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GM Files Voluntary Chapter 11; Agreements with US Treasury and Canada; “New GM” Expected in 60-90 Days

General Motors Corp. reached agreements with the US Treasury and the governments of Canada and Ontario for the creation of a smaller, self-sustaining “New GM”. Pending approvals, the New GM is expected to launch in about 60 to 90 days as a separate and independent company from the current GM.

The New GM will incorporate only the “best brands” and operations, and benefit from shedding much of the older debt burden and operating cost structure. The New GM will incorporate the terms of GM’s recent agreements with the United Auto Workers (UAW) and Canadian Auto Workers (CAW) unions and will be led by GM’s current management team.

GM Manufacturing Plans
PlantStatus / Timing
(or sooner)
Orion, Mich. Standby: Sep 2009
Pontiac, Mich. Close: Oct 2009
Spring Hill, Tenn. Standby: Nov 2009
Wilmington, Del. Close: Jul 2009
Grand Rapids, Mich. Close: Jun 2009*
Indianapolis, Ind. Close: Dec 2011
Mansfield, Ohio Close: Jun 2010
Pontiac, Mich. Standby: Dec 2010
Livonia Engine, Mich.Close: Jun 2010
Flint North Components, Mich.Close: Dec 2010
Willow Run Site, Mich.Close: Dec 2010
Parma Components, OhioClose: Dec 2010
Fredericksburg Components, Virg.Close: Dec 2010
Massena Castings, N.Y.Closed: May 2009*
Service & Parts Operations (SPO)
Warehousing & Parts Distribution Centers
Boston, Mass. Close: 31 Dec 2009
Jacksonville, Fla.Close: 31 Dec 2009
Columbus, OhioClose: 31 Dec 2009
* previously announced

The New GM will:

  • Focus on four core brands in the US—Chevrolet, Cadillac, Buick and GMC—with fewer nameplates and a more competitive level of marketing support per brand.

  • Reduce GM’s total number of assembly, powertrain and stamping facilities in the US from 47 in 2008 to 34 by the end of 2010 and 33 by 2012. These totals reflect GM’s recently announced plans to build a future small car in the US. (Earlier post.) Under this plan, the New GM will achieve full capacity utilization of its assembly operations in 2011, two years ahead of what was scheduled in its 17 Feb. viability plan submission.

  • Close the gap in active worker labor costs compared with transplant auto manufacturers.

  • Feature lower structural costs enabling its North American region to break even (on an adjusted EBIT basis) at a US total industry volume of approximately 10 million vehicles. This rate is substantially below the 15 to 17 million annual vehicle sales rates recorded from 1995 through 2007.

  • Achieve its lower structural costs in part by further reducing 2009 salaried employment in North America from its year-end total of 35,100 to approximately 27,200, and continuing to improve its balance sheet by reducing retiree benefits for salaried retirees and non-UAW hourly retirees.

  • Reduce its dealers to approximately 3,600 from the current 5,969.

GM also reaffirmed its commitment to improve the fuel efficiency of its vehicle fleet, meet or exceed new federal fuel economy and emissions regulations, and push ahead with advanced propulsion technology. GM will launch the Chevrolet Volt extended range electric vehicle in 2010, expects to have 14 hybrid models in production by 2012, and will have 65% of vehicles alternative-fuel capable by 2014.

The New GM will have a number of key vehicle launches in 2009 and 2010, including:

  • Chevrolet Camaro, with highway fuel economy of up to 29 mpg
  • An all-new Buick LaCrosse premium midsize sedan
  • The luxury midsize Cadillac SRX crossover and CTS Sport Wagon
  • The Chevy Equinox and GMC Terrain, midsize crossovers with highway fuel economy of 32 mpg
  • The Chevy Cruze, GM’s new global compact car
  • The Chevy Volt

The mechanics of the sale. The New GM will execute the key elements of its 27 April viability plan (earlier post), along with additional initiatives. Under the plan, GM will sell substantially all of its global assets to the New GM. To implement the sale agreement, GM and three domestic subsidiaries have filed voluntary petitions for relief under chapter 11 of the United States Bankruptcy Code in the US Bankruptcy Court for the Southern District of New York, and the sale is subject to the approval of the Court. Because GM’s sale of assets to the New GM already has the support of the US Treasury, the UAW and a substantial portion of GM’s unsecured bondholders, GM expects the sale to be approved and consummated expeditiously.

None of GM’s operations outside of the US are included in the US. court filings or court-supervised process, and these filings have no direct legal impact on GM’s plans and operations outside the US. GM confirmed that all business operations are continuing without interruption in its Europe; Latin America, Africa and the Middle East; and Asia Pacific regions.

GM has filed various first day motions with the Court to ensure the company’s continued ability to conduct normal business operations. Upon Court approval, GM will be expressly authorized, among other things, to:

  • Honor all obligations to customers and continue customer programs, including warranties, without interruption;

  • Respect operating and financing agreements with GMAC, supporting continued wholesale financing for dealers and retail financing for customers;

  • Pay dealers’ open accounts and continue warranty and incentive programs;

  • Pay essential suppliers and logistics providers for goods and services provided before and after the company’s court filings; and

  • Continue pay and benefits for employees and retirees; however, the amount of non-qualified pension for some executive retirees may be affected.

Capital structure. On 31 March 2009, GM reported consolidated debt of $54.4 billion, along with additional liabilities, including an estimated $20 billion obligation to the UAW VEBA. Under GM’s agreements with the US Treasury, the Canadian and Ontario governments, and the UAW and CAW, and with the support of a substantial portion of GM’s unsecured bondholders that came over the weekend, upon closing of GM’s sale of assets to the New GM, the New GM’s capital structure will consist of:

  • Approximately $17 billion in total consolidated debt, including:

    • $6.7 billion of debt owed to the US Treasury
    • $1.3 billion of debt owed to the Canadian and Ontario governments
    • $2.5 billion of notes issued to the new Voluntary Employee Beneficiary Association (New VEBA)
  • Approximately $6.8 billion of other, primarily international debt, but excluding Europe

  • $9 billion of perpetual preferred stock with a 9% annual dividend, payable quarterly in cash, $2.1 billion of which will be issued to the US Treasury; $0.4 billion of which will be issued to the Canadian and Ontario governments; and $6.5 billion of which will be issued to the New VEBA

  • Common equity, 60.8% of which will be owned by the US Treasury, 11.7% of which will be owned by the Canadian and Ontario governments, 17.5% of which will be owned by the New VEBA, and 10% of which has been reserved for GM for the benefit of the unsecured bondholders and other unsecured creditors of GM

  • Warrants granted to the New VEBA to acquire newly issued shares in the New GM equal to 2.5% of its outstanding common equity

  • Warrants granted to GM at closing to acquire newly issued shares in the New GM equal to 15% of its outstanding common equity, with various exercise prices and expirations

  • Other than the $8 billion of debt owed to the US Treasury and the Canadian and Ontario governments by the New GM, all amounts owed by GM or the New GM to the US Treasury and Canadian and Ontario governments would be equitized in exchange for the New GM securities described above, and no other debt will be owed by GM to the US Treasury and the Canadian and Ontario governments.

GM Europe Restructuring. GM announced separately that GM Europe has an agreement for €1.5 billion of bridge financing from the German government and a Memorandum of Understanding to partner with Magna International Inc. (Earlier post.) Under the agreement, the Opel/Vauxhall assets have been pooled under Adam Opel GmbH, with the majority of the shares of Adam Opel GmbH being put into an independent trust (the balance to remain with General Motors), while final negotiations with Magna proceed.

GM’s primary bankruptcy counsel is Weil, Gotshal & Manges LLP. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsels. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM’s restructuring advisor is AP Services LLP and its financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP.

More information about GM’s chapter 11 cases is available at Court filings and claims information are available at



A back of the napkin restructuring plan for GM, based on the promotion of plug-in hybrid vehicles:

Because GM is cancelling their Saturn line with its practically-priced hybrid models, and promoting the Volt hybrid aimed at the luxury car market, GM's board of directors are NOT acting in the best interests of the United States of America.

GM should divest of Pontiac, Saturn, Chevrolet, Buick and Cadillac. These car companies should receive public assistance to continue manufacturing and marketing with the proviso that plug-in hybrid models are offered and promoted. They should include NiMh battery packs, which have sufficient storage and are road tested to last 100,000+ miles.

GMC may place that brand name on trucks and vans only. They may market those models at the restructured 'car' company dealers. GM's trucks and vans also must produce and promote plug-in hybrid models.

GM may produce one more fleet product: low-floor, hybrid drivetrain, paratransit vans. These public transit vehicles are long overdue for low-floor models. Seniors and the disabled need these vehicles to have simpler, less strenuous boarding. GM and Ford may compete for this market.

The Plug-in hybrid drivetrain offers safety features that are impossible to achieve in standard drivetrain. They are an intregal part of a modernized and more energy efficient utility grid. It is in the public interest to produce hybrids. Neither GM nor Chrysler intend to produce hybrid because their boards of directors are traitors.


Sirkulat, I think GM's hands are tied with regards to what it can do with NiMH batteries.

Cobasys / Ovonics, a front for Chevron / Texaco, controls the patent on these batteries and limits their use to HEV's, notably never even mentioning battery electric vehicles (BEV's) as a potential application.

The following link, from the bottom of page 11 to the top of page 15, is also particularly illuminating:

Unfortunately, for the next 4 years or so, we are stuck with Lithium ion batteries (and their higher price) if we want to do anything other than a Prius-type parallel hybrid drive system.


" interests of the United States of America."

I can not recall many corporations doing this in the past and I can not envision that many will in the future. Chevron not licensing large format NiMH batteries for BEV and PHEV applications may have harmed American interests when it comes to reducing imported oil. We need every advance that we have to reduce oil imports and continuing to import so much oil can harm the country.


GM sold the NiMH battery, EV scale patent(>10amp/cell), to an oil company ten years ago, displaying it's corporate philosophy and contempt for all electric vehicles..

Honda, Toyota, Nissan, .. each have their name and a luxury brand. With four brands, is GM staging more of it's own same results for the future?


Anyone remember the past years when criticizing GM would get you branded as "GM basher". GM has now pissed away $172 billion in other people's money. Where are the GM Cheerleaders® now?


"GM's board of directors are NOT acting in the best interests of the United States of America."

Whatever made you think that was their job?


After such a huge failure and longer term mismanagement, most if not all current GM + Chrysler top managers should get their pink slip. Otherwise, those two will not adapt to post recession markets and will go deeper and deeper in dept with USA/Canada public funds.

Why not let those two fail (that's what they deserve) and convince potential buyers to go to Ford + Toyota USA + USA Honda USA + etc etc. The world would quickly adapt without GM or Chrysler around.

With GM + Chrysler out of the way, the other manufacturers would do much better. Investing about $100B in two mismanaged firms producing marginal hard to sell products is a huge mistake.



Do you have a link for the $172 billion figure? There's a lot of creative accounting in the auto/oil industry to document.

Is there something unsettling in the "New GM" arriving this summer including "..a new Camaro, multiple crossovers, sport wagons..?" Many working jobs may disappear, even a token CEO or so(naturally with multi-million retirement), yet there's a "we're doing it again - we got away without paying the old debt, so in with the new debt" feel to most of that product lineup.


What a mess! Ugh!


Bankrupt G.M. Says It Owes $172 Billion


The world is full of wonder.

I wonder if the administration would have invested $50 – 100 billion in GM to save the previous shareholders
I wonder if the new owners will now be able to automate freely – regardless of displacing employees.
I wonder if the common factor among each of the failing Detroit three, that distinguishes them from the local Japanese manufacturers, is/was they are under partial control of a single union that coordinates strikes (the CEOs and senior managers of the 3 are not related, you know).

I wonder if the new owners realize that even though they repeatedly blame most if not all current GM + Chrysler top managers, that if they gave them pink slips, the US government and the unions would be much worse managers.
I wonder if the new owners realize that if they let the 2 companies make profitable cars (new Camaro, multiple crossovers, sport wagons) with the old management, and GM fails soon, they can say they could not legally interfere with GMs decisions. If GM survives for at least a while, they can take credit for sacking Rick Wagoner. If it fails later they cam blame the old "carried over" administration.

I wonder. If dumping Saturn and making the Camaro, multiple crossovers and sport wagons is NOT good for America, well then, which (the US or GM) is obligated to do what’s best and which one is supposed to make a profit.

I wonder; April US vehicle sales show 432k cars and 386k light trucks, and the top 10 were Accord, Ford F PU, Silverado, Civic, Solara Matrix, Fusion, Ram PU, Impala, Malibu and escape; does this mean that the marginal hard to sell products that GM should quit selling are small cars.

I wonder if GM management is largely responsible for product selection and the total LDV US sales share (GM 578K YTD vs. Ford 440K YTD vs. Toyota 486K YTD ) and the UAW is largely responsible for the lack of quality and high prices. [same source]

I wonder if the new owners will halt GM truck sales (342K YTD US) so that Toyota trucks can catch up (196K YTD US). [Same source]
I wonder if Chevron not licensing large format NiMH batteries for BEVs, has advanced the technology of normal size NiMH and Li-Ion batteries so that the market share of UVs plus Hybrids has skyrocketed to a, umm, never mind.
I wonder if small NiMH cells have higher power and energy density than large ones – just like CZn and Alkaline cells.
Always room for wonder.


@ Mark BC,

The newer lithium-ion chemistries are in fact cheaper than NiMH per kWh and per kW.

For example, the NiMH battery in the Prius stores 1.3 kWh, weighs 28 kg and can discharge 25 kW. Replace that with a modern Hitachi LiIon unit, and you can have that 25 kW power rating from a battery weighing just 7 kg which would in fact be cheaper than the Prius battery.


Indeed, the world is full of wonder.

Yet there's little wonder about the prior oil administrations that started the bailouts - GM, Wall Street, etc.

There is wonder if throwing darts at phonebook listings for the next GM, etc. CEO could have possibly wasted more hundreds of billions as they still kept their seven figure salaries and parachutes.

There is wonder if selling the EV1, EV2, etc. would have allowed the EV market to be ten years further along, NiMH batteries and all - and there shouldn't be..


Lithium batteries are being developed rapidly. You have seen GM work on the Volt the last 2 years proving them out. They want to make sure they are at least as reliable at the NiMH that were in the RAV4EV ten years ago.

The price of the Volt would probably be lower if they used the same batteries used in the RAV4EV 10 years ago. Which makes you wonder, if they could go with a proven technology that would produce the same range at lower cost, why don't they?


Maybe I crossed the line with the last sentense in my 1st comment. If the forum moderators would care to delete that sentense, that's fine with me.

I'm not impressed with Fritz Henderson. His speech yesterday did not mention the word 'hybrid', let alone plug-in hybrid. This omission validates my concern that GM is up to no good, no matter the fanfare heralding a supposedly new GM.

President Obama has mentioned plug-in hybrid technology many times, so I suspect he realizes its tremendous potential and promise.

I expect any US manufacturer should feel a loyalty to their customers, not merely to their customers money. But that's just my opinion. Ai Vin is entitled to believe the tens of millions of people GMC products affect are nothing more than consumers or insects.

As far as battery technology goes, Lithium-ion is still unproven and more than twice as expensive as NiMh, no matter how you slice and dice it. Eventually, I expect its cost will come down, but for the meantime and in many applications, road-tested NiMh battery packs are perfectly suitable for plug-in hybrid vehicles.

I can only offer a brief explaination of the many advantages of plug-in hybrid technology. We should all expect a more thorough and complete assessment of their potential from our leaders in government, business and industry. I choose to present the auto-related industry's deferring and wholesale dismissal of plug-in hybrid as a conspiracy theory because GM, other carmakers and business interests have a long history planned obsolescence and the manipulating of markets as a standard practice.

GM is up to no good. To hell with GM. Let Chevrolet, Buick, Pontiac, Saturn and Crapillac continue to manufacture and market cars. Let GM produce trucks, vans and paratransit vans, etc. They should all produce and promote Plug-in hybrid models. That's the deal. It looks like GM wants to continue its practice of 'planned obsolescence' and producing cars that predictably kill people. Screw GM!


The Justice Department should investigate Chevron not licensing large format NiMH batteries for BEVs and PHEVs. This is a national security issue when we send hundreds of billions of dollars out of the country every year for imported oil and those same countries could cut us off any time they want.


Here's an idea: Can we do eminent domain on intellectual property? Force Chevron to sell MiMH technology to the US government who would then license it to American (and other) automakers.


We could have had BEVs and PHEVs 10 years ago with a proven affordable battery. We could have millions of them on the roads now using NO gasoline at all.

Patent abuse should not be allowed to happen, but when it causes the U.S. to send 100s of billions of dollars to foreign countries every year that would like to cut us off and harm us, that is criminal.


"The Justice Department should investigate Chevron not licensing large format NiMH batteries for BEVs and PHEVs. This is a national security issue when we send hundreds of billions of dollars out of the country every year for imported oil and those same countries could cut us off any time they want."

"Here's an idea: Can we do eminent domain on intellectual property? Force Chevron to sell MiMH technology to the US government who would then license it to American (and other) automakers."

WOW - folks can get fed up!!


I think it has really harmed the country and that is not right. We have known since the oil shocks of the 1970s that we needed to do something. Now in October 2001, Texaco buys the rights and almost immediately Chevron buys Texaco for a really high price. Then they create Cobasys, with Chevron having total veto power as to who they license to and for what purpose. They have refused to license to anyone intending to us them for BEVs or PHEVs. Something is not right here and we all need to get to the bottom of it.


"..They have refused to license to anyone intending to us them for BEVs or PHEVs. Something is not right here and we all need to get to the bottom of it."

I'm in total agreement. The punitive damages alone could repay years of taxpayer 'bailouts'.

Who's got a lawyer relative to get this filed?

Andrey Levin

Sorry to interrupt your party, but this widely propagated conspiracy theory is complete BS.

For starters, series of mentioned patents cover application of NiMH battery TO HYBRID VEHICLES ONLY. Where it is widely used, including large formate batteries on hybrid buses. You can consult parent US patent 6,330,925 issued to Stan Ovshinsky (Ovonics) at 1997.

Application of any battery to propel pure battery electric vehicle is not patentable, because it was routinely done for more than two centuries.

NiMH battery is extremely poor choice for BEV because:

Low energy density (only 70Wh/kg);

Poor deep discharge ability: NiMH batteries are limited in hybrid vehicles to about 1/3 of full capacity to prolong battery life (which makes useful energy density of about 20 Wh/kg);

Very high rate of self-discharge at elevated temperature;

Low cycling efficiency of about 70%; it means that you will have to put at least 2 KWh of electricity to get 1 KWh from battery to propulsion motor.


Concerning EV NiMH batteries.."Sorry to interrupt your party, but this widely propagated conspiracy theory is complete BS."

..and bumble bees can't fly..(not aerodynamically possible)..

You are actually telling your lies to hundreds of 1997 through 2003 Toyota RAV EV owners who think they've been driving their EV-95 battery NiMH EV's for thousands of miles annually - like Tom Hanks(understandable picture provided):
Shai Agassi(understandable videos provided)

Chevron sues and has EV-95 battery assembly lines destroyed because the EV batteries don't work?

After hundreds of testimonials and videos, TRY SELLING YOUR CHEVRON LIES TO A JURY..


Typo: replace "lies" with "BS" - wouldn't want any misunderstood words or deeds..


There may be no conspiracy, but the fact remains that they have refused to license to anyone intending to use them for BEVs or PHEVs. This is patent abuse, whether conspiracy or not and it has kept the U.S. from using less imported oil.

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