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Will you buy GM vehicles? [Copy link] 中文

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Post time 2009-6-1 20:32:43 |Display all floors
White House Plots GM Bankruptcy, Unsure When Taxpayers Will Recoup $50 Billion Investment
Senior administration officials said the U.S. government will be a "passive" investor but will oversee operations at the new GM because "the taxpayer will want us to."

By Major Garrett

Sunday, May 31, 2009

The Obama White House auto task force said Sunday the government will pump another $30 billion into a restructured General Motors that has 50 percent fewer liabilities and far fewer product lines.

Senior administration officials, who declined to speak for attribution, said the U.S. government will be a "passive" investor but will oversee operations at the new GM because "the taxpayer will want us to."

Not one of Obama's senior economic advisers could or would venture a guess as to when taxpayers would see a return on their massive and White House-engineered investment.

"We're not here to predict," a senior official said when asked about any timeline for taxpayer payback.

The White House was more certain about GM's future access to the taxpayer till -- it's over.

"One never says never, but this is it in terms of support for GM," a senior official said.

The outlines of the restructured GM are as follows:

* Cut GM's production break-even point from 16 million annual unit sales to 10 million. This will require the shuttering of numerous factories and the closure of several vehicle lines. But the White House declined to name the factories or GM divisions destined for the bankruptcy chopping block. It said GM will separately announce the closure of 11 factories and the idling of 3 other facilities. The White House predicts this new unit-production goal can, over time, return the company to profitability.

* UAW concessions include allowing GM to shed its $20 billion obligation to its pensions and health care fund, otherwise known as the VEBA. The White House said the UAW concessions were more substantial than those sought by the Bush administration when it was considering throwing the company a taxpayer lifeline.

* Bond holders representing at least 54 percent of the company's unsecured bonds have agreed to trade their portion of GM's $27.1 billion in unsecured debt for a pro-rated share of 10 percent of the equity in the so-called new GM. In addition, the bond holders will receive warrants for an additional 15 percent of the company. The bankruptcy process, which the White House said should take between 60 and 90 days, will enforce this distribution as well as adjudicate proceeds for bond holders who do not participate in the White House deal.

* The reorganized GM will buy most of the old GM assets needed to carry out its business plan. The purchase will happen in the chapter 11 process. In exchange, the U.S. government will relinquish a majority of its loans to GM.

* The new GM will create an independent trust (VEBA) that will finance health care benefits for GM脙垄芒鈥毬?⑩?垄s retirees. The VEBA will be funded by a note of $2.5 billion payable in three installments that end in 2017. There will be an additional $6.5 billion purchase that will create 9% perpetual preferred stock. The VEBA will also receive 17.5% of the equity of New GM and warrants to purchase an additional 2.5% of the company. The VEBA will be able to chose one independent director for the new board. It will have no right to vote its shares or other exercise other governance rights.

* The GM-qualified pensions for current hourly and salaried employees will be transferred to the New GM.

* Treasury will provide $30.1 billion of debtor-in-possession financing to support GM through an accelerated chapter 11 process. Officials anticipate no additional funding for GM. "There is no plan of any kind for future support beyond this point," an official said. "One never says never but this is it in terms of support for GM."

The government will receive $8.8 billion in debt and preferred stock and 60% of the company's equity. Treasury will appoint all new board of directors members not appointed by the VEBA and the Canadian government.

* Governments in Canada and Ontario will lend $9.5 billion to GM and New GM. The Canadian and Ontario governments will receive approximately $1.7 billion in debt and preferred stock, and approximately 12% of the equity of the new GM. The Canadian government will select one director to the new GM board.

* The new GM will, as part of the government-supervised restructuring, build a new small car in an idled UAW factory. The goal is to increase the share of U.S. production for U.S. sale from 66 percent currently to 70 percent.

These are the White House "principles" for managing the ownership stake:

* The government will sell equity stakes as "soon as practicable." The goal is a profitable company without government involvement.

* The government will reserve the right to set up-front conditions to protect taxpayers, promote financial stability and encourage growth.

* The government will manage its ownership stake in a hands-off, commercial manner. It will not interfere with day-to-day company operations. No government employees will serve on the boards or be employed by these companies.

* The government will only vote on core governance issues, including the selection of a company's board of directors and major corporate events or transactions.

White House policy on new GM warranties:

* GM will honor consumer warranties. Last week, Treasury provided $361 million in financing to the Warranty Support Program as a backstop so GM can pay warranties on vehicles sold during the restructuring.

Employee issues during bankruptcy:

* Employees will receive ordinary salary, wages and benefits. The pension plan and VEBA will be transferred to New GM.

* GM will seek authority at its "first day" bankruptcy hearing to continue to pay suppliers. In addition, the U.S. Treasury's Supplier Support Program will continue to operate, and GM suppliers benefiting from the program will continue to receive that support.

* GM will seek authority at its "first day" bankruptcy hearing to honor dealer warranties and maintain sales incentives for dealers the new GM intends to retain. Terminated dealerships will be given an 18-month wind-down window to close their operations.

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Post time 2009-6-1 21:24:08 |Display all floors

Bulls Wave off GM Fears...

Bulls Wave off GM Fears

FOX News Business
Monday, June 01, 2009

Stock futures soared Monday morning as Wall Street looked to build on its best three-month performance since 1998 even as General Motors became the largest industrial bankruptcy in U.S. history.

Today's Markets

As of 8:36 a.m. EDT, the Dow Jones Industrial Average futures rose 120 points, or 1.41%, to 8608, the Standard & Poor's 500 futures gained 16 points, or 1.74%, to 934.10 and the Nasdaq 100 futures jumped 18.75 points, or 1.29%, to 1454.

Wall Street was boosted early Monday by hopes of more clarity on the shaky U.S. economy from a trio of reports on personal spending, construction spending and manufacturing activity. At the same time, stock futures rallied around continued strength from commodities, as crude oil jumped for the fifth-straight session, and a global equities surge amid the weaker dollar.

The rally in the pre-market come after the Dow climbed nearly 100 points on Friday, capping off the best three-month performance in nearly a decade. The Dow has surged 30% since hitting a 12-year low on March 9 -- representing one of the strongest rallies from a bear-market low on record.

Stocks stayed strong after the Commerce Department said personal spending declined by 0.1% in April, improving on March's 0.3% decline and better than the 0.2% fall economists had forecasted. Incomes unexpectedly rose by 0.5% in April. At the same time, consumers continue to save rather than spend, with the U.S. savings rate jumping to its highest level since 1995.

GM Goes Bust

While the world awaited the Chapter 11 filing from GM (GM: 0.795, n.a., n.a.%), the markets weren't particularly worried by the fallout as it has been widely telegraphed for weeks. Some argue it's a bullish sign for the markets that Wall Street is unfazed by the failure of the American industrial icon.

GM filed for Chapter 11 protection at 8 a.m. EDT in the Southern District of New York, becoming the third-largest bankruptcy in U.S. history. The auto maker claimed total liabilities of $172.81 billion as of March 31, compared to $82.29 billion in assets.

GM's stock is expected to finally fall to near zero after having plunged to its lowest level since 1933 on Friday. The auto maker has said there is no role for common shareholders in the New GM, which will be spun off from the company's "bad" assets through a 363 sale. CEO Fritz Henderson is set to address reporters in New York later on Monday.

President Barack Obama is slated to address GM's restructuring at a press conference later in the day. The U.S. plans to inject another $30 billion into the company, bringing its total aid package to $50 billion. The markets' ability to wave off fears about GM's failure is a sharp contrast to last fall, when stocks routinely swung on the latest rumors of the Big Three's demise.

Commodities, Global Markets Rally

Meanwhile, shares of multinationals like Coca-Cola (KO: 49.1, n.a., n.a.%) were strong in pre-market trading, benefiting from the dollar tumbling to five-month lows.

The weakness for the greenback gave a further boost to red-hot commodities like crude oil, lifting energy stocks like ExxonMobil (XOM: 70.2, n.a., n.a.%).

Crude oil was on track to build on its four-day win streak. Amid signs of an economic recovery, crude oil surged 30% in May -- its best one-month rally since 1999. Crude, which is up each of the last four months, was recently up $1.68 per barrel, or 2.55%, to $67.99.

The tumble for the dollar came as Timothy Geithner made his first voyage to China as Treasury secretary in an effort to calm growing fears about the U.S. deficit. Geithner said China抯 dollar assets are 搗ery safe.?

Stocks are likely to be moved however by a slew of economic reports that the bulls hope will provide new evidence the U.S. economy is not just stabilizing but improving.

The rally began overseas as European and Asian markets soared by as much as 4%.

After the markets open, the government is set to release a new report on construction spending that could move home builders like KB Home (KBH: 14.97, 0, 0%) and Lennar (LEN: 9.47, n.a., n.a.%). Economists forecast spending slid by 1.8% in April.

Lastly, the Institute for Supply Management, a private-research group, is expected to say manufacturing activity in the U.S. tumbled 1.8% in May.

Corporate Movers

Chrysler's sale to a new company owned by the U.S., Canada, Italian auto maker Fiat and a UAW trust was approved Sunday by a bankruptcy court judge. The move allows Chrysler抯 揼ood assets?to emerge from bankruptcy at a faster rate than anticipated. The old company will remain in bankruptcy and liquidate.

Ford (F: 5.73, n.a., n.a.%) looks to capitalize on the failure of its two domestic rivals by ramping up production by about 10% from a year ago, The Wall Street Journal reported. The output boost comes as GM and Chrysler plan to shut their plans for almost the entire quarter.

Elan (ELN: 6.99, 0, 0%) saw its shares jump after the Journal reported the Irish biotech firm is in talks to sell a minority stake to Bristol-Myers Squibb (BMY: 19.94, n.a., n.a.%) and one other unnamed suitor. The potential deal could be a prelude to a full takeover of Elan, the paper reported.

Air France (AFLYY: undefined, undefined, undefined%) said a plan en route to Paris from Rio de Janeiro went missing overnight with 228 people on board. The airline said the plane was likely struck by lightning and suffered an electric failure while over the Atlantic Ocean.

Playboy Enterprises (PLA: 3.25, 0, 0%) is expected to tap Scott Flanders, CEO of Freedom Communications, as its next CEO as early as this week, the Journal reported.

Global Markets

European markets also added to their three-month rally. London's FTSE 100 rose 1.61%% to 4489.27, Germany's DAX gained 3.18% to 5098 and France's CAC 40 added 2.34% to 3354.35.

Asian stocks surged overnight. Japan's Nikkei 225 rallied 1.63% to 9677.75 and Hong Kong's Hang Seng closed up 3.95% to 1888.59

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Post time 2009-6-1 22:32:18 |Display all floors
Originally posted by chinadaily at 2009-6-1 10:22
The General Motors is expected to file for bankruptcy protection filing on Monday. Will you continue buying GM vehicles? Many customers are worried about the service warranties, resale values, and  ...

Yes,I am going to buy one this month.

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Post time 2009-6-1 22:42:59 |Display all floors
Genetically Modified vehicles?

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Post time 2009-6-1 23:50:25 |Display all floors

bankruptcy DOESNT mean a thing...

i think they will back on the track in the near future but not totally vanish from the auto industry...i'd love to collect one of the old rare vintage automobile from 'em if i opt for the option  

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Post time 2009-6-2 01:49:14 |Display all floors
Originally posted by NYChinatown at 2009-6-1 09:50
i think they will back on the track in the near future but not totally vanish from the auto industry...i'd love to collect one of the old rare vintage automobile from 'em if i opt for the option  : ...

I collect old American vintage cars and trucks, I rebuild them and show them as a hobby...... I am known as a motorhead here in my country....

What kind of old vintage automobile does your eye find attractive..... I see a old car like a very pretty woman, and they all have different personalities.......

She has to have the right body lines, paint, lipstick and rouge, and she must have a solid beating heart "engine".........

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Post time 2009-6-2 02:04:49 |Display all floors

thinkin havent have the guts yet...

Originally posted by Eagleclaw1 at 2009-6-1 12:49

I collect old American vintage cars and trucks, I rebuild them and show them as a hobby...... I am known as a motorhead here in my country....

What kind of old vintage automobile does your eye ...

still thinkin & decidin whether i should go ahead & travel to kentucky to look at some of the old NYC taxi cabs bein graveyard (out of commission) out there; i just love those old chevys (not the old nasty lookin Impala, ok)...the checker box type  

but i'm no way like yourself that know how to restore 'em...i just pay & get it done with voila  

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