With bankruptcy looming, a new GM begins to emerge

With an almost certain bankruptcy filing days away, General Motors is beginning its reinvention, planning to retool one factory to make its smallest vehicles ever in the U.S. and rid itself of the biggest.

As GM’s board began two days of meetings Friday to make a final decision on the company’s fate, GM was also closing in on a sale of its European Opel unit, and its main union overwhelmingly approved dramatic labor cost cuts. A deal to sell its rugged but inefficient Hummer brand also appeared on the horizon.

The moves provided more clues about what a restructured GM might look like ahead of the expected Chapter 11 filing Monday. Taxpayers will eventually own nearly three-quarters of a leaner GM, with a total government commitment of nearly $50 billion.

GM has yet to confirm it will seek bankruptcy protection but scheduled a news conference for Monday in New York.

With the government’s backing and nearly $20 billion in U.S. loans so far, the company has made more dramatic changes in just a few days than it has in decades.

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Posted in * Economics, Politics, Corporations/Corporate Life, Economy, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The Possibility of a Bailout for the U.S. Auto Industry

9 comments on “With bankruptcy looming, a new GM begins to emerge

  1. Jeffersonian says:

    This “New GM” is little more than a ward of the state, a corporate welfare queen in every respect. The Chapter 11 filing is a sham. There is no reason for GM to ever make an effective reorganization as long as taxpayers are propping the Potemkin company up.

  2. robroy says:

    Has anyone else noticed that none of the GM car brands stick around. I will see a really cheap looking car and wonder what it is. As I approach, I see it is a Chevrolet Cobalt or whatever. Of course, there are the car names that they have simply recycled but that have nothing to do with the original, e.g., Impala. It sounds like they are going to get rid of the longstanding car lines that have been successful like the Corvette.

    In contrast, we have Honda Civic and Accord and Toyota Camry and Corolla going strong.

  3. Jeffersonian says:

    [url=http://www.thetruthaboutcars.com/general-motors-death-watch-254-all-that-you-dream/]A great editorial about this very topic,[/url] with a good Lowell George/Little Feat tie-in.

  4. Phil says:

    I would never buy a car from Government Motors.

  5. Jeffersonian says:

    Iowahawk implements his own [url=http://iowahawk.typepad.com/iowahawk/2009/05/look-ma-no-bailout.html]automotive stimulus package!![/url]

  6. libraryjim says:

    Some of those ‘brands’ you mention are the result of cross-overs with other companies. For example, the Cobalt is built by Suzuki, I think. Remember the Chevy Geo line? Toyota.

    The difference when I bought my 2000 Corolla vs the Chevy ‘sister’ car (The Prizm?) was that Toyota was willing to dicker on the price. Chevy refused to come down even $100 to match the advertised Corolla price. Sadly, there was a design defect in the 2000 Corolla engine that caused it to ‘gunk up’ and Toyota’s customer service showed itself to be crap like the engine (refusing to accept any responsibility), and I ended up trading it in for a Dodge Caravan. I’ve often wondered what would have happened if I bought the Chevy version?

    Those are the ones that don’t stick around. You still have the Impala, Malibu, Corvette, and returning this year, the Camaro. And the larger cars/trucks such as the Suburban and Silverado.

  7. Cennydd says:

    One of things that have always left me puzzled is why GM builds virtually identical pickup trucks and SUVs with both Chevrolet and GMC nametags. I think they should shift ALL of the production of these vehicles to the GMC Division and close the Chevrolet truck and SUV production plants permanently. Why duplicate vehicles? It just doesn’t make good sense!

  8. libraryjim says:

    All car companies do this, thought. Ford has almost identical vehicles built under their Mercury logo; Toyota is Lexus; GM has Chevy, Pontiac and Buick. The difference is the level of luxury or payload. Mercury, Lexus, Buick are the Luxury arms of the car companies. Chevy, Ford and Toyota are the ‘blue collar’ versions. GM is the workhorse.

    But I agree. It’s needless duplication, a GM is a GM, you take it to the same people for service, and buy the same parts at the auto store.

  9. libraryjim says:

    Oh, I forgot:
    Dodge and Chrysler, eg., Dodge Caravan and Chrysler Town and Country. Essentially the same vehicle, yet the T&C;costs quite a bit more, and has more ‘standard’ features.