There’s a mystery to the news of the morning. What is so far known is that General Motors, facing the immediate threat of bankruptcy, and the more extended problems caused by the massive slump in car sales, plans to idle the majority of its U.S. assembly plants, over the summer, for as much as nine weeks.
The downtime would eliminate about 170,000 cars, trucks and crossovers from its already bulging inventory. What we don’t know, yet, is which plants are to be idled, but that the automaker is expected to reveal that by the end of this week.
The move is the latest in a series of setbacks for the giant automaker, which has barely five weeks left to convince the White House it deserves an additional bailout. As if to underscore that situation, GM officials are telling bondholders they won’t receive an expected $1 billion debt payment that was due on June 1st. Whether this will help convince reluctant lenders to move ahead on a demand to exchange $28 billion in debt for equity is uncertain, but it certainly gets the message across.