GM to file bankruptcy on June 1st

[braeden0613]

http://www.bloomberg.com/apps/news?pid=20601087&sid=av6aV2soJRn8&refer=home
GM Said to Plan June 1 Bankruptcy as Debt Plan Gains (Update2)

By Jeff Green and Mike Ramsey

May 28 (Bloomberg) -- General Motors Corp., the world’s largest automaker until its 77-year reign ended in 2008, plans to file for bankruptcy protection on June 1 and sell most of its assets to a new company, people familiar with the matter said.

GM’s path will be smoothed by an accord today giving some of its biggest bondholders an equity stake in the reorganized automaker. The U.S. Treasury is requiring that an unspecified percentage of debt holders accept the terms by 5 p.m. New York time on May 30, Detroit-based GM said in a regulatory filing.

“If bondholders agree to this up front, this would essentially be a prepackaged bankruptcy,” said Shelly Lombard, an analyst with New York-based bond-research firm Gimme Credit LLC. “GM could exit Chapter 11 faster.”

Battered by almost $88 billion in losses since 2004, GM fell short in a bid to cut debt by $44 billion under a U.S.-set June 1 deadline to restructure outside court. The 100-year-old automaker seeks to rebuild around assets such as the Cadillac and Chevrolet brands as it follows Chrysler LLC into bankruptcy.

The people familiar with GM’s plans didn’t specify where the automaker might make its Chapter 11 filing. They asked not to be identified because the details aren’t public.

Vice Chairman Bob Lutz, while not confirming GM’s intentions or a possible bankruptcy venue, said any court restructuring would be quick.

‘Pay It Back’

“We intend to get in and out very soon,” he said today at an Automotive Press Association luncheon in Detroit. “The U.S. government wants its money back, and our plan is to pay it back as quickly as possible. The U.S. government doesn’t want to own auto companies.”

The bankruptcy probably would last 60 to 90 days, said an Obama administration official who asked not to be identified because the talks are private. The Treasury will finance the trip through bankruptcy with about $50 billion, which includes $19.4 billion in current borrowing, GM said in a statement.

GM’s bankruptcy will be the third-biggest in U.S. history after Lehman Brothers Holdings Inc. and WorldCom Inc., based on GM’s reported global assets of $91 billion and total liabilities of $176.4 billion as of Dec. 31. Chrysler, which sought court protection on April 30, listed assets of $39 billion.

Going to court would end the suspense for GM, which said it expected to declare bankruptcy after failing to get enough support for a debt-for-equity exchange on $27.2 billion in unsecured bonds.

Sweetened Offer

Only 15 percent of bondholders approved the offer to trade their debt for a 10 percent stake in the new company, a person familiar with the matter said. GM sweetened the plan today to promise warrants good for buying 15 percent more of the new enterprise, which would have an improved balance sheet based on a U.S. plan to trade bailout loans for equity.

Another 20 percent of bondholders now support the swap, according to a statement from their ad hoc committee today.

Bondholders would lose some or all of the warrants and their 10 percent stake in the new GM entity unless the company wins sufficient support from those investors to satisfy the Treasury, GM said in the regulatory filing.

The government will make a “judgment call” on May 30 as to whether bondholder backing for the latest proposal is sufficient, the administration official said.

The accord with bondholders marks “another important step” in GM’s restructuring, another administration official said in Washington. President Barack Obama set the June 1 deadline after the government began propping up GM with emergency loans.

New Owners

The filing shows the U.S. Treasury owning 72.5 percent of equity in the new GM, a union health-care trust with 17.5 percent and 10 percent going to the old GM to hand to creditors in the bankruptcy process.

Creditors would have warrants to buy as much as 15 percent of the company through newly issued shares in two portions. The first 7.5 percent would become available when GM’s market value reaches $15 billion and the remainder at $30 billion, according to regulatory filings.

GM’s market capitalization last exceeded $30 billion in January 2004, according to Bloomberg data. The value at yesterday’s closing stock price was $702 million.

According to the filing, the debt at the new GM would consist of $8 billion in new Treasury loans, $2.5 billion owed to the United Auto Workers fund and $6.5 billion in dividend- paying preferred stock. The Treasury will get $2.5 billion in preferred shares that pay a 9 percent annual dividend, bringing the issuance to $9 billion in preferred stock.

Bonds, Shares

GM’s 8.375 percent bonds due in July 2033 rose 3.88 cents to 11 cents on the dollar as of 5:06 p.m. in New York, the highest closing price in seven weeks, according to Trace, the bond-pricing service of the Financial Industry Regulatory Authority. The yield was 96.8 percent.

The shares rose 15 cents, or 13 percent, to $1.30 at 4:09 p.m. in New York Stock Exchange composite trading. The stock has fallen 59 percent this year.

A portion of the debt financing for the new GM may be provided by the governments of Ontario and Canada, according to the filing. In that case, those governments would receive part of the preferred stock and common equity of the new company allocated for the Treasury.

GM wants to scrap the Pontiac line, sell its Hummer and Saturn units, and drop as many as 2,400 U.S. dealers by the end of 2010. Its Saab Automobile unit is in bankruptcy protection in Sweden, and the Opel division in Europe is up for sale.

Federal Recovery

The administration is optimistic about prospects for recovering taxpayer dollars being invested in GM’s restructuring, according to the official who discussed the timetable for the automaker’s stay in court.

The official didn’t know how much may be recovered and wasn’t certain about amounts invested during the George W. Bush administration. GM would be a private company for a time under the restructuring plan currently envisioned, the official said.

Chrysler may leave court protection as soon as next week under a plan to create a streamlined entity run by Italy’s Fiat SpA, based on the official’s prediction earlier this week that the automaker’s time in bankruptcy might be only about 30 days.

GM reached a tentative agreement with the UAW on May 21 to modify a 2007 labor contract and a day later arrived at a similar accord with the Canadian Auto Workers to keep alive operations in that country.

UAW members are voting this week on the contract changes and a plan to shrink GM’s obligation to a union-run trust fund for retirees’ medical expenses.

GM ceded the global auto sales crown last year to Toyota Motor Corp. and hasn’t posted an annual profit since 2004. GM’s U.S. sales have fell for 18 months in a row through April.

[Yonivore]

How much money have we dumped into that company only to have it end up where many of us said it should have been allowed to go -- months ago?

[FaithInOne]

Can I has my money back from the non-fearmongering fearmongers plz??

[LnGrrrR]

How much money have we dumped into that company only to have it end up where many of us said it should have been allowed to go -- months ago?

Yup. Gotta love it. :p

[coyotes_geek]

How much money have we dumped into that company only to have it end up where many of us said it should have been allowed to go -- months ago?

$20 billion so far, but it will be $100 billion before it's all said and done. And no one should be buying any of that bullshit about getting paid back.

[SnakeBoy]

How much money have we dumped into that company only to have it end up where many of us said it should have been allowed to go -- months ago?

$20 billion so far. To put that in perspective, it works out to around $600k per GM employee.

On the business networks today (FBN & CNBC) I heard people saying they would need $16 - $18 billion more in taxpayer money following the bankruptcy just to keep them afloat while they try to become a competitive company. Of course they'll be owned by the government at that point so I guess that won't be called bailout money.

[Bender]

Of course they'll be owned by the government at that point so I guess that won't be called bailout money.
"Capital contributions" from then on I guess, from the major stockholder

[TDMVPDPOY]

dumping more money into a fail company, only to pay the clowns who are smart thats going to pull out when they get their share

[Marcus Bryant]

And Toyota will still kick GM's ass, even with the full faith and credit of the American printing press behind it.

What does the cost to the taxpayers work out to for each UAW member's vote?

[FaithInOne]

Government owning (in all senses of the word) General Motors. It's the Union/Government/Militant Environmentalist Alliance WET DREAM SONS!!!!!!!

[FaithInOne]

And Toyota will still kick GM's ass, even with the full faith and credit of the American printing press behind it.

What does the cost to the taxpayers work out to for each UAW member's vote?

Exactly my man. It is going to get ugly if people quit buying GM out of pure principle and shitty downgraded vehicles.

The government will eventually have to FORCE people to buy their models directly or as they always do, indirectly. They will alienate Toyota etc in one form or another.

[coyotes_geek]

Obama is going to make sure the new GM utilitizes overpriced union labor to crank out fuel efficient cars, irregardless of the fact that American consumers don't want them. Then when the new GM continues to struggle financially we the taxpayers will either get to subsidize GM's ongoing business losses, or subsidize massive tax incentives to try and get people to buy the cars GM is making. Basically, GM is going to become the automotive equivalent of the Post Office.

[clambake]

cool.....i still use the post office.

and thanks Mr. President. you've done a damn good job, so far.

[Viva Las Espuelas]

so it was bad for GM to go bankrupt a couple of months ago, but now it's "ok".
got it :tu

bye bye, GM. nice knowing you.
i'm sure lawyers and salivating over this move.

http://latimesblogs.latimes.com/photos/uncategorized/2008/06/24/shark_fin2.jpg

[clambake]

timing is everything.

[Viva Las Espuelas]

timing is everything.
wow.

[clambake]

wow.

impressive, huh? i've been saving that one.

[spurster]

GM going bankrupt last October would have really tanked the economy. Now it's still bad news, but it's not going to cause a depression now.

As for unions, my understanding is that they have had to make quite a few concessions, and in bankruptcy, my understanding is that they'll have to start anew.

[clambake]

GM going bankrupt last October would have really tanked the economy. Now it's still bad news, but it's not going to cause a depression now.

As for unions, my understanding is that they have had to make quite a few concessions, and in bankruptcy, my understanding is that they'll have to start anew.

fuck off. viva doesn't have time for rational thought.

[Viva Las Espuelas]

fuck off. viva doesn't have time for rational thought.
then why was it not ok back then?

[clambake]

is this a slow day for you?

[Viva Las Espuelas]

GM going bankrupt last October would have really tanked the economy. Now it's still bad news, but it's not going to cause a depression now.

As for unions, my understanding is that they have had to make quite a few concessions, and in bankruptcy, my understanding is that they'll have to start anew.
has our economy really gotten that much better since then? why we won't be plunged into a depression now that they're filing for bankruptcy?

[FaithInOne]

has our economy really gotten that much better since then? why we won't be plunged into a depression now that they're filing for bankruptcy?

um, Obama is in office now. Everything is better. He tells us so. Literally. Regardless of continued negative economic stats, we have escaped the brink by printing stimulus moneyz that hasn't hit the people yet.

Get with the clambake program good sir.

Government will subsidize failure, the "people" will pay for it in taxes, the debts will continue to grow anyways, and life will go on. Praise allah

[coyotes_geek]

GM going bankrupt last October would have really tanked the economy. Now it's still bad news, but it's not going to cause a depression now.

As for unions, my understanding is that they have had to make quite a few concessions, and in bankruptcy, my understanding is that they'll have to start anew.

There are more unemployed people now than there were last October. There are more homes in foreclosure now than there were last October. Consumer spending is slower now than it was last October. Yet somehow it's now OK for GM to go under, but it wasn't OK in October? Please explain.

Also, GM's influence on "the economy" is horribly overstated by politicians looking to justify the billions and billions of dollars being given away. GM, a DOW component, announces they're going bankrupt, their stock is down 30%, yet the DOW is up today. The economy wrote off GM a long time ago.

[Duff McCartney]

Lest we never forget to thank the Bush administration for starting all these government bailouts of everything. It's ironic that the GOP doesn't want Obama to break with the Bush model on torture, yet when he doesn't break with the Bush cycle on loans for GM...they fry his ass.

I say good riddance to GM. A shitty car company making shitty cars deserves to go down..the same for Chrysler. If I've said it once I've said 6000 times...American cars are garbage. Period.

[baseline bum]

GM lost its right to ask taxpayers for a bailout when they eliminated thousands of American jobs so they could pay Mexicans $1 an hour 23 or 24 years ago.

[DarrinS]

GM lost its right to ask taxpayers for a bailout when they eliminated thousands of American jobs so they could pay Mexicans $1 an hour 23 or 24 years ago.


GM was being drained by the UAW and all the retirement benefits it had to pay out.


Good thing that the Obama administration is pushing for smaller, more fuel efficient vehicles that Americans don't want to buy.

[Duff McCartney]

Good thing that the Obama administration is pushing for smaller, more fuel efficient vehicles that Americans don't want to buy.

I want to buy a more fuel effecient vehicle.

If I've said it once I've said 6000 times...Americans are idiots. They don't know what's good for them and someone has to come along and force on them what is good for them. If Americans knew what was good for them...this country wouldn't have a massive obesity problem.

[braeden0613]

Well I was going to use the Pontiac G8 as an example of how American cars have gotten better, but then I remembered it was Australian. The Corvette is a good car even if the interior is a disaster. Hmmmmm

[Duff McCartney]

I was watching a documentary called Heat on frontline.org...a PBS website. Basically it was talking about the global warming epidemic and interviewing different sectors and debating the issue..

Anyway, they talked about the Partnership for a New Generation of Vehicles, the program started under the Clinton adminstration. The big 3 did end up with 70-80 mpg diesel/hybrid prototypes that were supposed to roll out in 01. That never happened of course.

They then go on to talk about how they all decided to abandon the program. In the mean time Toyota and Honda developed their own hybrid cars that were/are far superior than anything the big 3 have come out with. The interview with the GM executive that they interview is hilarious.

Basically she states that GM didn't bother trying to develop a hybrid because they weren't economically feasible at the time, while Toyota decided to move forward anyway and make one even if it lost money. Then the interviewer says "But now Toyota is eating your lunch"....the look on her face is priceless. But their reasoning is just ridiculous.

Like I said...I'm glad GM is going to the shitter..I'm glad Chrysler is too...and unless sales pick up Ford is going down as well maybe within the next year.

All in all it's a testament to their stupid business practices and no foresight on the part of their executives as well the greed of their corrupt and shiftless unions.

[Viva Las Espuelas]

Good thing that the Obama administration is pushing for smaller, more fuel efficient vehicles that Americans don't want to buy.

you know i was thinking about that. what about all the 18 wheelers bringing our food, building materials, silly windmills, etc going to do. will those be excluded? i'm sure you could kill a small horse with the exhaust that comes out of those in one day. if so, will the cut in emissions from these wind up cars be thrown off by the 18 wheelers?

kyoto treaty, anyone?

this administration takes us all for fools yet many defend them.

[ChumpDumper]

kyoto treaty, anyone?The US is not bound by the provisions of the Kyoto treaty.

[Duff McCartney]

you know i was thinking about that. what about all the 18 wheelers bringing our food, building materials, silly windmills, etc going to do. will those be excluded? i'm sure you could kill a small horse with the exhaust that comes out of those in one day. if so, will the cut in emissions from these wind up cars be thrown off by the 18 wheelers?

Even if they are excluded...which I'm pretty sure they are...how would it be thrown off by 18 wheelers? Cars emitting emissions now + 18 wheelers now = lots of carbon.....cars emitting less emissions in the future + 18 wheelers now = less carbon.

I don't get what you're asking...unless you are saying that there will be more 18 wheelers in the future.

[Viva Las Espuelas]

The US is not bound by the provisions of the Kyoto treaty.
i know this. clinton didn't ratify it.

[Viva Las Espuelas]

Even if they are excluded...which I'm pretty sure they are...how would it be thrown off by 18 wheelers? Cars emitting emissions now + 18 wheelers now = lots of carbon.....cars emitting less emissions in the future + 18 wheelers now = less carbon.

I don't get what you're asking...unless you are saying that there will be more 18 wheelers in the future.that's why i referenced kyoto treaty 'cause it restricted one country while others did whatever in the hell they want. it's really not that hard to parellel

[clambake]

so.....your answer would just be "fuck it"?

[ChumpDumper]

i know this. clinton didn't ratify it.Presidents don't ratify treaties.

[DarrinS]

I want to buy a more fuel effecient vehicle.

If I've said it once I've said 6000 times...Americans are idiots. They don't know what's good for them and someone has to come along and force on them what is good for them. If Americans knew what was good for them...this country wouldn't have a massive obesity problem.

:wow


Wow, maybe a benevolent dictator can tell us what to drive and what to eat.

WTF

[Extra Stout]

If I've said it once I've said 6000 times...Americans are idiots. They don't know what's good for them and someone has to come along and force on them what is good for them.
Thanks for your contribution, Generalisimo.

[Viva Las Espuelas]

Presidents don't ratify treaties.
he didn't sign off on it. sorry.

[ChumpDumper]

he didn't sign off on it. sorry.The US is indeed a signatory to the Kyoto Treaty.

[Viva Las Espuelas]

The US is indeed a signatory to the Kyoto Treaty.
but it's not ratified, handjob. we don't follow it. it's null. it's comparable to ass wipe at this point. now you understand what i meant, spoonfed.

[Duff McCartney]

:wow


Wow, maybe a benevolent dictator can tell us what to drive and what to eat.

WTF

Yeah sure.....making people drive fuel effecient cars and not allowing people to become obese is soooo bad.

Why don't people want to drive fuel effecient cars? Cause they don't give a fuck that's why ...and why do people become so obese and stuff their faces at buffett lines? Because they don't give a fuck..and because our entire social/political/economical whatever system is set up so that A) People are allowed not to give a fuck about anything other than themselves and B) everything is set up to make it easier for them not to...don't give a fuck about your body we have buffetts on every corner...don't give a fuck about driving a fuel effecient car...we have 8 MPG SUVs for you and your obesity.

I don't think it's any surprise that SUVs became so popular in the United States and at the same time obesity has surged.

[SnakeBoy]

If we'd just paint everyones roofs white we wouldn't have to worry about what kind of cars we drive.

[FaithInOne]

I want to buy a more fuel effecient vehicle.

If I've said it once I've said 6000 times...Americans are idiots. They don't know what's good for them and someone has to come along and force on them what is good for them. If Americans knew what was good for them...this country wouldn't have a massive obesity problem.

Guess what friend. I will never be driving a hybrid or little car. Never.

I will own a truck jeep and a bike for the rest of my life. Does that make you angry that you and your government cannot control my life? Are you saddened that I cannot be swayed by government controlled hysteria?

It's a great idea to allow a certain group of people who rely on these American Idiots {see yourself} to gain power and exercise that power over all others :shootme


P.S. I'm on a 2800 Calorie cutting diet comprised of clean unprocessed food with a macronutrient ratio of 40P/40C/20F. :toast

[Duff McCartney]

Guess what friend. I will never be driving a hybrid or little car. Never.

I will own a truck jeep and a bike for the rest of my life. Does that make you angry that you and your government cannot control my life? Are you saddened that I cannot be swayed by government controlled hysteria?

No I'm not angry or sad. You don't matter. Who are you? Nobody. Just another idiot.

I personally shouldn't give a damn about the enviornment but I do..but I really believe that humanity matters very little in the entire totality of time and space. In the ever expanding universe and the billions of years of existence of time we are but a fraction of a fraction of a fraction of a percent of anything.

So I don't really care what you drive. Personally I would never buy an american car..nor buy a truck/jeep. I do go offroading I'm not a farmer nor I do I have a small penis that I feel the need to buy a gigantic 4x4.

[FaithInOne]

but I really believe that humanity matters very little in the entire totality of time and space. In the ever expanding universe and the billions of years of existence of time we are but a fraction of a fraction of a fraction of a percent of anything.


haha to be honest I have felt the same thing. However we are not some omnipotent observer in the sky that gets to sit back and watch everything unfold. We are the particles of dust, so we might as well work to obtain the few things that make the short time worth it.

It's the design's sense of humor that allows us to comprehend the big picture :downspin:

[Duff McCartney]

haha to be honest I have felt the same thing. However we are not some omnipotent observer in the sky that gets to sit back and watch everything unfold. We are the particles of dust, so we might as well work to obtain the few things that make the short time worth it.

It's the design's sense of humor that allows us to comprehend the big picture :downspin:

You're right...and one of the few things I'm doing is caring about the enviornment. And also not buying shitty cars.

Regardless....as I've said before I don't care what you do. In ten thousand years...hell in maybe 100 years nobody is going to care what you did nor even remember you..nor what I did or remember me. So I don't know why you would ask if it pisses me off or makes me sad. It doesn't.

[Extra Stout]

Yeah sure.....making people drive fuel effecient cars and not allowing people to become obese is soooo bad.
The fallacy of authoritarianism is that while the putative dictator is largely correct in observing that most other people are idiots, he fails to discern what that implies about himself.

[Viva Las Espuelas]

If we'd just paint everyones roofs white we wouldn't have to worry about what kind of cars we drive.
also remember them there tire gauges.

[Duff McCartney]

The fallacy of authoritarianism is that while the putative dictator is largely correct in observing that most other people are idiots, he fails to discern what that implies about himself.

I agree. The fact is I don't want to be a dictator/authoritarian. In my mind...people should be told/forced to do what is good for the whole community/earth or whatever. But it'll never happen.

Personally I wouldn't care about it so much...save for a few personal freedoms I'm not that in love with my posessions. If tomorrow they passed a law that no one is allowed to buy guns...it wouldn't bother me in the least. If they said you couldn't own more than one tv...I wouldn't care...if I was forced to drive a Prius...I'd welcome it with open arms.

[Viva Las Espuelas]

I agree. The fact is I don't want to be a dictator/authoritarian. In my mind...people should be told/forced to do what is good for the whole community/earth or whatever. But it'll never happen.

Personally I wouldn't care about it so much...save for a few personal freedoms I'm not that in love with my posessions. If tomorrow they passed a law that no one is allowed to buy guns...it wouldn't bother me in the least. If they said you couldn't own more than one tv...I wouldn't care...if I was forced to drive a Prius...I'd welcome it with open arms.
man, you've got the vaseline ready for it, don't you. way to follow :tu

[txallstar]

gm blows, chrysler blows. us had a chance to kill off a weak brand (chrysler/dodge) long ago set the example and the stage and now it didnt.
one example - the lame crossfire built on 97-2001 clk platforms, nice job.

gm spending money on 8 different brands when should have just focused on cadillac and chevy. gm's bullshit philosophy of painting an orange 8 different colors and calling it something else. it's still an orange

the prius is selling like crazy and toyota is stepping up production so i think most americans know what they want.

the same hybrid technology gm shunned at years ago, built bigger and more suvs and told every one it wasnt the answer mean while toyota and honda put down billions on it and now look, american auto industry started rushing these cars out like crazy

[sabar]

I agree. The fact is I don't want to be a dictator/authoritarian. In my mind...people should be told/forced to do what is good for the whole community/earth or whatever. But it'll never happen.

Personally I wouldn't care about it so much...save for a few personal freedoms I'm not that in love with my posessions. If tomorrow they passed a law that no one is allowed to buy guns...it wouldn't bother me in the least. If they said you couldn't own more than one tv...I wouldn't care...if I was forced to drive a Prius...I'd welcome it with open arms.

A picture is worth a thousand words.

http://upload.wikimedia.org/wikipedia/commons/thumb/f/f7/Italian_Fascist_flag_1930s-1940s.svg/220px-Italian_Fascist_flag_1930s-1940s.svg.png

http://upload.wikimedia.org/wikipedia/commons/thumb/2/2f/Flag_of_Germany_1933.svg/200px-Flag_of_Germany_1933.svg.png

http://upload.wikimedia.org/wikipedia/en/thumb/c/c3/1984first.jpg/200px-1984first.jpg

http://upload.wikimedia.org/wikipedia/en/thumb/6/67/Mussolini_biografia.jpg/225px-Mussolini_biografia.jpg

http://upload.wikimedia.org/wikipedia/commons/thumb/7/7e/Hammer_and_sickle.svg/150px-Hammer_and_sickle.svg.png

http://upload.wikimedia.org/wikipedia/en/thumb/6/62/BraveNewWorld_FirstEdition.jpg/200px-BraveNewWorld_FirstEdition.jpg

[FaithInOne]

I guess I can go ahead and lose all hope Jeeps will ever come with V8s/Diesels off the line :lmao

GM 1/2 Tons were suppose to start coming out with 4.6L Diesels. Damn it!!!!:depressed

[antimvp]

don't fret^


http://www.truckcampermagazine.com/index.php?option=com_content&task=view&id=761&Itemid=34

[Extra Stout]

I would like to nominate Duff as the archetypical representative of his generation: sullen, nihilistic, lethargic, apathetic, and ready to throw away every good thing this country ever had for a pocketful of trinkets.

[DPG21920]

http://news.yahoo.com/s/ap/us_obama_gm

[MannyIsGod]

I would like to nominate Duff as the archetypical representative of his generation: sullen, nihilistic, lethargic, apathetic, and ready to throw away every good thing this country ever had for a pocketful of trinkets.


Fuck you. Unless you let me nominate Yoni as the rep of yours.

[PixelPusher]

I would like to nominate Duff as the archetypical representative of his generation: sullen, nihilistic, lethargic, apathetic, and ready to throw away every good thing this country ever had for a pocketful of trinkets.

stereotyping a whole generation based on it's worst representative is fun!

(handpicked for you, ES)
http://buzznewsroom.com/wp-content/uploads/2008/12/sarah-palin.jpg

[Viva Las Espuelas]

I would like to nominate Duff as the archetypical representative of his generation: sullen, nihilistic, lethargic, apathetic, and ready to throw away every good thing this country ever had for a pocketful of trinkets.
i second that. looks like you've pissed off his generation. :wakeup

[MannyIsGod]

Better yet, you let me nominate Viva as the representative of yours. You and him share the same thirst for knowledge; don't you agree ES?

[Viva Las Espuelas]

so will an idiotic czar be appointed to "overlook" this now?

[Viva Las Espuelas]

don't look now, but i think i see a glimpse of capitalism. GO FORD!!!
-----------------------------------------------------------------

DETROIT -- Ford Motor (http://online.wsj.com/public/quotes/main.html?type=djn&symbol=f) Co. is preparing an effort to gain market share while its two main rivals are bogged down in bankruptcy and restructuring.
Ford, the only one of Detroit's Big Three that didn't need a bailout from the federal government, plans to increase production of cars and trucks in the third quarter by about 10% from the level of a year ago, a company official said. It will be Ford's first significant production increase in almost two years.
In contrast, General Motors (http://online.wsj.com/public/quotes/main.html?type=djn&symbol=GM) Corp., which is expected to file for Chapter 11 protection Monday, and Chrysler LLC, which is nearing the end of its bankruptcy reorganization, are planning to shut down their plants for nearly all of the third quarter. The difference in production plans will give Ford a chance to push sales through the prime summer selling months while GM and Chrysler focus on their internal issues.
"This is a once-in-a-lifetime opportunity to separate us from our other domestic competitors," said a person familiar with the matter at Ford. "No one is going to gift-wrap it for us. You have to deliver the product people want to buy. That said, you have to take this historic opportunity to grab market share."
Ford has seen a gain in retail market share in six of the past seven months and expects to see another boost when May auto sales are reported Tuesday. As of April 30, Ford's U.S. market share was 13%, according to the company.
In the third quarter, Ford plans to produce 150,000 cars and 310,000 trucks for a total of 460,000 vehicles, according to company officials. A year ago it built 184,000 cars and 234,000 trucks for a total of 418,000. The bulk of the increase stems from high production of the company's highly profitable F-150 pickup trucks.
The move represents a gamble, however. Gas prices have been creeping higher in recent weeks, topping $3 a gallon in some parts of the country. Further gas-price increases could damp F-150 sales, and a worsening of the overall economy could slow sales of both cars and trucks. If either happens, Ford could end up with elevated inventory levels later in the year.
The truck market "is still going to be a challenge," said Michael Maroone, president and chief operating officer of AutoNation Inc., the largest chain of car dealerships in the U.S. and the largest Ford dealer by volume and locations.
Ford executives played down the notion the company is trying to take advantage of the troubles of GM and Chrysler. "I feel for my competitors. It's got to be very, very difficult," Mark Fields, Ford's president of the Americas, said Sunday. "This is not a case of 'Gee, let's stick it to them.' We have been watching our inventory levels and we've seen our market share grow. This is really just us working our plan."
Like most other auto makers, Ford is still losing money -- it lost $1.4 billion in the first quarter -- but it has been faring better than GM and Chrysler, in part because it borrowed $23.5 billion in 2006, before credit markets started to freeze up, and was quicker to sell some of its fringe brands. As a result, Ford had a larger cash cushion. Recently it also raised $1.6 billion in a common-stock offering.
Ramping up production can be seen as evidence of Ford's cautious but growing confidence in the state of the U.S. auto market, which saw one of the most severe downturns in its history last year and may now be poised for a rebound.
"We're starting to see the light nearing at the end of the tunnel," Mr. Fields said.
Ford's production increase also raises the prospect that the Dearborn, Mich., auto maker could surpass GM in North American production this year, something that hasn't happened in decades, according to IHS Global Insight, a forecasting firm.

[DarkReign]

don't look now, but i think i see a glimpse of capitalism. GO FORD!!!

Hey, look at that!

Someone actually pointed out a positive in all this.

Ford hasnt taken $1 from the public trust. Theyre going to steamroll the market if Americans care at all about this country's ability to self-manufacture anything that requires engineering and metal.

[FaithInOne]

ugh. I've been raised a Chevrolet man since I was a little lad.

This transition will be hard. Any color your heart desires as long as it's black! :toast

[Bender]

who makes Smart cars.. are they GM? (no I don't want one, just wondering)

edit: never mind, google tells me it's a mercedes company...

[LnGrrrR]

so will an idiotic czar be appointed to "overlook" this now?

I'm guessing this is a dig at the cyber czar...

Do you think that a person overseeing our cyber security is stupid? Or do you think it should just be handled inhouse by the FBI and/or CIA?

[Viva Las Espuelas]

I'm guessing this is a dig at the cyber czar...

no just all the czars in general.


Do you think that a person overseeing our cyber security is stupid? Or do you think it should just be handled inhouse by the FBI and/or CIA?we have an IT dude here that takes care of our security. nothing new and/or refreshing about that. just a sign of the times.

[LnGrrrR]

no just all the czars in general.

we have an IT dude here that takes care of our security. nothing new and/or refreshing about that. just a sign of the times.

It's just a different head of security. Sure, it's a dumb name, but to me it looks like he's just putting someone in charge that can make sure the FBI and CIA are working together with the other factions of government to ensure that our cyber security is strong, and that, most importantly, all sides are communicating with one another.

From what I've seen, the government cyber security isn't too shabby. Couldn't hurt to tighten some things up though. I've seen some stuff come down recently that is a step in the right direction, but I'm only seeing it at a low level. Not sure what it looks like from up high.

[Extra Stout]

Fuck you. Unless you let me nominate Yoni as the rep of yours.
:rolleyes

No, the best representative for my generation would be the guy who believes society owes him a living.

Stop being so sensitive. Pointing out that Americans typically are fatter than people in other Western nations does not mean that you specifically are a fat cow.

[angrydude]

If they're going to let GM go bankrupt, then why, why God why, did the government have to be the one who bought it?

[Yonivore]

If they're going to let GM go bankrupt, then why, why God why, did the government have to be the one who bought it?
Obama wanted to be CEO of a big corporation and play with the company.

Well that and he wanted to make sure his UAW cronies weren't screwed in bankruptcy court...

[Viva Las Espuelas]

Obama wanted to be CEO of a big corporation and play with the company.


be careful there, yoni. you're flirting with godwin's law there...............

[Yonivore]

be careful there, yoni. you're flirting with godwin's law there...............
No, see...it is your statement that is advancing Godwin's Law.

[Viva Las Espuelas]

No, see...it is your statement that is advancing Godwin's Law.
just so you know.

[Yonivore]

just so you know.
Oh, I know.

[Viva Las Espuelas]

GM deals Hummer to Chinese buyer

Bankrupt automaker won't disclose details of deal to sell truck line, but source identifies buyer as Sichuan Tengzhong.

By Aaron Smith, CNNMoney.com staff writer
Last Updated: June 2, 2009: 12:49 PM ET

NEW YORK (CNNMoney.com) -- General Motors Corp. has signed a deal to sell its Hummer truck unit to a Chinese industrial company, a person with knowledge of the deal said Tuesday.
The news comes a day after GM (GMGMQ (http://money.cnn.com/quote/quote.html?symb=GMGMQ&source=story_quote_link)) filed for bankruptcy in New York. The company did not identify the buyer nor name a price, saying only that the deal would close by the end of September.
But a source identified the buyer as Sichuan Tengzhong Heavy Industrial Machinery Company Ltd. in China.
As part of the deal, some GM plants will continue to build the Hummer brand for the new owner, at least for awhile. The company said its Shreveport, La., plant will keep building Hummers for the new owner until at least 2010.
"I'm confident that Hummer will thrive globally under its new ownership," said Troy Clarke, president of GM North America, in a press release. "And for GM, this sale continues to accelerate the reinvention of GM into a leaner, more focused, and more cost-competitive automaker."
GM also said that the deal should protect more than 3,000 jobs in manufacturing and engineering, and at dealerships "around the country."
The Hummer and other large vehicles have been a drag on the U.S. auto industry since fuel prices spiked in 2008 and the recession deepened.
GM said it sold 5,013 Hummers worldwide in the first quarter, down 62% from the 13,050 that it sold in the same period the prior year.
Hummer isn't the only brand that GM is leaving behind. The automaker will also shed its Pontiac, Saturn and Saab brands and cut loose more than 2,000 of its 6,000 U.S. dealerships by next year.
That could result in more than 100,000 additional job losses if those dealerships are forced to close.
GM filed for bankruptcy (http://money.cnn.com/2009/06/01/news/companies/gm_bankruptcy/index.htm?postversion=2009060204) hours after Chrysler's bankruptcy process cleared a hurdle when a federal judge approved its asset sale (http://money.cnn.com/2009/06/01/news/companies/chrysler_bankruptcy/index.htm?postversion=2009060113).
The GM bankruptcy was hailed by President Obama, who wants a complete overhaul of the U.S. auto industry, even though the Chapter 11 filing is expected to result in the loss of 20,000 jobs and the closure of a dozen facilities.
Citigroup (C (http://money.cnn.com/quote/quote.html?symb=C&source=story_quote_link), Fortune 500 (http://money.cnn.com/magazines/fortune/fortune500/2009/snapshots/2927.html?source=story_f500_link)) was financial adviser in GM's Hummer deal.

[Trainwreck2100]

I'll give em 5 bucks for Saturn

[jacobdrj]

I am very happy that they finally got it done. I just hope they didn't do it too late.

[DarkReign]

As a supplier to these companies, it is in fact, too late.

[CubanMustGo]

Hey, look at that!

Someone actually pointed out a positive in all this.

Ford hasnt taken $1 from the public trust. Theyre going to steamroll the market if Americans care at all about this country's ability to self-manufacture anything that requires engineering and metal.

The other positive: I got a bunch of F for $1.70 or so. :king

[DarrinS]

No I'm not angry or sad. You don't matter. Who are you? Nobody. Just another idiot.

I personally shouldn't give a damn about the enviornment but I do..but I really believe that humanity matters very little in the entire totality of time and space. In the ever expanding universe and the billions of years of existence of time we are but a fraction of a fraction of a fraction of a percent of anything.



But you probably believe that the 3% that humans contribute to the already minuscule amount of carbon dioxide in the atmosphere (0.038% :wow) is killing the planet.




So I don't really care what you drive. Personally I would never buy an american car..nor buy a truck/jeep. I do go offroading I'm not a farmer nor I do I have a small penis that I feel the need to buy a gigantic 4x4.


I don't drive a large vehicle, but I don't think anyone has the right to tell another what he/she can drive. If someone wants to drive a 1 mpg land yacht, that is their business.

[Wild Cobra]

I don't drive a large vehicle, but I don't think anyone has the right to tell another what he/she can drive. If someone wants to drive a 1 mpg land yacht, that is their business.
I agree. The only thing I don't like, is I cannot see the traffic in front of them. Makes me want to buy an SUV also, so I can see through their windows, to traffic ahead.

[DarrinS]

I agree. The only thing I don't like, is I cannot see the traffic in front of them. Makes me want to buy an SUV also, so I can see through their windows, to traffic ahead.


I would be nice to have a higher seating position. Not to mention the fact that you are at least on a level playing field, safety wise, if you have a larger vehicle. That damn "smart" car might was well be a coffin on wheels in Texas.

[coyotes_geek]

CG: Now Congress wants to get involved in dealership closings. Another reason why this whole government owned auto industry mess is a bad idea.

***********************

WASHINGTON (Reuters) – General Motors Corp and Chrysler LLC, both bankrupt, will try on Wednesday to ease congressional concern, and in some cases anger, over their plans to slash more than 2,400 dealerships.

Members of the Senate Commerce Committee plan to grill GM Chief Executive Fritz Henderson and Chrysler President Jim Press about the lone aspect of restructuring that has triggered a broad response from Congress since dealers are nationwide.

"Rapid dealer reductions increase unemployment, threaten communities and decrease state and local tax revenue without any material corresponding decrease in an automaker's costs," said John McEleney, chairman of the National Automobile Dealers Association who sells vehicles made by GM, Toyota Motor Corp and Hyundai Motor Co in Iowa.

At risk are dealers at both companies that employ more than 100,000 people, industry estimates show.

In his testimony, McEleney will emphasize the need for government to provide new financing to Chrysler so the company can buy back unsold inventory, parts and other assets, and give dealers more time to close their businesses.

Press told Congress last month in a letter the company would help dealerships losing their franchise agreements beyond the deadline set by the company. Chrysler plans to shut 789 showrooms, about 25 percent of its dealers, by June 9.

On Monday, a bankruptcy court judge in New York approved the sale of substantially all of Chrysler's assets to a group led by Italy's Fiat despite objections from dealers and other groups that Chrysler was moving too fast.

The court must still approve Chrysler's dealership strategy.

Chrysler, which is close to stepping out of court protection, would not comment on Press's testimony ahead of the hearing.

Henderson, who steered GM into bankruptcy on Monday, plans to contrast his plan as a softer landing for dealers not part of GM's future.

GM wants to cut 1,100 of its smaller and least profitable dealerships and will lose another 470 by cutting its Saab, Saturn and Hummer brands.

GM expects to offer an agreement to those businesses slated for closure to wind down their operations in orderly fashion over the next 18 months.

GM plans to end up with about 3,600 showrooms.

That plan must also be approved by the judge overseeing GM's bankruptcy.

More than three dozen lawmakers in both the House of Representatives and Senate have asked the Obama administration to intervene on behalf of dealerships.

The U.S. government will own 60 percent of GM and 8 percent of Chrysler once their restructurings are complete. Both will be privately held for the foreseeable future.

Additional help for dealers beyond government money intended to help them finance floorplans is not out of the question, according to Sen. Carl Levin of Michigan.

"There may be a remedy that has not been considered yet," Levin told reporters.

However, Levin said a legislative solution was unlikely.

(Editing Bernard Orr)

http://news.yahoo.com/s/nm/20090603/bs_nm/us_autos_dealers_3

[Viva Las Espuelas]

The year was 1902. Two teenage girls, frightened and caked with dust, were taking their first ride in an automobile.

The car was a long-forgotten French brand: Panhard. It was loud, and it sputtered as it chugged along a dirt road in Flint, Mich.
One of the girls taking that joy ride was Margery Durant, whose millionaire father was the nation's most successful seller of carriages — and no fan of the horseless variety.

William Crapo Durant scolded his daughter, who had taken the ride without his knowledge. In his view, automobiles "were noisy, dangerous contraptions that disturbed tranquility and frightened horses," wrote biographer Lawrence R. Gustin.

Durant's journey from pessimist to industry patriarch boils down to one thing, said Gustin,
"He wasn't a car guy, but the self-seller — something that can sell itself — was a big thing to him. He saw this as something that he could sell," said Gustin.
That self-seller was a vehicle that hit the roads in 1904. Its name: Buick.

Road carts
Durant had a talent for finding hit products. The first was in 1886. The Flint, Mich., resident was late for work one day and accepted a ride in a Coldwater road cart, a two-wheel horse cart with an innovative suspension system. Durant was so impressed with the cart's performance that he borrowed $2,000 from a bank, went into partnership with his friend Josiah Dallas Dort and bought the Coldwater operation for $1,500.
Using his new Flint Road Cart Co. — later renamed Durant-Dort Carriage Co. — as a base, Durant built (up) his carriage business. He did so by acquiring key suppliers and snapping up other cart companies, Gustin said.
"They didn't just have one road cart; they had carriages for different levels of the market," Gustin told Automotive News.
"They always competed well on price, and they could do that because they had created their own consolidation of all these different industries. They bought their own axle company, their own wheel company and their own top company, linseed oil and varnish companies."

Buick gets a champion
Durant was a brilliant salesman, but he was easily bored. With his company at the top of the carriage business, he left Flint to play the stock market in New York.
He agreed to come back to Flint after a rival cart company, Flint Wagon Works, enlisted him to manage its latest acquisition: the debt-ridden Buick Motor Co., which started building engines in 1903 and branched into automobiles the next year.
Re-energized, Durant went to work in late 1904. He negotiated relief from Buick's creditors; moved vehicle assembly from a one-story building in Flint to a more spacious site in Jackson, Mich.; and in January 1905 went to an auto show in New York and took orders for 1,108 vehicles. At that point, the factory had produced only 37, Gustin said.
Durant later set his mind to building the world's largest automobile assembly plant, and he did so in Flint. He persuaded suppliers, notably axle maker Charles Stewart Mott, to build near the massive Buick complex.
By the end of 1907, Buick had become the nation's second-largest automaker, behind Ford.
But Durant's biggest adventure lay ahead.

Morgan's concept
Historians trace the idea for what eventually became (Durant's future company) to banking giant J.P. Morgan & Co.
Morgan, writes historian Pelfry, was backing an automaking venture named Maxwell-Briscoe. Morgan sent one of the company's principals, Benjamin Briscoe, to investigate a major consolidation of automakers. It would be similar to the consolidation that formed U.S. Steel. Its working name: International Motor Car Co.
Briscoe called Billy Durant first. Eventually, Henry Ford and Ransom Olds, founder of Oldsmobile and then head of Reo Motor Car Co., joined the talks. But negotiations collapsed when Ford and Olds demanded cash instead of stock in the new venture.
Durant wasn't ready to give up.


"Durant said: 'I like this idea of consolidation. I'm going to do it anyway,' " said Gustin. "I think he saw it as an extension of what he'd done in the carriage business."
By then, Durant already had his eye on a company he would add to the stable along with Buick: Olds Motor Works, the struggling maker of the Oldsmobile in Lansing, Mich.
The plan in place, Durant needed a name. International Motor Car Co. was no longer available. Durant's lawyers suggested an alternative: General Motors Co.
GM was incorporated on Sept. 16, 1908. Within two months, it acquired Buick and Oldsmobile.
The road ahead would be bumpy for Durant, but in his unpublished autobiography, as quoted by Pelfrey, he clearly saw the implications of what he had created.

"I had made the first step; the responsibility was mine and it was up to me to make good," Durant wrote. "My experience and success with Buick gave me the idea. I figured if I could acquire a few more companies like Buick, I would have control of the greatest industry in this country."

http://www.autonews.com/article/20080914/ANA03/809150384/1215/gm

-----------------------------------------------------------------------

oh, how time flies.

[FaithInOne]

It's funny how ppl always group the small penis with the huge 4x4.

It's true 85% of the ppl that drive huge trucks/4x4s are douchebags who throw all their money into their truck and have nothing else to their name, but one has to admit a lifted vehicle does look better than a stock truck/suv/jeep/etc. Look at most stock trucks. They have weak suspension as is and usually droop in the front by 2 inches. They are on 29 inch tires! That's not a rugged vehicle. That's a watered down big version of a honda accord. The consumer has to put a lot of bullshit money into these trucks/suvs/jeeps to make them fun. 30k for a Jeep rubicon and it comes with 32" tires and a 3.8 V6 MINIVAN engine. WTF??????????????????????????????????????????????

Fast cars, sports cars, cars in general do nothing for me. I have never gone above 80mph LOL.

[Viva Las Espuelas]

GM to provide $2 billion cash for Delphi buyout
Fri Jun 5, 2009 7:01pm EDT

DETROIT (Reuters) - General Motors Corp said on Friday it would provide $2 billion cash plus credit to support private equity firm Platinum Equity's buyout of its bankrupt former parts unit, Delphi Corp.
GM, which filed for bankruptcy on Monday, said it would acquire a Class A interest in the new company for the cash. Platinum Equity would put in $250 million cash for a Class B interest and Delphi would acquire Class C interests on behalf of junior bankruptcy financing lenders that forgive some debt.
GM and Platinum also have agreed to establish a secured term loan for the new company, with GM providing $500 million and Platinum $250 million, the automaker said in a filing with the U.S. Securities and Exchange Commission.
On Monday, Delphi said it reached a deal to sell most of its global operations to Platinum Equity, including its headquarters in Troy, Michigan, and five of its operations back to GM. Other assets would be sold or closed.
At that time, Delphi said it had emergence capital and capital commitments totaling $3.6 billion, but did not provide details. Delphi hopes to complete the deal by the end of July.
The deal could provide a final resolution for Delphi, which filed for bankruptcy in October 2005. A previous Delphi plan to emerge from bankruptcy protection in April 2007 fell through.
Supply agreements between GM and Delphi will be carried through to the end of related product programs, GM said. GM also said it would provide financing to support Delphi's operations, while the deal is completed.
The automaker said it would pay or take over $600 million of Delphi's senior debtor-in-possession credit facility, $300 million of its junior facility and $200 million of other obligations to be shared with the new company.
GM said it would waive $1.6 billion of pension costs that had been transferred from Delphi and $300 million of administrative claims when the transactions are completed.
GM also agreed to provide Delphi with a $250 million credit facility that will be waived if the deals are completed.
The plans require U.S. bankruptcy court approval.
The case is In re Delphi Corp, U.S. Bankruptcy Court, Southern District of New York, No. 05-44481

----------------------------------------------------------------------

thoughts?
i'm not familiar with bankruptcy procedures, but is it normal or within the letter of law for bankruptcy to bailout other failing companies?

[coyotes_geek]

It's not normal, but there is a unique twist here because GM and Delphi are joined at the hip. GM created Delphi by spinning them off back in the 90s. As part of the deal GM maintained liability for the pension/retiree benefits for all the workers who were going to become Delphi employees. Benefits which now amount to a huge liability.

Basically what's happening here is the government is funneling $2 billion of taxpayer money through GM to bribe a hedge fund into taking over responsibility for Delphi's union benefits.

[Viva Las Espuelas]

It's not normal, but there is a unique twist here because GM and Delphi are joined at the hip. GM created Delphi by spinning them off back in the 90s. As part of the deal GM maintained liability for the pension/retiree benefits for all the workers who were going to become Delphi employees. Benefits which now amount to a huge liability.

Basically what's happening here is the government is funneling $2 billion of taxpayer money through GM to bribe a hedge fund into taking over responsibility for Delphi's union benefits.
so basically it's laundering

[coyotes_geek]

so basically it's laundering

That's what it looks like to me, but it's possible I'm just more cynical than most.

[Viva Las Espuelas]

......... I'm just more cynical than most.
when it comes to jackasses in government there's no such thing


..............i liked how much publicity this news got.

[Crookshanks]

Viva - that article you posted about the beginnings of General Motors in Flint, Michigan made me sad. I grew up in Flint and my father worked for AC Spark Plug for 43 years.

As a child, we took tours of the original location of the Durant Carriage Company and the automobile museum that had cars all the way back to the original "carriages". The name Mott was a big one in Flint and I remember driving past his estate many, many times.

It's so sad what has happened to Flint. My dad said about the only thing in downtown Flint now is the huge branch of U of M. My dad doesn't even go into Flint anymore because he says it's so depressing to see all the factories where he worked torn down and nothing left but empty lots. It's just so sad...

[coyotes_geek]

..............i liked how much publicity this news got.

Another auto-related story not getting any publicity is how the hedge fund that owned Chrysler gets to just walk away from the whole mess without having to put in so much of a penny, yet the taxpayers are on the hook for $8 billion.

[SnakeBoy]

Makes me want to buy an SUV also,

Well you should wait until you can get a tax break for buying this 4x4 badboy...

http://digiads.com.au/car-news/images/2008/02/article_12283-img_0.jpg

[Winehole23]

^^^Vulture!

[jman3000]

Ed Whitacre, the new chairman, has SA connections. He still lives in SA and most probably already know he was the ex CEO of ATT.

If he had stayed ATT would have never defected to Oklahoma South.

[ChumpDumper]

Ed Whitacre, the new chairman, has SA connections. He still lives in SA and most probably already know he was the ex CEO of ATT.

If he had stayed ATT would have never defected to Oklahoma South.Richers don't like plane transfers.

[coyotes_geek]

Senators seek answers on U.S. stakes in GM and Chrysler

WASHINGTON (Reuters) – The Obama administration must provide a clear explanation to Congress of how it plans to extricate the government from ownership stakes in General Motors Corp and Chrysler Group LLC, Senate Banking Committee leaders said on Wednesday.

"My hope is whatever we like or dislike about the present configuration, I want to see us get out of this business as quickly as we can," Christopher Dodd, the panel's Democratic chairman, said at a hearing.

Richard Shelby, the committee's top Republican, asked whether taxpayers will make money and if nearly $20 billion in government writeoffs of GM debt so far foreshadow more losses.

Dodd and Shelby's comments represent the first formal public questioning of the administration's rescue of GM and Chrysler.

The U.S. government has taken an 8 percent stake in Chrysler, which is exiting Chapter 11 in an alliance with Italy's Fiat SpA, and a 60 percent investment in GM, which entered Chapter 11 on June 1.

Government aid dedicated to Chrysler totals more than $12 billion while GM has received $50 billion. Billions more in taxpayer funds have been spent to help for affiliated finance companies and suppliers.

Ron Bloom, a senior member of the administration's auto task force responsible for overhauling the companies, said there will be no specific blueprint for shedding ownership because such a strategy could disrupt markets.

"There is no perfect system. It is our judgment at this point that a prearranged time schedule will create more problems than it solves," he told lawmakers.

Bloom said President Barack Obama wants to get out of the auto business "as soon as practicable" but not before GM and Chrysler can demonstrate viability. An exit plan will depend on how GM and Chrysler perform as well as overall economic factors and industry sales.

While there is no guarantee that both automakers will fully repay the government, Bloom said there were "reasonable scenarios" in which taxpayers could recover a substantial portion of their investment down the road.

[B]Senator Jim Bunning said that for taxpayers to break even on GM, its market capitalization would have to reach $70 billion or 15 percent higher than its all-time high at the height of the sport utility sales boom of the late 1990s and first half of this decade.

"It seems pretty clear to me that taxpayers will never get back their money," said Bunning, a Republican from Kentucky.

Bloom said GM's capital structure will be conservative once it is out of bankruptcy, with more room for equity and fewer deductions for debt and other liabilities.

(Reporting by John Crawley, Karey Wutkowski and Mari Saito, editing by Gerald E. McCormick and Tim Dobbyn)

http://news.yahoo.com/s/nm/20090610/pl_nm/us_autos_congress_3