Shortly after the new company emerges from bankruptcy: the U.S. government (currently the owner of GoodGM) would issue an initial public offering (IPO) it would become a public company much like the current General Motors though the current GM stock would be canceled in bankruptcy Most of the money raised from the investment of the new company would likely go to the VEBA (Voluntary Employees' Beneficiary Association) fund for the UAW (United Auto Workers).”
Good Vs. Bad GM When or if the dividing of the GoodGM and BadGM takes place certain assets and liabilities: such as retiree health care and nearly $28 billion in bond debt could stay in bankruptcy for an extended period be liquidated or haggled over by creditors. This could create a huge uproar if not managed in the proper manner.
What to do about Bondholders There is talk about GM planning to unveil a new offer to bondholders than it proposed originally. In the new offer there would be as little as 20 percent of GM's equity, versus the previous offer of 8 cents on the dollar 16 cents of new debt and up to 90 percent of GM's equity This development makes us think that a bankruptcy is more likely
In Regards to the United Auto Workers Expecting there to be stricter terms for the UAW as well GM had reportedly proposed last month that the UAW would accept: $10 billion in preferred stock, this would have a 9 percent interest rate $10 billion in cash received over the next 20 years, considered to be payments towards a union run retiree health care trust GM has a tough road ahead of them
GM’s Issues & Problems that Need to be Addressed HUMMER High price of the truck Low MPGs Low sales
Saturn Was a unique car company. Turn into a Chevy with different badges. “As of February 17, 2009 that Saturn will remain in operation through the end of the planned lifecycle for all Saturn products (2010-11). In the interim, should Saturn retailers as a group or other investors present a plan that would allow a spin off or sale of Saturn Distribution Corporation, GM would be open to any such possibilities.” CEO Rick Wagoner.
Volt The volt is a new kind of car for GM, it is a hybrid car that you can plug in and charge the batteries. With the batteries charge the car can drive for 40 miles without using any fuel. Price too high Can see the savings
Can see the savings For example the Chevrolet Tahoe has a hybrid option and the sticker price for that truck is over $51,000 and the non hybrid starts at $37,000.That’s 7,000 gallons of fuel (at $2 per gallon) you will have to save to cover the added cost of the hybrid model. If you get 20 miles per gallon of gasoline you have to drive 140,000 miles to use up the 7,000 gallons of gasoline.
Hydrogen Cars Very expensive No where to refuel the car.