GM is largest-ever industrial US bankruptcy
01/06/09 15:21 Filed in: News
General Motors has filed for
bankruptcy protection under Chapter 11 of the United States
Bankruptcy Code, making it the largest-ever industrial bankruptcy
in the USA. Operations outside the USA are not included in the
bankruptcy.
Putting a positive spin on the momentous news, GM announced it had reached agreements with the US Treasury and the governments of Canada and Ontario “to accelerate its reinvention and create a leaner, stronger ‘New GM’ positioned for a profitable, self-sustaining and competitive future”.
So positive, in fact that the press statement had to include a disclaimer about some of the positive language in the statement and how the “...statements are based on GM management's current expectations and assumptions, and as such involve a number of risks, uncertainties and other factors that could cause actual results to differ materially...”.
Pending approvals, a new GM is expected to launch in about 60 to 90 days time. It will be a separate and independent company from the current GM.
This fresh start brings the new company two distinct advantages. It will be built on selected brands from GM's current range of names – Chevrolet, Cadillac, Buick and GMC. Plus the balance sheet will be stronger because of lower debt burdens and reduced operating costs.
"Today marks a defining moment in the reinvention of GM as a leaner, more customer-focused, and more cost-competitive company that, above all, can quickly generate winning bottom line results," said Fritz Henderson, GM president and CEO. "The economic crisis has caused enormous disruption in the auto industry, but with it has come the opportunity for us to reinvent our business. We are going to do it once and do it right.
"From day one, the New GM will be well-positioned to capitalize on the award-winning vehicles we have developed and launched during the past few years, and on our investments in exciting new technologies like the Chevy Volt, so that we can build and return value to our customers and to the millions who will have a stake in our success. The New GM will play a critical role in the future of the automobile, and assure that the US has a strong stake in this rapidly changing global manufacturing industry," Henderson concluded.
On March 31, 2009, GM reported consolidated debt of $54.4 billion, along with additional liabilities, including an estimated $20 billion obligation to the UAW VEBA.
Putting a positive spin on the momentous news, GM announced it had reached agreements with the US Treasury and the governments of Canada and Ontario “to accelerate its reinvention and create a leaner, stronger ‘New GM’ positioned for a profitable, self-sustaining and competitive future”.
So positive, in fact that the press statement had to include a disclaimer about some of the positive language in the statement and how the “...statements are based on GM management's current expectations and assumptions, and as such involve a number of risks, uncertainties and other factors that could cause actual results to differ materially...”.
Pending approvals, a new GM is expected to launch in about 60 to 90 days time. It will be a separate and independent company from the current GM.
This fresh start brings the new company two distinct advantages. It will be built on selected brands from GM's current range of names – Chevrolet, Cadillac, Buick and GMC. Plus the balance sheet will be stronger because of lower debt burdens and reduced operating costs.
"Today marks a defining moment in the reinvention of GM as a leaner, more customer-focused, and more cost-competitive company that, above all, can quickly generate winning bottom line results," said Fritz Henderson, GM president and CEO. "The economic crisis has caused enormous disruption in the auto industry, but with it has come the opportunity for us to reinvent our business. We are going to do it once and do it right.
"From day one, the New GM will be well-positioned to capitalize on the award-winning vehicles we have developed and launched during the past few years, and on our investments in exciting new technologies like the Chevy Volt, so that we can build and return value to our customers and to the millions who will have a stake in our success. The New GM will play a critical role in the future of the automobile, and assure that the US has a strong stake in this rapidly changing global manufacturing industry," Henderson concluded.
On March 31, 2009, GM reported consolidated debt of $54.4 billion, along with additional liabilities, including an estimated $20 billion obligation to the UAW VEBA.