Source: CNBC.com
The NY Times reports that The Treasury Department is directing General Motors to lay the groundwork for a bankruptcy filing by a June 1 deadline, despite public contention that it could still reorganize outside court, people with knowledge of the plans said during the weekend.
The goal is to prepare for a fast “surgical” bankruptcy … creating a new company that would buy the “good” assets of GM almost immediately after the carmaker files for bankruptcy … Less desirable assets, including unwanted brands, factories and health care obligations, would be left in the old company, which could be liquidated over several years.
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But what about the UAW? Not to worry …
President Obama, who was elected with strong backing from labor, remained concerned about potential risk to GM’s pension plan and wants to avoid harming workers, these people said.
So, GM may require as much as $70 billion in government financing, and possibly more to resolve the health care obligations and the liquidation of the factories, according to legal experts and federal officials.
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Preserving GM’s stellar reputation. Huh ? …
a quick restructuring is necessary so its image and sales are not damaged permanently.
The government has said it will guarantee GM’s vehicle warranties.
GM has started an aggressive advertising campaign stressing that car buyers should have confidence in the company, and offering to make nine months of payments, up to $500 each, for owners who lose their jobs.
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Promise: a transparent administration. Yeah, right …
None of these people agreed to be identified because they were not authorized to discuss the process. GM declined to comment and the Treasury Department did not comment.
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Full article:
http://www.cnbc.com/id/30184869
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