Late in yesterday's session, The Wall Street Journal reported that General Motors (NYSE: GM) is having problems with its internal restructuring and that it will skip a $1 billion debt payment on June 1.
Furthermore, the company's finance head Ray Young told reporters in China that bankruptcy is "probable," although the automaker expects to get back into shape "in court or out of court." Renee Rashid-Merem, GM spokeswoman, stated that the company is working aggressively to reach a deal with bondholders, which she called an "essential element" of GM's restructuring.
GM continues to motor toward bankruptcy, as this news added to the day's earlier revelation from Goldman Sachs that it believes GM and Chrysler will likely file for bankruptcy in coming weeks. Furthermore, GM's CEO Fritz Henderson stated last week that bankruptcy remains the "likely outcome" of the automaker's dealings with the Obama administration.
Then, late last night, the Associated Press reported that GM will idle most of its U.S. plants for as much as nine weeks, thanks to poor sales and growing inventories. The report notes that the shutdowns are expected to happen at the same time as the firm's normal two-week July closure.
Bottom line: The bad news continues to mount for GM and the picture ain't looking pretty as far as a recovery is concerned. Is bankruptcy inevitable? It sure looks that way.
Then, late last night, the Associated Press reported that GM will idle most of its U.S. plants for as much as nine weeks, thanks to poor sales and growing inventories. The report notes that the shutdowns are expected to happen at the same time as the firm's normal two-week July closure.
Bottom line: The bad news continues to mount for GM and the picture ain't looking pretty as far as a recovery is concerned. Is bankruptcy inevitable? It sure looks that way.
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Reader Comments (Page 1 of 1)
4-23-2009 @ 9:25AM
Jean said...
the biggiest problem is the word bankruptcy and the media and big business tend to use it frequently as a scare tactic to get what they want I hope they (the rich and powerful get what they deserve one day) good will override evil someday but by then we will all be in the poor house for stupid management moves the least you could do is have the dignity to let people know the truth instead of letting politics rule. Good ridence to the greedy businesses. Thanks big oil for driving the price of gasoline up so far last summer that you did what you were out to do ruin the auto industry. I hope you can sleep at night.
4-23-2009 @ 1:59PM
Donovan said...
Lets face it. The best option, and really the only option left for GM is to file bankruptcy.
The American people are NOT going to continue to financially support GM's BILLION dollar a month tax payer funded financial drain.
And right now, the tax payers (consumers) are so pissed at GM and the UAW. were sure as hell NOT going to additionally support GM by purchasing their vehicles, on top of the BILLIONS GM has already received through our Governments forced tax payer bail out funding to GM.