Well, given the events of the last few weeks, this is hardly a surprise. None-the-less, now it is really happening.
From Yahoo Finance, originally from AP
General Motors Corp. filed for Chapter 11 bankruptcy protection Monday as part of the Obama administration’s plan to shrink the automaker to a sustainable size and give a majority ownership stake to the U.S. government.
GM’s bankruptcy filing is the fourth-largest in U.S. history and the largest for an industrial company. The company said it has US$172.81 billion in debt and $82.29 billion in assets.
They owed more than twice what their assets were. The big question now is, how much of that debt was tooling owed to metal stampers and other outsources? How many upstream businesses will fail now because of the defaults? How many jobs will be lost? Is there protection for the supplier chain as part of this deal? I know it was a slow, negotiated slide into bankruptcy, but was saving the supply chain a part of the negotiations? I’ve heard lip service paid to this idea in the press in the last month, but see nothing in todays headlines that is on point.
From the same article:
the automaker will permanently close nine more plants and idle three others
and the article contains unconfirmed speculation on where those dozen plants likely are.
The downsized GM’s brands will be limited to Chevrolet, Cadillac, GMC and Buick. Its Pontiac, Saturn, Hummer and Saab operations will be either sold or closed.
I never got the point of Hummer. Not as a car, not as a part of GM.
It’s a shame about Pontiac. We had one when I was a kid. Everyone did.
Saturns are good cars. Everyone I know with one loves it. I don’t understand why they’d sell it.
It’s a shame what they did to Saab. It was a good brand. My boss in Germany had one 20 years ago, and it was a wonderful car. But it became the Commodore Amiga of the auto world. They bought it and had no idea what to do with it.
The Globe had an interesting list of who the creditors are (or should we already speak of them in the past tense?)
Name of GM creditor and amount of claim.
- Starcom Mediavest Group $121.54-million (U.S.). Not a parts supplier, as far as I can see.
- Delphi Corp. $110.88-million. parts supplier
- Robert Bosch $66.25-million. parts supplier
- Lear Corp. $44.81-million. parts supplier
- Renco Group $37.33-million. not sure
- Enterprise Rent A Car $33.10-million. not a parts supplier
- Johnson Controls Inc. $32.83-million. parts supplier
- Denso Corp. $29.23-million. I believe these are the rust proofers
- TRW Automotive Holdings Corp. $27.52-million. parts supplier
- Magna International Inc. $26.75-million. parts supplier
- American Axle & Manufacturing Holdings Inc. $26.74-million. parts supplier
- Maritz Inc. $25.65-million. ? there are several companies named Maritz
- Publicis Groupe SA $25.28-million. Advertiser, I think
- Hewlett Packard Co. $17.01-million. computer maker
- Interpublic Group of Cos Inc. $16-million. marketer
Not to diminish the damage to non-parts manufacturers, but this is a metal stamping blog. There’s a lot of part suppliers out there with their unmentionables flapping in the breeze this morning.