This has to be a record for something this big:
General Motors completed a major step in its turnaround on Friday and closed the sale of its good assets to a new, government-backed carmaker, at a speed unimagined by auto and bankruptcy experts even six months ago.
The government and G.M. signed the documents at 6:30 a.m. at the offices of Weil, Gotshal & Manges, the company’s chief bankruptcy counsel, according to a person briefed on the matter, after a bankruptcy court order staying the sale for four days expired on Thursday. G.M. will hold a news conference in Detroit, hosted by its chief executive, Fritz Henderson, and its new chairman, Edward E. Whitacre Jr., later Friday morning.
G.M.’s sale of its desirable assets, including brands like Chevrolet, Cadillac and GMC, to the new company — now named Vehicle Acquisition Company but soon to be renamed the General Motors Company — is meant to shed decades of buckling liabilities. The federal government will hold nearly 61 percent of the new company, with the Canadian government, a health care trust for the United Auto Workers union and bondholders owning the balance.
Good luck.
Napoleon
Never mind, the story seems accurate.
wolfetone
Too bad they’ll rename the company that bought the ‘desirable assets.’ I was really hoping for commercials offering the latest model from Vehicle Acquisition Company…
Barry
Well, it’s good that GM can produce baked goods now (GM Out of Bakruptcy‘), but when will GM exit bankruptcy? :)
kay
@wolfetone:
That made me laugh too. It’s what I love about bankruptcy, although you don’t sound like you share that admiration. It’s a process completely uncorrupted by marketing. When you take GM apart, it’s just debts and assets, and you can’t really spin that.
If financials had this level of clarity and transparency, I would be a lot happier about bailing them out.
What’s AIG worth? Who the hell knows. It’s either zero or billions. Pick a number.
gnomedad
Bush’s plan is working!
Dennis-SGMM
Absent a turnaround in the economy that includes more widely available credit, GM is going to be on taxpayer-provided life support for a while.
Bob
Now if only Obama would do a big press conference about them exiting bankruptcy as he did when then entered bankruptcy. Seems that only the bad news of the U.S. auto industry gets any coverage.
demimondian
Bakruptcy, John? Is that a misspelled broken back (as opposed to a broken bench).
jm
“and its new chairman, Edward E. Whitacre Jr…..”
The same Ed Whitacre formerly of AT&T (aka SBC)? The customers of the new GM are screwed.
Bill H
Well, as I read this, GM is not “out of bankruptcy” at all. What has happened is that a new company has formed, bought all the good stuff from GM and left GM in bankruptcy, where it will be folded up and dissolved along with all of the garbage that the new company did not want, including all of the debts. After that happens, the new company will be renamed GM.
Fulcanelli
I am a broke-ass American taxpayer with my credit rating in the tank and I need a new car.
I should be able to get a new American made car from the auto manufacturer I now own, financed and paid for by the American bank I now own, and insured at no cost to me by the American insurance company I now own.
But I can’t.
Should I be upset or happy about this? I’m confused.
Jeezum Crow
@Bill H:
So GM’s evil twin is killing it and taking over its identity? Man, when did the auto industry turn into Days of Our Lives?
Josh E.
Bill is correct. GM has not technically emerged from bankruptcy. The corpse still has to be divvied up.
Bokonon
Let’s see if the dittoheads will now torpedo the reorganized company with their boycott. Because the government bailout is bad! Obama must fail!
Don’t laugh – Fox News is now talking this up as well.
lawtalkinguy
GM is not out of bankruptcy. Instead, they sold all of their good assets, and left all of their creditors, most particularly those injured by defective products, to fight for scraps in a bankruptcy that will take many years.
The people most harmed by this sale are the ones who are most vulnerable, such as my client, Irma Gonzalez. Irma was traveling with her husband down to San Diego to take their only child, Cynthia, to start her freshman year of school. The Jeep Grand Cherokee they were driving in rolled over, and because of the vehicle had one of the weakest roofs in the industry, Cynthia and her father were crushed to death, leaving Irma alive, but alone. GM knew of the danger from this roof for years, and fixed the roof on later models, but nevertheless did not recall those vehicles it knew to be dangerous.
Irma is now a shell of her former self, and barely leaves the house, and suffers from debilitating depression. The government brokered a deal to insure that Irma gets nothing.
As much as I know the economy needs a “new” GM to be successful, I do not wish them good luck. Allowing these claims to survive would have cost a drop in the bucket in the grand scheme of things, but they nevertheless chose to further ruin lives they had already mostly destroyed.
White House Department of Law (fmrly Jim-Bob)
Lawtalkingguy:
Jeep is a Chrysler product. The government allowing GM to get off the hook is bad. But if you planned to sue GM for something that happened in a Chrysler, then Irma’s case was lost from the git-go.