GM Outlines What It's Doing With Federal Money

GM Outlines What It's Doing With Federal Money - Sort of DETROIT — As the U.S. Department of the Treasury hired law firms with expertise in bankruptcy to advise it on auto restructuring, General Motors on Thursday hustled to put its spin on what's become of the two installments of its $13.4 billion federal bridge loan.
"We're already making progress," insisted Steve Harris, General Motors vice president of global communications, writing in the corporate GM FastLane blog.
Bloomberg and Reuters reported that the U.S. government has retained law firms with extensive bankruptcy experience, along with the investment bank Rothschild to advise officials on the restructuring of GM and Chrysler. The experts "will consider a range of possibilities for the struggling automakers, including the prospect of a bankruptcy funded by the U.S. government," said Reuters, quoting an unnamed source.
GM and Chrysler, which are receiving a combined $17.4 billion in taxpayer-backed loans, must submit restructuring plans to the government by February 17 and show their viability by March 31 or risk having those loans called.
Harris wrote that GM's more detailed restructuring plan will "prove we can repay the loans, achieve a positive net present value and meet federal fuel efficiency and emission requirements, and manufacture advanced technology vehicles in the U.S." He said this would be done by "offering a product mix and cost structure that is competitive in the U.S. market."
Harris also briefly discussed the fate of the Hummer brand, saying: "We're been working with all of our stakeholders, including our unions, dealers, debt-holders and parties who are interested in acquiring parts of our business that are under strategic review, such as our Hummer brand." He said he "can't share specific details yet about the status of those ongoing discussions."
Bloomberg said one of the scenarios being explored by the U.S. government is a Chapter 11 filing with debtor-in-possession financing provided by the federal government.
The Obama administration is expected to appoint a so-called "car czar" shortly to oversee the restructuring of GM and Chrysler.
Source : http://www.edmunds.com (2/6/2009)