Solemn but confident, GM’s CEO in the United States, Fritz Henderson, addressed the media today to present the outlines of the company’s decision to file for Chapter 11 bankruptcy protection.
In fact, the automaker officially filed for bankruptcy protection on the morning of June 1 to ensure that a complete reorganization plan be put in place. We already know that 14 plants will be closed in the U.S. and that thousands of jobs will be lost. However, all Canadian and Mexican operations have been spared in this decision.
With this move, and by calling on Section 363 of the Bankruptcy Code authorizing the division of a company, GM is looking to create a new, stronger, better structured organization that should emerge within 60 to 90 days by dropping the less viable brands.
Some of them, such as Opel, have already found takers, while Saturn may be of interest to the Saturn-Penske consortium. GM is hedging its bets with the Chevrolet, Cadillac, Buick and GMC brands to ensure its revival.
“The days when General Motors would have countless launches, of which we would count on 2 or 3 of them being hits and the rest of them being o.k., are history. We need to make sure that every single one of our vehicle launches is a best-in-class car or truck, nothing less. There is no room for hesitation,” emphasized Henderson.
He also stated the company’s desire to focus on the customer. “To those of you who have never tried a GM vehicle, or have tried one and given up on us, we ask that you give us another chance. We will prove to you that GM can take the lead,” said Henderson.
Complete reorganization
To achieve this, however, General Motors will have to consider closing additional dealerships, at least in the U.S., and a new wave of closures should begin during the first week of June.
As for financing of the operations, the U.S. Treasury will invest some 30 billion dollars while the Canadian and Ontarian governments will contribute 8 billion. The United Auto Workers trust for health care and the unsecured bondholders will also own a percentage of the company’s shares.
“At the moment, everyone is working towards the same goal: creating a new, stronger GM better prepared to face the future. Afterwards, government shareholders would like to sell to a private shareholder, but not before several years. This is temporary but indispensable support to help us realize our plan.”
“We know we’re asking a lot from you, but we ask that you have confidence in us. The only way we can earn this confidence is to produce results, and we will have them soon,” concluded Henderson.
For the moment, no additional cuts or closures have been announced for Canada. Prime Minister Stephen Harper will also make his position known.
photo:General Motors
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| "The new GM will be stronger and more customer-focused" - Fritz Henderson |
In fact, the automaker officially filed for bankruptcy protection on the morning of June 1 to ensure that a complete reorganization plan be put in place. We already know that 14 plants will be closed in the U.S. and that thousands of jobs will be lost. However, all Canadian and Mexican operations have been spared in this decision.
With this move, and by calling on Section 363 of the Bankruptcy Code authorizing the division of a company, GM is looking to create a new, stronger, better structured organization that should emerge within 60 to 90 days by dropping the less viable brands.
Some of them, such as Opel, have already found takers, while Saturn may be of interest to the Saturn-Penske consortium. GM is hedging its bets with the Chevrolet, Cadillac, Buick and GMC brands to ensure its revival.
“The days when General Motors would have countless launches, of which we would count on 2 or 3 of them being hits and the rest of them being o.k., are history. We need to make sure that every single one of our vehicle launches is a best-in-class car or truck, nothing less. There is no room for hesitation,” emphasized Henderson.
He also stated the company’s desire to focus on the customer. “To those of you who have never tried a GM vehicle, or have tried one and given up on us, we ask that you give us another chance. We will prove to you that GM can take the lead,” said Henderson.
Complete reorganization
To achieve this, however, General Motors will have to consider closing additional dealerships, at least in the U.S., and a new wave of closures should begin during the first week of June.
As for financing of the operations, the U.S. Treasury will invest some 30 billion dollars while the Canadian and Ontarian governments will contribute 8 billion. The United Auto Workers trust for health care and the unsecured bondholders will also own a percentage of the company’s shares.
“At the moment, everyone is working towards the same goal: creating a new, stronger GM better prepared to face the future. Afterwards, government shareholders would like to sell to a private shareholder, but not before several years. This is temporary but indispensable support to help us realize our plan.”
“We know we’re asking a lot from you, but we ask that you have confidence in us. The only way we can earn this confidence is to produce results, and we will have them soon,” concluded Henderson.
For the moment, no additional cuts or closures have been announced for Canada. Prime Minister Stephen Harper will also make his position known.
photo:General Motors