Word: gm
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Dates: during 2000-2009
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Creditors are not the government's biggest problem with GM, although they would like the public to think debt is the headache everyone should focus on. A bankruptcy judge could force a large cut in health and retirement benefits for UAW members. That would be on top of what is likely to be another round of lay-offs. With the national unemployment rate moving up as fast as it is and large numbers of pensions facing funding problems, the federal government may not want to be forced to support current and retired GM workers. Someone will have...
...GM's (GM) stock trades at $1.71, which is not even its 52-week low. Several news outlets have reported that the Treasury has asked the No.1 US car company to prepare for Chapter 11. The government will probably try to have GM broken into two pieces. In that case, most of the creditors may be stuck holding paper in the weaker of the operations which will be made of brands like Saturn and Hummer which have no economic value at all. If that tactic works, the money that GM owes to financial firms could end up being next...
...GM may still make it as a public company because a bankruptcy could be too messy for the Administration's tastes. According to The Wall Street Journal, "Key members of an ad hoc committee representing GM bondholders have begun preparing arguments against the auto maker's bankruptcy plan." The creditors may lose their attempt to get a better deal than being given debt in a company which holds the worst part of the GM asset base, but they can make the process prolonged and painful for the company and the Treasury. (See the 50 worst cars of all time...
There are several estimates of what a GM bankruptcy would cost in terms of jobs loss, both at the company and suppliers. The figures which are over a million unemployed are probably not accurate. GM has already fired too many people and so have its suppliers. But, an event that pushes even several hundred thousand people out of work would hamper the Administration's efforts to get unemployment under control...
...trading partners. Take car sales, which rose in March for the third straight month, once again making China the largest market for automobiles in the world, ahead of the U.S. Those statistics, you'd think, would bring a smile to the faces of executives at beleaguered American carmaker GM, whose success in China in recent years has been about the only bright spot in its funereal performance...