UAW approves GM concessions
Members of the United Auto Workers union have ratified a package of concessions designed to reduce General Motors’ labor costs.
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GM moves closer to bankruptcy
General Motors said Wednesday it has fallen far short of the bondholder support it needed for its proposed debt-for-stock offer, virtually guaranteeing that the nation’s largest automaker will be forced to file for bankruptcy court protection within the next five days. The bondholders were not satisfied with the prospect of owning only 10% of the company when the U.S. government would own nearly 70% and a union-controlled trust fund up to 20%. The bondholders own $27 billion in corporate notes. GM (GM, Fortune 500) needed owners of 90% of those bonds to accept stock in return for the debt in order to reduce its interest expenses to a more manageable level. – From CNN
GM, UAW reach accord
The United Auto Workers said today it has reached a tentative agreement with General Motors Corp. and federal officials to modify its labor contract with the automaker, removing a major hurdle to GM’s government-mandated restructuring. The UAW did not release details of the agreement because it has not been ratified by its members at GM. The union said it was in the process of scheduling a ratification vote. The “tentative understanding” contains modifications to the UAW’s labor deal and GM’s obligations to fund a trust to pay retiree healthcare benefits, the union said. – From LA Times
GM axes 1,100 dealers
General Motors notified 1,100 of its 6,000 dealerships Friday that it is terminating their contracts with the struggling automaker, the first step in an even deeper 40% cut in its retail network. GM spokeswoman Susan Garontakos said that the dealers receiving notice Friday are being told that their contracts will not be renewed in October 2010. Many of them are expected to close shop this year. The company has told the Obama administration that it plans to cut its network down to 3,600 dealers by next year. – From CNN Money
GM kills Pontiac, cuts 23,000 jobs
General Motors announced plans to cut 23,000 U.S. jobs by 2011, drop its storied Pontiac brand and slash 40% of its dealer network in its latest bid to stay out of bankruptcy. GM also announced an offer to its bondholders to swap $27 billion of the company’s unsecured debt for stock. GM is offering bondholders 225 shares of its stock for every $1,000 it owes the bondholders in principal. The moves are GM’s latest efforts to cut costs and stem losses that have dogged its North American auto operations since 2005. But Monday’s restructuring announcement goes much further than the viability plan GM unveiled to President Obama’s auto industry task force in February. – From CNN Money
Video of GM Workers Brawling After Layoffs
For your horribly depressing video of the day, here’s freshly fired GM salesman fistfighting each other in a dealership parking lot in western Michigan last week. Following the brawl, one of the combatants chillingly proclaims, “It doesn’t really matter how hard that you work, because there’s always somebody a little bit above you that has the right to control every decision.” His bailout won’t come. – From Jossip
GM CEO Rick Wagoner to get $20 million retirement package
Rick Wagoner will leave his post as CEO of bailed-out General Motors with a $20 million retirement package, the company’s financial filings show. Although the Treasury Department has barred GM from paying severance to Wagoner or any other senior executive, Wagoner is eligible to collect millions in retirement benefits from his former employer, according to the documents reviewed by ABC News. The Obama administration asked for Wagoner to resign Sunday, as part of its restructuring of the auto industry. President Obama said this morning that forcing Wagoner out indicated it was a time for new leadership. Under Wagoner’s leadership, GM lost tens of billions of dollars, took billions in taxpayer-financed aid, and announced plans to cut 47,000 employees by the end of 2009. – From ABC News
The Hummer’s fate to be decided by Tuesday
By Tuesday, General Motors Corp. will have to decide whether its struggling Hummer brand will die a quiet death or live on with a new owner. The wounded automaker has told the federal government that it will make the decision to jettison or sell Hummer by the end of the first quarter as part of a plan to justify the government loans on which it is living. GM says it’s still talking to several possible buyers, and many of Hummer’s dealers nationwide are hoping that someone, perhaps a Chinese automaker, will come to their rescue and buy the brand, which traces its roots to rugged vehicles used for transporting soldiers. – From MSNBC
GM teetering on the brink of collapse
General Motors Corp. said in a government filing Thursday that its accounting firm has found there is “substantial doubt” about the automaker’s ability to survive. The embattled automaker made the disclosure in a 480-page filing with the Securities & Exchange Commission. GM has sustained large and continuing losses, while saying it needs additional federal loans to remain in business. Thursday’s statement from the company’s auditors presents another hurdle the automaker will have to clear as it makes the case that it deserve additional taxpayer support going forward. – From CNN
GM’s $30 billion request; lose 47,000 jobs
General Motors Corp. and Chrysler LLC on Tuesday told the U.S. government it needs even more taxpayer money to survive than originally thought. Meanwhile, the United Auto Workers union said it has reached a tentative agreement with Chrysler, GM and Ford Motor Co. on modifications to existing labor contracts. But discussions were still under way about how the companies would fund union-run trust funds that will take over the companies’ retiree health care obligations starting next year. GM, presenting a dire outlook for the future, said it may need $30 billion in total government financing to weather the economic downturn and would cut 47,000 jobs worldwide and shutter five more U.S. factories in a massive restructuring plan. – From Fox News
Troubled US carmaker Chrysler has asked for another $5bn (£3.5bn) from the US government, saying it plans to axe 3,000 jobs and cut three car models. The moves form part of its restructuring plan submitted to the Treasury Department on Tuesday. Meanwhile General Motors has said it would try to borrow up to $16.6bn more from the government, on top of the $13.4bn it has already received. Its plan includes cutting 47,000 jobs and closing five more US factories. – From BBC News
The price tag for bailing out General Motors and Chrysler jumped by another $14 billion Tuesday, to $39 billion, with the two automakers saying they would need the additional aid from the federal government to remain solvent. In return, the two companies also promised to make further drastic cuts to all parts of their operations, in the hope that they can eventually strike a balance between their bloated cost structures and a dismal market for new car sales. – From NY Times