General Motors (GM) is working feverishly on a number of projects related to the bankruptcy. GM has scheduled an announcement for Monday morning....it is anticipated that they will declare a chapter eleven bankruptcy. The government had given them until June 1st to resolve their financial issues or file for bankruptcy. Presently, bond holders have withheld their approval of the deal to give them shares in GM in exchange for the bond debt. The United Automobile Workers have already reached an agreement with GM.
GM is also working on the sale of GM Europe to Magna International (MI). Magna International is a Canadian company based in Aurora, Ontario. It is Canada's largest automobile parts manufacturer and one of the country's largest companies. MI is a business to business company...with a name that is not well know to the public. They manufacturer parts for the Big 3 U.S. auto manufacturers in addition to Volkswagen, BMW, and Toyota.
The German government has requested that the GM subsidiary Opel be shielded from the parent GM's U.S. bankruptcy. The German government apparently be willing to put up 1.5 billion Euros($2.1 billion) for a bridge loan that would be repaid when the deal is closed.
GM is also working on the sale of GM Europe to Magna International (MI). Magna International is a Canadian company based in Aurora, Ontario. It is Canada's largest automobile parts manufacturer and one of the country's largest companies. MI is a business to business company...with a name that is not well know to the public. They manufacturer parts for the Big 3 U.S. auto manufacturers in addition to Volkswagen, BMW, and Toyota.
The German government has requested that the GM subsidiary Opel be shielded from the parent GM's U.S. bankruptcy. The German government apparently be willing to put up 1.5 billion Euros($2.1 billion) for a bridge loan that would be repaid when the deal is closed.
It appears that Fiat has withdrawn from bidding on GM Europe, due to the German governments demand for emergency funds during the transition. Apparently, Fiat does not have the ability to fund the transaction.
Today, a memorandum of understanding was signed outlining a plan for the future ownership of the Opel and Vauxhall assets. The assets are to be transferred to a new company, which Magna International will take a 20 per cent stake and Sberbank, a Russian bank, will take a 35 per cent stake, giving their consortium a majority. GM will retain a 35 per cent holding, while the remaining 10 per cent will go to Opel employees.
The fate of Saab has not been resolved, but as soon as I have information I will advise!
We hope that they can pull it all together, but it will not be the some company as before. Every one else will have their hands in the pie, telling them what to do and how to do it.Our government will have a bigger say in what they do and how they do it. If the government does not like something they fire the CEO and get another one that will do what they want. That is sad that this nation has come this far in this direction. The government is taking power that they should not have. We are the ones that will pay the price for this in the long run. Sorry that these companies gave away the right to run the companies as they see fit. Not that they did so well at it themselves.
ReplyDeleteDan and Deanna "Marketing Unscrambled"
Hi Dan & Deanna,
ReplyDeleteMy aspirations for GM when they get out of bankrupcy....is that they let innovation become part of the corporate culture. That should result in good, competitive products. They lost innovation a number of years ago!
Hopefully, the bankrupcy will give them the financial ability to build some good products....the market will force that if they are to survive.
Thanks for your your comment!
Pete Baca
The Car Enthusiast Online
But, they have shown that they can produce some good cars!
Honda is a ver innovative companyIf they
Peter, They are not the ones to say any more the government is. The government how will choose. It is a sad day with all of this. Our freedoms to buy the kinds of cars that they want. Now they Government is the one to say. Yes they will come out of this,but in what way. How sad that it even had to come to this.
ReplyDeleteDan and Deanna"Marketing Unscrambled"
Hi Pete .. it's all unknown at this end .. how it will pan out = who knows ... business in Europe is a different place now - let alone the car market.
ReplyDeleteWe shall see - Hilary Melton-Butcher
Positive Letters
Hi Dan & Deanna,
ReplyDeleteI viewed the sale both negatively and positively. The negative is that the government is controlling the situation. GM is selling vital assets that they have owned since the 1920's. That tells you the desperation of the situation.
The positive is that the government is helping them! The other solution would be the liguidation of the GM. GM will come out of the bankrupcy a more viable company. They can them produce the products that are necessary to compete.
Thanks for your comment!
Pete Baca
The Car Enthusiast Online
Thanks for your comments!
Hi Hilary,
ReplyDeleteThe economic situation is currently still in flux....I don't think anyone knows where it will end.
It appears that the auto business will be changed forever...with many more smaller players.
Thank you for your comment!
Pete Baca
The Car Enthusiast Online
Peter, history repeats itself again. These are the same kind of things that happened in Germany and Russia before they started into the bad times that they had after the wars (in Germany) and for the USSR (Russia). Yes the government said that they are trying to help. How many more of our big businesses are going to go this way, into government control. The market is not the one now that is making the changes it is the government. They are already doing that and you wrote about it not to long ago with the mpg that they have to have. Emissions, safety requirements. The government has all these new requirements coming out because of global warming that are going to hit like a tun of bricks. So this is just the beginning, not just for the auto companies. Just like with people, they are trying to tell us to temperature you can have the air conditioner set at in your home. In some places the utility companies are sending out letters telling people that they should get this thermostat that they (the utility co.) can change the temperature in your home. If you do not have it at 80 they can change it for you. For global warming everyone has to do things this way or that way. No choice in the matter. How many things can you think of that they are already saying that companies and people are having to do things the way the government wants them to. Here is one. Coal powered electric plants. Any company that has a smoke stack. The car companies are just one of the first. They are not the last. It was at one time "we the people" and they (government) was to do what the majority of the people said that they should do-now it is the government that is telling use what to do and when.
ReplyDeleteDan and Deanna "Marketing Unscrambled"
Hi Dan & Deanna,
ReplyDeleteIt looks like the government has gone from the Bush era of anything goes....to the Obama era which government controls. I have not doubt that we sill see a lot more government intrusion.
All I can say is that I hope for the best! Thanks for your comment!
Pete Baca
The Car Enthusiast Online
Peter, you are so right. Yes we can hope for the best and work our tails off to keep that as little as possible. What a great blog that you have. You come up with the best stuff. You keep us on top of these things. Thank you so much.
ReplyDeleteDan and Deanna "Marketing Unscrambled"
Hi Dan & Deanna,
ReplyDeleteThank you so much for your kind comments! I read most of the automobile magazines and newspaper stories. So, I try to post articles that are informative and interesting.
Pete Baca
The Car Enthusiast Online