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Old 04-01-2009, 09:55 AM   #1
DeMAN
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Default Could Saturn live under these plans.........

Quote:
General Motors Corporation Bankruptcy Plan Includes Company Split-Reuters
7:55am EDT
Reuters reported that a possible bankruptcy plan being discussed for General Motors Corporation includes quickly forming a new company of the Company's most profitable parts, while a group of other units would remain under bankruptcy protection for a longer period. The Company also would seek to have a new deal in place with the United Auto Workers union prior to any bankruptcy filing. Under the plans being considered, the Company would seek to quickly move its most profitable units into a new company separate from its other units in the early days of the bankruptcy filing.
What are you thoughts on this?

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Old 04-01-2009, 10:19 AM   #2
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Default Re: Could Saturn live under these plans.........

gm will still provide cars for a while but hopefully to saturn gm is no longer an issue. alot of benefits to not being owned by gm. new owner will have alot more effect than gm

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Old 04-01-2009, 01:52 PM   #3
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Default Re: Could Saturn live under these plans.........

The plan sounds similar to the "good GM, bad GM" plan, which is similar to the "good bank, bad bank" plan where a new bank is created to take all the non-performing loans.

I'm not sure if it would work for GM because the nature of the products being sold is so different.

For a bank, a loan is something that is paid back over time. When the economy revives, a non-performing loan can turn into a performing loan as the borrower finds a job or sells a house at decent price to pay back the loan. Creating the bad bank effectively removes the non-performing asset from the bank's books and move it to another bank where bad loans won't affect the bank's books (because it's the bad bank) and give it time to get better.

A car is not paid back over time. All payment must be made up front. So, even if all the non-performing products are moved to the bad GM, who will buy cars from bad GM knowing all the products there are non-performing products? ie. who's gonna buy a car that is known to be a sales dud?

What also makes this more complex is, no current employee will want to go work for this bad GM because they know this new company is on a suicide mission.

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Old 04-01-2009, 02:26 PM   #4
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Default Re: Could Saturn live under these plans.........

I think Saturn should do well.

Saturn has no workforce with whom they need to negotiate, and as a spin off, they will not be tarnished with bankruptcy.

Saturn will be able to source product from any manufacturer. My preference is Hondas made in Ohio. Top quality, sport sedan handling, and Saturn already has a history with Honda engines (Vue V6).

I think Honda would be thrilled to wholesale cars to Saturn. They need the business. They plan to shut down their Ohio plant for 13 days in May and are cutting pay for salaried and factory workers.

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Old 04-01-2009, 02:34 PM   #5
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Default Re: Could Saturn live under these plans.........

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I think Honda would be thrilled to wholesale cars to Saturn.
I can't see Honda stabbing their complete N. American dealership organization in the back by suddenly adding 300+ more dealerships to try to sell more Honda's.

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Old 04-01-2009, 03:16 PM   #6
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Default Re: Could Saturn live under these plans.........

Sadly, I think they pushed Rick Wagoner out because he didn't want to sit thru a bankruptcy.

They got Fritz Henderson to do the 'dirty' work of preparing for the bankruptcy.

Read between the lines of all these news conferences.

"DETROIT -- A bankruptcy reorganization by General Motors Corp. is appearing more likely, new GM Chief Executive Officer Fritz Henderson said in his first press conference today.

A Chapter 11 filing could come before the end of the 60-day period given GM by the Obama administration to rewrite its viability plan.

"If we're not successful doing it out of court, we will do it in court," Henderson said about GM's efforts to craft a new viability plan.

In an unusually frank exchange with reporters, Henderson said there will likely be more plant closings than in the original viability plan filed Feb. 17. And he said there probably will be another round of buyouts offered to GM's hourly employees.

"We will do what it takes to make sure General Motors will be successful in the future," Henderson said.

The automaker also announced a program to make payments on the purchase of new vehicles for buyers who have lost their jobs, similar to programs being offered by Hyundai and Ford Motor Co.

The program starts Wednesday and ends April 31."

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Old 04-01-2009, 04:22 PM   #7
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Default Re: Could Saturn live under these plans.........

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Originally Posted by unit731 View Post
The automaker also announced a program to make payments on the purchase of new vehicles for buyers who have lost their jobs, similar to programs being offered by Hyundai and Ford Motor Co.
The program starts Wednesday and ends April 31."
One month? Big deal. Does GM expect the recession to be over on April 30? (there is no April 31) Or does GM not see itself existing after April 30? Food for thought.

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Old 04-01-2009, 06:37 PM   #8
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Default Re: Could Saturn live under these plans.........

The best scenario for Saturn under a GM bankruptcy is that whatever assets that are grouped under the term "Saturn" are sold or otherwise separated from the GM whole with the approval of the creditors and any other involved parties claiming an interest in GM's assets. The key is to determine a fair value for Saturn and to convince everyone involved that acceptance of that value is in everyone's best interest. If the FOT really has a potential deal worked out with some other company, that company could soon make an offer to GM that the creditors would hopefully find reasonable and the court would quickly approve the sale with the agreement of all concerned. At that point Saturn is out of the GM bankruptcy picture. Where it would get difficult is if the parties involved could not agree to the proposed terms of the Saturn separation and the whole issue becomes highly contested in front of the court. The whole thing can be resolved in a few weeks if things go amicably, but complicated and contested bankruptcies can be tied up in court for many years. I personally believe the government's involvement in both wanting this settled quickly and using public funds to perhaps guarantee some aspects of the negotiated deal may expedite the process.

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