GM Poised To Declare Bankruptcy

With Declaration Reportedly Hours Away, A Look Back At The Company's Storied History - And At What's Likely to Happen Next

(CBS)  This could be the most important week ever for General Motors. The deals have been set. Investors have spoken. And the company that was once the world's biggest automaker is believed to be hours away from declaring bankruptcy, reports CBS News correspondent Dean Reynolds in Detroit.

With a majority of its bondholders removing the last obstacle, General Motors is now poised to declare bankruptcy tomorrow - a sad chapter in what was once a great success story.

Time has not been kind to the company. In 1961, GM commanded 51 percent of the U.S. auto market, compared to 21 percent today. It once employed 618,000 workers (in 1979) but has fewer than 90,000 now and is heading toward 60,000 by the end of next year.

"There is a lot of tension. The workers here have been under a lot of stress all hoping and praying that the plant survives," said a GM worker in Tennessee.

"I don't know how i am going to survive. I may have to get another job, another income," said another GM worker. "I really don't know."

GM once had so many makes and models it was hard to keep track. Today it's trimming them as fast as it can, dumping Hummer and Pontiac among others.

Up to 40 percent of the dealers who had such a hard time selling these cars are being eliminated.

GM lost $6 billion in the first quarter of this year alone - $90 billion since 2005 - so bankruptcy would come as no surprise.

The plan is to have the government take over 72 percent of GM, with its chief union getting 17.5 percent and its creditors 10 percent, with the possibility of purchasing more down the road. Dealer warranties will be honored, but consumer enthusiasm for vehicles from a bankrupt manufacturer is anyone's guess.

GM has already received about $20 billion in government loans to stay afloat - most of it already spent with little hope of being recouped - and could get another $30 billion to help navigate bankruptcy. But that batch won't come without some government-imposed direction for the future.

"There will be a new, humbler, more practical approach at GM and GM management," said Ed Lapham, executive editor of automotive news.

But some analysts say when a government takes over an automaker it can be worse than risky.

"It doesn't work. We saw that in England in the 60s when the government became the biggest shareholder of British Leyland," Lapham said. "You know, within a decade it was gone."

The hope all around is that this will be a quick bankruptcy lasting no more than 90 days - something much like Chrysler's swift reorganization, which is expected to be completed as early as tomorrow.

[WayAround]

Yesterday, the state of Nevada approved same-sex registrations (a story missing from CBS, by the way).

America's industrial and financial sectors are in shambles.

Come on, people, put two and two together!!! The country should shift its economic focus to attracting homosexual travellers. Think of all the possibilities!!! State tourism bureaus could create advertising videos for display in foreign countries, emphasizing the state's services that cater specifically to gay and lesbian visitors.

Please note: I have the only legal concession for issuing souvenir marriage licenses to Ugandan gays. DO NOT infringe,or I will seek redress in the courts.

Come on, America!!! You dreamed up a cap that can hold two beer cans with a straw down to the wearer. You dreamed up the "Clap on, clap off, the clapper". Put the country's stagnant brainpower to work on ways to fleece...errrr...accommodate homosexual travellers from around the globe.

The possibilities are endless. Even the colors of the American flag could be changed to pink, white, and lavendar.

[whitemale08]

Of course that money is lost,

The government is trying to sell GM as quickly as possible, which means that they will sell it at an extreme loss or pennies on the dollar.

That's why GM was sold to the government in the first place because no one else wanted until it get rid of the unions and health-care benifits through bankruptcy court.

My goodness, can't anyone connect-the-dots and see that AGAIN, the BIG FAILED BANKS like Citicorpse and JP Morgan got away with murder as creditors selling a junk car company to the taxpayer?

Come on guys we have to be smarter then this.

CALL CONGRESS AND DEMAND THAT THE BAILOUTS FOR GODLMAN SUCKS STOP!

[common2cents]

"Does this mean that all the money the government has socked into this company (Taxpayer money) will be lost as it is in most bankruptcy cases."

I assume that's why the government's taking such a large chunk of the company.

[whitemale08]

...after all the havoc that globalization and free trade has done to our beloved Repubic, we still have idiots in Washington, Wall Street and the public at large insist that we keep it and keep comitting suicide.

What are we thinking?
Why do we continue to elect politicians that love bankers like Goldman Sucks over people?
Why do we continue to embrace globalization?
Why do we love British-style 'free trade' so much?
Why do we sacrifice health-care benifits to the HMOs on Wall Street and the globalists?
Why do we inspite of every thing we see hate physical labor and love credit-default swaps?
Why do we think it's necessary to bailout trillions in worthless derivatives?
Why do we think that Goldman Sucks and JP Morgan are TOO BIG to file for Chapter 11?
Why do we think that we owe the British trillions to their counter-parties like Barclays Capital?
Whyd do we think that the criminal financiers and banksters have a right to loot our country?

Why ask Why?...(Enron comercial)

[oiaf17]

Oh yeah, weapons and armaments.
Posted by incog-nito at 7:42 PM : May 31, 2009

America's leading exports are vehicles, electrical machinery, and airplanes.

Ya when you think electrical machnery, you think USA.

Airplanes, well what housewife doesn't have a few of those tucked away in her closet.

Vehicles, well there's still Ford. Ford quality number one in America.

Ford make Pelosi brown eyes blue, they don't take any bailout so she can not buy them on her shopping trip.

[oiaf17]

Obama win! Pelosi win! They break the back of American workers. They break the biggest company in America. The greedy ultra wealthy power elite have been trying for decades to make this accomplishment. It took the Democrats to make it come true.

Reagan tried trickle down, and it did not work. Senior Bush tried free trade, and it did not work. GM kept making junky cars and the union workers kept getting paid.

Clinton tried banking deregulation, NAFTA, and the New Economy, but it did not work. Dumbya tried just sitting there and doing nothing for 8 years, and it did not work. GM was still in business. But in just four months, Obama did what none of the others did in 28 years.

And best of all, Pelosi stole billions of dollars from you Americans and gave it to the greedy CEO to move more jobs out of the country. Just in time, before the company went broke. That was close, America might have saved a few jobs. But Pelosi was on the job, she made sure those jobs were out of the country before the axe fell.

Bravo to Obama and Pelosi! As the ripple effects spread through the economy, GM suppliers will go bankrupt and many more jobs will be lost. With this one swift move, they have taken a huge chunk out of the economy. This could push unemployment to 15% or 20%. China will give them a medal of honor for destroy the USA more than China or the terrorists could ever do.

[incog-nito]

Let's see: We don't make high tech electronic products anymore, and pretty soon we won't be making autos anymore. So what does America do that's still the best?

Oh yeah, weapons and armaments. Of course to keep business humming we need a way to foment wars and insurgencies. That's why we have the best intelligence agency in the world, the CIA. Not only that, we also have the best prison system in the world, with the highest incarceration rate in the world, far ahead of the next country, Communist China.

Isn't America great or what?

[summarex]

KILL THE IDEOLOGUES

[NegatoryInhale]

""The plan is to have the government take over 72 percent of GM, with its chief union getting 17.5 percent and its creditors 10 percent""

That statement pretty much spells death for the company with only a 10 percent private stake. At least the government will buy the new cars they are forcing you to build. The ones no one else will buy.

Rest in Peace General Motors. There is plenty of blame to go around but like many Americans my age your products are ingrained in my soul and despite both management and labor's complicity in your demise I wish it wasn't happening.

[Livinontheedge]

Does this mean that all the money the government has socked into this company (Taxpayer money) will be lost as it is in most bankruptcy cases.

[nolalou]

Obama and Pelosi accomplished more in four months than Bush did in 8 years. They broke the union and took billions of dollars out of taxpayer's pockets to pay greedy rich CEO's to move jobs out of the country. Bush could never do that. Bravo to Obama for accomplishing the Republicans' dream. The ultimate trickle down by free trade.

Remember Reagan started trickle down and Senior Bush started free trade. But it took Obama and Pelosi to make it pay off by bringing down the biggest company in the USA!

Bravo to Obama for turning the RepubliCrooks green with envy. Now expect more Repigs to join the DemoCrooks, they know better how to give America the business.
Posted by oiaf17


oiaf17, you are such a complete and utter MORON, I don't even know where to start! GM was in big trouble long before Obama even thought of running for President! Nobody was paid by this administration to move jobs out of the country! Obama inherited a situation with no easy answers, and he sure doesn't need advice from IDIOTS like you!

[gratvialavas]

You want to sweat, you work in hot sun all day in my uncle's rice paddy. The sun so hot, the water make you feet hotter.
Posted by oiaf17

When do I start?

[mje222]

Have you ever broke a sweat? Have you even worked hard?

[gratvialavas]

I too am from foreign land where my english is spoken not. Dank you veddy much. I would like to do for you now the elvis presley.

[sjc_1]

See, I told you he was a troll pretending to be someone else...how foolish.

[sjc_1]

oiaf17,

Give it up, we know you are a troll pretending to be some foreign fool.

[sv0126]

Thank You Unions job well done. Skill labor my foot. Screwing nuts and bolts is a no brain er.

[mje222]

The GM workers will not be the only ones out of work. Many more layoffs will be comming. this is very sad for all. More will lose there homes, cars ,wont be able to put the kids in good schools.It is going to snowball!

[oiaf17]

Obama is a failure. Pelosi gave billions of your dollars to them to send jobs to China and Brazil before they go bankrupt.

[sjc_1]

We need to keep track of all those people that said "let em fail" months ago. Now we get to see the consequences of their words. They will certainly not accept any responsibility for what they have said, it is not their way. The impact has been reduced with months of preparation, but it still will have quite an effect on lots of people. The damage would have been worse without the careful consideration for the consequences of actions that has taken place. This is all I ask, be careful what you say and take responsibility for it.