling that a bankruptcy judge would GIVE them money from the liquidation.
I have no sympathy for anyone that lost money on GM. The writing has been on the wall for the last 3 years. People could have reduced their risk long ago.
As for "over paid" labour walking away with everything mostly intact, I ask you WTF are you smoking? The UAW has given up a tonne of cut backs and suffered massive massive job cuts.
Most smart people understand WHY the government did this. It's the spin off jobs that are tied to the auto industry. Even smarter people question though whether the government can stem the tide completely and stop the auto industry from moving to asia. It seems inevitable. The long term trend here, as with everything, is the manufacturing base moving to asia. Look at the rise of Hyundai, Suzuki, Kia, Mazda, Toyota, Honda. This is the real reason the big 3 are failing. Market share erosion...plain and simple.
Originally posted by normbenignyour issue isn't about investors getting screwed. You are just envious of the amount of money the average joe blow auto worker was paid.
The money paid in the past whether for executives or line workers is gone. IMHO both were overpaid. Their pensions represent continuing to over pay them, and financing that overpayment on the backs of the current labor.
.
Transparent jealousy only weakens your "argument".