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Posts Tagged ‘Motors Liquidation Company’

Sorting Out GM Stock – Old versus New

As the maker prepares for an IPO beware of the old stock.

by on Jun.23, 2010

General Motors Company holds all of the productive assets.

As General Motors prepares to register with the U.S. Securities and Exchange Commission for sale of stock in the new Company, confusion exists about the old stock of the bankrupt Corporation. It’s worthless.

General Motors Company is the “new GM,” which emerged from bankruptcy last summer. All of GM’s continuing operations and assets are completely out of bankruptcy and are now operating as an independent and separate company called “General Motors Company.” It holds virtually all of the productive assets of the old Corporation. These include the Cadillac, Chevrolet, Buick, and GMC brands, and the plants and other hard assets that those brands need to continue operations. GM Company also owns all of its overseas operations.

General Motors Company posted a first-quarter profit of $865 million, but it wasn’t a strong performance since the profit came from relief from the interest payments on debt that was wiped out in the bankruptcy. The company has repaid $6.7 billion in outstanding U.S. government loans and $1.4 billion to Canadian governments, with money taxpayers advanced to it.

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Clarity!

There are currently no shares of General Motors Company for sale to the public and there won’t be until it is given legal approval to do so. It’s also unknown how many shares will be offered for public sale or by whom, or at what price.

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Is Mercury Dripping through Bankruptcy Cracks?

How the law, money and politics conspire against a cleanup.

by on Sep.24, 2009

As always, the question is who pays for old environmental sins.

As always, the question is who pays for old environmental sins.

Environmental groups are calling on the Obama Administration or Congress to direct General Motors Company to adhere to a contract signed by the old GM requiring it to pay for the removal and disposal of mercury switches from GM vehicles headed for the scrap yard.

Given the criticism the Administration is taking over the unpopular auto bailouts, it is unlikely that it will interfere in bankruptcy law, so another solution must be pursued.

A spokesperson for Motors Liquidation Company – the legal name of the old bankrupt GM that is being liquidated – told The Detroit Bureau that it “is carefully analyzing about half-a-million contracts of the former General Motors Corp. This agreement is among them. Ultimately, any decision made on any contract will be consistent with our obligations under the bankruptcy code.”

Translation: there is no legal reason to continue the contract, so GM will not.

The problem is a serious one that will not go away anytime soon.

Follow The Money!

Follow The Money!

Mercury switches were used to operate hood and trunk lights in virtually all U.S. made vehicles before 2004, when automakers, under increasing pressure from environmental groups and states, finally stopped their use.

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American Axle Averts Bankruptcy

GM Spin-off partially returns via stock options to GM.

by on Sep.18, 2009

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GM accounts for almost 80% of AAM's sales, so its recovery sent the stock soaring.

General Motors Company has agreed to bailout American Axle & Manufacturing Holdings Inc. by giving the key supplier $110 million in exchange for an equity interest in the company it once owned.

Critics have maintained GM sold American Axle for song at a corporate garage sale in the early 1990s, but GM continues to be AAM’s largest and most important customer, accounting for almost 80% of its sales in the second quarter.

American Axle also was forced by its creditors to agree to several restrictions on its operations.

The company’s management outlined the changes in a filing with the Securities Exchange Commission Thursday where it disclosed the terms of the renegotiated covenants.

Driveline News!

Driveline News!

AAM will be required to comply with revised financial covenants stipulating that it maintain an average daily minimum liquidity of $85 million until June 30, 2010. Without the revised agreement, creditors could have forced AAM into bankruptcy.

AAM expects to post a profit for the third quarter and its sales to total about $400 million, according to the SEC filing, as production at GM resumes.

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General Motors Company Arises from the Ashes

The new GM launches today, just 40 days after bankruptcy.

by on Jul.10, 2009

Fritz Henderson, CEO GM Company, photo TBD

The speed of the bankruptcy proceeding could not be matched by an impending reorganization plan.

General Motors Company, or the new GM, is abandoning the old way of doing business that drove it into bankruptcy, according to its CEO. He also will streamline its organization, focus on “best in class” products and attract enough customers to stop its sales slide.

The U.S. taxpayer-owned company is expected to go public by the middle of next year. And GM wants to pay off its U.S. loans that are currently keeping it afloat well before the required  2015 date.

These are all extremely ambitious goals, to put it politely, coming from a management team comprised almost entirely of old-line GM executives who set the policy and made the decisions that resulted in the largest corporate bankruptcy in U.S. history.

“One thing we have learned from the last 100 days is that GM can move quickly and decisively,” said Fritz Henderson, CEO. “Today, we take the intensity, decisiveness and speed of the past several months and transfer it from the triage of the bankruptcy process to the creation and operation of a new General Motors.”

The problem confronting GM — new or old — is the continuing decline in production, sales and share in the toughest vehicle market since WW2.

Keep up with the Reorganization!

Keep up with the Reorganization!

Little new ground in the all critical product or cost cutting areas was covered by Henderson in his first press conference as the operational head of GM Company, which was created today by an asset sale approved by a bankruptcy court in New York on July 5th. In fact, the cliche’s of a product and customer focused organization, repeated over and over, seemed more suitable for an internal pep rally than for a news event after a near death experience for a  company whose future is still by no means assured.

Even the claim that GM can move quickly was cast in doubt by the lack of detail in just how GM is going to trim its bloated corporate ranks.  Henderson’s new management organization was being prepared in anticipation of a July 31st closing date, and the restructuring could not keep pace with the swiftness of the bankruptcy proceeding.

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A Closer Look at the General Motors Asset Sale just Approved by the U.S. Bankruptcy Court

Yes, an appeal has already been filed. The outcome will almost certainly be the same as with Chrysler. GM's sale will proceed.

by on Jul.06, 2009

Ex GM Chairman and CEO Rick Wagoner,center, Ex GM Vice Chairmen Bob Lutz, left, and survivor Fritz Henderson, right

General Motors Company will be headquartered in Detroit and led by Fritz Henderson as the president and chief executive officer.

The U.S. Bankruptcy Court for the Southern District of New York approved the sale of almost all of General Motors Corporation’s assets to NGMCO, Inc., a new legal entity funded by U.S. taxpayers for about $51 billion. An appeal by product liability lawyers is unlikely to halt the sale at noon on July 9th. 

When the sale closes, during the next week, NGMCO, Inc. will change its name to General Motors Company and continue to operate much like GM did in the past, albeit with only four core brands, and far fewer employees and dealers. Current GM employees will be offered positions by the new company. The current General Motors Corporation will then change its name to Motors Liquidation Company. It will ultimately be dissolved under direction of the court.

Stay auto news solvent!

Stay auto news solvent!

General Motors Company will be headquartered in Detroit and will be led by Fritz Henderson as president and chief executive officer. Edward E. Whitacre, Jr. is chairman of the board of directors. 

Also selected to serve on the board of directors are six current members of the GM Corporation board — Erroll Davis, Neville Isdell, Kent Kresa, Philip Laskawy, Kathryn Marinello and Fritz Henderson. 

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