General Motors emerges from bankruptcy after crash diet

The rich elite in the United States must be different from ordinary folks. How else to explain the behind-the-scenes maneuvering that brought the largest U.S. automaker, General Motors, out of bankruptcy in a lightning-quick six weeks and lighter by tens of billions of dollars in debt. With the completion of the sale of assets Friday to a company set up solely to liquidate them under bankruptcy court supervision, GM returns to the competitive world of automobile designing, building, servicing and selling -- largely under the same management that led the company's decline, according to Cable News Network (CNN). Of course, there'll be some major differences -- GM is now more than 60 percent owned by the U.S. Treasury. In addition, by the end of next year, the new GM will also be lighter by tens of thousands of jobs and thousands of dealerships across the country. "This is an exciting day for General Motors, one that will allow every employee, including me, to get back to the business of designing, building and selling great cars and trucks and serving the needs of our customers," GM Chief Executive Fritz Henderson said, CNN reported. "We deeply appreciate the support we've received. We'll work hard to repay the trust, and the money, that so many have invested in GM." But Henderson, who took over the top spot at GM after the Obama administration forced out then-CEO Rick Wagoner as a condition of loaning the automaker as much as $50 billion, faces a daunting challenge. GM lost most of its market share, now 20 percent of the U.S. market, in the last few decades, was overtaken by Toyota Motor Co. of Japan as the world's largest automaker, and even lost its standing as a component of the Dow Jones Industrial Average. GM also will be losing its Saturn, Saab and Hummer brands, and previously decided to drop Pontiac. Henderson even said that he didn't know if GM would be able to repay the billions it borrowed from the treasury, according to CNN, but probably wouldn't have to borrow more next year. "This is a precious second chance," he said. "There are no third chances." Even if there were, who could afford them? GM has lost $88 billion since 2005 while its debt rose to $54 billion, CNN said. Bondholders who loaned money to GM before the bankruptcy will end up with around 10 percent of the new company, CNN said, but shares will not traded until next year at the earliest.

General Motors gets rear-ended by its executives

Top executives at General Motors finished running the once-proud automaker into the ground Tuesday as they dumped their remaining shares of stock and watched the company's stock price fall to its lowest since the Great Depression in the 1930s. The stock sank as low as $1.09 on the New York Stock Exchange before closing at $1.13, a 22 percent decline, according to the Reuters international news service. Former GM vice chairman and product chief Bob Lutz and five other execs revealed Monday in Detroit that they were selling their last holdings in the largest U.S. automaker, including $315,000 in stock, Reuters said, as GM approached a government-imposed deadline for reorganizing or filing for bankruptcy protection. It was a humiliating collapse for the carmaker, one of the original members of the NYSE, which for decades symbolized the strength and success of U.S. capitalism. But GM came to stand for corporate atrophy, as the automaker doggedly refused to build energy-efficient small cars to compete with its overseas rivals despite a plunging market share. Instead, GM used its wealth to lobby for tax changes and environmental law waivers that kept profits high in the short term but actually sealed its doom. Few Americans will forget seeing the chief executives of the three largest U.S. carmakers waste tens of thousands of dollars flying to Washington, D.C., in private jets to beg Congress for taxpayer bailouts. Now, that's out of touch! Of the three -- Rick Wagoner of GM, Bob Nardelli of Chrysler and Alan Mulally of Ford -- only Mulally remains in his post. Not coincidentally, Ford is the only one of what used to be known as the Big Three to have refused government loans so far.

General Motors is already bankrupt every way but legally

News that General Motors told the Treasury Department this week that it could seek bankruptcy protection comes as a surprise to no one, except maybe the federal regulators who have been propping up the auto giant with billions of dollars in taxpayer money since last year. The admission, the first time GM has openly discussed a bankruptcy filing, appeared in a regulatory filing about its restructuring progam, according to the Reuters international news service. Of course, new GM chief executive Fritz Henderson, who took over the top spot after the Obama administration demanded the removal of former CEO Rick Wagoner, mentioned the possibility earlier in the week after its proposed restructuring plan was rejected by the government. In its report to Treasury, GM said it was trying to restructure out of court but would file bankruptcy if it was unable to reach cost-saving agreements with its bondholders and employee unions. "If the changes needed for long-term restructuring cannot be obtained out of court, the company is prepared and would consider in-court options,” GM said in its filing. The United States has loaned the automaker billions of dollars in an effort to help it recover from the economic downturn, and also has suggested guaranteeing warranties and aiding GM in emerging from bankruptcy after restructuring. But if what GM really wants is to get out of its labor contracts while stalling on new car development and continuing to overpay its executives, maybe it really should get out of the way and let emerging automakers with better ideas take over.