General Motors (GM) 01 (Jun 08 - Jul 10 )

[iam802]

GM Said to Plan All-Equity Offer for Bondholders (Update1)

Source :
http://www.bloomberg.com/apps/news?pid= ... refer=home

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From Google Finance, GM's market capitalization is US$1.18B...vs the US$27.5B claims from the bondholders.

If this goes through, won't current shareholders be diluted?

[helios]

don't know.

Bought some last night, & position for next week's trade.

[helios]

see if this one goes back to $2.6 region ...

[helios]

April 18 (Bloomberg) -- General Motors Corp., racing against a June 1 bankruptcy deadline, may be able to reach a union agreement to cut costs for a health-care trust within days after Chrysler LLC does so, people familiar with the talks said.

A Chrysler accord with the United Auto Workers probably can be quickly adapted to meet GM’s needs, said the people, who asked not to be identified because details aren’t complete. Chrysler’s plan is understood by GM to rely much more heavily on equity than cash, one person said.

GM has been trying since December to cut a $20.4 billion cash obligation to the trust in half as it tries to revamp operations and keep emergency U.S. loans. The Obama administration told GM last month it needs even deeper cuts in debt to avoid a government-supported bankruptcy.

“I would expect we’d be able to pick up the pace here in the next several weeks,” Chief Executive Officer Fritz Henderson said yesterday on a conference call, without giving specifics about GM’s plans.

Source: Bloomberg.com

[iam802]

GM ‘Likely’ to Build in China as U.S. Factories Close

http://www.bloomberg.com/apps/news?pid= ... refer=asia

By Stephanie Wong

April 20 (Bloomberg) -- General Motors Corp., shuttering U.S. plants in a bid to avoid bankruptcy, is “likely” to build a new factory in China on surging demand.

“Operations in China are profitable and in the future China can finance its own growth,” Nick Reilly, the company’s Asia-Pacific president, said at the Shanghai auto show today. He didn’t give a timeframe for the new plant.

GM, the biggest overseas automaker in China, boosted sales in the country 38 percent last month as government stimulus measures spurred demand for its minivans. By contrast, the company’s U.S. sales slumped 45 percent on the recession, as it battles to convince the U.S. government that it’s still viable.

The automaker has also delayed expansion of an Indian plant for as long as two years as sales growth there has slowed, Reilly said. The company will seek to turn around sales in Australia and South Korea, he added.

GM is basing its business planning in Asia on the assumption that it will have to finance projects locally, insulating it from possible problems in the U.S., Reilly said.

“We won’t get money out of the U.S. into China,” Reilly said. Still, “we don’t need to because we have a very good balance sheet.”

China Sales

The Detroit-based carmaker said April 9 it expects to double annual sales in China to more than 2 million vehicles over the next five years, with more than 30 new and upgraded models being introduced in that span.

GM makes vehicles in China through two ventures, both of which are backed by SAIC Motor Corp. Reilly said he wouldn’t comment on the possibility of Chinese automakers buying GM brands.

GM is trying to prove it’s viable in order to keep $13.4 billion in U.S. federal loans. The company is seeking to shed some brands, cut 47,000 jobs worldwide this year and close five assembly plants as it faces a June 1 deadline to avoid a U.S. government-backed bankruptcy.

GM will keep its “most profitable” Buick brand, Reilly said. The carmaker is trying to sell or close Saturn, Hummer and Saab out of its eight brands.

It’s also studying plans to drop Pontiac and GMC as part of its broader cost-cutting moves, people familiar with the discussions have said. The Chevrolet, Cadillac and Buick brands are likely safe, said the people last week, asking not to be named because decisions aren’t final.

GM is ready to cede controlling stakes in Adam Opel GmbH and Vauxhall Motors Holdings Ltd. in exchange for a promise to invest in a new venture formed from those European units, the Financial Times reported, citing two people familiar with the plans.

An investor will be asked to pay at least 500 million euros ($650 million) in equity for the units, while GM will inject the money directly into Opel, the newspaper said.

[iam802]

lai liao.... one more round. (but not confirmed/official yet)

U.S. to give Chrysler, GM new aid
http://www.reuters.com/article/topNews/ ... KU20090421

WASHINGTON (Reuters) - The Obama administration will make about $500 million available to Chrysler LLC through the end of this month as it seeks to reach an alliance with Fiat, and up to $5 billion through May to help General Motors Corp restructure outside of bankruptcy, an independent oversight report on the Treasury Department's corporate rescue fund said on Tuesday.

Separately, the United Auto Workers (UAW) union urged its members to lobby the White House by phone or email to ensure that workers and retirees are treated fairly in negotiations at both companies on new concessions, which are considered vital for the automakers' to survive.

"We need President (Barack) Obama and his auto task force to stand up for the interests of workers and retirees in these restructuring negotiations," the union said in an appeal on its Web site to members.

The UAW represents about 26,000 workers at Chrysler and 62,000 at GM.

The union is under pressure along with bondholders and banks to help Chrysler and GM slash debt so they can restructure. The central issue for the UAW and the car companies is reaching an accord on restructuring the finances of a multi-billion-dollar retiree health care trust.

The administration's task force does not believe Chrysler can stand alone and is brokering meetings this week in Washington and Detroit to see if a deal with Fiat is possible.

The administration has offered up to $6 billion to help finance the alliance that would give Chrysler access to Fiat's small car technology and the Italian automaker a platform for building light trucks and a robust network for selling its vehicles in the United States.

Analysts and consultants have questioned whether the companies can close the deal and avert what most believe would be a certain Chrysler bankruptcy.

At the White House on Monday, Obama's chief spokesman, Robert Gibbs, would not forecast where the talks were headed but said the administration was working "with all of the stakeholders involved" and was hopeful a solution would be found to "continue the Chrysler brand" and strengthen the industry overall.

"The President continues to be involved in this issue and understanding the tremendous economic importance both for the overall industry and for the dozens of communities throughout the country that are dependent upon Chrysler and auto parts suppliers that supply Chrysler for good-paying jobs," Gibbs said.

The administration in March set aside up to $500 million to help Chrysler get through April, according to a report on oversight of corporate bailout funds prepared by the Treasury Department inspector general. GM was slated to receive up to $5 billion through May.

GM said on Monday it would cut another 1,600 salaried jobs by May 1. The reductions are part of GM's plan to slash its global salaried work force this year by about 10,000, or 14 percent. GM also aims to cut 37,000 hourly jobs worldwide by the end of the year.

GM and Chrysler, controlled by Cerberus Capital Management, received a $17.4 billion government bailout in December. Ford Motor Co is also struggling but opted against seeking rescue funds.

(Reporting by John Crawley; Editing by Lincoln Feast)

[helios]

April 22 (Bloomberg) -- General Motors Corp., trying to avoid a U.S.-backed bankruptcy on June 1, may close plants and scrap models as much as four years sooner than planned to lower its break-even point, people familiar with the plan said.

The cuts may mean Detroit-based GM can turn a profit in a U.S. market with sales of as few as 10 million vehicles, said the people, who asked not to be named because the planning is private. GM said Feb. 17 it was targeting break-even at 11.5 million to 12 million annual vehicle sales. They fell in 2008 by 18 percent to 13.2 million. In March, the annual rate was 9.9 million.

The largest U.S. automaker is pushing to revise its business plan in time for a debt-cutting offer to bondholders as early as April 27, people familiar with the plans said.

Source: Bloomberg.com

[helios]

stacked some tonight ...

[helios]

NEW YORK (CNNMoney.com) -- General Motors won't be making a June 1 debt payment of $1 billion, a company spokeswoman said Wednesday.

The debt is due the day after GM's government-imposed May 30 deadline to have an aggressive restructuring plan in place or be left to face bankruptcy.

GM (GM, Fortune 500) said it wouldn't make the June 1 payment because as part of its restructuring, the company will be offering to exchange bondholder's debt for equity in the company.

"We're going to have an exchange offer open anyway," said GM spokeswoman Julie Gibson.

Source: CNN.com

[iam802]

Be careful on this. (swap debt for equity??)