GM Buys Bankruptcy For Dummies Book

GM declares bankruptcy and how your going to get the shaft.

I came across this article in the New York Times

Source

DETROIT DAILY DIRT translated it into terms the rest us can understand.

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QUESTION. Is G.M. going out of business?

ANSWER. No. G.M. is reorganizing under Chapter 11 of the United States Bankruptcy Code. The law allows companies to shed assets, restructure debt, cancel contracts and close operations that normally would have to continue running. Once they secure financing to emerge from bankruptcy, these companies are reconstituted as new legal entities.

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DETROIT DAILY DIRT TRANSLATION. Going out of business? HA! No way, they will be better off than they have in the past 20 years after all their debts are forgiven. Recent changes in the bankruptcy laws made it harder for you and I to declare bankruptcy but this one gets the corporate fast track to the tune of $172 billion.

If you or I went to court to declare bankruptcy we would have to explain to each of our debtors why we could not pay in front of a judge and then the debtor would ask the judge to make us pay...fun.

Now figure all your debts and the months it would take you to go through a bankruptcy.

Imagine how complex and convoluted the finances of a 100 year old corporation that used to be the largest employer in the country must be AND imagine that same company with piss poor board level management of finances which threw it into bankruptcy in the first place...pretty murky huh?

By all rights to be done right it should take years if not decades to resolve. I foresee this as the sloppiest chapter 11 declaration in American history.

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Should G.M. fail to successfully reorganize, it might turn to a Chapter 7 bankruptcy, which would mean liquidation, but that is not seen as likely given support from the Treasury and the Obama administration.

Q. Where will the case be heard?

A. As with Chrysler, the case will be heard in the United States Bankruptcy Court for the Southern District of New York. Judge Robert E. Gerber will preside.

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DETROIT DAILY DIRT TRANSLATION. Liquidate it how? To who? Be real, Chapter 7 is as likely to be completed as a ladder made of my poop to the moon.

No offense to the honorable Robert E. Gerber but how the hell would he even approach something like this? Introduction of the known GM assets would take years in court.

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Q. How long will this take?

A. Senior White House officials say the essence of the case should take 60 to 90 days. It plans to use Section 363 of the bankruptcy code to sell assets, rid the company of liabilities and restructure its debt, creating a new version of G.M.

Late Sunday, the bankruptcy court approved the sale of Chrysler assets to Fiat, only a month after its case began. The remaining pieces of Chrysler will remain in bankruptcy for at least several more weeks. Such quick bankruptcies are unusual. In reality, most bankruptcies take much longer. United Airlines spent more than three years under bankruptcy protection. Delphi, the auto parts supplier, has been in Chapter 11 since 2005. The bankruptcy by LTV, a steel maker, took seven years to resolve.

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DETROIT DAILY DIRT TRANSLATION. 15 to 25 years.

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Q. What happens to G.M. dealers?

A. G.M. is able under bankruptcy to cancel franchise agreements with its dealers. It has already announced plans to eliminate 1,100 dealers and may cut more. The company wants those dealers to close within 18 months. Dealers can sue to block the action, but a final decision would be up to the judge. In the meantime, G.M. will continue to provide dealers with vehicles.

GMAC, with support from the government, will provide financing for G.M. customers. It is also providing financing for Chrysler.

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DETROIT DAILY DIRT TRANSLATION. Dealers? Out of business unless they have a proven track record of selling X amount of product per year if Chapter 11 is used.

If chapter 7 is utilized all dealers are on their own, probably will switch to used vehicle sells or a new manufacturer.

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Q. What’s the biggest difference between the G.M. and Chrysler cases?

A. Chrysler had reached an agreement to sell assets to Fiat before its case began. G.M. is attempting to restructure on its own, with financing from the Treasury. It is providing G.M. with $30 billion in debtor-in-possession financing so it can operate while in bankruptcy, in addition to about $20 billion G.M. has already received. It is likely the Treasury will provide more scrutiny and guidance in the G.M. case, since such a large amount of taxpayer money is at stake.

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DETROIT DAILY DIRT TRANSLATION. GM's corporate officers collective egos would not allow them to admit to themselves and the world that they failed.

Selling assets would have been tantamount to admittance of failure in addition to the fact all the assets for lack of a better term would be considered toxic since GM had little or no worth to the private investor.

GM also went toe-to-toe with the US Government on the "we are too big to fail" defense and received $50 billion.

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Q. What happens to G.M. employees?

A. G.M. employees who are not union members do not have any job security. The company can ask a judge for an immediate pay cut for its salaried employees, and can announce job cuts and close offices, just as it can outside bankruptcy,

Contracts covering members of the United Automobile Workers union and other unions will remain in force, unless the company asks a judge to void them. However, U.A.W. members approved changes last week, and the new G.M. is expected to honor that contract.

But in bankruptcy, the company can ask for contracts to be terminated and replaced with terms it can more readily afford, and the union would have a chance to respond in court. Negotiations would take place before any cuts were imposed. Such a process could take months.

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DETROIT DAILY DIRT TRANSLATION. Attention GM employees you are hereby screwed.

If GM can squirm it's way out of ANY contractual or moral obligation to it's employees and retirees...it will.

The Union will be worth less than nothing at this point as well, what good are 20,000 members if they can't pay dues?....see ya!

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Q. Are pensions and retiree health care benefits protected?

A. The White House said Sunday that, assuming the sale goes forward, G.M. workers’ pensions and health care benefits would transfer to the new company, and remain in force.

Companies have the right under bankruptcy law to ask to terminate their pension plans. If such a request were to be made, a judge would convene a brief trial on the subject and hear both sides. If pensions were terminated, employees would still receive about a third of their benefits through financing from the federal pension agency.

A company can also eliminate retiree health care benefits for nonunion employees; they would subsequently be covered by Medicare.

The U.A.W. and G.M. agreed in 2007 to transfer responsibility for union retiree health care to a special fund, and the fund would administer those retiree benefits.

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DETROIT DAILY DIRT TRANSLATION. If GM can push its health benefit cost to US taxpayer, it will. Otherwise it will probably just cut it off regardless.

I would just consider pensions and health benefits as good as gone at this point.

P. S. Refunds on the 30 years of your life you gave to GM are not enforceable, so even though you came through with your end of the deal by giving your entire life away in 8 hour shifts to GM, they will choose to renege on their promise to you to take care of you in your golden years.

Don't believe me? Just watch.

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Q. What happens to G.M.suppliers?

A. In its bankruptcy filing, G.M. listed its 50 biggest creditors holding unsecured claims, meaning those that would have to get in line behind creditors whose debt is secured by collateral, like the company’s plants, brands and other assets. The unsecured creditors include Wilmington Trust Company, a bondholder; the U.A.W., through its health care trust; and suppliers like Delphi, Robert Bosch and Lear.

The White House said supplier contracts would remain in force, and it has created a program to provide federal help to parts makers. But in bankruptcy, supplier contracts can be canceled.

G.M. is likely to tell the court which suppliers it wants to keep doing business with, and which contracts it wants to reject. Suppliers could challenge the rejection of their contract, but most likely they would have to reach a settlement with G.M.

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DETROIT DAILY DIRT TRANSLATION. If suppliers aren't flexible enough to move sales to new clients they are as good as gone. They won't get enough money to survive without GM to continue with "business as usual" and any money the do get will take years to get and the lawyers will no doubt have their cut first.

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Q. What happens next in the bankruptcy case?

A. G.M. filed its initial paperwork with the federal bankruptcy court in New York on Monday. Next, it will ask a judge to issue a series of rulings called the first-day orders, which allow the company to keep operating. They may include authorizing the payment of routine expenses, like salaries and payments to vendors, including its lawyers, and whatever else G.M. needs to run its business. G.M., unlike Chrysler, has not halted production.

Once the case begins, a committee will also be formed that represents G.M.’s creditors.

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DETROIT DAILY DIRT TRANSLATION. The lawyers descent like maggots on a dead bison.

All officers of the GM upper management will secure their own salaries and start searching the"old boy network" to get another job. Sad part is, they will get other jobs.

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Q. Should owners of G.M. cars and trucks be concerned?

A. The federal government said it would back the warranties on vehicles bought from G.M. while it is operating in bankruptcy. So, effective Monday, warranties are underwritten by the government.

Owners of G.M. vehicles bought before Monday should expect their warranties to be honored until they expire. Owners whose vehicle warranties have run out are liable for any problems with their cars and trucks, as they are now.

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DETROIT DAILY DIRT TRANSLATION. No more concerned than those of us who own AMC Hornets should be.

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Welcome To Detroit

GM and Chrysler leave thousands of destroyed lives in their wake

Chrysler dealer closures rip at fabric of communities

Redford - At Bruce Campbell Dodge, the voice mail of owner Bruce Campbell greeted callers thusly:

"It is a thrilling Thursday here in remarkable Redford."

On a day that Campbell and 38 other Chrysler dealerships in Michigan learned they were no longer wanted by the company, the greeting may have been the only positive note.

And it wasn't just the sellers of autos who were hurting.

Communities where the dealers have been fixtures, some for more than a half century, wondered how they will fill the holes that will be left when the businesses close.

Source

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Can you hear the doors slamming America?

Did you hear that first shoe fall?

This is a signal that will reverberate with unemployment across the country.

And Why?

The PT Cruiser sold so many units that you could hardly turn your head without seeing one on the road, that was just a few short years ago.

GM was the largest automaker in the world.

How bad of a CEO/COO/Etc., do you have to be to get from prosperity to bankruptcy?

I can tell you why in one two words. I can summarize what all the analysts and commentators cannot encapsulate with hours jabbering about what if, and should of, could of, would haves....what the top 1% of executive talent could never seem to fathom.

Two words.

Incompetence and Greed.

Both words practiced ad nausea by every major auto companies' upper echelons for decades while Detroit and the country were squeezed for every dollars' worth that faulty products, lack luster design and shoddy manufacture could muster.

They sold millions of cars, MILLIONS, the US auto companies had a virtual monopoly on the automotive market for nearly a century across the entire planet and what did they accomplish?

Nothing.

No energy advances worth mention, no remarkable advances in any of the technology involved. The advent and incorporation of computers into cars did more than any automaker did to change the face of the industry.

All the auto companies did was incorporate other advances and others' inventions into a 100 year old business model that remained unchanged during that whole time.

Black ink and profit margins for shareholders were their only concerns for decades.

And now they fail.

The auto companies are falling apart at the seams and they want the very customer and employee base they took advantage of for nearly a century to pay for it.

I say let them fail.

Let incompetence and greed reap what it has sown.

The collapse of the US auto industry will be felt across the country with slow reverberations of unemployment and economic despair for decades.

But we should just take this bitter pill and get it over with.

Let new companies with forward ideals and justifiable business ethics take their place, it is economic evolution in motion and it shouldn't be stopped.




Welcome To Detroit

Why GM Is UnAmerican And I Buy A Toyota

I get a lot of ribbing, most light hearted but at other times threatening, about my choice to own and drive a Toyota.

Well here is why.

A) 3 recalls on the one new Ford I ever owned, AFTER repairs I made at my cost totaling to about 1/3 the price of the total vehicle because of poor, untested design and overall crappy manufacture.

B) The attempt by American automakers to put the spin of patriotism on their manufacture and my purchase.

C) The bureaucratic corruption and sense of self entitlement of auto worker unions.

And now....Ladies and Gentlemen I give you GM...yes the GM that was bailed out by your money...my money...your neighbors money...your employers money...

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GM ‘Likely’ to Build in China as U.S. Factories Close

General Motors Corp., shuttering U.S. plants in a bid to avoid bankruptcy, is “likely” to build a new factory in China on surging demand.

“Operations in China are profitable and in the future China can finance its own growth,” Nick Reilly, the company’s Asia-Pacific president, said at the Shanghai auto show today. He didn’t give a time frame for the new plant.

GM, the biggest overseas automaker in China, boosted sales in the country 38 percent last month as government stimulus measures spurred demand for its minivans. By contrast, the company’s U.S. sales slumped 45 percent on the recession, as it battles to convince the U.S. government that it’s still viable.

The automaker has also delayed expansion of an Indian plant for as long as two years as sales growth there has slowed, Reilly said. The company will seek to turn around sales in Australia and South Korea, he added.

GM is basing its business planning in Asia on the assumption that it will have to finance projects locally, insulating it from possible problems in the U.S., Reilly said.

“We won’t get money out of the U.S. into China,” Reilly said. Still, “we don’t need to because we have a very good balance sheet.”

China Sales

The Detroit-based car maker said April 9 it expects to double annual sales in China to more than 2 million vehicles over the next five years, with more than 30 new and upgraded models being introduced in that span.

GM makes vehicles in China through two ventures, both of which are backed by SAIC Motor Corp. Reilly said he wouldn’t comment on the possibility of Chinese automakers buying GM brands.

GM is trying to prove it’s viable in order to keep $13.4 billion in U.S. federal loans. The company is seeking to shed some brands, cut 47,000 jobs worldwide this year and close five assembly plants as it faces a June 1 deadline to avoid a U.S. government-backed bankruptcy.

Source
GM says it will expand in China despite U.S. woes
GM: 1,600 will lose jobs in next few days

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So there you go...your thanks for being a loyal buyer of GM...increases in employment in India and China while plants are closed in the US.

Feel good knowing you bought American while you drive your GM around town...while looking for work...you've earned it.



Welcome To Detroit

Big 3 Threatens To Take Ball And Go Home

Democrats to automakers: Prove you can repay $25 billion

Democratic leaders in Congress called on Detroit's automakers Friday to submit "credible" financial plans to lawmakers by Dec. 2 for spending up to $25 billion in government money, including vows for "significant sacrifices" by top executives.
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A letter from House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., came just hours before the Wall Street Journal reported on its Web site that General Motors Corp.'s board of directors had put an eventual bankruptcy filing into its range of options.

Source

The Journal, citing unnamed sources, said the board was willing to consider "all options" for GM, which has said it could be near the minimum amount of cash it needs to operate by the end of the year. The story said the board's position on a potential filing put it in "rare disagreement with Chairman and Chief Executive Rick Wagoner."

Wagoner had told Congress this week that bankruptcy is not practical for the company because people wouldn't buy vehicles from a bankrupt company.

"I am very optimistic and hopeful that they have gotten the message that they just can't come and say, 'Give us this,' " Pelosi said Friday. "How do we tell the American taxpayer it was worthwhile to put this in not as a life support for a few more months and then they are back again, but as an investment in their viability?"

According to the letter, automakers will have to explain their financial position, how they plan to spend the money and the assumptions behind their assurances that any loan will be paid back. General Motors Corp., Ford Motor Co. and Chrysler LLC consumed nearly $18 billion in cash last quarter, and analysts have said GM and Chrysler could run short of cash by the end of the year.

The terms for any loan are to mirror the conditions set in a draft bill released by Rep. Barney Frank, D-Mass., earlier this week. Among them: The government debt takes precedence among the company's other loans; automakers have to provide warrants or stock to the government, and if the automaker's plan appears off track, the government can call its loan back immediately. Automakers also must promise to meet the fuel economy standards set in last year's energy bill.

And Congress promises to limit executive pay, bonuses and other benefits of top executives, who were roundly criticized after flying corporate jets to two days of hearings this week and providing what many lawmakers called stilted, incomplete answers.

Reid and Pelosi shut down a last-minute attempt at a compromise rescue Thursday, saying there were not enough votes in either side of Congress to pass a bill backed by Michigan's Democratic senators and key Republicans. That bill would have taken $25 billion in loans for building more efficient vehicles that Congress approved in September and lent it to the automakers immediately, an approach backed by the Bush administration.

Pelosi again suggested Friday that the Bush administration had the power to help the industry without Congress acting by using money from the $700-billion financial industry bailout. She also suggested that the automakers' finance arms could have access to an additional $25 billion under that program. And she promised not to use the $25 billion approved for retooling plants as a short-term lifesaver for the industry.

"It is like taking your kids' college education fund and spending it on your credit card bills," she said.

All Detroit automakers have committed to sharing their plans with Congress, but were seeking more guidance about how much detail they would need to share.

It was still not clear Friday whether lawmakers would question the basic business assumptions made by the automakers -- who have said they don't expect U.S. sales to rebound until 2010 at the earliest. Several analysts have warned that without steep cuts, Detroit automakers would continue burning through cash even when the economy revived.

Pelosi made clear Friday that she wanted proof the automakers were making progress on building fuel-efficient models, not just slashing costs to survive the roughest period in their history and using taxpayer dollars to bail water from a sinking boat.

"Their viability is not just about tightening the belt, which is important; it is about a decision to compete and to innovate," she said, adding, "The behavior of the past generation in terms of Detroit has not produced the preeminence that we would like to see."

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GM, which has said it could be near the minimum amount of cash it needs to operate by the end of the year.

Idle threats my friends, I could probably name 100 ways for them to save money immediately and I don't even work there. I am betting you could as well.

Wagoner had told Congress this week that bankruptcy is not practical for the company because people wouldn't buy vehicles from a bankrupt company.

Uh hello dumb ass...no one is buying your vehicles because you laid them all off, no one has a job to buy your crappy line of junk and the ones that do have jobs are now so overburdened by taxation they won't be buying anything for a decade either...what a tool.

"I am very optimistic and hopeful that they have gotten the message that they just can't come and say, 'Give us this,' " Pelosi said Friday. "How do we tell the American taxpayer it was worthwhile to put this in not as a life support for a few more months and then they are back again, but as an investment in their viability?"

Wake up call Nancy Pelosi, your head is in the sand...you just gave 700 billion to the investment industry...these jackasses are only asking for 25 billion and you make them do the whole dog and pony show...where the hell was your smart mouth when the finance industry asked and received without question? Getting your hair done or something...what a tool.

provide warrants or stock to the government,

How about make the executives give the taxpayer their Class A stock option packages? That worthless public stock the government wants is just that...worthless.

Automakers also must promise to meet the fuel economy standards set in last year's energy bill.

Puleeze! There has been mpg legislation for decades. The automotive industry just ignores it. Period.

And Congress promises to limit executive pay, bonuses and other benefits of top executives, who were roundly criticized after flying corporate jets to two days of hearings this week

If this isn't the pot calling the kettle black I don't know what is. Congressmen and Senators get so many perks for their "public service" it isn't even funny...the fact the the auto execs flew their jets in just shows how out of touch with the reality of regular people they are.

Pelosi again suggested Friday that the Bush administration had the power to help the industry without Congress acting by using money from the $700-billion financial industry bailout.

Jesus Christ! Why is everyone throwing around our money like this? I don't want to bail out the finance industry OR the automotive industry and Nancy here is saying why didn't you ask Daddy first?

All Detroit automakers have committed to sharing their plans with Congress, but were seeking more guidance about how much detail they would need to share.

This is just a smoke screen. They don't want to be answerable at all to the Government. By asking for more detail from the government you might as well throw the whole request into legislation hell.

It will take the government a decade for them to decide they want the reports in 10 pt font and not 12, let alone what content they want.

It was still not clear Friday whether lawmakers would question the basic business assumptions made by the automakers -- who have said they don't expect U.S. sales to rebound until 2010 at the earliest. Several analysts have warned that without steep cuts, Detroit automakers would continue burning through cash even when the economy revived.

If they are "burning through cash" shouldn't they then fail? I mean if you or I "burn through cash" and don't pay our bills what happens?

Everyone is terrified of the auto industry failing, I say let it fail. Yes it would be a bitter pill to swallow but it would put us on the road to recovery quicker than having it happen anyway over the next two decades in chunks of 25 million a pop.

I guarantee you this...this will NOT be the last time the auto industry asks for money if you give it to them now and I would say the same for the financial infrastructure institutions...shit they are already saying the financial institutions will need more than the 700 million and they haven't even received on it yet.

"Their viability is not just about tightening the belt, which is important; it is about a decision to compete and to innovate," she said, adding, "The behavior of the past generation in terms of Detroit has not produced the preeminence that we would like to see."

Again..then let them fail.

Business 101 says if they cannot compete and fail to innovate then they fail.


Welcome To Detroit

GM Says "Hey It Worked Once..."

GM seeks $250M loan from Detroit pension fund

General Motors Corp. officials pitched a plan today to borrow $250 million from a city pension fund and refinance the Renaissance Center, but pension fund members did not approve or reject the request.

It is unclear whether, or if, the request will be voted on any time soon by the Detroit Police & Fire Retirement System.

Two members are against loaning GM that much money, especially considering the automaker's financial problems, which stem from an 18 percent drop in sales this year, a credit crunch and consumer shift away from profitable trucks and sport utility vehicles.

"It's just too much money," pension board member Barbara-Rose Collins said. "We can't uphold General Motors if they are having cash flow problems."

Another member, George Orzech, said: "This little fund can't cover something like this."

GM wants to borrow about $500 million from two city pension funds. The requests come as the automaker is trying to raise about $5 billion through asset sales and borrowing to survive the worst auto sales market in 15 years.

Source

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No No No No No No No No, you do not produce profit by incurring debt.

This pathetic proposal shows the truly criminal nature and limited vision of GM's top brass.

If GM get's their hands on those pension funds they are as good as gone, mark my words.


Welcome To Detroit

Big Three Ask For Less In Hopes It Will Get Here Quicker

Big Three pare back fed loan request

"There's a lot of people saying, 'Here is Freddie and Fannie, and now we're bailing out the domestic auto industry, but it really isn't," Rep. Candice Miller, R-Harrison Township, said. "(The Big Three) are in dire need of some reasonably-priced credit to retool. It's absolutely critical."

The Big Three want the money, in part, because they have sub-investment grade credit ratings, which make it more expensive for them to borrow money conventionally. The low-cost federal loan program could reduce their borrowing costs by more than $100 million for each $1 billion borrowed. The government could also defer repayment for up to 5 years.

"It's not a bailout because this is part of the energy bill," Furman said. "It's not that the auto industry came to Washington. It's Washington came to the auto industry, and it said you have to help make American energy independent. As part of doing that, the auto industry needs some help. It really is the backbone -- the hub of a large fraction of the manufacturing and service sector."

Source

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Ohhhh...$25 billion of my money is NOT a bailout...I am so silly.

Read it all again folks, another business fails bcause of inane, unethical mismangement by those at the top of the heap and they get rewarded for it.

So can I ask the bank defer my mortgage?...no

Can I ask my frineds and neighbors to pay for my mortgage because its a tough market?....no

How about if I wait for the other half of my mortgage payoff until next year, but you give me the other half now?

Doesn't the public realize that I have a lot of people counting on me owning this house? The garbage collectors, the grocery store, the mail delivery person, the power company and more.....if I leave this house their jobs will then be in jeopardy.

Doesn't make much of an argument does it?


Welcome To Detroit

GM Cares About The US Worker So Much They Spend $500,000,000 In India

GM opens second plant in India

General Motors Corp. opened a second plant in India on Tuesday, boosting its production capacity in the country from 85,000 to 225,000 vehicles a year.

The factory is part of GM's aggressive push into emerging markets, which have helped cushion the beleaguered auto giant from falling sales in the developed world. It also furthers the Indian government's ambition to turn the country into a manufacturing hub for small vehicles.

"We believe India in three to four years will be a significant source of profit for us," said GM Asia Pacific President Nick Reilly.

The first car -- a pint-size red Chevrolet Spark draped with marigolds -- rolled off the production line at 11:25 a.m.

GM invested $300 million in the new plant in Talegaon near Pune, a fast-growing manufacturing hub about two hours outside Mumbai, the nation's financial capital. The factory will start by producing the Spark -- a mini-car introduced in 2007 that is GM's most popular local model -- for the domestic market.

Detroit-based GM is ranked fifth by sales in India and hopes to boost its share of the booming Indian auto market from 4 percent to 10 percent in the next few years. The company manufactures six Chevrolet brands at its factory in Halol, Gujarat -- the Captiva, the Optra, the Aveo, the SR-V, the Aveo U-VA, and the Tavera -- and plans to introduce another small car near the end of 2009.

GM said Tuesday the new Talegaon factory could also be used for export as early as 2010.

Last week, the automaker pledged to invest another $200 million in a powertrain facility adjacent to the Talegaon plant, which will eventually produce 300,000 diesel and gas engines a year for both domestic and export markets.

GM's investment in India, which now tops $1 billion, pales in comparison with China, where the company produces more than 1 million vehicles a year. GM has poured $5 billion into its China operations and plans to invest $1 billion a year going forward, company officials said.

Source

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There you go, GM to invest over 2 billion dollars into two foreign economies, not in the US, not for the people whom built the company with their blood, sweat and tears for 100 years...but for India and China.

India and China known bastions of Democratic and Union principles.

"...for export"? Where? Here?

Are our new GM vehicles going to have parts from India and China?

If my experience with foreign help desks is anything to go off of, I should expect "long wait times" when I need my power train repaired.

Yay Rick Wagnoner...hip hip hooray....hip hip hooray.

Rick Wagoner.....a TRUE American businessman.



Welcome to Detroit

How Many Lap Dances Does That Work Out To?

Delphi's emergence from bankruptcy is uncertain

Nearly three years after Delphi Corp. filed for bankruptcy, its prospects for emerging soon remain deeply uncertain as the Troy-based auto parts supplier faces growing pressure from investors and the government.

Delphi remains mired in Chapter 11 bankruptcy because it cannot raise the money it needs to operate outside court protection from creditors. The company is seeking court approval to borrow an additional $300 million from General Motors Corp., but investors are objecting to Delphi's continued reliance on its former parent when GM is facing deep financial trouble of its own. A court hearing on the loan that was scheduled for today has been postponed until next month.

For now, it turns to GM, which has loaned Delphi $650 million and is prepared to add $300 million. U.S. Bankruptcy Judge Robert Drain has set a Sept. 23 hearing on the loan, which has been criticized by one of Delphi's largest investors.

That loan is "a Band-Aid (albeit an enormously expensive and porous Band-Aid)," Highland Capital Management LP said in a court filing last week. Highland said Delphi is losing "staggering sums of money" at an "alarming rate," noting that it burned through $960 million in cash in the first six months of the year.

There also are significant questions about Delphi's ability to meet its pension fund obligations. The Pension Benefit Guaranty Corp., which insures the nation's pension plans, is urging Delphi and GM to shift some of that burden to GM.

Source

Delphi rocked the auto industry when it filed for Chapter 11 bankruptcy protection on Oct. 8, 2005. Since then, it has lost $11.8 billion, closed 21 of its 29 U.S. factories and cut its hourly work force by nearly 50 percent, and its salaried work force by almost 40 percent.

The supplier has spent $3 billion to offer buyouts and early retirements to thousands of hourly workers. This month, it reported a $551 million second-quarter loss and said it would cut 600 more salaried workers, mostly in Indiana.

Delphi is tight-lipped about its progress in bankruptcy. Spokesman Lindsey Williams said the company continues to talk with GM, its unions, government agencies and others about resolving the pension funding problem.

"We do not provide commentary regarding ongoing negotiations," he said. Williams also said Miller planned to remain with Delphi through the bankruptcy.

Despite the delays and continuing problems, Delphi executives say the company will emerge from bankruptcy, but as a much smaller, more profitable company.

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Again...leaving the same people in charge who got the company in the sad state it's in now in the first place.

How is it EVER legally and morally justifiable that a company can promise retirement benefits then renege at a later more convenient time?

This is the kind of thing that makes retirees pick up a gun and go balistic and I can't blame them one bit.

I can resolve this though.

A) Make all executive operating officers of companies of this scale legally and criminally accountable for failure to honor contracts and keeping the company financially resolute. (This is justified by the enormous pay scales which already exist, they just get paid to fail currently.)

B) Fire them via court order and have the court post the positions for people actually qualified whom may not be in the "old boy network".

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Steve Miller is just as tough on UAW president Ron Gettelfinger. Since the opportunities for retribution are frequent and one-sided, auto executives almost never criticize union leaders in public. But Miller is fearless, at least in print. He butted heads with Gettelfinger over Delphi, and found the union boss stubborn, inflexible, and occasionally nasty. After Miller put together what he thought was a reasonable compensation package to keep Delphi executives from departing the bankrupt company, Gettelfinger denounced it as "obscene" and "outrageous," and then attacked Miller personally for disrespecting workers and destroying the middle class.

Miller won the public relations battle by declaring he would cut his own salary to $1 a year. But the war continued. "Gettelfinger's disdain was not confined to me," Miller writes . "He simply couldn't get along with anyone," referring to Delphi's executives as "pigs at the trough." During the last half year of negotiations, Gettelfinger refused to meet personally with anyone from Delphi. Miller concludes: "Gettelfinger was a big disappointment. An industry in crisis needs leaders who can rise above the tactics of intimidation that may have worked decades earlier."

A sadly-shrunken Delphi is due to emerge from bankruptcy in March with a fraction of the union workers it once enjoyed. Miller, now executive chairman, is looking forward to the retirement at his Oregon home that he has been postponing for years He may not get a chance to enjoy it. With the economy now in a tailspin, his skills as "the Turnaround Kid" may drag him off the sidelines once again.

Source

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The Turnaround Kid just made tool of the day.

I like the $1 a year thing...good PR...means nothing.....but it is good PR...These guys get Class A stock options and contracts like you would not believe...did you think he was going to have to cut coupons while making a dollar a year....please...most of these guys don't even pay for their own gas for their company cars...or planes...or boats....or helicopters....

How do you pay for the gas for your helicopter?



Welcome to Detroit, get paid millions to fail then retire to Boca Raton.

Big 3 Seek $50B In Taxpayer Money Because They Don't Know How To Do Their Job Right.

Big 3 seek $50B in fed loans

McCain now backs help for car makers; Money sought to retool plants

Detroit's Big Three automakers are planning an aggressive push on Capitol Hill as they seek up to $50 billion in low-cost loans to speed the development and production of more fuel-efficient vehicles.

General Motors Corp., Ford Motor Co. and Chrysler LLC would use the money to help pay for retooling of older assembly plants and developing advanced technologies.

The lobbying effort comes as the car makers face dramatically higher fuel economy mandates and consumers are demanding more fuel-friendly options in an era of high gas prices. The Big Three are revamping their product lineups to include smaller, fuel-sipping models.

An energy bill Congress passed last year authorized but did not fund $25 billion in direct loans to help automakers meet the new fuel standards. The financially-strapped companies now want additional funding, but it is not clear how much they hope to obtain.

Source

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I don't agree with this proposed action, in my opinion if you can not operate your company at a profit level and sustain your business model YOU DESERVE to go out of business.

That is what "should" happen in a capitalist society driven by market demands.

Don't forget the big three automotive companies just laid off huge numbers of people and now also are probably salivating over this proposed bail out.

It's easy money.

The executive officers at any of the big three are a total embarrassment to the business world and everyone is buying into the mystique of their excuses.

Now us here at Detroit Daily Dirt...the American auto industry provided a crappy product for decades, provided crappy service for decades, laughed at the possibility of imports taking a lions share of the market.

I also hold the auto workers union, the UAW responsible for half of this debacle.

This "union" lost it's balls decades ago. They kept problem employees on site for years, take a galling amount of pay from the employees and stood by and did nothing while it's own membership population has been whittled down inch by inch for decades....the UAW is a total paper tiger that does nothing but raise the cost of the product.

What happens to you or I if we are business entrepreneurs and are failing in our task?...we certainly don't get a billion dollar helping hand from the taxpayers (i.e. the customer) when we can't sell our widgets.

Can you imagine your grocery store asking you for $100 dollars for a loaf of bread because they have upper management that doesn't know it's ass from a hole in the ground?

No you can't and neither can I.



Welcome to Detroit

Let's Look At Some OF GM's OTher Top Ass...I Mean Brass

GM now states it's keep a tight reign on things and everything is going according to plan.

________________________________

Board tightens watch on GM

Directors vow support for CEO and team, but are keeping closer tabs in challenging times.

The lead outside director of General Motors Corp. said Wednesday that Chairman and CEO Rick Wagoner has the board's unanimous backing but added that directors are keeping closer tabs on the automaker during this difficult stretch for the industry.

At the close of a meeting Tuesday of the 14-member board, headed by Wagoner, GM officials said the board reiterated its support for Wagoner and his management. Board member George Fisher reinforced the message Wednesday to quell talk in the media of mounting pressure on Wagoner after GM's first-half losses totaled $18.8 billion.

source

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Let's look a little closer at the business genius that is George Fisher.

One report of his tenure at Kodak reads very similar to his tenure at GM.

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Problem is, Fisher still seems to have been taken by surprise by the depth of the company's problems. The issues that have dogged it--confused marketing, a bloated cost structure, intensifying competition from Fuji Photo Film Co., a strong dollar--have either been around for a while or could have been anticipated.

source

It continues...

LOTS OF FAT. For the past few weeks, Fisher says he and his staff have been furiously devising a plan to ''significantly revamp our cost structure.'' He is seeking to cut both Kodak's manufacturing costs and to accelerate a five-year plan to slash overhead and administrative costs, which now stand at 27% of sales. He also needs to cut the payroll. Fuji's sales per employee, for example, are twice those of Kodak. In recent months, Fisher pushed out two of his top lieutenants, including the heads of the core consumer products and digital imaging units. And on Oct. 6, he cut loose 200 of the company's most senior 1,000 executives. Simultaneously, Fisher is vowing to take action to slow the loss of market share in the core color-film business to Fuji.

________________________________

Here is the problem, you see these guys go from company to company to company, taking golden parachutes when convenient, leaving devastated companies, individuals and families.

They are one trick ponies.

This is what they do at every company.......fail, cut, fail, cut, fail, cut, leave, get new job from old boy network, fail, cut, fail, cut..... see the pattern?

Ego and a glass ceilings their only form of real security against pale and lackluster job performance...in what company has someone risen from the ranks of the plant floor or mail room to eventually lead the company...only in the movies.

Lets look further back in time....

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In a move that took his company's board of directors by surprise, Motorola Chairman and CEO George Fisher said he will leave the telecommunications giant Dec. 1 to accept the position of chairman/president/CEO of Eastman Kodak Co. Upon learning of his plans, Motorola removed him from the company ledgers, a not-uncommon occupance when a company executive resigns. The question remains whether Fisher is taking anyone from Motorola with him to Kodak.

source

it continues...

Reaction to Fisher's announcement was swift. "I enjoyed working with George, and I will miss him," said Len Kolsky, vice president and director of global telecom relations as Motorola's Washington, D.C., office. "But he's not Motorola, and the company will go on.

________________________________

How many of us have Motorola phones...or something else, something better?

How many of us have Kodak digital cameras....or something else, something better?

How many of us have a GM vehicle...or something else, something better?

Wonder where George is going to next?



Welcome to Detroit

Wagoner's Death Grip Tightens On GM's Throat

Wagoner still has GM's support

Despite huge losses, backing for CEO 'has not changed,' says spokesman

General Motors Corp. said its board continues to support Chairman and CEO Rick Wagoner despite the company's deteriorating performance in the second quarter, when it lost a staggering $15.5 billion.

"The board has expressed support for Rick Wagoner and the GM management team on several occasions and that has not changed," GM spokesman Steve Harris said Tuesday.

Some analysts say it's hard to fault Wagoner for most of the problems GM is facing, such as $4-a-gallon gas and the market collapse for its most profitable vehicles.

"I can understand the pressure, but from where I sit, it's hard to see anybody else coping any better than what they have done," said auto analyst David Healy of Burnham Securities.

source

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I have no problem faulting Wagoner, no it's not his fault gas is 4 bucks a gallon, or everyone wants a small car, no one can sell their house, no one has a job to buy a car or truck BUT it is his fault he lacks the fore sight to prepare for these kinds of market changes....technically that is why he is paid ass loads of money, for his ability to "lead".

Leading by definition means your ahead of the pack, on the front, cutting edge and all that...none of which he has proven.

Wagoners "leading" is entirely reactionary.

What common intelligent citizen of Michigan hasn't seen this coming for years?

FOR YEARS...everyone knew that there was a trend to buy smaller import cars.

FOR YEARS...everyone knew gas was going up since the the Iraq and Afghanistan wars (both of which are still raging on).

FOR YEARS...everyone knew that the economy in Michigan and the nation has been limping along, tied also to a gloomy real estate market.

FOR YEARS it's all been common knowledge in Michigan

Yeah I do hold him at fault, where is accountability in the country anymore?

___________________________

PS - See above, GM spokesman Steve Harris said GM has confidence in Rick Wagoner...c'mon Steve, who pays your check?

Of course you'd said that, it's your job as a fluffer to the media.

What cracks me up is "spokes people" actually went to school for something and now they are professional mouth pieces. What a job.

The whole point of this announcement to the press is a pathetic attempt to keep market prices on GM stock from falling any further than it is already or if you prefer...manipulating the press to GM's advantage.

Hardly what I would call "news".

...here is a tip ever notice that when a failing major corporation fires a CEO and hire another their stock sees a bump up?




Welcome to Detroit

Alan Mullaly Gets Millions To Fail, What Do You Make Per Year?

Ford Has $8.7 Billion Loss, Shifts Away From Trucks (Update4)
July 24 (Bloomberg) -- Ford Motor Co., the world's third- biggest automaker, posted a record quarterly loss of $8.7 billion and accelerated a conversion to fuel-efficient vehicles to wean itself from money-losing trucks.

Source from Bloomberg

The revamping is a response to record gasoline prices that have ravaged sales of large pickups and sport-utility vehicles and derailed Chief Executive Officer Alan Mulally's turnaround plan.

Alan Mulally went on to say "DUH DUH DUH, DUH DUH DUH DUH" then proceeded to take his finger out of his nose and taste it.

Just kidding but I figure if Al can make that amount of money for being a total fuck up, he can take some ribbing from me, one of the great unwashed masses.

Alan made 28 million for 4 months of work, and I mean back breaking, sweaty, ditch digging work too, in the sun all day, wearing a do-rag work, just like a farmer. What did you make and how hard do you work for it? Bet its not as hard as the work as Al does for his paltry pay.

Ford CEO: $28M for 4 months work

Former Boeing exec got $18.5 million bonus, almost $9 million in stock and options and base salary at annual $2 million rate.

Struggling Ford Motor Co., which posted a record $12.7 billion net loss in 2006, gave its new CEO Alan Mulally $28 million for four months on the job, according to the company's proxy statement filed with the Securities and Exchange Commission Thursday.

The Ford (Charts) pay package for Mulally comes on top of the $7.4 million that aerospace company Boeing (Charts) had previously reported paying him for his eight months running that company's commercial aircraft unit before he made the move to Ford at the beginning of September.

Alan Mullaly is hereby nominated for Detroit Daily Dirt's Tool Of The Year Award.

In 2005, Michigan's state population was 10,120,860, so if Al made 28 million every 4 months let's say just for fun, thats 124 million per year OR, drum roll please..... $12.25 for every man, woman and child in Michigan. Probably more per person since so many people have left Michigan since 2005

Personally I think the money would have been better spent and put back into the economy had everyone in the state got their 12 bucks.


I love putting shit in perspective.




Welcome to Detroit

Rick Wagoner, Professional Tool

Rick Wagoner was quoted today:

"Since the first of this year, our progress has been threatened as U.S. economic challenges become (more) difficult," said Wagoner, calling higher fuel costs a structural change, not a cyclical change, to which the automaker must adapt. "In the past six weeks, U.S. market and economic conditions have continued to decline. These require us to take further actions."

Who is is kidding? Even the lowest blue collar worker among us has know for years that the economy was limping in Detroit, FOR YEARS RICK! Do you even know how much a gallon of milk costs us little people? What a tool.


Some of Rickie's directives:

• A 20 percent reduction in salaried worker costs through a variety of means including normal attrition, early retirement and voluntary separation programs.

Guessing 20% of the top executive staff will NOT be removed, I figure middle management.

• Cutting health-care coverage effective Jan. 1, 2009 for Medicare-eligible salaried retirees, partially offset by increased pension payments.

Stealing from those retirees whom worked their whole lives for your company, this guy is like Mother Theresa. How is this even legal?

• No pay raises for salaried workers through the end of 2009.

HA HA HA, Like this was even going to happen anyhow.

• No discretionary bonuses for executives.

Make note of this one, I bet this is total bullshit, I see a big bonus in his future.

• Cutting and consolidating sales and marketing budgets, including motorsports activity.

Cut ALL commercial promo and marketing activity Rick, let your product sell itself on quality alone, oh wait thats crazy. You won't sell a hundred units that way.

• Holding engineering spending to 2006-07 levels through the end of 2009.

Screw that, increase engineering spending and make a revolutionary hybrid everyone will actually want. Dare to be a leader and not a follower Rick, it's not like your going to ever end up homeless.

• Reducing capital spending.

So your going to fly coach?

• Suspending the dividend on common stock, to save $800 million through 2009.

Thats COMMON stock, In other words what you and I can buy. Executives get a different type of stock which appears will NOT have dividends suspended per this quote.


Welcome to Detroit

GM Takes A Dump, Workers Are The Toilet Paper

GM today gave a live newscast here in Detroit, Chairman Rick Wagoner, announced how bad it's going in such a weird way as to put a optimistic spin on it. I guess that's why he makes the big bucks. Certainly not for his total lack of vision on the economy and the future of energy as it applies to the auto industry.

The GM situation is a prime example of the vanity of the auto industry in thinking the sky will always be blue and payroll for the upper echelon can be as high as wanted.

G Richard Wagoner Jr
As of 2006 he was making 2.2 million a year.
Education
College: Duke University EM ' 75
Graduate School: Harvard MBA ' 77

How bad can someone fuck up and get paid this amount of money?

How many people of a lower pay grade will lose their job to ensure he continues to get this level of pay?

Anywhere else in the world you fail you get fired, not in Detroit.


Welcome to Detroit