Mar 30 2009
Chrysler, GM Plans Non-Starters
The U.S. government has rejected reorganization plans submitted by Chrysler and General Motors. As the March 31 deadline approaches, GM CEO Rick Wagoner was forced to resign last night.
GM has 60 days to retool its proposal or enter bankruptcy. Meanwhile, Chrsyler has 30 days to merge with Fiat, an Italian automaker, if it wants additional federal aid.
President Obama’s administration believes GM still could be viable if costs are slashed further. The government apparently thinks there’s no hope for Chrysler–which has needed federal bailouts twice within the last 30 years–as an independent company.
A key sticking point is the bondholders’ reluctance to accept pennies on the dollar. Letting GM and Chrysler go to bankruptcy court would enable a judge to force bondholders to take some losses.
The government, under the proposal, would guarantee warranties for GM and Chrysler vehicles. That promise, officials believe, would encourage people to buy from the beleaguered companies.
Hi again! I’m happy to see that you are keeping so busy with this blog. I’ve included “Politics 2000″ in my blogroll and I hope you continue to receive lots of traffic even though EntreCard is going to be gone from our sites.
–Doug in Missoula, Montana