Word: gm
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Dates: during 2000-2009
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Chrysler and GM will force 2,000 car dealerships to close. This event has elicited a great many opinions from industry experts. The consensus is that the most damage to the car companies will come from the anxiety facing potential customers who may buy automobiles at these dealers and expect to have them serviced there. The car buyers will not want to drive long distances in order to find a dealer who sells the brand that they want. They will buy a Toyota (TM) or some other brand because they know that continued service is virtually assured. They...
...Detroit A New Plan For GM General Motors announced a new deal with the U.S. Treasury on May 5 in which the government would forgive about $10 billion of the carmaker's $15.4 billion federal debt in return for a 50% stake in the company. The United Auto Workers union urged the government to reject the proposed plan, which also includes a 100-to-1 reverse stock split, because it would call on GM to outsource more of its manufacturing to foreign countries...
...related move, GM announced on Friday that 500 dealers who handle Hummer, Saab and Saturn brands would be moved outside of GM's dealer network or terminated if a buyer for those nameplates cannot be found. Also on Friday, GM began notifying 1,100 GM dealers that their franchises will be terminated because they have failed to meet sales targets. Of GM's other 4,500 dealers, the automaker expects to cut 900, and it may use bankruptcy to get that done...
...biggest sticking point in any bid to avoid bankruptcy is the complexity of GM's debts. Chrysler's 40-odd creditors could fit into a large conference room. GM's creditors, however, could fill up most of the seats in the University of Michigan's football stadium. The bondholders include an estimated 127 major financial institutions, including banks, hedge funds and mutual funds, as well as 100,000 or so small holders that represent a cross section of American savers...
...bondholders complain that neither GM nor the Treasury has held any kind of serious discussion with them. In fact, CEO Henderson has described the offer to bondholders - 225 shares of GM stock for every $1,000 of bond face value - as a take-it-or-leave-it proposition...